“It’s okay to want a Gucci purse. It’s okay to buy it if you love it.” Those were the first words I spoke to a group of women at a Wellness Conference. I let those words soak in and register as the women began to smile and lean forward in anticipation.
Now some of you may feel confused. Haven’t I been preaching about the importance of financial literacy all month? And shared some rather dismal statistics on our lack of financial knowledge with you? Have I lost my mind?
No, I haven’t, but I also meant what I told those women too.
Before you start calling me out in the comment section, please hear me out. Being financially literate does not mean you are never allowed to spend your money on something you want—even if it may seem frivolous to another person. It does mean finding YOUR sweet spot—where spending and frugality coexist.
My father taught me that money was gift. Something I could use to bring joy to myself and others. This was very different from my observations of how others felt about money or even my own experiences. In fact, money seemed to cause more pain than joy. People purchased many things under the guise of happiness. The problem is bought happiness rarely lasts long.
According to my father, their mistake was making fast decisions that weren’t in alignment with their goals and values. But if I took the time to figure out what I really wanted, then I would find joy in earning the money to purchase my goal, be able to say “no” to other distractions and experience long-term satisfaction when I achieved my goal. My coveted “want” would become a source of pride and inspiration.
Many people struggle in the area. Reformed spenders need to be careful because they don’t want to undo all their hard work and slip back into old habits. Spending can be an addiction. So you have to ease back into it, and the best way to stay honest is to know what you want, so you can keep your eye on the prize and disregard everything else.
I also see reformed spenders who get a bit … shall we say, holier than thou. There are times when I see people being reckless with their money or demonstrating poor financial behavior to their kids and it makes me see red too. This is not what I talking about. I’m referring to those reformed spenders who get so caught up in their new frugal lifestyle and fed up with consumerism that they lash out and demean anyone who dares to want anything that isn’t a necessity or is too materialistic in their mind. Where people are made to feel bad for wanting nice things.
It can be frustrating watching people live beyond their means then complain about not having enough money. Sometimes I feel annoyed by their actions too, but mostly I feel sympathy. These are not bad people. Many of them are simply unaware their actions are crippling their financial well-being until they reach their own fiscal cliff.
Wanting things is not the problem—it’s spending beyond what you can afford. We need to help people recognize this and prioritize how they use their money, including understanding how wants fit into their overall financial life. We need to show them the joy of living within or below their means. But being consdescending towards the things they want isn’t the answer.
In fact, I think it can be incredibly hurtful. People become paralyzed trying to figure out what is “okay” to buy or what are “permissible wants” and now they are back to viewing money in a negative light. They may not be overspending, but money isn’t bringing joy into their lives either.
We all have different values, beliefs and financial situations and we need to respect other people’s goals, even when they differ greatly from our own. I’m giving you permission to want things, even things that make other people roll their eyes and grumble under their breath. These are YOUR goals, not theirs.
Just be sure you want it for the right reasons. Not to flaunt your wealth or to make others jealous. Not because you believe it will make you better than those around you or to super-size your ego. It should mean something to you. And not just when you purchase it. The joy you feel at achieving your “want” should last for a long time afterwards. And if what you really want is a Gucci purse, than so be it.
Of course, there is a caveat when it comes to the things you want. After you figure out what you truly want, a financially literate person doesn’t immediately run to the store and hand over her credit card to buy that lovely Gucci purse. No, you take your time to make sure the goal is truly worthy of your hard-earned money and effort. To ensure that you’re not feeding an emotion or your ego. Once you decide to move forward and make your “want” an official goal, you shop around, looking for the best price and most important—wait until you can afford to buy it.
When you find your sweet spot, you truly experience financial freedom. You allow yourself to buy what YOU want without guilt or debt. You no longer try to keep up with the Joneses or the UnJoneses. You figure what makes you happy—whether it is living ultra-frugal or enjoying the finer things in life within your means.
That is a sweet spot to live in and one I wish everyone has the opportunity to experience.
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Photos courtesy of www.freedigitalphotos.net.
SHANNON RYAN, CFP®
If someone's financially literate to budget and knows how a splurge will affect their financial goals (and is ok with that), then why not?
You are right Shannon, about finding a balance when it comes to spending. We are much better at doing that, but there are times when we slip a bit. But recognizing that, is a sign of just how far we've come and we know how to get back in balance.
I mean take for instance if a parent decides to spend money on junk food or cigarettes but not milk for their kids -- would that not be something unacceptable to you?
My husband is so good at this. Once he puts his mind on something he "wants" he finds out how much he needs and starts saving. He doesn't dip into our budget either. He'll either work extra hours or cut back on what he spends during the week like cutting back on his Red Bull :)
He has definitely set a great example for the kids. They see what he's doing and I encourage them to follow in his foot steps.
Have a great week Shannon!
Warren Buffett once said he's the only man who can make an expensive suit look like it came from Walmart, and we're the same: we're the only people who can have a "non-budget" vacation staying in places like Motel 6 and Super 8. Like we hope to do next week as we follow our noses meandering through Northern California after taking care of some business there... :)
But to do that we scrimp and save on other things. It's exactly as you say: spending in the sweet spot, saving where it doesn't matter that much. Good post!