A few weeks ago I wrote How You Spend Your Time Shows What Is Important To You.
Then, just the other day, I heard Ramit Sethi say on his podcast, “Show me a person’s spending, and I can show you what they love.”
I have to agree with Ramit. There’s wishful thinking – ie. “I want to spend my money wisely and with intention” – and then there is reality. My guess is that for most of us, these don’t align.
During the decades when I was poor, in heavy debt and living paycheck-to-paycheck, I spent every penny I earned. Then, to cover additional expenses, I maxed out credit cards.
I didn’t love everything I spent money on. But even while racking up debt, I made sure we spent money on date nights, movies, dining out, booze, food, pets, home upgrades, cars etc. The truth is, I didn’t think about where I was spending my money. If I wanted something and had enough to room on a credit card, I bought it while thinking, “I’ll figure out some way to pay down my credit card someday.”
Or, if I had a new credit card with a big line of credit, I didn’t think about it all.
What was important to me (as defined by my spending):
- Having a home
- Having reliable cars
- Making my wife happy
- Appropriate work attire
- Dining Out & Take-Out meals
- Booze
- Pets
- Kids/Family
What was missing from this list, and from my life for 3 decades:
- Savings
- Investments
- Security
- Financial Freedom
- Time Freedom/Autonomy
- Work Flexibility
- Healthy Diet
- Low Stress Living
Although I professed to want the items on the second list, my spending reflected what was more important to me.
It’s a bit embarrassing to admit this. But, I can’t change the past. And making mistakes is how I learn most lessons.
Today, things are much different. My spending is both intentional and aligned with my values. Of course, it’s easier now since I’ve had a long career, paid off debt and achieved a modest level of financial security. As a widower who has no dependents it is admittedly much easier to control my spending.
My spending did not start to align with my values until I was introduced to the idea that I could pay off my debts from a Dave Ramsey radio show around 2008. Up until that point, I always assumed I would work until I dropped dead and that I would most likely die with huge amounts of debt.
Instead, I learned from Dave, then later from Early Retirement Extreme, Mr. Money Mustache and others in the FI/RE blogosphere how to reduce my spending, payoff my debts, invest and retire early.
It was not an overnight transformation. But, here I sit, 15 years later, debt free and spending on what I love and living a life that is usually fantastic.