The $1,500 Haircut

This is the story of a $1,500 haircut. A friend of a friend loves getting her hair done. Cut, color, extensions - at a high-end salon - for the low, low price of $1,500. To me (and probably you), this is a staggering amount to spend on a haircut. Why would anyone do something like this? "Well, I can afford it, so why not?"

I can afford an entire semi-load of Hostess Oatmeal Creme Pies, but it doesn't mean I should. This is where so many of our financial decisions come off the rails. We often justify questionable decisions by saying we can afford them. Afford, on what grounds? In the classical sense, do I have enough money in my bank account to trade for xyz good? If so, technically, I can afford it.

However, we often underestimate the opportunity cost. Sure, I could buy an entire semi-load of Hostess Oatmeal Creme Pies (or a $1,500 haircut). Doing so probably wouldn't destroy my finances. But the better question is: "Is there something I'd rather do with this money?"

Every dollar we spend on something is one dollar we can't spend on something else. If I could talk to this woman with the glorious hair, I wouldn't ask her if she can afford the haircut. I'd ask her if there's something better she would do with that money. Everything is about the opportunity cost, including her haircut and my Oatmeal Creme Pies. There's nothing inherently wrong with her spending $1,500 on a haircut, but based on my coaching experience, I'm guessing there are areas of her life that are lacking.....frustratingly so. We humans have a way of sabotaging ourselves like this.

People tend to fall into one of two camps:

Person A: Do I have the money to buy this thing I want?

Person B: What is the best use of this money?

Both people might buy the same item, but the second person does the mental math to account for the opportunity cost. If we're wise, every decision is framed through the lens of opportunity cost. And, no, the goal of this mental exercise isn't to figure out which decision will create more monetary gain. This isn't about spending being bad and saving being good. Rather, this is about giving our decisions an honest look to determine how we can maximize our meaning, fulfillment, and impact. Sometimes, it means buying the cool thing. Sometimes, it means choosing a different option.

Perhaps you already do this. If so, you're far wiser than most. If not, today is a fantastic day to start looking at your decisions through the lens of opportunity cost. It changes our relationship with money, and it helps us focus on what's truly important to us.....even if it's a $1,500 haircut.

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Numbing the Pain Sensors

"How much should I spend on a car?" a friend asked me recently.

"How much cash do you have saved for a car?" I asked in return.

"About $18,000, give or take."

"Then I would spend $18,000 or less."

He stared at me for a moment, pondering what to say next. "But the car I want costs $35,000. How do I know if I can afford that?"

"It's pretty simple. You'd be able to afford it if you had $35,000 saved up. But since you only have $18,000, you definitely can't afford it."

He stared again. "What should I do, then?"

"Either buy a $18,000 vehicle now, or keep saving until you can afford a more expensive vehicle."

I think we complicate things too much, especially with vehicle decisions. Then, we add the psychological warfare of debt into the mix, and we get completely twisted up. That's where my friend went next.

"There's no scenario where I would spend $35,000 of cash on a vehicle. That's why I want to finance it."

See what's happening here? The debt pollutes our decision-making. He just admitted he would never exchange $35,000 of cash for a vehicle (because it's a lot!!!!), but he would mindlessly sign papers to finance $35,000, $45,000, or even $55,000. He said he'd have no problem financing a vehicle up to about $70,000, but wouldn't feel comfortable spending more than $20,000 of cash on a vehicle.

See the problem here? The debt numbs the emotional triggers that tell us something might be a questionable-to-poor decision. He would have an emotional breakdown paying $25,000 for a car, but he wouldn't flinch at spending $65,000 with debt. That's how we Americans have enslaved ourselves in crippling debt payments.

If we really want to make proper choices, we'd take debt out of the mix and look at everything through the lens of cash. Are we really willing to pay for something, or are we just trying to numb our pain sensors by slowly bleeding ourselves out over time?

Update: My buddy called me a few days later. After much consideration, he realized that he was, in fact, being heavily influenced by the debt. There's zero chance he would ever pay cash for an expensive vehicle, and the debt merely allowed him to "cheat the system," in his words. He said he'll likely save up for a few more months and pay cash for a vehicle in the mid-twenties range. I think that's a wise decision! His future self will thank him for that one.

Don't let debt numb you to the realities of your decisions. You'll think more clearly, make better decisions, and create far more freedom in your life. It's worth it.

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Ignorance Is Not, In Fact, Bliss

In working with hundreds of families over the years, one thing is consistently true: We humans have a very poor ability to mentally track how much we spend on x category each month. Example: I recently asked a family how much they spend on dining out each month: "Probably $200, $300 tops."

"Well, we're about to find out," I responded. "Out of curiosity, why do you say $200-$300?"

"Because we kinda track it already. I just know what we spend."

"Kinda tracking is the same as not tracking at all," I said.

Fast forward to the end of the following month, and they had formally tracked all their spending: $913. More than triple their top-end estimate!

"That can't be!" the husband exclaimed. "I know what we spend, and we don't spend $900!"

He's not dumb. He's not a liar. He's not bad at math. He's not trying to pull my leg. This is how we humans mentally accrue math that spans several smaller numbers. We grossly miscalculate the cumulative impact of a string of decisions.

Ignorance isn't bliss. A rough understanding is the same as no understanding. We don't need to be number police and obsess about everything in our lives, but if we want to get better in a certain area, we need to educate ourselves. This is always priority #1 for my coaching clients. There are three steps to getting right with money:

1. Gain awareness

2. Gain control

3. Gain traction

We can't gain control or gain traction until we've first gained awareness. Here's the good news: Gaining awareness doesn't cost money, require special skills, or necessitate a large time commitment. All it requires of us is care and intentionality.

Here's my encouragement. If you're not fully locked into a budget yet, pick a category you want to improve on. For the next calendar month, log every dollar you spend on that category. Use the Notes app on your phone if you'd like. You don't even need to log it to the penny; round to the nearest dollar. Date: Amount. Date: Amount. Date: Amount.

If you commit to the practice for even just one month, you'll gain insights about yourself that will arm you to succeed next month, the month after, and so on. Simple, effective, game-changing. Note: this isn't about spending less; it's about spending better. After we assess what we're actually spending, we can determine if that's a good amount in the context of our lives. Maybe we should spend more! Maybe knowing how much we're spending can help us make better and healthier decisions in the other categories. Maybe we want to put some guardrails in place. So many opportunities for improvement, all stemming from becoming aware.

This isn't supposed to be some magical, earth-shattering idea. Rather, a simple idea that's easy to execute and will provide far more value than it will cost you. Happy tracking!

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Want Now vs. Want Most

My kids are afflicted with the same disease many of us suffer from: the instinct to choose what we want now over what we want most. I'll give you a recent example. There's something Pax really wants to buy. He talks about it all the time, and it would really mean something to him to get it. That's what he wants most.

Here's where the problem comes. A few nights ago, after helping me unload and organize our most recent Northern Vessel coffee shipment, he had $22 in his account. He's nearly halfway to his goal! Unfortunately, there are a few other smaller things he wants now, and said smaller things happen to cost around $20. Therefore, he was begging me to stop at the store so he could buy this thing he doesn't really care about... but it's within instant gratification's reach.

Over and over and over again, he sacrifices what he wants most for what he wants now. After explaining this concept to him, I strongly encouraged him to resist the urge to buy what he wants now, knowing he can buy what he wants most soon enough. He made the right choice for now, but his human desire for instant gratification will surely heat up again.

Does this sound familiar? We humans do it all the time! We so badly want to go on that trip, but it feels so far away and hard to attain. So instead of saving that cash and getting closer to making the trip happen, we blow it on dinner and drinks. We have our eye on a particular watch. It's not outlandishly expensive, but it will take some work to save up. However, we just want to scratch the itch of buying a watch, so we'll buy several cheaper watches that we probably won't wear or appreciate. These are two recent examples from the hundreds of versions of this I see play out in my coaching.

I'm certainly not immune to it, and I suspect you aren't, either. Write it down. What do you want most? Name it. What things do you want now? Write those down, too. Call them out. Now, look at the two lists and compare them. If it's true that what you want most is what you want most, act like it. Make decisions around it. Choose wisely. Each step of the way should revolve more around what we want most than what we want now. These could be more material things, but truthfully, they are often priceless, meaning-laden things in our lives that are far more valuable than money. Choose those. Always choose those.

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81 Years of “Boring”

My family enjoyed a Shelton family tradition last night: Nutty Bars in Okoboji. Okoboji is one of our favorite places in the world, and Nutty Bars are woven into the fabric of the Okoboji experience. To give you some context, Nutty Bars are small blocks of vanilla Blue Bunny ice cream with a wooden stick inserted, dunked in chocolate, and rolled in crushed peanuts. Simple, classic, delicious.

Finn’s very first bite of Nutty Bar, age 3.

I was recently talking to a fellow business owner about our anticipation of enjoying some Nutty Bars. “Their business is boring. They’ve literally been doing the same thing for 100 years. They haven’t innovated once.” He scoffed at the Nutty Bar stand……he might as well have insulted my sons!

81 years, actually. They’ve been doing the same thing for 81 years….since 1945. In a world where businesses come and go as often as we change underwear, 81 years is pretty amazing. And they don’t seem to be slowing down. Every time I’m there, hundreds of people are coming or going. I wish I knew more about their business, but they no doubt sell thousands of Nutty Bars each day.

The Nutty Bar stand practices something vitally important in business. They simply offer a consistently excellent product for an attractive price. Simple, consistent, excellent, and more valuable than it costs…..all four components are important. They’ve created a machine that puts smiles on hundreds of thousands of people’s faces, and I suspect they’ve been handsomely rewarded financially for that.

We don’t have to come up with a world-changing idea to be successful or impactful. Instead, we just need to find a way to implement the Nutty Bar formula in our own lives. Stay simple, be excellent, remain consistent, and add more value than we charge. Whether we’re business owners, self-employed, or employees, these values are the building blocks for a fruitful and impactful journey.

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It’s Actually a Gift

My all-time favorite band, Twenty One Pilots, just released a live album a few days ago. Upon the news of this upcoming release, thousands of fans flooded social media and began throwing shade:

• "All they care about is making money!"

• "Look at them ripping people off again."

• "Always trying to sell something."

As for me, I couldn't wait to purchase this new album. Why? I am receiving it as a gift; their gift to the world. I will happily fork over a little cash for the right, privilege, and honor of listening to this beautiful concert over and over and over again for decades. What a gift!!!!

Our culture is so quick to demonize business. Movie ticket prices? Scam. The price of a latte at a local coffee shop? Highway robbery. A package of beautifully marbled steaks? Greedy farmers! The fee for our tax professional to prepare and file our annual taxes? A racket.

On the flip side, I view each of these as gifts. Enjoying the magic of the movies is a gift. Savoring a wonderfully crafted coffee is a gift. Grilling up some juicy steaks is a gift. Having a trusted tax professional to advocate for me is a gift. Sure, I pay for each of these, but what I receive in return is a gift. That's what business is supposed to feel like.

When we spend money on things that truly add value to our lives, that's a gift. We shouldn't spend money on something and then immediately lament how we were taken advantage of. Instead, we should lean into our values by spending money on things that are truly valuable to US.....then receive the gift for the blessing it is.

This new Twenty One Pilots album is such a gift to me. I couldn't hand over my money fast enough for the right to own a piece of history that I will enjoy for decades to come. It doesn't matter if the artist makes $100 from it or $10,000,000. A gift is a gift, and I'm grateful for it.

As consumers, we should look at our purchase activity through this lens. Business owners, this should also influence how we treat our craft. We're creating a gift that will add value to people's lives. And if we add enough value to enough people's lives, we'll earn the right to make a living carrying this torch. Enjoy the ride and never be ashamed of it. It's an honor, a privilege, and a responsibility.

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Pizza, Pigeons, and Ice Cream

We concluded our amazing family trip to NYC yesterday, returning home satisfied and exhausted. During the car ride home from the airport, I asked the boys to name their favorite things from the trip. Pax jumped in quick and decisively:

• $1.50 pizza slices from a little place called Mr. Pizza.

• Ice cream (lots and lots of ice cream)

• Visiting the Statue of Liberty

• Playing on the beach (Coney Island)

Finn piped in next:

• Pizza

• Feeding the pigeons

• Riding the subway

• Coney Island roller coaster

I've written on many occasions about the idea that memories don't discriminate based on price. We, parents, love to assign value to activities, memories, and experiences based on how much they cost. I see it all the time in my coaching, and frankly, I'm occasionally guilty of it myself.

During our trip, we dined at some of the most famous restaurants in the city and even took in a Broadway show. The Broadway show was easily the most expensive thing we did, with a total price tag of $600. The boys enjoyed the show, but it didn't even come up when inventorying their top moments. I'll re-summarize their favorites:

• $1.50 pizza slices from Mr. Pizza: $1.50 (duh!)

• Ice cream: $6-$12....several times

• Statue of Liberty: $22/person

• Feeding the pigeons: Free

• Subway: $3/person

• Coney Island Roller Coaster (The Cyclone!): $10/person

• Coney Island Beach: Free

No, it wasn't a cheap trip. Flights, hotels, parking, transportation.....it added up. However, we parents need to give ourselves a break. We don't need to go all-in on fancy, elaborate events. The simplest ideas often win out. The most insignificant moments become the memories. The unexpected happenings between activities create the shared experiences.

In a moment of conviction, I asked Sarah if she regretted spending $600 on the Broadway show. "Not at all! I'm so glad we went." I'm glad one of us feels that way, and perhaps one day the boys will look back fondly at that experience as well. But in the meantime, I'm going to savor that trip....mostly the small little moments. So many beautiful little moments.

It's worth a reminder again today. We don't need to live for the big, elaborate, fancy, costly moments in life. Sure, those are cool; they have value. But we ought not miss the value and beauty in the simple, the small. Have an awesome day!

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(Not) Running It Into the Ground

My family is in NYC for a few days. It's been so much fun watching the looks on the boys' faces as they experience the wonders of one of the greatest cities in the world. I feel like a kid every time I'm here, which makes it even more special to experience it with my own kids.

I love talking about travel. I talk about it with friends, clients, and whoever else will engage with me. Whenever that topic arises, I hear one common theme: It's impossible to manage costs while traveling......especially food. Heck, I have people regularly tell me that it's impossible for a family of four to dine out in the Midwest for less than $100, never mind what it would cost to eat in one of the most expensive cities in the world.

I couldn't disagree more with this narrative, and yesterday was a perfect example. Sure, we could have blown it out of the water and easily dropped $300. It would be a very easy lift to astronomically run up the tab. However, we decided to keep it simple.

We started by finding an awesome little bodega in Midtown Manhattan to get some sandwiches. I indoctrinated Pax into the sausage, egg, and cheese on a roll with salt, pepper, and ketchup club. Classic, and delicious. Then, we walked next door for a few massive slices of NY-style pizza. We finished the meal with a massive cookie from a local bakery. All in, $50. Not bad for dinner in the big city for a family of four.

I'm not saying this is what every family should do for every meal, but I want people to remember that it's possible to travel on a budget. It's possible to explore a city's food scene without blowing tons of cash or running up the credit card. Good food doesn't discriminate. Some of the best food in the world is cheap. Some of the most enjoyable meals on this planet are accessible without breaking the bank.

Get out there and explore. Try new things. Be curious. Dive into foods and cultures that might seem a little foreign to you. Just enjoy! However you choose to do it, you don't need to spend an arm and a leg. Bon appetit.

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Chicken or Egg?

I recently stumbled upon a heated online conversation on a social media platform. The original poster posed a question: "If so many people are struggling right now, why are there so many people with brand-new vehicles parked in their driveways?" It seemed counterintuitive, as these new vehicles are presumably evidence that people are doing well.

Let's just say the comments were lively. Hundreds of people chimed in, positively confirming that most people are, in fact, doing great. The commenters believed they, individually, were simply part of the small share of people who are struggling, while everyone else is thriving.

I have news to break to them (and anyone else who will listen). Those brand-new vehicles sitting in people's driveways aren't evidence that people are doing great. Rather, those same vehicles are one of the primary culprits for why people are struggling so much. People's vehicles are putting them into a financial grave, month after month.

I recently met with a successful-looking couple who, from the outside, appear to have it all put together. They are fit, their kids are cute, their house is immaculate, they have good jobs, and they both drive new vehicles. The subject of the conversation? How they can stay financially afloat and not lose everything. Truth be told, their monthly finances didn't contain many red flags. Lots of normal, but not outlandish spending allocations. However, there were two major red flags.....and both were parked in their garage:

• His vehicle: $1,100/month payment

• Her vehicle: $850/month payment

Total vehicle payments of $1,950. In my brain, that's called a mortgage payment. Two thousand bucks for vehicles!?!? Both assured me that 1) they can afford them, 2) they are perfectly reasonable vehicles, and 3) everyone else has at least as nice vehicles as they do.

They aren't alone. This is a dynamic I see every single week in my coaching work. I've met with hundreds of families, and vehicle tension is the leading contributor to financial pain, suffering, tension, stress, and destruction. Not a lack of income, student loan debt, a failure to budget, or limited financial literacy. Vehicles. Vehicles are literally milking an entire society dry.

Many people who read this piece will roll their eyes at me. This topic often draws the ire of those who digest my content daily. That's okay, though, as this message needs to be shared over and over and over. I so badly want people to live a quality of life, and if I can get them to make different decisions in this vehicle department, I strongly believe it will have a direct positive impact on their quality of life.

We need more humility. We need more patience. We need to care a whole lot less about what others think. That's the ticket to some beautiful things in our lives. Please don't allow a vehicle to play a significant role in your journey. It can play a role, but not a leading role. You deserve better; much, much better!

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What’s Your Weird?

People frequently tell me that I'm "weird" in how I spend money. I never take offense to these comments. In fact, I love them! I wear them as a badge of honor, and in some ways, they tell me I'm right where I need to be. Here are some examples of things people have told me I'm weird for doing:

• When it comes to my personal residence, I'm a perpetual renter. I've owned two houses in my adult life, but I much prefer renting over owning.

• The biggest category in our household budget is giving. This is non-negotiable.

• Our second-largest category is travel. This is also a non-negotiable.

• I will gleefully spend a few hundred dollars on a first-class meal. I've had $25 dinners that felt expensive and $250 dinners that felt cheap. An amazing meal is worth its weight in gold.

• There's no amount of money too much when it comes to creating once-in-a-lifetime memories.

• When I'm at a coffee shop, restaurant, or bar with someone, I almost always offer to pay for them.

• If someone offers to buy my coffee, meal, or drink, I accept.....always. No exceptions.

• When eating at a sit-down restaurant, the minimum I’ll tip is 20%, but it’s usually closer to 40%-50% if the server demonstrates excellence. It’s one of the few areas of life where people will gratefully accept generosity, so I love to lean into it as much as possible.

• I will never purchase a new vehicle. In fact, I've never purchased a new vehicle. At best, any vehicle I purchase is probably at least 3-4 years old.

• I will always pay for services that save me time, sanity, or stress.

What say you? Do you find these weird? I hope so, as you're different than me. That's what makes this money stuff so fascinating. We're all wired differently, heavily influenced by our experiences, values, upbringing, and circumstances.

I want to know what weird money habits you have. Please hit reply to this e-mail if you're a subscriber, or comment below if you're on the website. Please share your quirks with me. If enough people reply, I'll put together a fun little list and share it in a future post. Have an awesome (and weird!) day.

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The Want-to-Need Migration

Much discourse centers around the idea that life is so much more expensive today than it used to be. We blame inflation, capitalism, Boomers, politicians, and the systemic structure of our modern-day society. In other words, we love to blame everyone except the person in the mirror. Has life gotten more expensive? Sure. It always does. That's how inflation and the time value of money work. In all of this discourse, I think we've missed the biggest culprit of all: the want-to-need migration.

Over the past 25 years, I've personally witnessed a slow and steady cultural shift from what was once a want to now a need. Houses are a great example. When I was a kid, young families lived in small, conservative houses. However, over time, the average square footage of houses in America grew, as did the expectations of younger homeowners. Houses we now consider "starter homes" would have been mini-mansions 25 years ago. What about those small, conservative houses people used to live in? It would be unthinkable to live there!!!! Out of the question! Our expectations for the houses we choose have migrated from a want to a need.

Dining out is another great example. I recently met with a family who said a $600/month dining out budget is a "need." They didn't want a $600 dining out budget; it was a basic human need for their survival. Conversely, 30 years ago, dining out was more of a luxury. In my house, it felt more like a twice-per-month event. Taco Bell was a treat, Pizza Hut was a splurge, and Golden Corral was fancy. Our dining out habits have migrated from a want to a need.

Off the top of my head, I can think of countless items we now call needs that would have been wants 20+ years ago, including:

• Streaming services (many people didn't even have basic cable in the 80s and 90s).

• Cell phones (not in most people's budgets).

• Internet service (also scarce).

• Plane tickets (air travel used to be rare; today it's the norm).

• Coffee shops (as the 90s kids ask, "What's a coffee shop and why would anyone go there?")

• Online shopping (it was much harder to spend money in the pre-internet days, when you used to have to drive to the store. Today, click, click, click....delivery in an hour).

I'm not saying there's anything wrong here. In fact, I enjoy all of those things I just listed. They are part of my budget and part of my family's rhythm of life. I'm grateful for them. However, we ought not forget what's really a need and what's really a want. Sometimes, we need to get back to basics: food, clothing, transportation, and shelter. Let our needs be needs, then address our needs head-on. Once we've accomplished that, then we can move on to the wants. But let's let wants be wants. View them as such. Treat them as such. Enjoy them as such. Don't let your wants migrate into needs.....that's the gateway drug to much stress and bad outcomes.

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If Everything Is Important…..

I received a half-dozen messages yesterday in defense of the family I discussed in yesterday’s post. In short, people defended this family's actions by saying that all of these things were important. Thus, this family was simply a victim of having all these important things stacked on them.

Here's a general truth. If everything is important, nothing is important. Let's say there are 50 different things vying for our time or money, and all of them are deemed "important." If they all occupy the same plane of importance, then none of them are actually important. In a world of relativity, none of them win.

This is the curse that strikes so many of us. Our budgets are living testimonies of this. For example, I'll regularly meet people who are actively saving for 15 different things—$ 25 here, $30 there. When I do the math, I point out to them that it will take years to knock out any of them. That becomes immensely frustrating, eventually defeating.

For this reason, we need to truly prioritize. Are some of these things in our lives needs and wants? Yes. That's totally cool. Allow them to live in our hearts and minds. However, we need to be honest with ourselves when setting priorities. Once we have our list of upcoming needs and wants, do whatever it takes to prioritize them so your values can be lived out.

If everything is important, nothing is important. Therefore, keep it simple, prioritize, and execute. Confidently knock out the most important goal, then move on to the next.

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There’s Always Something

A couple I know has some big aspirations. Their values and goals are clear, and they know what it will take to achieve them financially. One problem: something came up. An unexpected need arose, and they must delay this goal until they address it.

Here's another problem: this is only the most recent in a string of unexpected needs. Truth be told, they've been putting off this big, important dream for more than six years! Why? There's always something!

I'll illustrate for you.

• First, they decided that buying a new vehicle was an immediate need. $27,000 of saving, 15 months of time, and another $35,000 of vehicle debt later, they had their new vehicle and were ready to achieve their dream.

• Second, they decided that buying a house was an immediate need. $20,000 of saving and 12 months of time later, they had their house and were ready to achieve their dream.

• Third, they decided that a dream Disney vacation was an immediate need. $18,000 of saving and 11 months of time later, they took their trip and were ready to achieve their dream.

• Fourth, they decided that finishing their basement was an immediate need. $40,000 of saving and 18 months of time later, they had their new basement and were ready to achieve their dream.

• Fifth, they decided that buying the other spouse a new vehicle is an immediate need. They are currently saving for this. But once they have this new vehicle, they will be ready to achieve their dream......

There's always something! When asked why they haven't pursued their huge dream yet, they will cite not being able to afford it. But when you look at the items above and how many resources they put toward them, it's easy to see that they could have done some amazing things over these past six years......they just chose to do something else instead.

Just remember, there's always something. Some things are in our control, and some aren't. However, far more is in our control than we'd like to believe. Please don't allow yourself to be a victim of your own life. Seize control of these decisions and prioritize your time, resources, and actions in accordance with your true values. Future you deserves it.

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Don’t Let the Sequence Fool You

A young man asked me to look over his finances and help him get some control. Included in this conversation was a review of his most recent bank statement.

"Dude, you spent $700 more than you made last month!" I exclaimed.

"I had to buy groceries at the end of the month. What, you expect me just not to eat?"

"No, I expect you not to implode your finances by plunging yourself into debt."

"I had no choice, Travis! Either I buy groceries, or I don't eat."

"The sequence of your purchases isn't what matters here. That $700 of overspend doesn't just get credited to the last $700 you spent in the month."

"Again, I HAD to buy groceries."

"Did you need the other $1,200 of impulse purchases you made before that?"

“……….”

This young guy fell into the same trap so many do. Instead of viewing his money as a giant puzzle, he viewed it as a sequence of transactions. Then, when he had known and tangible needs, he acted (even though he had already exceeded his budgeted income for the month). This is how we end up in debt. This is how we never have funds for wants. This is how we can't afford to invest. This is how we justify not giving. We spend, spend, spend, then when a NEED arises, we flippantly meet that need without regard for the consequences.

It's a psychological phenomenon that often strikes us humans. If you're human, you're subject to it. What's the solution? Have a plan for the month. The WHOLE month. We know we need groceries. We know the rent or mortgage has to get paid. We know we'll need to put fuel in the vehicles. These are known expenses. Therefore, plan accordingly. While we're planning, we should also plan for the fun stuff. Plan for the dining out. Plan for the date nights. Plan for the concerts. Plan for the plane tickets. Plan for the new clothing. The keyword is "plan."

Let's remove the bias toward sequence and replace it with a bias toward intentionality. Oh, you really, really want a new Blackstone grill? Great! Is it in your plan? If not, then don't do it. Put it in your plan next month. Then buy it! The goal here isn't to demonize spending, but to demonize unplanned, impulsive, destructive spending. Let your plan be your plan, then execute. If it includes a fun trip or a Blackstone grill, go for it! But we can't constantly buy things that aren't in the plan, blow past our budget on buying true needs, then blame the needs.

We can do better! We deserve better. We'll thank ourselves for giving ourselves better!

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To Save a Few Bucks

In my 20s and well into my 30s, I followed a certain practice. It was a practice instilled in me from a young age and affirmed at every step through adulthood. The practice? DIY projects. Trouble with a toilet....figure it out. A landscape project needs to be installed.....figure it out. A large and complex piece of furniture needs to be assembled.....figure it out. If we can save money by figuring it out ourselves, that's a win! After all, that's what men do!!!!!!

Then, in my mid-30s, I finally broke. Sarah and I moved into our new house, and I needed to mount a TV above the fireplace. I bought the parts, collected the tools, and watched the appropriate YouTube videos to teach me everything I needed to know about mounting a TV above a fireplace. Six hours later, I had a damaged TV, a damaged house, and still no TV mounted on the wall. I tried to save a few bucks, and all it got me was a boatload of stress, a wasted Saturday, and a higher financial cost from the damage I caused than it would have cost me to just have a pro quickly knock it out for me. That's what happens when pride gets in the way. Pride and, well, irrational frugality. I was acting too cheap to make wise choices, and we paid the price for it.

Fast forward into the back half of my 30s and now well into my 40s, and I've turned over a new leaf. I will always opt to invest money in a pro to help me out. Sure, it costs some money. However, it saves time, stress, and the risk that I'll do far more harm than good. That, in my book, is a wise investment!

We can save a few bucks if we want. That option is certainly on the table. However, it's not the only option. Never be afraid to hire out tasks that will save your stress, your time, and ultimately, even more money than it costs. We should never overlook the value of our time and our sanity. Money may have a nominal dollar value tied to it, but our precious time and mental health are priceless.

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Blind Spots: Pet Edition

I love dogs. I grew up with a dog and never pass up an opportunity to pet a random dog on the street. If the boys keep asking hard enough, we might actually get one for our household soon, too.

Buddy, my childhood friend, showing off part of his Michael Jordan jersey collection.

In my 10+ years of coaching, though, I've realized that pets are one of the biggest financial blind spots for families. It never fails. When I'm going through the initial budget with a new client, and we get to the pet category, the answer is always some form of, "Oh, we spend almost nothing on pets. Probably just a $50 bag of food every few months."

That's when my eyes get really, really big. Pet expenses are secretly crushing people's finances from right under their noses. Yeah, that bag of dog food might only cost $50, but all the other things we don't think about cost hundreds.....or thousands. And the vet expenses!!!! Here's what a typical vet expense monthly rhythm looks like: $0, $0, $0, $0, oh crap! That "oh crap!" moment is where the wheels fall off, and where the math works against us. Pets get sick. Pets get hurt. Pets make poor choices.

I didn't want this piece to be merely anecdotal, so I dug into my client files to find some real-world data. I looked up 8 active clients who have 2+ years of pet data. Here's what it looks like (in order of my research discovery):

• $9,130 over 51 months = $179/month

• $5,860 over 21 months = $279/month

• $6,815 over 47 months = $145/month

• $5,850 over 45 months = $130/month

• $11,730 over 24 months = $489/month

• $15,744 over 24 months = $656/month

• $4,320 over 36 months = $120/month

• $16,482 over 41 months = $402/month

In total, these eight randomized clients had an average monthly pet spend of just over $260/month. I don't know about you, but that's a tad bit different than a $50 bag of food every other month. These families range anywhere from $120/month to $656/month, with unexpected vet bills being the key driver of how high this category can get.

Pets are also one of the main culprits of credit card debt, as there's a deeply emotional component to this. When faced with a life-or-death decision regarding our beloved pets, it's hard to emotionally look ourselves in the mirror and put a rational price tag on our go/no-go decision. Thus, we simply act now and sort it out later. This is having some pretty harsh consequences for families.

Again, this isn't an indictment of pets or pet ownership. Rather, this is my encouragement to make decisions with our eyes wide open. It's totally okay to financially prioritize pets, but we ought to understand what we're really getting into from a financial perspective. The same goes for other categories, too! Eyes wide open is always the best approach. That way, our cute little pets (and all the other choices we make) can truly be blessings in our lives, and not pain points.

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Define “Actually Enjoy Life”

I received split feedback about the recent post titled A Middle Finger to Our Future Selves. Specifically, it was about the following excerpt:

"...the idea that we don't know whether we'll even be alive when we're older, so we might as well "enjoy life" while we're young. And by "enjoy life," he meant spend, spend, spend. He hated the idea of saving, or heaven forbid, investing. If he had it, he was going to blow it on something fun."

One blog reader replied to this post and said the following: "Your friend is right you know. We should actually enjoy life while we're young and healthy."

I think this comment gets to the heart of a really important decision. How do we define "actually enjoy life"? The friend in my previous post, this blog reader, and countless others tend to define "actually enjoy life" as some combination of spending money on wants and not working. Those seem to be our two cultural measuring sticks of "actually enjoying life."

What if enjoying life is so much more than how much we can spend and how little we can work? I tend to look at life through the lens of meaning. Am I living my most meaningful life? If the answer is yes, then there's a strong probability that I'm "actually enjoying life." If the answer is no, then I may have some issues. But how much money I can spend on wants is not a real driver in that discussion.

This is why contentment is so important. If we define our enjoyment by how much money we can spend on wants, then our ability to enjoy life is essentially capped by our income and resources. If we have many resources, we can be happy. If we don't, we can't. That's a really depressing proposition. Fortunately, it's a lie.

Contentment, on the other hand, disconnects the two altogether. The people I know who are the most content live tremendously enjoyable lives despite having limited resources. They don't allow stuff and leisure to define happiness. This disconnect in definitions is also one of the reasons there are so many people unhappy, fantasizing about retirement, while others are still working in their 70s, happy as a clam. This group of positive and optimistic people aren't defining themselves by how much they can spend or how little they can work. They are merely soaking up every bit of meaning they can find in this life.

Yes, we should "actually enjoy life." Amen to that! However, I don't think it's as simple as deciding to spend as much money on wants as possible. Instead, I believe it comes from pursuing meaning each and every day. Meaning in our home life. Meaning in our work life. Meaning in our generosity. Meaning.....period. The rest will sort itself out.

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What Is a Memory Worth?

For the past 25 years, I promised myself that if I ever had a chance to attend a World Cup game, I would. Well, we are nearing the fulfillment of my wish and a referendum on my promise to myself. The World Cup is hitting the U.S. this summer, and one of the host cities is three hours from my house (and 30 minutes from my sister-in-law's). Will I do it? Will I follow through on the dream of younger me? We shall see.

Looking at the calendar, I have the opportunity to watch two teams I have no affinity for or allegiance toward. But it's the freaking World Cup!!!! The get-in price is currently $313 per person. That's the worst seat in the stadium.....for $313.

But what is a memory worth? No matter what happens or how the game goes, going to that game will be a lifelong memory. No question about that. Therefore, if this is something I'll remember for my entire life, is it worth at least $313? I think that's a resounding yes.

Will I actually do it? Only time will tell. Perhaps that's one of the reasons I'm writing this post: So hundreds of people will hold me accountable to my own principles!

I think it's an interesting idea, though. It's so easy to get hung up on prices for things that, on the surface, should cost far less than they do. We look at these prospective transactions and try to view them objectively. We put our logical caps on and attempt to do a little cost-benefit analysis in our heads. Ultimately, though, we sometimes have to throw out the normal playbook and understand we're talking about a lifelong memory. That, in my opinion, can trump the normal decision-making process.

What about you? What's something that might not make much sense on paper, but in the long run, you believe is a steal of a deal, no-brainer?

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Throwing In the Towel

I stopped to get gas for my car the other day. The fuel pump asked me to enter my rewards number.

I purchased a cartful of groceries. The cashier asked me if I had rewards.

I bought a Cruchwrap Supreme at Taco Bell. The kiosk asked me to check in with my rewards account.

I stopped at a local coffee shop. The barista asked me if I had a rewards punch card.

I'm tired, guys! I can't keep up with this. I want to keep up with it, but at the same time, I can't. It took nearly 45 years, but I decided yesterday to draw a line in the sand. Regardless of whatever rewards I could be earning, I need to completely turn my back on rewards programs. Ultimately, the upside doesn't even come close to the mental and emotional fatigue it costs to manage all of this.

Have you ever experienced retail rewards anxiety? You walk into a shop and either a) forget to scan your rewards, or b) can't get it to work. There's this weird anxiety-mixed-with-guilt-mixed-with-regret feeling that seeps in.

Starting today, I am experimenting with ZERO rewards. I'll buy what I buy, then I'll move on with life. Whatever I pay in lost rewards, I will surely make up for in saved stress, emotional energy, guilt, regret, and time managing it all.

Want to guess how many apps I just deleted off my phone that are correlated with rewards programs? Seven. Just in apps alone, I deleted seven different store-specific reward apps. No gas stations. No restaurants. No grocery stores. No anything!

I haven't even visited a store since I made this decision, and I already feel 25 pounds lighter. Reward programs are specifically engineered to lure us in, entice us, and modify our behaviors. I've always been leery of falling too deeply into them, but today, I'm fully throwing in the towel. I'm untethered from outside influences and shiny little carrots hanging above my head

Where do you stand on this subject? Are you an avid reward user? Do you turn your back on them? I'm curious to hear where this lands with people. I'm excited for this little experiment, and I'll be sure to report back soon.

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What Else Are We Supposed to Do?!?!

A friend of a friend recently made an exciting decision: He purchased a new car!!! Everyone around him is so excited. "Congratulations!" exclaimed one person on social media. "Well deserved," quipped another. Silently, I mourned for him. He did exactly what he was supposed to do, and now, he's screwed.

He's a young man in his early 20s, with an okay job ($22/hour, full-time). It's not a bad job, but after I tell you the next part, you'll probably cringe. He has a $62,000 loan on his new purchase. I don't know the exact terms of his financing, but it's highly likely that his monthly payment is north of $1,000.

When I asked my friend about this guy's decision, he said something interesting. This young guy was just trying to do what he's supposed to do. He needed a car, new cars cost a lot of money, so he did what he needed to do to buy it. It's not his fault that he doesn't have a higher income. It's not his fault that cars cost so much. It's not his fault that his new payment is going to crush him. This is the way of the world, and he's just trying to survive.

This young man isn't alone. In fact, I'd say more people fall into this line of thinking than not. It's pervasive.....and it's destructive! I regularly meet with folks who are burdened by crushing vehicle loans. Very rarely do they admit there was a mistake made. Instead, they typically do what this young man did: defend it through the lens of what culture says we should do, have to do.

Is there an alternative? Of course there is! Sarah and I haven't had a car loan for the entirety of our 17-year marriage. It's not because we've always had so much money. Rather, it's because we said we would never again have car debt, then made decisions to honor that promise. What does that look like? In our case, only buying vehicles we could afford. I've never paid more than $19,000 for a vehicle, EVER. Here, I'll show you:

• Age 16: $7,000 (if I remember correctly) - used debt

• Age 17: $2,500 (after totaling above vehicle) - with cash

• Age 19: $19,000 (stupid!) - with a LOT of debt (stupid, stupid!!!)

• Age 26: $10,000 (reasonable) - with cash

• Age 30: $15,000 (car for me) - with cash

• Age 35: $18,000 (car for Sarah to fit twin babies) - with cash

• Age 36: $16,000 (replacing a car that got totaled) - with cash

• Age 42: $9,000 (my fun 350z convertible) - with cash

We'll soon replace Sarah's vehicle that we purchased a decade ago for $18,000, which now has about 250,000 miles. The budget is $25,000 for a used Toyota Sienna. Why used? Because that's the amount we can justifiably afford without going into debt. It's not easy, but it's simple.

At the exact same time, young adults all over America who are making a much lower income than us are spiraling into crippling debt because "that's what we're supposed to do." Please don't fall for the trap. It's not worth it. I promise, it's not worth it!

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