Yesterday I shared a guest post from Leo of Zen Habits. His guide to minimalist money was a sort of overview of good financial skills, useful information for those in the first stage of personal finance. But some long-time GRS readers couldn’t relate to Leo’s post.
Today’s post goes in the opposite direction. It’s a meditation for those in the third stage of personal finance (or beyond), and it’s probably going to seem foreign to those who are still struggling to get debt under control.
The evolution of spending
Before I developed smart money skills, I spent without thinking. I accumulated debt because I had no self-control. I bought what I wanted, even when I couldn’t afford it.
To repay my debt and build wealth, I learned to be frugal. I was never able to completely discard my tendency to spend, but I curbed it sharply. In fact, I became so frugal that I would debate whether to use two spoonfuls of hot chocolate mix or three when making a cup of cocoa. (And this was just a year ago!)
I’m still frugal. In my day-to-day life, I make choices to save money in every way I know how. I clip coupons, buy store brands, borrow from friends, make do with what I have. I am a proponent of thrift.
At the same time, however, I’ve reached a point where it’s possible to save for some very nice things. I saved for my used Mini Cooper. Kris and I are saving for a trip to France next year. And this weekend we’ll receive a shipment of some nice furniture we’ve saved for.
Because I’ve made smart choices in other parts of my life, I’m able to spend well on the things that really matter to me.
The guilt of wealth
There’s no question that I’m happy about my current financial situation. I’m doing well, making smart choices, and enjoying a balance between tomorrow and today. But not everything is perfect. I’ve found that I feel guilty about some of the things I can now afford to purchase. And I’m not the only one.
I had lunch with a close friend yesterday. Though he was raised dirt poor (way below poverty level), he’s worked hard to obtain an education, to build a career, and he now owns a couple of businesses. It was never his aim, but now he finds he’s wealthy. He’s proud of his accomplishments — but he also feels guilty.
“I look at my extended family, and they’re still poor,” my friend told me. “They struggle. And yet I have a nice house a nice car and everything I could possibly want.” A few years ago, my friend purchased an expensive car as a reward to himself for his hard work. He could afford it, but somehow over the past few years, he hasn’t enjoyed it as much as he thought he would. He feels embarrassed to drive it. He worries that his kids will grow up to take for granted those things he views as blessings.
This morning, I walked across the street to pick ripe Concord grapes at my neighbor’s house. He came out to help. We chatted as we plucked the juicy bunches from the vine. My neighbor has been retired for fifteen years, and through patience and smart investing has built an enormous nest egg.
When my neighbor retired, one of the first things he did was buy a boat. He spends his summers cruising from Seattle, Washington to Juneau, Alaska and back. (He’s invited me to spend ten days on his boat with him next year — I can’t wait!) My neighbor told me about the first summer he had his boat. One day he anchored in a little cove. Before long, several other boats had anchored in the same spot. He was embarrassed to see that his was by far the biggest boat. “I was worried about what they thought of me,” he said.
A strange new world
Both my friend and my neighbor are generous. They contribute time and money to their friends, family, and community. They’ve built wealth through hard work, and can afford the indulgences they allow themselves. Yet they both feel some degree of guilt over the things they have.
Believe it or not, I’ve begun to experience some of the same feelings. I know I’ve worked hard to get where I am today, but I’ve also been incredibly fortunate. I have a great job. I’m doing something I love, which also happens to help other people. I work from home, so can set my own hours. (I spent all yesterday hanging out with friends, but here it is Saturday morning and I’m working.) I’ve eliminated my debt and am building wealth. As a result, I can allow myself some of the nice things I’ve always wanted.
So why do I feel guilty? I never felt guilty about the things I had when I was in debt. I felt I deserved them. I don’t feel that anymore. Now that my new furniture is on its way, I don’t feel happy to have it, or proud that Kris and found ways to save so much money on it. I feel ashamed that I’m able to afford this while my little brother and his family are struggling to stave off bankruptcy.
Yes, I know that his situation is largely a result of his choices, as mine is a result of my choices. But I know there are plenty of people in this world who have worked as hard as I have, but who haven’t had the breaks.
Does anyone else experience this? How you handle it? I’ve decided that the best thing I can do is to continue my frugal lifestyle, allowing myself occasional indulgences as I can afford them. At the same, I’ll continue to help as many people as possible improve their financial situation. Maybe if I can help others achieve wealth, I won’t feel guilty about my own.
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I earn six figures and often feel similar guilt-related feelings. Here are the 2 best fixes I’ve found:
1) Give away a lot of money. JD, don’t let the perfect be the enemy of good. Don’t keep waiting to be a philanthropist. And don’t be a baby philanthropist by giving away piddly amounts of $50 or $100 checks when random friends as you to sponsor them or when you go to some charitable event. Give until you actually feel it in your checkbook and your heart. It’s an amazing feeling. Start cutting $1000 checks. Or more! You can give nationally, or you can start making an immediate difference in your own area. I know you love cats. Drive to a nearby animal shelter, ask what they need, and give cash or go buy it (food, medicine, crates, publicity for adoption events, a new kennel, etc). You could save dozens of pets today. Just do it and your giving muscle will grow. You’ll get a high from giving away more than you ever thought you would or could.
2) I let myself feel guilt and I sit with the feeling because I think I SHOULD have some guilt. I don’t believe that any of us “deserve” to have more than our basic needs met. I know that my lifestyle is not sustainable on a global level — the world would explode if every person on it had an American lifestyle. I know that I take more than my fair share from the environment. Even “poor” Americans have countless more luxuries and things that go beyond their true needs than people around the globe. Millions (or billions?) of people still live on less than a dollar a day, die because they don’t have clean water, and lack access to basic healthcare. I earn a lot and live a yuppie lifestyle, but I don’t work harder than a lot of people in other professions that our society has decided should receive a lower wage. So, I feel guilty. And I think I should. It’s not helpful if I let that guilt get debilitating. But, it’s helpful because it reminds me not to take things for granted, that I don’t “deserve” my current lifestyle, and that I need to be giving back all the time. If I ever have children, it will also help me raise them in a way that they don’t end up being over-entitled losers.
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@KF[151]:
I can’t really address much of what you’ve said, because I don’t really agree with most of it. But here are a few points:
“Society” does not determine the wages of a profession. Simple supply and demand do. Anyone with an able body can be a janitor. High supply, low wages. Only highly trained people can be doctors. Low supply, high wages. Obviously, as said before, there are aberrations to this.
The best way to keep kids from being “over-entitled losers” is to instill in them work ethic, not charity. What happens if your children end up un(der)educated and poor? Will they not expect charity then, because that is exactly what they were brought up with? Charity conditions expecting something for nothing; work ethic conditions getting nothing without earning it.
There is one “charity” that I support when I can: Habitat for Humanity. Why? Well, first I go and work, and I learn home construction and maintenance skills which can be applied to my own benefit. Second, they actually require their beneficiaries to earn their home; they do not simply give them away for free. They must help in the construction or rehabilitation of the home, and they must still pay for a mortgage, though it is a small non-profit loan covering H4H’s outlay of funds into the house. By doing this, they instill pride and ownership of the home into their beneficiaries. It is truly THEIR home that they earned, not one that was simply given to them.
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KF (#151)
Thank you for your valuable comments. I think you are correct in accepting a certain amount of guilt concerning your over-sized environmental footprint. It is mostly due to resource limitations that so many around the world needlessly suffer.
I recommend that you seriously consider assuaging your guilt a little by simplifying your lifestyle. As I am sure you know, the material surroundings inherent to the “yuppy” lifestyle will not positively impact your well-being, and the well-being of those you care about. Further, if you do have kids some day (and I hope that you do), teaching them about living simply can be the best lesson you can give them, particularly by example. Not only does excessive material consumption lead to environmental problems, it leads to devastating mental conditions, such as materialism. Regardless of how much you inspire people to give back, the hypocracy of living large will undermine you and yours.
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Actually, it is not due to resource limitations that so many around the world suffer. If that were the case, Hong Kong would not be the economic powerhouse it is today. What leads to extreme poverty is a) lack of firmly substantiated property rights (or lack political stability to enforce them), and b) lack of free trade (i.e. having overly strong economic controls, regulations, and barriers in place which prevents small businesses from developing and flourishing). Simply making a transfer of resources from one place to another won’t fix that problem. In fact, in some ways, it makes the problem worse by making those countries reliant on the handouts we give them.
That doesn’t mean it’s wrong to try to help… on the contrary. But instead of focusing too much on the symptoms, we need to keep our eyes on the underlying problem.
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Hi DC Portlander @ 153: I totally agree with you. I guess that’s another useful aspect of guilt and a way the emotion serves us. It helps me keep my lifestyle in check, which keeps my priorities in line, which in turn means that I live well below my means, have financial peace, and have plenty of money to give to meaningful causes. I live in a small 1-bedroom apartment when I could afford more, I do not have a car and only use public transportation even though I could technically afford a car, I am still frugal in my daily purchasing choices even though my income has increased over the years, I am environmentally conscious with most of my purchases, etc. Living a simple life, regardless of income, is quite powerful. And feeling a little bit of guilt over how much I am blessed to have is a good reminder to keep this up.
Justin @152: Society does in fact often determine wages. I am a lawyer in the private sector. I earn much more than friends who are federal prosecutors, state prosecutors, public defenders, federal judges, state judges, nonprofit attorneys and even elected Senators and Congress people who have law degrees. Most of those people work just as hard as I do, they have similar educational backgrounds, and they help society. This is true in many fiends. I am fine being paid more than a janitor, and I agree that my skill set, education and talent should be rewarded to a certain degree. But, I assure you that there isn’t always a rational process regarding how much people are paid.
I also assure you that there are many good charities in addition to Habitat for Humanity. Hundreds of organizations help people help themselves. There is an entire microcredit movement based on this. Other nonprofits don’t really involve “charity” to people — environmental organizations, animal shelters, political campaigns, etc.
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I think that the guilt you feel is a beautiful thing. Some of that guilt (I speculate) may come from the fact that you are teaching people about how to be frugal on this site… while at the same time splurging a little bit more. You will eventually get used to being able to afford some of the “finer” things. But you can use that to keep you from going overboard and not getting a swollen head!
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Money is a hammer. That is, a tool. Use it well whether you have a little or a lot. As I see it, that means *work* and *build*. The one time in my life that we had money, we re-invested in our home-based business and helped the folks working for us to set up and build their own small business. Even though illness took us down, some of those other small businesses survive to this day.
Do not feel guilty about the tools you have. Instead, use them to build…to the best of your ability.
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Before I decided to post I read every single comment, to see if anyone’s made this point and to get a sense of the community on the subject of guilt. There will be readers who disagree with my examples and I’m very interested to hear reasons and other examples. There will probably be readers who disagree with the entire concept, in which case I hope to read why.
I think one source of wealth is worthy of feeling guilty about, another is not.
The first is privilege. Privilege here is defined as something that benefits you, that you don’t have as a result of your own efforts. Morrison #84′s example of brown hair is one case. If brown hair is a tremendous benefit in getting wealth, then it’s a privilege and not an earned item. Examples of wealth-inducing privilege in US society include well-educated parents, being white, growing up in a house full of books, being offered test prep classes, not having to work during the school year. I think this is what tosajen #46 means when ze talks about winning the birth lottery. Since we didn’t do anything to earn these benefits, they’re worth feeling guilty over.
Things that benefit you that come from your work, are earned and not something to be guilty over. Some examples include learning from the good role models around you, making good financial decisions, working hard at what you do no matter what level you start at. If having brown hair were an advantage I guess dying your hair would count as well.
People’s condition is a mix of privilege and work. People without privilege can work hard and do well, people with privilege can waste it entirely. But it’s easier to do well if you have a better starting position.
In my perfect world we’d all have the same starting position; our finishing position would depend on what we do after that.
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WilliamB,
If we are to determine what one ought to feel guilty about, we should determine the root and the ultimate purpose of the emotion. From my perspective, the purpose of guilt is to motivate a person to try to change behavior in the future.
So if a person is successful because of privilege, what useful purpose does guilt have? You don’t want to encourage yourself NOT to read, or not to give your own children opportunities that other children don’t have (like, for example, the opportunity of having good parents!). And truthfully, defining what “privilege” really means, and how much that “privilege” has lead to success rather than hard work or luck is very tough.
It’s good to recognize and try to correct for inequities, especially when they exist because of some kind of privilege rather than hard work, but guilt is the wrong emotion. Most people who get where they’re going with a combination of many factors, and telling those people that they should feel guilty about what privilege may have contributed to their success is putting blame in the wrong place. Instead we should all focus on making society better so that more and more people have access to privileges that help people become more productive (like books and college), and so that things that do not directly contribute to productiveness are no longer treated as privilege (like the color of one’s skin).
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This year, I paid off my house and started saving properly. I’m 31 so consider myself very well off… and yes, with that comes guilt.
My brother has made so many poor financial decisions. So out of guilt, I loaned him $65K AND let his entire family move in with me, rent-free. He subsequently quit his job and is doing nothing.
Now I feel like I’ve been taken advantage of, and it was my guilt that put me in this position!
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My mother is a hard working class woman, my father is a lot wealthier. I was raised by my mother, in a modest home that wasn’t extravagant, although comfortable. I grew up listening to a lot of punk rock, ended up focusing my education on the labor movement and labor industry. I hadn’t thought of myself as impoverished or rich, simply fortunate and comfortable. After I graduated from college my father recruited me to help him manage his business and property. I had never imagined I’d really inherit all of what he built and actually have to be a business person. I have buried a seed with in me to be more inclined to despise business and money transactions. Recently, we’ve spoken of what I will be responsible for… I have always felt uncomfortable by my fathers wealth and have hidden it from friends. I have heard things like “well I didn’t have daddy to help me,” and “some of our parents still have to work.” I don’t feel I have a right to defend the working class or participate in casual conversations about the cost of living, although I have not inherited the wealth yet. I have always had friends with financial problems and it was always very real for them and so I always did what I could to help. I give, I do not loan. I work and study and try to help the ones I love as much as I can. Sometimes I even feel like this was given to me just so that I could eventually give them the life they deserve and the luxury of new cars, A+ health care and unlimited air conditioning during the summer.
JD, although I did not work for my money, there were many things you said that I immediately related to. Thank you for sharing that with me. I have been guilt ridden all my life and it tears me to pieces.
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Wow! I just linked back to this post and the comments are wonderful to read. The post is good, but what makes this blogging thing so fantastic is the shared experiences. That alone is an embarrassment of riches. I wish my mom and sister would get on the internet, but they refuse, to their own detriment.
As far as feeling guilty. Mea culpa. I’m not rich money wise, but I know I’m rich, if that makes sense. Certainly I have money, but my richness is derived from gratitude. Gratitude for the sun, the air we breathe, my family, and especially the commenters on this board:-) I wonder if I were to become poor (materially) would I not be happy?
I have a few rich relatives. I guess there is some envy there, but I’m surprised at how unhappy one of them is. So the rich I don’t feel a lack, but with the poor, I wish I could give them all a million dollars. (Though I don’t have that:-)
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@Jennifer[161]:
So you feel guilty, because your father put in the breaking work of creating a business that has made him wealthy? And by breaking, I mean many things. For every successful business, there are a magnitude more that fail. It is a financially risky proposition, as well as a personally psychological and sometimes physical challenge. But people take the risk and stress anyway, because they might end up like your father, and be able to bear the rewards. That business was not magically created, and the money it brings in was not stolen. It was given, by the willful exchange of people for whatever goods or services your father’s business offers. For that, there is absolutely nothing to feel guilty about.
Also, your comments make it sound like you and your father need to have some pow-wow time about the future of the company, and your place (or lack thereof) in it.
@Michael Crosby[162]:
And giving all the poor a million dollars would do nothing other than cause inflation to the point where being a millionaire is considered poor.
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I was raised by very frugal parents on a farm. I entered the workforce at 20 (1980)and now 32 years later, I feel like I’ve worked hard, but know that I mis-managed my money at times. I furthered my education, switched careers when economiuc conditions demanded it, paid for a house and generally got along, but I also spent money foolishly on useless things. When my father died I received some money that paid off the remainder of my mortgage. I felt guilty, but overtime I also committed to cleaning up my financial act and have adopted a much more frugal lifestyle where I am very conscious about what I spend and on what. Recently, my immediate family sold the family farm and we each received a substantial sum money and now I am confused by the amount of guilt I feel about being financially secure. I am relieved and extremely grateful, but I am also feeling awkward as if all the work I did in the past is now undermined by receiving money. I am also somewhat depressed and anxious. I have enjoyed reading these posts and have got some good ideas about values – I have always thought about setting up a scholarship fund and I am thinking about how to achieve better balance in my life and giving back to the community, something I never really did in the past except through financial contributions when I could afford it. I feel somewhat off kilter about the future and will now be more aware about self-destructive behaviors that could manifest.
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I am lucky enough to have been raised by parents who instilled a strong work ethic in their children. I worked 70+ hours a week all through my 20′s while my friends were throwing their money away at the bar or leasing fancy SUV’s. My wife also works full-time and we have been fortunate enough to land careers that place us comfortably in the middle to upper middle class. We do not feel guilty at all because we know nothing was handed to us. To be honest, once we started a family, I now only work an average of 50 hours a week and feel guilty that I am not working as hard as I used to. I know that no matter how much wealth we accumulate, we will never be the types with fancy cars or country club memberships. We are thrifty and do not have all the latest gadgets and toys. We live in an affluent part of the country and are surrounded by millionaires flaunting their wealth. I guess my lack of guilt is because I know that if I am ever fortunate enough to amass enough disposable wealth to buy a mercedes benz or exotic vacation home, I never would. I’d rather give my money away or start a business that provides others with a job and am working to be able to do that someday.
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