Potential needs versus actual needs: Re-writing my financial blueprint

Last week, I was a guest on the new Fire Below Zero podcast. The interview was fun. (It'll probably be several weeks before the episode airs, though.)

Toward the end of our conversation, the hosts asked a question that my mind keeps returning to: “What's something you spend money on that other people might question?”

At the time, I had two answers:

  • On the business side of things, I spend lavishly on gear. I buy top-of-the-line Apple computers, then pimp them out with as much memory and storage as possible. I recently bought some expensive audio and video equipment to help with the GRS YouTube channel. I pay a lot for this gear, but I don't regret it.
  • In my personal life, I have season tickets to the Portland Timbers, our local pro soccer team. These tickets cost $1050 each this year (and I have two of them), or about $62 per game. The price increases to $1150 each next year (or about $67 per game). This might seem exorbitant to some people — especially when you consider costs for parking, food, etc. — but I'm fine with it. I get a lot of pleasure from these games.

This morning, my mind drifted back to this question again. It occurred to me that it doesn't bother me that I spend on either of these things, and I doubt that it would bother other people either. These are deliberate expenses. They're purchases I make mindfully and that bring me both joy and satisfaction. This is how money should be spent.

If I were to answer the question today (now that I've had a week to think about it), I'd say that my biggest spending problem is buying things that I might want to have in the future — but for which I have no use in the moment.

Let me explain what I mean.

My Scarcity Mindset

Earlier this year, I wrote about the abundance mindset and its evil twin, the scarcity mindset. With a scarcity mindset, you believe that everything is limited. With an abundance mindset, you believe there's plenty for everyone.

A scarcity mindset can manifest in many ways. Sometimes it leads people to be jealous and spiteful, to be resentful of others. Sometimes it makes people afraid of the future, makes them feel like they'll never have enough. For people like me, however, a scarcity mindset leads us to want instant gratification. Deep in my money blueprint, there's something that makes me afraid of missing out. As a result, I want things now now now!

My desire to buy and have things now is a deeply-ingrained money script that overrides my rational brain.

Here's how I operate: If I discover a book or a song or a game or a movie that looks interesting, I buy it. If it's something that I think I'll want to read or hear or play or watch in the future, I pick it up now, even if I'm nowhere near ready to read or hear or play or watch it.

Earlier this year, for instance, I decided I wanted to read all of the James Bond books in order. There aren't many (and it's easy to find cheap used paperback copies), so I bought all fourteen of them at once. I plowed through the first six books, then slowly read three more. My interest waned with the quality of the novels. It's now been several weeks since I last picked up The Spy Who Loved Me, and I'm skeptical I'll ever finish it (or the other four books in the series). But I own all fourteen because I bought the entire series at once.

James Bond Books

I could also use the Alfred Hitchcock films as an example. A couple of years ago, iTunes had a $50 bundle containing maybe a dozen Hitchcock films. What a bargain! I bought it. Since then, I think I've watched North by Northwest, Rear Window, and Vertigo. I'm not sure when I'll watch the other nine movies from the bundle. A bargain isn't a bargain if you don't use it, right? While these twelve films cost me about $4 each, if you apply that $50 to the three films I've actually watched, my average cost is over $16 per picture. That's not such a bargain.

These are minor examples, I know, but I feel like I've spent my entire life buying things to fill potential needs. In the olden days, this led me deep into debt, which sometimes made it tough to meet actual needs. Nowadays, pursuing potential tends to make my life cluttered and chaotic.

Potential Needs

I'm nearly fifty now. In my thirty years as an adult, my scarcity mindset has led me to purchase a lot of things that have gone unused. The potential needs remained potential. They never materialized.

Around the time I started Get Rich Slowly in 2006, my personal library had grown to over 3000 books, most of which I'd never read. Why did I own 3000 books? Part of it is because I love books, yes, but a larger reason was that I thought I might want (or need) each of those books at some point.

  • “I need a dozen books about astronomy because at some point I might want to spend time studying the sky.”
  • “I need a small library of books about woodworking because I want to learn woodworking someday. Besides, what if I need to build a table?”
  • “I need a complete collection of Shakespeare's plays because every educated person should have read them all. Not sure when I'm going to read them, but I know I should.”

Eventually, I recognized the folly of of my ways. I purged 80% of my personal library. I still own several hundred books, but today I have a reason for owning most of them. I have an active reference library for subjects I deal with every day — personal finance, personal development, etc. — and have (mostly) eliminated the books I was keeping to solve potential future problems.

It's not just books I've bought to fill potential needs. I built a collection of 7500 comic books that I barely read. I owned dozens of board games that I never played (but might want to someday). I had a huge wardrobe of clothes, many of which had been worn only once or twice.

During my divorce, I purged a lot of stuff from my life. As I did, I was amazed and how many things I'd purchased in the past not because I needed them, but because I thought I might need them in the future: Voice recorders! Power tools! Yard tools! Travel gear! All sorts of gadgets and gizmos!

One of the core parts of my financial blueprint has always been this faulty notion: “If you might need it someday, then buy it today.”

Changing My Mind

Fortunately, I'm making progress. It's slow progress but it's progress.

Living with Kim for the past six years has helped. While Kris wasn't necessarily a spendthrift (just the opposite, in fact), she and I had similar tendencies to buy things “just in case”. (For Kris, this meant buying tons of kitchen gadgets and food-prep items.) This isn't in Kim's DNA. It's not a part of her money blueprint. She doesn't buy something unless she has an immediate need for it.

Our RV trip was eye-opening too. Living in so little space, it just wasn't possible to carry a lot of contingency items. When a problem arose, Kim and I dealt with it in the moment. There was no room to carry anything for potential needs.

My progress is especially evident with big, expensive stuff.

Longer ago, I felt like part of being a responsible homeowner was having a workshop filled with high-quality tools — even if I rarely (or never) used them! It was easy for me to rationalize owning a $500 compound miter saw because I might want to use it someday.

Nowadays, I only buy a tool if I have an immediate need for it and I believe it's likely I'll need it again in the future.

A new hedge trimmer? That's a no-brainer. I bought one in April because I needed it to tame our ivy, and I'll need it again every spring and autumn that we live here in our country cottage. But when I needed a compound miter saw to cut baseboard molding in June? I rented instead of buying because I don't anticipate needing one again for a long, long time.

Re-Writing My Financial Blueprint

Don't get me wrong. I'm not saying it's bad to want things or to buy new things when you need them. What I'm questioning in myself is my compulsion to buy things before I'm ready to use them. I'm questioning my tendency to accumulate things because I might want to use them or I might need them someday.

What if I instead gave myself permission to buy whatever I need and/or want — but only if I'm going to use it right away? I'm sure I'd still acquire a lot of books, comics, movies, games, and power tools, but I suspect I wouldn't feel nearly as guilty. (Plus, I'd save a ton of money and my life would be less cluttered!)

What if, in the future, I lived by these guidelines?

  • If I want to watch a movie, and I'm going to watch it right now, then I give myself permission to buy it.
  • If I want to read a book, and I'm going to read it right now, then I give myself permission to buy it.
  • If I want to play a game, and I'm going to play it right now, then I give myself permission to buy it.
  • If I need a tool for a job, and I'm going to use it right now, then I give myself permission to buy it.
  • And so on.

What if, in the future, I changed the core question I've been asking myself?

In the past, that question has been, “Do I want this?” If the answer was yes, then I bought it. In the future, the question should be, “Will I use this right now?” If the answer is yes, then I can give myself permission to consider the purchase. But if the answer is no, I won't use it immediately, I need to learn to wait.

The rational part of my brain thinks this makes a lot of sense. Deeper inside, where my money blueprint resides, I can feel the scarcity mindset already starting to panic…

More about...Psychology

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J
J
1 year ago

Funny, the two things you noted you’ve spent money on that others may question are nearly identical to mine: 1) my day job is video production but I’m saving to start a side business which requires investment in quality video/audio equipment and 2) I went in on season membership for LAFC (split it with a friend at least) and will be renewing again next year.

Melissa
Melissa
1 year ago
Reply to  J

Just here to say “Yay!” for fellow MLS STHs! I have season tickets for DC United, and even though the team is pretty consistently crappy, I really enjoy going to games with my friends.

Kiryn Silverwing
Kiryn Silverwing
1 year ago

I had to develop this mindset myself with my video game collection. I’d read articles about games, think about how much fun they sounded, and put them on my wishlist. They’d inevitably go on sale for 60% off at some point and I’d think “oh, I wanted to play that someday. I should buy it now so I’ll save money.” Or the game would be part of a Humble Bundle where I’d get one game I’d heard of plus a bunch of others if I spent $10-15. I now have 136 games in my library, and the vast majority of… Read more »

infmom
infmom
1 year ago

Why didn’t you get the James Bond books from the public library?

I read at least 100 books (or more, I don’t keep count) per year. Almost all of them come from the library. Once in a while I find I like a book enough to want to buy it, but usually once through is enough and back to the library it goes.

Kathy Globeck
Kathy Globeck
1 year ago
Reply to  J.D. Roth

Just FYI, wherebI live you can rent books, magazines, and movies from the public library. Once you set it up it is not hard at all! And if a book I want is not online, they will order it for me. Love my library!

Frogdancer Jones
Frogdancer Jones
1 year ago
Reply to  J.D. Roth

This is why I’ve fallen in love with kindle books. I use the free app on my iPad and I borrow kindle books from my library without ever leaving home to actually go there. No clutter, no fuss and it’s free.
Plus, if I actually want to buy a book, the kindle version is (usually) far cheaper than the physical version.
I thought I’d hate reading electronically, but it turns out that I quite like it. Maybe it’s worth giving it a go?

Accidental FIRE
Accidental FIRE
1 year ago

I’m questioning my tendency to accumulate things because I might want to use them or I might need them someday. I’m constantly fighting that as well. I posted about my parents, both born in 1929, that gave me the depression-era mindset of “i might need that”. It’s a constant battle. As for books, wow, 3000. I have several hundred, but have read probably 90% of them. My unread shelf is bigger than I’d like, but I’m working on it. Of course something new always pops on my radar and keeps it permanently accumulating, although I usually try to get books… Read more »

Jaime
Jaime
1 year ago

I struggled with this too and then I realized, “Stuff will always be there to buy, no need to rush to buy it now…” and companies are always figuring out how to make stuff faster, better, etc., so I figure I can get stuff later on. =)

bogart
bogart
1 year ago

I run into this problem also, particularly when I see something that’s a “bargain.” Occasionally such finds have brought me joy but often … not. My current system is that if I see something I want to get, I only let myself get it if I knew I wanted to get it (one of whatever it is) before I saw it. So if I’d been thinking, “Gee, I really need a new pair of running shoes” because my old ones are wearing out, then it’s OK to shop for running shoes or buy a pair when I find some. But… Read more »

Mr RIP
Mr RIP
1 year ago

No no no J.D. don’t touch my books!
I agree with the whole philosophy, but books need to be accumulated in amounts vastly greater than what you could ever read in your life.

Do you know about the concept of “Anti Library”, first introduced by Italian writer and Nobel Prize winner Umberto Eco? Ryan Holiday mentioned it too in several blog posts.

Unread books are there to remember you what you know you don’t know.

Luke
Luke
1 year ago

Wow. This one hit very close to home… Damn home gym….

Thanks for always keeping this relevant and in perspective.

daniella flores
daniella flores
1 year ago

This is great advice! Buying something that I need right now is much more effective than buying something I might use a month from now, misplace it, then never end up using it.

Dan Blakely
Dan Blakely
1 year ago

Great post J.D. – As I reflected on my own struggles to acquisition fever, I took a step back and really justed asked why I bought certain things. In my experience, the problem with acquiring a lot of excess things is that it does one major thing mentally… it makes you feel like you have to use or do it someday so it creates a mental “project” in your mind. It could be as simple as buying some books to read or buying some bonsai tools to start doing bonsai, etc… You get enough of these maybe, someday projects in… Read more »

JanBo
JanBo
1 year ago

Our path has lead us to do much the same. I am addicted to travel gear. The last trip we took I gave away things as they did not fit or were not good for what I needed. I left notes in shoes, bags and such to the housekeepers. I indicated that they were gently used and theirs if they wanted them. I left books in the airport. Getting rid of it is important to me (I don’t do Goodwill after seeing so much of the US junk in Asia). Not replacing it is equally important now. We spent some… Read more »

Phylliss
Phylliss
1 year ago

This post resonated with me so strongly that I am leaving my first reply on your blog although I am a regular reader. Lots to learn and apply in my life.

Thanks for sharing

Kelsey @ On My Way to Happiness
Kelsey @ On My Way to Happiness
1 year ago

I used to do this with books too! Now when I come across a book I want to read, I just write it down on a super long list of books I keep on my phone. When I actually feel like reading the book right then, I just check on my list and pick up the next one. 🙂

Cindi
Cindi
1 year ago

I used to collect cook books but I can get any great recipe I want now, for free, off the internet. So, I donated most of my cookbooks and keep an iPad in the Kitchen instead. Then I realized that most of my text books were just taking up valuable space and got rid of them. You don’t have to leave the comfort of your home to get to a library anymore. It’s 2018 and most libraries can lend out eBooks. Have you tried that yet? You can rent them online and read them that way also, since you have… Read more »

MK@Mompowered Life
1 year ago

Just the other day I left my first comment about how my family had optimized our spending. But we aren’t perfect. The areas of spending that others might question are fitness and groceries. I’m a health junkie and if I need incentive to workout, I definitely believe in paying for a gym membership + studio yoga classes. After four years I’m considering nixing the gym membership to workout from home, but I can’t give up the once a week studio yoga. It is unbelievably therapeutic both physically and mentally for me. The other area I struggle with is groceries. I… Read more »

S.G.
S.G.
1 year ago

Some expenses are like that. I too try to economize and find groceries in my way. But when I added up my husband’s “must have daily” list I realized that my goal was unrealistic without a lifestyle change. It wasn’t worth it.

People talk about work/life balance, but around here it’s important to maintain a spending/life balance. If you’re managing to save money then don’t beat yourself up over groceries or whatever your spending category is. Just work around those luxuries.

Cody | FIRE Below Zero
Cody | FIRE Below Zero
1 year ago

Wow, the host of that podcast sounds so smart and amazing 😉

…thanks again for coming on JD.

Awesome post. I think I operate in a similar manner. I’m what Brad Barrett calls a “valuist”. If it makes you happy (and is reasonable) then buy it!

See you in a week.

Peter R Payne
Peter R Payne
1 year ago

But a man isn’t a man if he doesn’t have a spare trickle charger in the garage.

Mid America Mom
Mid America Mom
1 year ago

“What’s something you spend money on that other people might question?” Well in my case … what’s something you do NOT spend money on that other people might question. The act of replacing an existing item with a newer/better one is hard. Right now I have a pair of white gym shoes on. They are probably 5 years old. The soles are ok and no toes poking out BUT they are now dingy and the “leather” has cracked so my feet get wet when it rains. I know I should replace them but I hear my depression baby grandmother in… Read more »

Katelyn
Katelyn
1 year ago

The category of things I spend money on that some would question is anything health related, including a gym membership and “equipment” like shoes, organic produce, and a monthly massage for stress management. Most athletic shoes have AT MOST 500 miles in them before the support has broken down to a point where wearing them risks injury. In fact, most running shoes break have a lifespan of 350 miles. Assuming you’re using them near daily to hit a 10k step goal, you probably hit the 500 miles 4.5 years ago. In this case, replacing them isn’t in response to the… Read more »

lmoot
lmoot
1 year ago
Reply to  Katelyn

Exactly. I do long distance hiking and have to replace my shoes every year (I buy when there is a good sale). The old shoes get re-purposed, and I have a constant cycle of three or 4. The newest shoes are for long distance hikes, Next newest I save for hikes under 10 miles… It’s not enough hiking to create fatigue or injury if I wear them, and it saves miles on the new shoes for longer hikes. As long as they are somewhat presentable, the third oldest pair gets used at work. I work part time outdoors, but don’t… Read more »

LPK9
LPK9
1 year ago

I have book loving parents who have thousands of books. I used to accept that it was impossible to have too many books but I finally realized that is not true. I have gotten rid of hundreds of books in the last few years. And we still own hundreds because I am a homeschooling mother of nine children. So yeah. There’s that. As for groceries, I don’t want to talk about it.

Millionaire Dojo
Millionaire Dojo
1 year ago

I was in a similar situation as you except, I tend to buy things that I need in the present but only for a temporary amount of time. This resulted in having a lot of things sitting around that I don’t use anymore. A few months ago I started selling virtually anything I own that hasn’t been used in a while on eBay. I also started buying things to resell on eBay for some extra money. So far I’ve averaged an extra $500+ a month for only a few hours of work and I get to satisfy shopping urges by… Read more »

millionaire Dojo
millionaire Dojo
1 year ago
Reply to  J.D. Roth

Yeah, I’ve gained a lot of space in my small 1200SF house so that’s another bonus of getting rid of things!

Peg
Peg
1 year ago

I, too, spend a chunk of change on Macs. Latest is a MacBook Pro, 15-inch screen, i9 processor, 512 SSD, 16G ram. It’s zippy. It will be kept for years and years.

Fearless Squirrel
Fearless Squirrel
1 year ago

This is 100% me. I have a steam library of over 200 games and I’ve played about 6 of them. I also have a problem with the related issue: “If it’s worth buying, it’s worth spending enough to get a good one”. I develop interest in a new hobby like Tennis, then Instead of borrowing a racket, buying used or getting a cheap one from Walmart I will buy the nicest racket within my budget. Sometimes I’ll use it a lot, but mostly it gets used once or twice and then forgotten until I give it away or sell it… Read more »

Douglas J Barker
Douglas J Barker
1 year ago

What you spend on “unnecessary expenses” is the difference between surviving and purposeful saving. Why would anyone be incentivized by deferred gratification if it never arrives?

ScoreShuttle
ScoreShuttle
1 year ago

I wonder why we all to that – piling up books for that “perfect moment” when we might want to read all those books we saved for years and years. Although it’s extremely educating to read, it doesn’t make sense to pile up just for this “maybe” moment.

Thanks for a great read!

GreenDollarBills
GreenDollarBills
1 year ago

Thanks JD. Seems like a good philosophy to live by: only make the purchase if there is an immediate need/want and you’re actually going to do something with the good or service immediately

JanBo
JanBo
1 year ago

Five more days!
I have enjoyed that your “extras” have continued to change. The article on Traditional IRA giving was excellent and will be shared with my pastor this week. I have a number of people who are over 70 donating to our food bank. This may help encourage more of them to give without paying taxes on the money.

Joe
Joe
1 year ago

That’s a good development. I hope you can stick with it. Changing your mindset isn’t easy.
For me, I usually wait until I really need something to buy it. It works pretty well for us. When we had a baby, lots of people said buy this and buy that. It turned out we didn’t need most of those things. Just buy it when you need it, not before. You rarely need something right away.

Jake Jones
Jake Jones
1 year ago

Great article, J.D. The thoughts here remind me a lot of a book I just read, “Essentialism” and also of minimalism ideas that have gained popularity lately.

It makes a lot of sense to be intentional about the things you are spending money on. Especially, if you love your gadgets… like me. I don’t buy a lot of stuff I don’t need… just expensive stuff I don’t need. 🙂

Ani
Ani
1 year ago

Hi J.D Roth. I’m here from the Afford Anything Podcast. I just listened to a 2016 episode where you were a guest. So far I really like your writing. I think I will stick around for a while! This post really hit home for me. I bought a particular video game about 2 months ago, and I still have not played it! In fact, I have about 13 video games of the same series, and there are at least 3 that I have yet to play, and it has been YEARS since I purchased 2 out of the 3 games!… Read more »

Mercy
Mercy
1 year ago

When we moved to a condo half the size of our house, we evaluated all the gadgets we only used occasionally (eg: party size crock pot and large electric skillet; car repair stuff like ramps, jacks). We gave things away and made arrangements with friends (not always the ones I gave things to) to borrow as needed. I also lend things to friends who need things occasionally (eg: juicer during watermelon season). It’s worked well so far-does take some planning and helps that we have keys to each others’ homes.

Sandi Kay
Sandi Kay
1 year ago

The “buy now” impulse is strong. One way I’ve dealt with it (both for stuff and for books) is to keep Wishlists. Amazon has a plugin for your browser that allows you to add something from a non-Amazon site to your Wishlist; I use it to keep track of those things, which makes it easier for my husband to figure out birthday and Christmas. When I come across books I might like, I add it to my Notes section on my phone. I have one for Authors/Mysteries, and one for Authors/SF. This technique helps a lot! It assuages my anxiety… Read more »

Shelly Baur
Shelly Baur
1 year ago

I am so with you on the books. Due to a pending move and life change with a divorce, I went into Swedish death cleaning mode and purged 12 boxes of German books (to the German school librarian), 15 boxes and 2 bags of magazines to Half Price, and 8 boxes of calligraphy books, magazines, and paper to my ongoing calligraphy class and teacher. It was freeing! That lead me to reassess the other stuff in the house, and I realized it was all tied to memories of my 34 years with my spouse to not be. And I found… Read more »

Shelly Baur
Shelly Baur
1 year ago

Doh! I forgot to add that my 2019 resolution was to not buy ANY books including taking from the free box at the German language school. My one exception might be a math workbook for my kid, which is kind of a grey area and negligible money.

Shelly again

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