Hello YNABers. My name is Jesse Mecham and this is podcast number 72 for You Need A Budget, where we teach you four rules to help you stop living pay check to pay check, get out of debt and save more money.
Today I’ve had the thought, a wish… I wish… You know when you play video games? I have to confess that I haven’t played video games for a long time, but back in the day when you were fighting an opponent they’d have a little bar that would go down as you would win the fight. You’d take away their power or their health, whatever it is, and the bar would maybe be green at first and then as you’re beating your opponent it would go yellow and get smaller and smaller, and then go red and then be empty. And the bar was always hovering over your opponent, so if you had a group of opponents you could see which of those monsters or whatever were healthy and which were hurting.
And we kind of have that today, but it gives us wrong information. And the thing that people use for those financial health meters is cars and houses. Cars more than houses because you’re driving around, you’re seeing people in their cars and you’re making value judgments. And you’re able to look at a person’s car and say, “Oh, that person makes money. That person’s healthy financially,” or, “That person just cut me off,” or, “Man, that person doesn’t make a lot of money.” Maybe they’re driving a really old car or whatever. But you make judgments like that.
You do the same thing when you see where someone lives. You make judgments. And you do the same thing when you see what people wear. You think you don’t, but you do. And a lot of times you’ll try not to judge people – and I think that’s a good ambition – where you’ll say, “Well, I don’t want to judge a book by its cover. I don’t want to make assumptions,” because you feel bad about it for whatever reason. But what’s tough is the fact that we make these judgments all the time on auto-pilot, probably a lot subconsciously. And we end up being misled because people can look healthy – the monster can look like it has a lot of strength and power and it doesn’t have any. And when we use externalities like a car that’s being driven, clothes being worn, house being lived in, when we use to gauge where we’re at, that’s where we get seeds of discontent sown in there. And those grow and pretty soon you’re feeling unsatisfied with your current situation.
These comparisons happen all the time. There are a few ways to combat them. One is education. Read ‘The Millionaire Next Door’ so you can learn what people that are genuinely financially well off do as far as consumption goes. The other thing you can do is examine your friends, your circle of friends, and ask yourself if you are trying to keep up with your friends. And some people have very honest friends – and the relationship dictates how honest you are with your finances – where everyone’s very open and they talk about it and what they’re struggling with, what they’re doing poorly with, what they’re really acing. And then you have other friends or acquaintances where you don’t talk about money – maybe it’s a little taboo. Either way you go about it with your friends, whether it’s very open or very closed, you have to recognize that their wants, their consumption cannot dictate yours.
I was just camping over the weekend and we went out to do this survival stuff. And you realize quickly that all you really care about is shelter, food, clothing to keep you away from the elements, and everything else just kind of falls away. I was reading the book ‘Hatchet’ to my kids, and in the book there’s a 13 year old boy, a plane crash, he’s the only survivor, he has to live off the land in some Canadian forest out in the middle of nowhere, and he’s successful. He ends up finding some food and just feeling like it’s Christmas times a thousand. He’s just feeling overwhelmed. And his needs were all just brought back down to bare basics. And then from that point his contentment was just totally rewired.
I wonder if sometimes we couldn’t do something where we can kind of rewire ourselves. Maybe we do a spending fast where we just go insanely, insanely tight for a month. Added benefit – you’d probably get to your buffer or darn close following Rule Four. But do something where you just say, “We will not spend any money for two weeks.” Automatic bills, maybe make an exception, make sure all that’s done on that. But just say, “We will spend nothing.” See what happens. Or do a purge of your house where you’re saying, “Okay, we’re going to get rid of all this superfluous stuff. Everything that just is kind of dragging us down.” And we’ve talked about this on the podcast before with Claire. But getting rid of all this stuff, purging, feeling like you’re dialing it back to where you’re very content.
I told Julie – this is hilarious because I want a camper, so I actually want something – but I want to camp instead of going on other vacations because I want to kind of get back to some basics with the kids and discover other ways of entertaining, other ways of having fun, other recreational activities that don’t involve spending as much. And we don’t spend a lot, and we always save for it and enjoy the benefits of Rule Two in doing that. But I just thought, “Man, could we not kind of discover some more minimalist approaches to family recreational activities?”
All this being said, I just want you to be aware of what is influencing you and your desires. I want you to be aware of where potential discontent comes from, and I want you to be proactive in removing those things that cause that discontent with your stuff. So whether it’s a purge or a spending fast, or just a really introspective evaluation, any of that can work in having you realize, “Okay, this doesn’t define who I am, but who am I? And what will make me content? What would make me truly happy?”
One more point of education that you could look to is to read the book by Joe Dominguez – and I can’t remember his co-author, I apologize – ‘Your Money or Your Life’. An excellent book. A little bit dated on the investment side – they may have come out with a new edition that I’m yet to pick up. An excellent book on helping you rewire and look for what would truly make you content. Even happy. And you’ll be surprised how little money has to do with that.
So, until next time, follow YNAB’s four rules and you will win financially. You have not budgeted like this.