A coworker of mine was excited to tell me that he bought a brand new truck the other day. After congratulating him I asked him how much he paid. I almost choked on my water when he told me "Only $62,000". I asked him why he paid so much for something that's only going to depreciate and rust? He replied, "Because I'm young and it's a super sexy truck and besides, the sticker price was $75,000 so I got a great deal". Why is it that a person would rather spend $62,000 on a vehicle instead of , I don't know, putting a down payment on a house!?
It seems that most people let their spending define who they are. What's worse is that they are willing to go into debt to maintain the illusion. Wearing $350 jeans and $300 sunglasses have a magical way of transporting a person from their dull, mundane life into the rich and fabulous lifestyle they have always dreamed of. That is until the credit card bill arrives and reality rears its ugly head.
I remember one time I was working in a parking garage installing a new fire alarm system when a fancy green Jaguar pulled into a stall nearby. I couldn't help but laugh when the door opened and out popped a tall, lanky man in a suit that was 3 sizes to small and had a pattern like my grandmother's old couch. I assumed in order to pay for the sports car this man had to cut corners in his clothing budget and most likely other sources. I guess wearing flood pants was worth driving such a nice car.
Delusional thinking will have us believe that the more items we have, the happier we will be. When the thrill of the buy is gone, and the buyer's remorse sets in, that's when the problems start. Depression is becoming more and more common place each year. As blood pressure rises from stress, the body becomes more worn out and lowers life expectancy. All of a sudden that frivolous spending doesn't seem as exciting as it once did.
So what can one do to battle this urge to spend ridiculous amounts of money to make us feel important? Quitting cold turkey would kill most thrill spenders, so I suggest a slow and steady approach. Instead of spending $350 on a pair of jeans, spend $350 on four pairs of jeans for the entire year. Even better spend $90 on jeans, then take your grandparents out for lunch and ask them about the tough economic times when they were younger. I guarantee you will learn to be more thrifty with your money.
I don't plan to impress people with fancy clothing, a giant house or an expensive sports car. My plan is to impress people with how early I can afford to retire. Now that's something worth giving up designer labels for if you ask me!
9 comments:
That is an expensive truck and its going to cost a fortune to drive. I know people who have 3 or 4 computers, PS3, XBOX, and WII and live paycheck to paycheck. They don't save a single penny.
I find with each passing week of paying myself first, I sleep better at night. I buy nearly 95% of my clothes at Value Village. If looking for non-working clothes I look for clothes that look new. Buying a pair of jeans for 8.00 that would cost 50-80 dollars in a regular department store, just doesn't make sense to me.
Thanks for your comment.
I left out the fact he pays over $5000 a year in insurance because he is 19 and was caught drinking with a graduated license.
I don't think people realize what a good night sleep feels like when you live within your means.
Keep up the good fight!
If I was a betting man I would guess your co-worker financed the truck and will be paying much more than $62k for it!
I agree though - spending to impress is pretty stupid. One of the reasons I dislike larger cities is that there seems to be much more pressure to keep up with the Joneses.
On a completely separate note, I want to ask about SLF. I'm waiting to see SLF hit bottom before I invest into them again. The last several days SLF has been trending upwards, however I'm holding out on buying now because I know we are still in the middle of the EU crisis. I'm just want to confirm that my thought process is correct/logical.
Thanks,
I live in a large city Sustainable and I agree with you completely. Everyone seems to need a nice ride, brand new clothes and a huge mortgage.
My co-worker told me today that his care loan is 3% over 7 years. That's an awfully long time to pay off a loan, especially for a vehicle.
Well Kyle it's totally up to you as an investor. SLF can go either way right now, and since insurance companies rely on high interest rates to make larger profits, then I don't see them going higher anytime soon. I invested in two insurance companies because I have insurance through them, but they both haven't raised dividends for a long time. I will probably sell one once they reach my entry price.
19 and an expensive truck like that is insane!!! $5000 for insurance is a lot too. Wait until he has kids or a house to look after it. I can see having a truck out there but a 3 year old truck would save him probably 30-40 thousand dollars.
That truck costs more than Warren Buffett's Cadillac.
Good article: focus on what's important. It doesn't make sense to live so frugally that it impedes on happiness, but it doesn't make sense to buy depreciating assets for the sake of show. Happiness is lightness.
I totally agree DM. I think happiness comes from the simple things in life that we all take for granted, and not the shiny things we think we need to live.
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