There are a hundred different ways to save a couple of dollars. There are even more ways to invest a couple dollars. I read a lot of them, myself. Every day, I’m learning that there are a myriad of ways to save or invest my hard earned money.
But it makes me wonder. Why do we read and digest so much information regarding the best way to use our money?
One of my friends thinks it’s silly I spend so much time reading and learning. “It’s simple,” he told me. “All you have to do is spend less money than you make. It’s just math.”
That stuck with me.
If my friend is right, and it’s a case of simple math, then why is there credit card debt at all?
I think it’s more than that. We know how to add and subtract, so it must be something else.
Then, it hit me. It’s marketing. And companies do a lot better than people who are encouraging us to save.
Spending Money is Sexy
Look at all the commercials. They all exist to get you to spend your money. And when you don’t have it, credit cards make it really easy to borrow from your future (hopefully richer) self. If you don’t have Joneses of your own, turn on the TV and look at the car commercials. They’ll give you a Jones of your own.
Enough of our peers buy into the sex appeal of spending money, that you’d have to be superhuman (or antisocial, in the case of my friend) not to notice. You get asked to go shopping with a girlfriend, or you hear how your coworker just bought a new gadget. So you think, “oh, my old gadget is stupid. I’ll have to get a new gadget, too.”
Saving Money is Not Sexy
Maybe Sexy? Money PJ’s!
Not at all. In fact, nobody on the TV talks about it — encouraging people to save money doesn’t help anyone other than the person saving money, so why would that be encouraged? In fact, the powers that be measure spending in order to gauge the health of the economy. You hear things like, “spending is up three quarters of a percent,” and you never, ever, hear, “savings are up for the third quarter in a row,” so even the economists among us don’t count savings at all.
You have to take it upon yourself to save. And that’s bold. And really stinking hard, sometimes! To swim against the current is really challenging. Our peers continually upgrade their lifestyles, and it’s really heard not to want to keep up. But we have to save. Saving our money, regardless of how much we earn, is key to getting ahead and making something out of our lives.
Strive to be Unsexy – or Redefine Sexy for You
When you have the urge to spend money, ask yourself why you want to do that. When you get a promotion, ask yourself why you are all of a sudden thinking about upgrading your car.
Remember those Joneses? They are likely to be up to their eyeballs in debt. They’ve filled their 3000+ square foot home (which they likely own less than 5% of!), and they may even be using credit to go on vacation.
Six Ways to ChangeYour Mindset:
- Educate Yourself: Read financial blogs that challenge the status quo. If you’re reading this post, you can already pat yourself on the back.
- Get new Joneses: Compare against a different peer group. Follow these bloggers for a start.
- Focus on What Matters: Read about minimalism and simplicity, and strive for that. I have found that there is a lot of peace in eliminating clutter — my house is cleaner, I need less space, and switching to having more space than stuff (rather than the other way around) has really helped me reevaluate the important things. Zen Habits is a great place to start.
- Automate: Automate as much as possible. Max out your 401K if you are lucky enough to have one. Max out your IRA (my vote is traditional). $458 a month for 12 months will get you to the limit for 2013.
- Trick Yourself: This is my favorite tip. If your bank account is small, then you act more frugally. Keep it small and make a game of it. Open up a savings account and start adding x dollars a month to it. Your x will vary. Do not add this account to your financial tracking software of choice. Out of sight, out of mind. Don’t make it easy to get to, and don’t put too much in it. Start with $100/month.
- Imagine You’re Retired, and you’ve saved up enough during your working years to live off 80% of your income. Live like that.
Or, it’s simple math and you don’t need tricks.
How do you save money? Did it take you a long time to get into the saving mindset?
Good post Kathleen! I think you hit the nail on the head. Working in marketing myself, I know full well that ads are written to get people to spend. They’re used to convince us that we’re just not complete without whatever shiny new thing getting hawked at us. The key is to realize this and spend when it’s right for you. We follow many of your tips, with automation being key among them. It gets done twice a month and we never feel it.
It took a lot of struggle before I got in the savings mindset. However, as I’ve shifted my priorities and began to focus on what really matters in life, we’ve found it to be very exciting paying off debt and building up savings!
You’re right Kathleen, our culture glorifies spending, not saving. The show “Lifestyles of the Rich & Famous” was a hit; I doubt “Lifestyles of the Thrifty & Hardworking” would make it onto television.
Great job on the post Kathleen! I think you hit the two major points in getting educated and get new Jones. So often people don’t understand or start to understand finances and debt until they are in trouble and are looking for ways out. Some of this needs to start with educating kids about finances. I love having conversations about savings. I find that usually most of the people in the room don’t and are spending money like crazy and in debt. Savings and budgets are SEXY!
“Get new Joneses” is AWESOME. My wife and I fell into some of this but then my sister grew up, left home, got a job, and we started talking more. And she kept talking about ways to cut spending, homemade shampoo, etc. And slowly but surely, without me even realizing it, my sister was becoming my new Jones. I wanted to watch my money like her and do homemade more, like her. Getting new Joneses is a great idea!
Also, your friend isn’t wrong up top there. It IS simple math, just like weight loss is simple math. It’s just that our brains and marketing get us all clouded up!
I keep it simple, I set a payroll deduction 40+ years ago for savings. Since then I use a similar deduction for my 403B, IRA and Roth IRA. It is automatic and I live on what’s left.
Automation is sexy!
I’ve automated the whole thing, so saving has been very, very easy for me….but your right: it was setting up a system that worked, not convincing myself to save.
It’s always been frustrating that the few shows emphasizing good money management all seem to get cancelled right away. Maybe if these people showed a little leg or killed someone while funding a 401k they’d get traction….
They could make a show like Wipeout for Money. If you’re terrible or don’t follow the directions, they nail you into some slime!
One of the big ‘sexy’ areas are taking your kids on vacation. Remember that vacations for your kids when they are under 5 or 6 years old is not a memory maker for them as much as it may be for you. A stay-cation can be just as memorable and you’ll save money for the bottom line.
That’s a great call – but you should still consider going on vacation, because you’ll probably need it. Just make it enjoyable for you!