We all slip away from our frugality every so often, Grownups. John Schneider from Debt Free Guys explains how he and David stay on track with their expenses.
You know when you’re distracted from driving because the kids are causing a ruckus in the back seat or because your friends are blowing up your phone like there’s been a natural disaster—and you look in your rearview mirror to realize you drove through a traffic light?
You wonder, “Was that light green or red?” That’s mindless driving. Mindless spending is very similar.
A Mindless Story
David and I were hanging out at a local sports bar with friends, when someone proposed going from the bar to a dance club—as gay men often do after a few beers. Everyone was in agreement but me. I said to David, “I don’t have anything to wear!” In all honesty, clothing was the last thing I lacked.
Like a spoiled child determined to get candy from the checkout aisle, my mind was made up. David knew this was a problem he needed to overcome if we were to join the other boys for the night. David raced us over to the mall, minutes before it closed.
At the clothing store I pointed to particular items saying, “I want that shirt, those jeans, and those shoes!” Within 15 minutes, I picked out clothes, tried them on, paid for them (with my nearly maxed-out credit card), and we were on our way to the club for hours of dancing.
By the time we left the mall, I had spent more than $500 on clothes. Before the night was over, we spent an additional $300 on gin and tonics, tips, and taxis. Because the night doesn’t end when the clubs close, we skipped work the next day. When all was said and done, we were out $800 and a day of paid leave.
This story wouldn’t be a story if we had the $800 to spend. We didn’t. In fact, we didn’t have the $800 to spend 101 times over. We were already $51,000 in credit card debt and most of that was because of mindless spending.
Now, since we paid off our debt and have had the time to Monday morning quarterback, we know that there are three reasons for mindless spending and we had been guilty of all of them: not planning, not knowing, and not caring.
Most of us spend more time picking out clothes for work or planning a five-year-old’s birthday party than we do on a financial plan. People who wouldn’t drive across town without Googling directions will delay creating a financial plan until they have no other option.
Creating a financial plan for something 40 years away, even 10 years away, feels elusive. If something takes longer than one minute to cook in the microwave, I question its value. We’re an “I want it and I want it now society,” and therein lies the problem.
The best investing is due to time in the market—like, decades of time—not timing the market. The best way to save for a life goal, such as buying a house, paying for college, or living the retirement of your dreams is to set aside a small portion of every paycheck, not hoping on that big windfall from your uncle who’s usually drunk at Thanksgiving dinner.
If knowing is half the battle, we were 100 percent losing. We weren’t taught personal finance in school, and talking about money at home was taboo.
All of a sudden, we were thrust into college with the pressure of choosing a major that would guarantee our ticket into the middle class (at worst) and become the next Silicon Valley sovereign (at best). Who had time for math?
Still, who has time for math? Learning about finance, though logical, seems impractical on top of managing our careers, relationships, and rearing our children. We were going through life as though that ship had sailed, until we realized our house isn’t a retirement plan, states can’t fund their lotteries, and we can’t actually count on an inheritance from that drunken uncle.
Apathy is the Titanic of mindless spending. Lack of caring happens when we know that our finances are a mess and consciously do nothing about it. Our story above is a prime example of not caring.
By that night that we went shopping and clubbing (and dropped more than $800), we had spent a combined total of 21 years in financial services helping people with their money. We absolutely knew we couldn’t afford $800 on unnecessary clothes and an unplanned night of highballing. Our sorry rationale was that we were already $50,000 in debt. What’s another grand? We deserved it, right? Never mind the fact that we hadn’t earned it.
If energy flows where attention goes, we were the Bragg curve of personal finance. Eventually, we had to manage our finances and not let them manage us. Our decision to finally care about our finances was due to accepting that we weren’t happy with where we were headed. We didn’t need Einstein to tell us that doing something over and over and expecting a different result was insane—we were living proof.
For us, the best way to overcome mindless spending is exercising mindfulness. We do this by absorbing new media and keeping our financial goals at the forefront of our minds. This includes reading personal finance blogs written by people documenting their own trials and tribulation with money. We listen to awesome podcasts and watch great videocasts by motivational speakers and finance enthusiasts with a passion for helping others with money. Both are great alternatives to listening to music at the gym.
These tools have also helped us remain positive. We’ve made more financial progress than ever by focusing on the positive and the possible.
We feel like we’re on the right financial track now and that gives us peace of mind. Honestly, that drunken uncle was reliably unreliable anyway.
Read more stories from John Schneider and David Auten at DebtFreeGuys.com.