When Zac Bissonnette writes about how savvy he was about money in high school, I know his unusually precocious wisdom is not a put-on. I knew him back then. And, with his new book, How to Be Richer, Smarter, and Better-Looking Than Your Parents, I think you should listen to him.
Even though, admittedly, he only has one lesson to teach you.
I Knew Him When
Zac was one of the first writers I contracted for the fledgling BloggingStocks (an AOL-owned web site focused on news and analysis of “America’s favorite stocks”), back in 2007. Since then we’ve become friends — well, I felt I knew him well almost immediately; he pestered me via IM to finish the paperwork and the pinging has never stopped since. How to Be Richer, Smarter, and Better-Looking Than Your Parents is his third book; both of the personal finance books he sold to Penguin have become immediate best-sellers and have given him, if not fabulous riches, fabulous riches compared to just about most of those people writing books.
Richer, Smarter and Better-Looking is targeted at 20-somethings like Zac, and though I’m not a 20-something, his statistics feel familiar and his arguments are persuasive. He begins the book by recalling a conversation he had with his dad in high school, where he asks him, “Who do you think thinks about money more? You or Bill Gates?”
The answer is, of course, his dad thinks about money way more. He was defaulting on his mortgage at about the time I met Zac; about the time Zac had started thinking about writing about money.
People Make Bad Decisions About Money Because It Sounds Too Hard to Learn Better
The reason there is so much room in this world to develop as a financial whiz kid is that it sounds too hard to figure out. As Zac learned, his dad and a lot of the parents around him weren’t doing a great job of teaching financial literacy to their kids. (Luckily, he writes, his mom taught him a lot; more on that later.)
I see this a lot, especially among the 20-somethings I know; my little sister’s friends, my babysitters, the young women and men who work in the coffee shops and co-ops and organic groceries around me (I can’t help it, these are the only places I go!). Learning about money seems hard, so it’s skipped in favor of learning about Dungeons & Dragons (my barista this morning) or how to grow every single kind of cruciferous vegetable (the co-op cashier) or philosophies of teaching English as a second language (my babysitter).
As Zac writes, “Managing your financial life is not about spreadsheets and compound interest. It’s about your life. The financial decisions you make can give you freedom or make you a slave.” He goes on to list ways money problems ruin people’s lives:
- High credit card debt is correlated with high anxiety, physical health problems, and increased risk of depression and suicide.
- Graduate students with high debt are more likely to have poor mental health and poor satisfaction with life.
- One poll showed that ulcers and anxiety were three to eight times as likely in those with high debt loads than those with low debt loads.
So Give Us the Lesson Already!
Luckily, he writes, it’s pretty easy not to get into loads of debt, especially as a twenty-something to whom he’s targeting his book. Take a look at all the young people who populate the reality TV shows — who say things like, “If you’re going to consume, why not do it conspicuously?” He writes about their crushing, awful debt (I think there were more foreclosures per capita for Real Housewives stars than even the most blighted neighborhood in Florida or Nevada or one of the other states famous for its terrible real estate market), and points to what one financially ruined star said “it was all props.”
“A house you can’t afford can be a prop,” Zac writes. “Or a car. Or a watch. When you think about it, we spend a lot of money on props — stuff that makes us look like something we’re not.”
“I started the research for this book with one simple question in mind: What should young people do with their money in order to have the best life possible today and for the rest of their life? After a year reading everything from the Bible to a nineteenth-century home-economics book that suggested using earwax as a free replacement for lip balm (seriously), I’m pretty sure I’ve found the answer: You shouldn’t spend it. On Anything. Ever.”
So That’s It: Don’t Spend Money?
Pretty much. Well, don’t spend money on stuff, and don’t spend it on education (at least not if it’s going to crush you with debt), and don’t spend it on cars (at least not a nice, new car), and don’t spend it on anything that could be considered a “prop” — something to make people think you’re rich. Perversely, that will keep you from being rich.
Zac goes on to cover lots of funny and useful topics, like banking (favorite chapter title ever: “The Financial Services Industry and You (Brought to You by the National Center for Domestic Abuse Prevention)”), debt, investing, cars, homes, careers, and financial things to think about when dating and marrying and planning a family. If you’ve read Get Rich Slowly for a long time, you won’t find a lot of new topics there, though you’ll surely find new information — Zac peppers his book with examples of reality TV stars, movie stars, sports stars, his parents, and the people he’s dated.
Worth Reading, Even If You Already Know This Stuff.
When Zac and I chat via IM these days, it’s usually about the crazy financial advice other people are giving. We talk a lot about how other people should spend their money. But we’re us, and sometimes we spend our money unwisely. I will do Zac the favor of not linking to the signed print he wanted to buy to celebrate his appearance on the New York Times bestseller list.
One big piece of advice he has (that I love and have recently added to my repertoire of tricks): don’t watch TV. “One reason we’ve gotten so profligate is that we’ve been exposed for our entire lives to examples of lavish consumption–whether responsible or not,” he writes. “Thanks in part to reality television, especially our favorite Housewives, we’re bombarded with the message that spending equals success. In fact, according to one study, the more television you watch, the more materialistic you tend to become and the more distorted your perception of reality. Consumer researchers Thomas O’Guinn and L. J. Shrum found that the more television people watch, the higher percentage of Americans they think have tennis courts, luxury cars, maids, and swimming pools.”
OK: I do watch a little Netflix, but we try to keep our consumption to medieval shows like Merlin and fanciful animation like Miyazaki’s highly non-materialistic movies. The important thing is to think about how we’re benchmarking ourselves, and how we’re measuring our happiness — and keep reminding ourselves of the very real, many-times-over researched finding that happiness from buying things never lasts (but debt-induced ulcers are forever) and the goodwill and benefits of financial freedom (from debt) are many-faceted and worth so much.
Now I’m Going to Go Dig in the Garden
One of Zac’s ideas in his chapter on credit card debt — and the quest we so often have for high FICO scores — is to, instead of questing for better credit, to get a hobby. My credit is less than stellar for many reasons, but my garden is gorgeous. I love how I can turn $16 in seeds and plants (less than I spent on a rare dinner out with my boys at a kid-friendly restaurant yesterday) into years of bountiful, lush, photo-worthy awesomeness. And food too! What a bonus. I’m going to go dig in that garden right now.
What do you think: Do you believe in the mantra, “don’t spend money ever”? How do you make that happen?
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My husband and I almost NEVER spend any money other than on consumables (groceries). And we eat home-made nearly every night.
On the rare occasion that we do feel we need to spend money (most recently on a pair of bicycles for us both) we figure out exactly what we want and how much we are willing to spend and how often we’ll use the item etc.
Every euro (we are Europeans) we get in and every euro that goes out is micromanaged in this house. I guess that’s what you get when pairing a budget analyst with a tax lawyer.
But we live debt-free (but for our mortgage, which we do not right now want to pay off because we pay MAYBE 1,3% in interest and inflation is higher that that right now!).
Incidentally: we don’t watch tv! Ever. We cancelled our cable subscription last January after having used it only 3 times in 2011. We watch the occasional movie or series on dvd but for the rest we spend our free time reading, studying and playing boardgames or engaging with friends (at our homes!). We exercise and take every opportunity to go out and play in the park with our dog.
Some people around us seem to pity us. But we don’t care, we feel quite rich! We have no debs and money in the bank. When the time comes, retirement won’t be a financial problem for us. And when, thanks to the euro-crisis, our combined income dropped by more than 35%, we shrugged our shoulders and just kept going.
Having no interest in frivolous spending and ‘stuff’ gives us a freedom that we seldom see around us.
(I must say: we do splurge on vacations, we travel about 3 or 4 times a year. The way we live our daily lives enables us to do this without even having to worry over the cost)
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It sounds to me like you have a healthy and rich life. I’m not sure why people would pity you but its their loss.
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I like the idea not to spend money on props– that seems to be keeping a lot of DH’s lower SES relatives down.
However, never spending money sounds foolish. What’s the point of having money?
Not spending money on true investments also sounds foolish. Sure, having huge amounts of education debt is ridiculous (I like Liz Weston’s heuristic of maximum debt = one year average salary of your college major from your college), but education itself is a great investment. You can’t do much with just a high school degree these days, and not everybody is in a situation to get a full scholarship somewhere.
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I agree with the spending money part. Hoarding your money is as foolish as spending all your money on props. Sure you may get well off, but to what end?
You don’t get ahead without taking risks. Sometimes those risks are financial. Taking risks without serious consideration is foolish regardless of the arena.
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If people never spent money on stuff, they couldn’t buy his book could they? Or let me guess – that’s different somehow?
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Maybe they could get it from the library or borrow it from a now-enlightened friend?
I have no issues with people not spending money, but if their lifestyle relies on other people spending and not giving back then I think there’s a problem.
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Jacq, Zac jokes about that a lot, both in the book and in his public appearances. in his NPR interview he says you won’t need to buy the book now he’s told all his secrets
he definitely supports checking the book out from the library!
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Then why bother writing the book?
Just write the book and sell it to only libraries. Make it a business to business good instead of writer to consumer good. Or get a domain and put it on there for all to see for FREE.
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Could not agree more. Let’s face it…everything is about money…everything outside of *time* spent with family and friends that is.
But I think it’s crazy to believe he didn’t want people to buy his book (or pad his bottom line)…that was evident early in the article when JD declined to provide the link to his NY Times best seller dealio.
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I *don’t* believe in the mantra of “dont spend money ever”. Moreover, I think such mantra’s alienate young people from embracing personal finance concerns. Its easy to say, just don’t spend. But who wants to give up everything?
For a lot of people, myself included, it doesnt sound particularly appealing. Moderation? Targeted savings? Priorities? I hope there’s some discussion of these strategies in the book. The not spending money extreme, is really no better than the celebrity alternative. We should all be shooting for somewhere in the middle – a life of thoughtful spending, and careful saving.
Not watching TV? Thats better advice.
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ah! i don’t watch tv either (haven’t owned one as an adult) and i feel that is the single best thing i have done to reduce my consumption of Random Crap, saving money along the way. the second i visit my family and start watching tv i find myself thinking that i need a new kitchen appliance/workout dvd/fancy vacation/etc.
that said, i also find that not having some sort of connection to pop culture can be isolating. this was especially true in my 20s, not so much now in my 30s when all my friends have kids and have less time to kick around in front of the tv. my solution to this is to be more involved in local events, even if it can seem cheesy at first. cheering friends on at sporting events (or participating in them myself), hiking, snow shoeing, meeting up for dog walks, hosting pizza nights, etc. basically trying to spend time with friends in a way that we can actually connect, not spend money (yay!), and not feel like we should be living up to some unrealistic situation. we don’t have pools, but we all know where the free tennis courts are and where to walk your dog off leash.
i love having money. i love having enough to pay the bills, save for goals, AND to have some to go out to eat or support my hobbies. i am not interested in never spending money, just being smart about the whole process.
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Not all tv is the same!
Most of what I watch is on my local public television stations which are splendid, and don’t include advertising.
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There is even advertising on PBS kids shows.
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Just walk down the toy aisle and Target and you’ll see that PBS kids shows ARE an advertisement.
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Given that funding has been cut left and right from public television and radio stations, the increase in ads should be no surprise. Someone has to pay for it.
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I watch a LOT of TV. And yet I spend very little money, in general.
Maybe it makes a difference that I watch everything online, and therefore rarely see commercials. OTOH, product placement is rampant, and it does make a difference when you see TV characters with huge, fancy houses. Even so, I am not much of a consumer.
So everyone is different, and I think people should try to analyze what influences them. I DO find that commercials influence me, whereas the idea of keeping up with the Joneses does not – whether those Joneses are my neighbors or are on TV.
(Also, I’ll add that I think it DOES matter what you are watching. I tend to watch old shows that are quite different from my reality – Battlestar Galactica, Buffy, Community, etc. Maybe it makes a difference if you can’t see yourself in the characters’ lives?
It also probably helps that I live in Japan.)
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Do I believe in the mantra, “Don’t spend money ever?” No. What would be the point of acquiring it? You may as well collect rocks. Then you could have a pile of rocks that you could have forever and ever and not do anything with. Saving money should be about prioritizing the things in life that really matter to you. A better mantra is “Don’t spend money on things that don’t matter to you.”
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Your mantra is the advice I give my kids, word for word. :0)
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The TV thing is definitely right. I have an aunt who watches all that crap and she is the most in debt in our entire family. She always feels like she needs new furniture, car, clothes, nails, … and she feels entitled to it. As though somehow merely being alive means she deserves a convertible and new living room furniture every year. And she pays for it
50+ years old and zero retirement saved. While GRS readers may know Zac’s advice already, many early 20-somethings may not… great idea for a book!
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I watch TV and I don’t have any debt.
What I do have is an education in critical thinking and marketing techniques. I think it might be more realistic to teach people how to think for themselves rather than tell them to avoid all TV, magazines, media, etc.
If people don’t enjoy watching TV, that’s cool too. I don’t see why we have to judge each other. (I mean TV watchers versus non-TV watchers in general.)
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It’s the critical thinking and marketing education that makes the difference. Most people (too many) don’t have that.
I agree there’s a definite correlation between watching t.v. and buying too much “stuff”, not only because it seems normal to consume conspicuously, but because it appears to promise a happier lifestyle. DH watches some t.v. and lots of DVD’s and is immune to modern advertising, but he watched lots of t.v. back in the ’60′s and is subconsciously convinced that the key to a happy family is a Cape or ranch house (popular in that era) and a car because that’s what he saw on the shows back then. He was largely raised in a boarding school and can’t understand it when I tell him not everyone had those things.
Along the same lines, I work at a university with lots of international students, and I tend to be “Exhibit A: The Typical American Wife/Mother” for them. They’re surprised that I don’t bear much resemblance to what they saw on t.v. or in movies. I don’t wear slutty clothes with my boobs hanging out, I don’t drive a Ferrari, I don’t live in a McMansion, and when my teen son stops by the office, he’s respectful and usually does his homework until I’m ready to leave. One student told me when he’s back in Turkey, he often has conversations with friends and family about how different the U.S. actually is from what’s shown on t.v., including that the Typical American Wife/Mother that works in his office comes across as modest as most Turkish women.
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I personally don’t have a problem with TV per se (though I only watch DVDs from the library), but I do have a problem with the stereotypes it perpetuates. As a black American woman, I am constantly told by international students and people visiting from overseas how they are shocked that I don’t dress, look and act like the hip-hip video girls, characters in movies, news and TV shows that always seem to show the worst of the worst.
No, I don’t have 4 kids by 4 different fathers, never been on welfare, never been shot, don’t use drugs, not loud in public, not obese, don’t wear a weave, don’t steal, don’t speak “Ebonics”, and so on.
I personally think those images and stereotypes are more harmful socially than people’s inability to control their spending habits – which can be learned. I guess if you’re constantly on the other end of negative stereotypes, you will have that perspective.
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Carla, I totally agree about media literacy in general, not just on the consumerism front. There are so many things society still considers normal to degrade, like women, homosexuals, people who are mentally ill, people who are overweight and people over a certain age. It’s quite scary how the stigma surrounding certain issues can stop people from getting help.
As an aside, it’s really funny to hear what some Americans think of Canada based on media representations
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I agree about educating yourself regarding marketing. Even though I’ve done that, when I watch TV I have to work harder to not want things. I don’t like it so I’d rather avoid it.
The biggest problem I have with shows is the food they eat. When I see people eating it makes me hungry. If I’m hungry I want junk food because it doesn’t require preparation. This leads to a large mid section. =)
We have an antenna for watching football games. Other than that we don’t use our TV. We just canceled Netflix for the summer. After reading this article and realizing this week we have a lot to keep ourselves entertained I’m thinking of not turning it back on.
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Haha, that’s actually a good point, Beth. TV and non-TV watchers DO both judge eachother quite harshly. Like the other side “just doesn’t get it.” (sorta like politics, huh?) Haha, never thought about that before.
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I don’t watch TV, have watched almost nothing on TV in 20 years. And you know what? I love to shop. A lot.
TV may be a source of consumer cravings, but so are magazines, social media sites, one’s friends, shopping itself, and maybe one’s basic personality . . . any number of things.
Not watching TV doesn’t make you a better person or even necessarily a more frugal person. It just makes you a person who doesn’t watch TV.
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I think it’s about your default setting. You want to switch the default to: Don’t Spend Money, rather than: Do Spend Money. That way you think about every purchase before you make it, instead of afterwards wondering if you should have made it. The only way to be rich is to realize that you don’t have to spend money for…
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While I understand that there is a correlation between watching TV and consumption, what’s the theory behind why? I watch a decent amount of TV and have quite low consumption levels (I think). All our TV is Neflix and Hulu so I almost never watch commercials and I never watch “reality” TV… are those the real triggers?
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I think it’s the idea of “monkey see, monkey do.” If you watch stuff like Sex & the City, it makes you think that shoes that cost hundreds of dollars is something “everyone” buys. If you watch high-end, performance car shows, you think those are the cars “everyone” has, or should have. Even a seemingly innocuous show like House Hunters can have those kinds of effects: I found myself chatting with my husband about our dream house, and it suddenly has granite countertops and all-wood floors. I don’t even *like* granite countertops, but that’s what “everyone” seems to want, so it had slipped into my subconscious.
I think if you can become a conscious spender, you can also become a conscious TV watcher: realize that you’re being marketed to (spotting product placement is a fun game) and try not to let it affect you.
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Yes, I can definitely see how you might subconsciously want to imitate the lifestyle of the characters you are watching even if it isn’t reality TV. My favorite show is The Office, which I’ve noticed is quite low on the lifestyle ladder! Only a couple wealthy minor characters, very few scenes in homes, hardly any fancy gadgets, and surprisingly open discussion about the financial problems of some characters. The other show I’ve been watching recently is Law and Order from the mid-’90s – no trouble there, either!
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Spot-on. The abstract concept of “everybody” and what they do/have has massive destructive potential.
How many girls right now honestly believe their parents are going to hook them up with a brand new S-Class and a private Jay-Z concert for their 16th birthday, because of a show on MTV so vile I won’t even type its name?
I’m sure some people are going to bristle at the “don’t spend money” line; they’ll read it as an extremist maxim, as in “dig your food out of the trash and steal your clothes from drifters,” in that Hyperbolic Internet Style that’s done SO many wonderful things for society, but I think “don’t buy PROPS” is really the crux of the biscuit here. Buy food. Buy necessary clothing. Don’t spend $25,000 on a home theater setup, with the chairs and the popcorn cart.
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Oh, House Hunters is the worst for that! It’s gotten to the point that I turn it off whenever I hear:
a. Kitchen is too “dated” (kitchen was built ten years ago)
b. Granite or stainless steel being described as “must-haves”
c. The phrase “man cave”
d. Someone describing a 2000 sq foot house as “a little tight” for a married couple with a baby.
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You forgot my favorite, the room dedicated to scrapbooking and crafts.
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But that room dedicated to scrapbooking and crafts is what keeps me from watching tv!
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Hah! You forgot the master bath aka “the spa-like retreat”.
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I also forgot to mention when one member of a couple, usually the wife, looks at the huge master closet and says to his/her partner, “But where will YOUR clothes go?” Barf.
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I even had problems with shows on H&G showing low cost home makeovers or giving a free room makeover to someone. Even when they’d get the stuff at garage sales. It was making me jealous of the people for getting new stuff. It was also making me feel dissatisfied with my life and the things I have even though they’re sufficient & I’m happy.
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orrrrrrr maybe it’s our meager income that’s keeping us from spending lots and it has nothing to do with TV or no-TV!
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I apologize for making this comment a bit ranty.
This article and some of the comments are sadly typical of the typical comments found in the sphere of personal finance on the ‘net. The basic assumption is “If (X) is hurting you, stop doing it altogether.” That could be watching TV, or using credit, or simply spending money. It is further supplemented by the “holier than thou” types who love to talk about how they are doing it right and people who are doing it wrong are going to end up destitute.
The problem is that both those attitudes can be unhealthy. Lets take “Just stop doing (X)” first. This is just the flip side of the coin from doing that thing more than is healthy. Stopping your expenditure of money can lead to many missed opportunities: a job that is fulfilling (education), experiencing things outside your comfort zone (travel), a new line of thought (reading), a good laugh (TV), or even just being with others (going out). Don’t get me wrong, I am not saying that you should go out and acquire as much debt as you can for your Ph.D. in Underwater Basketweaving, but a careful consideration of how that spending (now or into the future) will affect your life and how you want to live it.
As for the TV, while too much TV is bad, the problem is not the TV (or internet, or magazine, or book) it is the perception of reality. TV is not reality even when it fits into that genre. It is this simple realization that will set you free, not ignoring what is coming from the ‘tube altogether.
OK, the rant is over. Now with all that said, I do think that a very good point is brought up in this article and may be brought up in the book: People fail to understand PF not because it is hard but because they don’t know where to start or are afraid of doing it wrong. JD has addressed this many times but I think the reinforcement is good.
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The “don’t watch TV” advice seems to be brought up on these blogs a lot. And yet in real life, I know very few people who don’t watch. (Not all of them have cable; some use Netflix/Hulu/etc.) Some are materialistic and some are not. Some are in debt and some are very fiscally responsible. I agree with the sentiment that’s what important is how critically you watch, not whether you watch or not. I do have cable, but these days I mostly watch shows on DVR and fast-forward through the ads. I am not going to apologize for wanting to relax at the end of the day, yet I do sometimes sense a snobbery about TV watching on these blogs.
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I totally agree. I have a TV, with cable, and I watch shows with commercials. Yet somehow, I’m not impoverished on the street clinging to my cable box and withering away. I guess somehow I manage to make decisions about what I do and don’t want, and how I do and don’t want to spend my money, even while ads try to convince me to buy their product.
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heh heh heh…
http://stuffwhitepeoplelike.com/2008/01/26/28-not-having-a-tv/
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That’s great El Nerdo. Like the link says, I think one reason to watch TV is that it gives you something to talk about that isn’t politics or religion. I have found my broad knowledge of television to be very useful in interpersonal relationships and as a way to fill the empty spaces in conversation.
It is sort of a social equalizer, although of course people watch different types of shows. The same person who watches Mad Men probably wouldn’t be caught dead watching Jersey Shore (or if they do, they wouldn’t admit it in public).
And the quality of television has definitely gone up in the past decade or so. My brother still says, “I don’t watch television (said with a derogatory tone) – I watch movies.” But this idea that movies are better quality doesn’t really hold anymore. If anything, I find that certain television shows are better than your average movie.
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heh heh – that was AWESOME!
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Hey! I happen to believe vegetable gardens grant an amazing amount of value — as long as you are willing to put in a little work. I’m willing to bet gardeners as a cohort also have fewer ulcers.
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I like the advice of “don’t spend money, ever.” Several comments have focused on things like what’s the point of having money if you don’t spend it, and how you couldn’t live if you didn’t spend money, but I think they’re missing the point.
No one can follow a rule 100% perfectly; we all fail at times. So if your rule allows any grey area, that leads to more justification and wiggle room, which just leads to more spending. By having an absolute, extreme rule, it forces people to really justify each expense.
Incidentally, my personal mantra is a slight variation on that rule: instead of asking myself why I shouldn’t buy something, I ask myself why I should. I often can’t come up with a valid reason (“I want it” isn’t one) so back on the shelf it goes.
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I love this post! I especially agree with the statement “Don’t watch TV”!! Despite my pathetic financial past, I always felt a certain kind of ambivalence at allowing advertisers into my home. In watching TV shows on netflix (minus the commercials), it is apparent that TV shows have become long stretches of commercials with a little bit of TV show thrown in because I can watch an episode of (fill in the blank) in what seems to be a fairly short space of time. Which means, the rest of that time slot (1 hour) would’ve been filled up with commercials had I been watching the show on cable!! Insane.
I can only speak to the level of influence (huge) that watching TV had on me and my family which is why I shut it down years ago. I don’t want it in my house and I don’t miss it!
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I think don’t spend money ever is a great theory…..but it completely breaks down in the face of reality. Perhaps a better working guideline is spend your money consciously or even only spend money on things that make your life richer and align with your personal goals/beliefs (but even this is flawed…because if I followed it I probably wouldn’t be paying my taxes like I should!)
As for TV – I love a good story – whether it comes through an audio book, book, movie or TV show, so yes I watch TV shows. What I DON’T like is reality TV shows. I don’t understand how we can give so much time and esteem to people who are vapid, rude, egocentric and often times extreme to an unhealthy state (emotionally or physically). I don’t want to be influenced in any way by that ilk, and therefore I abstain from watching it.
My best bet has been to rent my entertainment from the library. It’s free, there are no commercials, and if I end up not liking my picks, I simply return them
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I’m regular GRS reader who just graduated from college on Sunday. My parents gave me this book (along with the ability to attend the college of my choice, debt-free) as a gift.
I read the book cover-to-cover in the span of a few hours and found it very appropriate for audiences in my age range (I’m 22). Sure, some of the information in it seemed old hat, especially because I’ve been reading personal finance blogs for about the past year, but just like Zac writes about, many people in my generation have never thought about money except in terms of what “must-have” item of the moment one can spend it on. Having recent pop culture examples of the negative effects of conspicuous consumption really hit home the point of getting rid of the television (or at least getting rid of the reality TV ideas that everyone spends $10,000 on a wedding dress and regularly gets every sort of salon treatment out there).
I don’t agree with the notion of never spending money on anything, and I don’t think that’s what Zac was writing about, either. He’s much more concerned about the way people spend money, which is often without thinking about what it means for the future. Reading his book confirmed my thoughts on saving and spending-save a lot, but when you do spend money, spend it on things that matter to you, not on things that matter to other people. For me this means contributing as much as my employer will match to my 401(k), saving for a trip to Iceland in a few years, and even starting to save for the house I’d like to buy. As far as spending goes, I choose to forgo the bar scene and instead put a bit more money toward my CSA share, which supports my love of cooking, and toward driving to new spots to go hiking.
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Hey JD!
Do a post on not watching tv! I think it strikes a nerve with a lot of us. I’d love to see your thoughts on this. I gave my tv away a year ago and it’s been a great decision so far. I have far more time for personal endeavors and I’m not fatigued by the media, political coverage, reality show stupidity, etc.
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Really, are you kidding? I can’t even count how many times not watching TV has been written about on this blog. AND every time people like you jump all over the comments with how much smarter, funnier, and simply better they are then everyone else because ‘I don’t watch TV’. So for the record – I watch TV – I watch total mind numbing junk. Because it’s fun, because I had a long day, whatever the reason. It doesn’t make me stupid, it is a ‘waste of time’ but so are a lot of things.
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Oh yes, it does not take long for the tv thing to come up ad-infinitum.
Here’s our little meta-rant on the topic:
http://nicoleandmaggie.wordpress.com/2011/08/16/my-hobbies-are-not-statements-about-your-values/
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Nicole, I read your post, and I have to say this is so true for parenting blogs too. Every time we (the women who run a mama-centric blog with me) bring up (1) TV (2) organic/local/fancy vegetable-based food (3) soda (4) sugar (5) working vs. staying at home with young children we get in these agonized discussions about how judgmental it is of us to mention our preferences. I wish it was more possible to state preferences without being perceived as judgmental, but it seems to be difficult. (though certainly Zac is absolutely intending to be judgmental when he writes these things… but that’s his schtick!)
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Ah yes, we also have some posts on mama forum stuff in our surprisingly lengthy series “my hobbies are not statements about your values”… This one discusses parenting stuff: http://nicoleandmaggie.wordpress.com/2011/09/13/the-persecuted-majority-vs-the-vocal-minority/
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Here’s one of my reasons – because it makes me feel like a good mother! Every so often my husband and I will tune into MTV’s “Sweet 16″. If you think you’re a permissive, overly indulgent parent and feeling a little guilty about it, tune into this program. You’ll walk away feeling like Parent of the Year.
I’m not sure why I enjoy Sister Wives – maybe I like to play armchair psychologist. In any case, I’m glad I have a DVR so I never have to miss it.
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I think there should be more posts about giving up your computer / internet vs the TV.
Being on the internet too much causes strange “keeping up with the other Joneses” tendencies (and possibly depression in some people) by making you focus on being minimalistic, frugal, uber-productive, paleo and/or vegan, possibly earning less because you’re just so passionate… And that’s just from reading zenhabits or lifehacker.
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But… blogging about giving up the internet is too ironic. I think I just saw a news story about some guy who is doing that. (He sends in paper copies of his posts to his editor to blog.)
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I think a better idea is to be more mindful what you read and what you chose to follow on the internet. I don’t think throwing the baby out with the bath water is a good plan either. I made the conscious decision to stop reading Zen Habits back in 2008 when I started to feel that the blog was starting to feel more like a race than anything else.
I think the key is to be mindful.
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Carla – I was being facetious. I haven’t reached the end of the internet yet so won’t be stopping any time soon (although I do take sabbaticals).
Mindfulness and moderation in most things is probably a good modus operandi. Even moderation in your mindfulness. It’s got to be stressful to be thinking about how mindful you’re being all the time.
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Sorry, Jacq. I haven’t yet figured out how to read sarcasm though words at this point. Carry on.
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Refusing to spend money just makes you a miser, which is another way of thinking about money all the time.
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Personally I think the book sounds good, however, I’m more of the save and spend consciously crowd.
I don’t believe in going into extremes and I like TV shows, I have a nice flat screen TV but we usually Netflix, ITunes, Amazon Prime and Hulu Plus everything. We don’t pay a cable package, we don’t even have a local channel package with the cable company.
Anyway I don’t think watching TV shows is evil. I own less than most of my friends and family members. Just because its on TV doesn’t mean that I’ll buy it and it doesn’t mean that its how most people live. TV and even reality shows are fake.
The reason that I don’t have cable TV is because I watch a handful of shows and most of the stuff on cable TV is repeated too often, there are too many commercials and I’m usually not home when my favorite shows are on. I also didn’t want to pay for Tivo.
Anyway watching TV shows doesn’t make you any less of a person.
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It’s possible to learn about money and also about games, cruciferous vegetables, and ESL teaching techniques. The mind can expand; it’s not an either/or situation.
Most adults should be able to watch TV and also keep up with their finances. Maybe even at the same time. Maybe even while chewing gum.
Such low expectations!
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Excellent post, especially regarding education debt. Rather than go into ed debit, work your butt off applying for fellowships and grants.
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“People Make Bad Decisions About Money Because It Sounds Too Hard to Learn Better”
Oh man, how true that is!! I never cease to be amazed at how many people sincerely expect “it to work out for them” without any input from their side. It’s like expecting the DVR to automatically record the right shows…
The fact is good money management is not rocket science. It really isn’t. Us geeks call it pocket science
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“Pocket science” – heh heh heh! I like it and am going to steal it.
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“I see this a lot, especially among the 20-somethings I know; my little sister’s friends, my babysitters, the young women and men who work in the coffee shops and co-ops and organic groceries around me (I can’t help it, these are the only places I go!). Learning about money seems hard, so it’s skipped in favor of learning about Dungeons & Dragons (my barista this morning) or how to grow every single kind of cruciferous vegetable (the co-op cashier) or philosophies of teaching English as a second language (my babysitter).”
I’m curious if you’ve actually talked to these people about money or if you are just stereotyping because they make minimum wage and don’t have a so-called “career”?
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I don’t think sarah is stereotyping here, I believe she had the conversations, but I don’t really care. The whole paragraph is confusing. Like, what do those things have to do with the conversations you were having about money? All those people sound money smart to me. Two have cheap hobbies and one has a second job.
Re the “don’t spend money ever” mantra, I think this is specific advice for your early 20′s. So many new grads get the job (if they’re lucky these days) and say “Wow~ $40,000 a year! I am RICH” and proceed to start racking up the debt. The author is trying to prevent this situation. As with dog training, it is a lot easier to teach a good behavior to a dog (pee outside! Yay!!) than to get them to unlearn a bad one (don’t pee on the carpet! boo…) If he can prevent the bad habits of new grads early on, we will all be in a lot better position when they are ready to start families in 5 or 10 years.
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Kirsten (and Amber), I didn’t mean to stereotype them; these are the people with whom I’ve actually had financial conversations. And they all are very smart and, in my opinion, make mostly good decisions about money. They just think they don’t know enough about their finances and it sounds scary to them (in much the same way that the workings of a car engine is scary to me; I just can’t make my mind wrap around that even though I’m sure it’s pretty straightforward and goodness knows my dad has explained it to me enough times!).
I’m always struck at how frequently people hear that I’m a finance writer and say something to the effect of, wow, I just don’t get money. These are often people whose technical knowledge in another field is stunning to me.
And I’m sorry if that sentence didn’t make sense. I have a naturally confusing style of writing that I sometimes fail to edit out in re-reads. What I meant to say was that people are able to simultaneously be extremely smart and believe they’re not smart about money, and I think that’s easily rectified!
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Thanks for the response Sarah. I understand what you were saying now.
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Zac’s mention of props is spot on.
When we remove what others think from the equation,and focus on what makes up happy, it’s a whole different ball game.
Most of what people do is for props. Whether it’s to impress family, friends , bosses or mate’s. When we remove those expectations, we find a whole lot of stuff we can do away with, both physical and mental.
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I think the idea that most of what we do for is “props” oversimplifies things somewhat. We live in complex logonomic systems of norms and expectations that we can’t always escape.
For instance, I can say I don’t want a diamond engagement ring — the tradition is all due to diamond marketing, after all. That kind of thinking could save a couple thousands of dollars. The consequences of not having a diamond engagement ring aren’t all that harmful.
Not wearing a suit to a job interview is a different story. That’s the norm in my industry, and yes, it’s all about making a good impression. When I don a suit, I’m acknowledging the rules of the game because I want to continue working in said industry. I can’t up and decide to wear jeans and a t-shirt without there being harmful consequences.
I think we have to learn to spot “the rules” and either find ways to get around them or work with them in a budget-minded way.
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“Don’t Spend Money”
I had a thought like this recently discussing with another couple why my wife and I couldn’t think about spending $27,000 on a wedding, because there’s no return on investment.
Then I had an ‘aha’ moment where I realized calling a wedding an investment was kind of absurd.
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Tom, if *I* ever write a personal finance book, it will be about how spending your own money on weddings (especially if it’s debt!) is the worst decision you can make in a relationship — and it’s only just beginning! I will tell this story from personal experience. You’re so right. The “investment” should be in the relationship, not the big party to mark its commencement. If I could go chat with 10-years-ago me, I would totally tell her that.
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Great article!
I do not like to spend money on new things. There is way too much production out there when there already exists everything we need to survive healthfully. My boyfriend and I have a very lovely life in a tiny apartment with a garden we put out back. We live by a river, close to downtown, and ride our bicycles everywhere (given to us used by friends, or bought cheaply from Craigslist). We have dinner at home with friends a few times a week.
My family is perplexed that we live with (what they consider to be) so little– They are always encouraging us to move into a bigger place, get a car, upgrade our [whatever], but ironically, we feel really happy and never fight, while they seem quite unhappy, stressed all the time, and fight regularly.
We do not have television channels but we recently caved and got internet and a subscription to Hulu Plus. Against what the rest of my lifestyle implies, I LOVE TV!!! We recently started watching Lost, and (again, ironically) we DO envy the lives of the characters! On an island, where money is inconsequential, getting exercise and eating fresh meats and produce (though we’d want to avoid the regular killings and kidnappings)… Quite a different envy from Desperate Housewives! I’ve never seen the show, but I did used to watch Sex In The City and constantly made fun of the excessive spending. We don’t get many commercials with Hulu Plus, but when given the option we select Spanish commercials (to work on our Spanish) or the one that has the sexy song… I’m not even sure what the commercial is for…
I’m not totally against spending money. There’s just so much free stuff out there, I don’t see a need for spending much on stuff. It’s like having the option to have this free bag of apples or this $5 bag of identical apples that come in a different bag…
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I know – doesn’t it totally drive you nuts in Lost that Hurley didn’t start shedding the pounds like crazy, a la Survivor or Biggest Loser?? He only has a small supply of food, they have to walk everywhere, it’s like a built-in diet!! Although I admit that I got bored and wandered off after Season 4, so I never did find out if it’s all just in their heads or something…
Also, your life sounds awesome.
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It’s not the TV per se. Its the commercials. I watch Netflix and I will admit that if I happen upon a show that I really like I will watch all of it in a relatively short amount of time. However, I still don’t buy all of that crap. It’s useless. With that being said, I hate reality TV and perfer to stick to science fiction. Dr. Who anyone?
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Dr. Who makes me envy the companion.
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I love Dr. Who, can’t stand reality TV.
I do spend more money because of the show however. As a direct result of watching DW, I have self-published my own (fan & original) fiction, I have bought fan art, I have paid to attend and participate in fan conventions.
And it’s worth every penny. I love this stuff.
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Interesting article, I love the comments about TV both pro and con. I enjoy a little TV when I’m tired and want some entertainment. I think the real danger is in the type of media consumption. Far more harmful to me is actually Facebook…I see where my peers appear to have amazing lives, where if I were to post about my life it would be something like: Just finished cleaning the bathroom — yeah! FB sometimes sucks me back in to see photos, but it makes me feel a little sad when it seems everyone else is going on trips and I’m home trying to sew curtains. So cutting out FB helps free me from the tyranny of want much more then eliminating my time spent watching The Middle. So, I’d suggest media consumption can be dangerous in forms — so recognize your ‘triggers.’
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Big thumbs up! TV is often demonized on PF blogs, but any kind of media can portray a certain lifestyle we want to attain. I scratch my head when some people assume superiority because they read books instead of watch TV — as if books don’t have their own messages.(You should see some of the stuff I review)
Then there’s the issue of our friends marketing to us, as GRS discussed previously
Facebook is a great example of that. I stopped following updates from friends who mostly posted about their parties, home renovations, vacations and stuff they bought. It got to be a bit much. I can dismiss the person on TV saying to buy this or not, but when it’s people you know it’s different.
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Sarah, I too have the Facebook problem. I’ve become “friends” with many of my high school friends over the past few years thanks to a 20th reunion, and I’m often panicky when seeing how often they seem to go to Disneyland, Mexico and Hawaii. I’m probably exaggerating but it seems one of my friends are vacationing tropically at any given moment! (it doesn’t help that one good HS friend is working for her mom’s travel agency and can do this for work
And let’s not start on the “check-ins”; people are forever checking in at restaurants at which I’d love to eat.
These are the times I need to go dig in my garden, and think, “Melissa/Kelly/Jessica probably doesn’t have nearly as bountiful a garden as I do, because she’s spending all her free time in Mazatlan!”
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I bet Melissa/Kelly/Jessica also carry a whole lot more debt than you do. While some people do indeed travel frequently and fund it from savings or a good paycheck, all the people I know who travel more than occasionally either have to as part of their jobs and/or carry credit card debt. Always look beyond the surface…
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I don’t think it’s fair to assume that most people who travel extensively are in debt. I live by one mantra…”live the life you have”. For me, as a divorced, single woman with no kids who has well-paying career and a home I take great pride in making lovely, I take at least one major trip per year (think overseas) and a lot of little trips throughout. My only debt is my mortgage. But since my lifestyle affords it, I do it. I don’t think sharing the details of my excursions on FB is any different than people showing pics of their kids proudest moments. Their posts are the consequences of their choices; my posts are a reflection of mine. I celebrate them as much as I would expect my friends to celebrate me. And I also garden extensively, belong to a local farm/CSA, cook all my meals from scratch, and watch minimal any TV. I’m also really into fashion and interior design. So, I like being a walking “contradiction”, particularly when this site seems to demand that you fall into one extreme or the other when it comes to lifestyle choices.
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So, are you saying you make yourself feel better by convincing yourself that your life is better than theirs because they may not have XYZ? Isn’t that the very thing we get up in arms about when our FB friends is constantly eating at the French Laundry every week and telling the world about it?
If we are truly satisfied with our lives, we wouldn’t need to make the comparisons.
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Carla, no, I don’t tell myself these things because I think my life is better (it very likely isn’t). But I remind myself that I made choices that have made me happy in special ways — the ability to pick radishes and chives and chard fresh out of my garden is one special way! — and those choices others have made that are unlike mine would me trading away many happinesses. (That’s not a word, but you understand.) Were I to have their life and lifestyle many things would be different; including the hours I worked (and I would spend none of this time clarifying my comments on this lovely blog with you all
) and, very likely, the debt I carried.
As to your note about comparisons, I do agree that a truly enlightened person would never compare his or herself against others. And that’s probably what Zac was getting at with his advice on TV. But very few of us have achieved such a highly enlightened state; not me!; and the best I can do right now is to remind myself of what my comparisons mean and how happy I am with what I have.
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Maybe your friends saved up for their vacations. How do you know that they put it on their credit cards? Well unless they told you they put it on their cards.
Growing up my family and I went to Hawaii, California, NYC, etc. We had a lot of fun vacations.
My parents were actually savers, they taught me you can make a good salary, save and spend.
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It may be even more effective to remind yourself that you’re comparing your life to *everyone else’s*, not to one person. So yeah, at any given moment, someone is going to be on vacation! But that doesn’t mean anyone is living it up more than you.
Also, April wrote a post recently exactly about these comparisons, and the “fear of missing out.” http://www.getrichslowly.org/blog/2012/03/15/do-you-suffer-from-fomo/
She included a great quote, one that applies particularly well to the Facebook issue: “…we always envy others, comparing our shadows to their sunlit sides.”
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I am 23 and only truly spend money on food and alcohol (I enjoy going to the bar with friends often — though the $1.25 beers at my local tavern aren’t exactly ruining my retirement plans). My hobbies are either free, or very cheap (such as a visit to the par 3 course by my place — $6!!!) and I certainly partake in the free activities far more than the others.
I don’t have any television other than Netflix, and am currently trying to sell my tv, which will enable me to cancel my Netflix. I completely agree that the media pushes over-consumption and the idea that inanimate objects prove success.
The truly empowering thing is knowing that, while wearing a plain t-shirt and pants, driving a cheap and reliable Nissan Versa, eating simple yet healthy food, and living overall modestly, I probably have more money than the man 10+ years my age I see walking down the street, driving next to me, etc.
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You might have more money than that 33-year-old, but you might not. If I were similarly ageist, I might point out that making unwarranted assumptions about other people seems like a very 23-year-old thing to do.
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Working with an extensive amount of people in their 30′s and 40′s, and knowing their income levels/assets vs. expenses/debt has been proof enough, not to mention all the random tidbits you hear in the news (i.e. high percentages of Americans who have no retirement savings, no emergency fund, huge debts, etc.). While I appreciate you letting me know that I act my age, do not call my short post an “unwarranted assumption,” as I am going off of facts that I am constantly bombarded with.
I was really only trying to point out the fact that many people who seem rich are not, and vice versa, and I apologize for not making that clear. I should not have said I am “probably” richer, only that there is a definite chance — not to say I am rich in any sense. Articulation is not my strong suit.
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Using that logic, should I assume that, like many people in their 20′s, you are burdened with tens of thousands of dollars in student loan debt, unable to find a job, and living with your parents? After all, I am bombarded with news stories that tell me such is often the case.
Many people who seem rich are not, as you state. But many are. In the long run, we should all just try our best to not screw it all up.
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@Jason-You really shouldn’t assume. Reading your post you sounded a bit snobbish.
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“Don’t spend money” is a rule that you won’t follow for very long. You’ll either break the rule or be dead after a month or so. (You could, of course, survive a little longer by mooching off people and/or dumpster diving.)
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It is all about moderation. Don’t spend money on things that you don’t need or that don’t bring you long term happiness.
I’m not going to lie, I spend more than I need to on “props” or “stuff”, but I have no debt, Own my car & condo in full. I know I’m lucky in that sense. We took advantage of the bad real estate market in Florida!
Regarding TV…I watch it, but I use DVR because I can’t stand the commercials. They are annoying, actually they do no want to make me buy stuff. The shows on HGTV do always make you feel like your house isn’t good enough, which is too bad, because they are fun to watch.
The thing that I try to avoid is magazines. Whenever I read a fashion magazine I always feel I need to run out and buy new clothes and make up. I mean that is the whole point of the magazines. They make it so convenient by telling you exactly where to buy the stuff too. If I do end up with a magazine in hand I tell myself to just get ideas, and then shop in my closet to make new outfits out of what I have.
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I have the daytime TV thing solved. I watch reruns of The Waltons, especially the depression years to motivate me and Little House on the Prairie, they are always having to tighten their belts because every year some disaster happens to the crops they were depending on to pay off the tab at the Mercantile.
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Definitely don’t buy props. Buy what you need for the utility. If you can do this you will save a ton of money and get ahead in life. If not, good luck keeping up with the Joneses
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My daughter (28) and son in law (25) are both technical workers. No student debt, they make a great income. They just bought a house. Fantastic! If no one spent money then no one else would have a job.
You shouldn’t be over the top (we used to call it keeping up with the Jones instead of watching ” the Kardashins”). You can have moderate, useful debt AND live to a good retirement. We have our house paid for, several vehicles, and a good nest egg (on one middle salary and one occasional other middle salary). Retirement is early and being enjoyed. It is possible. Spend on what you need and forget the Jones of the world.
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The idea of “never spending money” is quite absurd. The concept of personal finance isn’t to save as much as possible: it’s to find the best way to use your money to make you happy. In that sense, it has very little to do with saving! The reason why saving is discussed so frequently is that it’s the aspect of personal finance that most people tend to neglect.
If one were to “never spend money,” then one could justify living homeless. As long as it’s warm and not a threat to your health, you don’t need an apartment: get a gym membership with a shower. Sleep in a cheap car, etc. You could also justify not having indoor plumbing. It may be cheaper to have an outhouse.
Most people wouldn’t be happy that way, and I’m one of them. Likewise, people like me are willing to spend on certain things we don’t need: movie tickets, beer, a nice watch, etc. I can afford them, I am aware that I don’t need them, and I don’t mind spending the money (time at work) on them. It makes me happier now to take my girlfriend out to a fancy dinner for our anniversary than it would to retire a day earlier.
Lastly, along the same lines, the number one goal of personal finance should be to find a way to make money doing something you love. That way, you won’t mind spending on something you enjoy, because working a few extra hours to make up for it may even be enjoyable. The reason you’d want to save save save is to be able to do what you love with your time. If you’re already getting paid to do that, then you don’t have to worry as much about saving saving saving. Find a job from which you won’t want to retire. If you can’t, then find a good compromise, and save save save.
Sorry for the lengthy/preachy comment
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This is exactly how I plan on living my life. I’m a 20-something year old who this book is geared toward and I must admit that I wish I would have known some of the things at 18 that I know now at 22. I’m a recent college graduate who at the insists of my money mismanaging parents, applied for student loans to pay my way through school. Now that I’m out, I’m stuck. My major was international affairs, but thanks to mountains of student loans I can’t really go anywhere until I get them under control (a few of my loans are unable to be put into forbearance).
Thanks to financial planning, however, I’ve set goals for myself and plan to be debt free in about 3-5 years. I have no credit cards (never want them), no car note ( currently driving a 12 year old that’s not going anywhere), and no bills (thanks to my parents). My money’s split exactly three ways: giving, saving, loan repayment and about a week ago I went a whole three weeks without spending a dime on anything that wasn’t the gas needed to get me to and from work.
I’m in a very blessed situation right now, but if I could do it all over, I would have gone to community college first then commuted to a four year, my last two years of school. After doing all the math, including student fees, my biggest expense in college was housing.
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You can’t “never spend money” but you can be not stupid about it. Responsible spending and aggressive saving can be simultaneously done, regardless of which pay bracket you might be in if you are strict about your approach. It all comes down to your will-power.
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I’m don’t think the issue is “do I spend or not” so much as it is “how much do I spend.”
For example, we all a place to live — but is it a modest home or McMansion? We need clothing — but does it have to be designer labels? Need versus want isn’t a dichotomy: it’s a sliding scale.
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