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 licking 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 off 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
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
Obviously, although I professed to want the items on the second list, my spending reflected what was more important to me.
It’s embarrassing to look at this.
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.
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.