From a retail perspective, this holiday weekend was successful. The National Retail Federation — an organization that represents retailers and is always happy to report good news in the industry — says that total spending over the four-day weekend from Thanksgiving to Sunday increased 16 percent over the same time period in 2010 when measured by total dollars spent. The total number of shoppers increased 6.6 percent and the average spent by each shopper increased from $365.34 to $398.62, or 9.1 percent.
Even “Small Business Saturday,” which I still see as a self-serving marketing campaign on behalf of American Express, has produced anecdotal evidence of success from mom-and-pop small business owners, while some customers have expressed frustration that some of American Express’s advertising did not clearly mention that registration in advance was necessary to receive the $25 credit.
I can’t overlook the unseasonably mild weather, at least in the New York metropolitan area, as a contribution to people’s willingness to leave the house and shop this year.
On Friday, I spent most of the day on an airplane, traveling from Los Angeles to Newark. I did not have the desire to wait outside a store in a line Thanksgiving night, the eve of Black Friday. Over the weekend, once home, I did not completely refrain from shopping. I purchased a gift for my girlfriend as we passed an item of clothing she liked, as well as a few discounted items of clothing for myself. For myself, I spent about $50 for items that normally would have cost about $100 without the “one-day-only” discount.
This past week leading up to Thanksgiving, while I was spending time with family in California, I gave into pressure and purchased myself a few toys. I grew up playing the original Nintendo Entertainment System, and Legend of Zelda was my favorite game. After the great reviews of the latest iteration in this series, a few in my family decided to take a look at the game. After getting a chance to play it, I decided I wanted to have a copy of my own. I find that I don’t have the time to spend playing video games, but I splurged on the game for myself, anyway — without paying full price.
I have more shopping to accomplish over the next few weeks before the holidays approach. I think giving into the retail frenzy during the days after Thanksgiving is generally a mistake. I’ve seen this happen in past years; the hottest items, even those deeply discounted during Black Friday, can often be found at even better prices later.
Before you consider me overly frugal, take note that I plan to spend quite a bit of money on myself in the near future as I continue exploring my hobbies and interests with full force as I find the time.
While it may not be the most exciting activity in the world, building a budget is one of the most important pieces of getting your financial life on track, especially if you’re starting from a particularly precarious point. When I first realized I needed to improve my money situation, I was in debt and had no savings. Creating a budget was my first move in the right direction. I figured out what I was required to spend for my needs, and moved on to what I’d like to spend on my wants.
The state of my finances dictated I didn’t have anything left over for wants, and I was hardly meeting my needs with my income, so I had to make some sacrifices to reduce the cost of living. After a while, when I was earning more income, out of debt, and increasing my savings, I could loosen up my budget and afford some of the wants.
Budgets are seen as negative for two reasons:
Typically, budgets are designed with the intent of restricting spending rather than allowing spending.
Typically, sticking to a budget means not having flexibility.
When budgets are viewed as negative, people are less likely to follow them. Budgets should be approached as a positive — a recipe for spending that frees you, not limits you. One way to take that approach is to add in some flexibility.
Flexibility in budget categories
With budget categories, it’s easy to feel locked in. Budgets can cause stress, and stress can physically manifest itself in many harmful ways. Chances are you’re already stressed about money, so allowing yourself to be worried about making your budget could be harmful to your health. Yet, if you’re three weeks into the month and you’ve already spent all the money you have budgeted for that month’s food, having a strict budget can lead to negative feelings about that budget. You may consider this situation your fault, if you didn’t plan the month properly and could have spent less earlier, and guilt is yet another negative feeling related to the budget.
In reality, you’re not going to just stop spending on food if you’ve reached the end of that month’s funds. You’ll either borrow from another category’s spending or, if it’s available, turn to credit to feed your family for that last week or so. Either way, if your budget is strict, you may interpret this as a step backwards, and if it happens often, it could mentally derail your financial progress.
When designing and sticking to a budget, it’s important to keep in mind that it is acceptable to borrow from an unused category to cover unexpected expenses in another, even if it’s a result of poor planning. You can always do better the next time. If you do need to resort to credit, don’t fret; pay off the debt with excess money from next month’s budget. If, however, you start to see a pattern of spending beyond your budget in one category from month to month, it’s time to reevaluate your budget and decide if you need to change your spending, adjust your categories, or earn more income to compensate.
Flexibility in time
Most people budget from one month to the next. Every month, the budget resets and you’re given a clean slate. When you’ve reached the end of the month and haven’t spent your full budget in any particular category, you have a few good options. First of all, this is a great position to be in, because you’ve spent less than you’ve expected, and you’ve survived. You can use this as an opportunity to look at your spending, and if you think this is sustainable, adjust your budget going forward to represent the lower amount of spending.
The options you have for your surplus can go a long way to improving your financial condition. Let’s say, across three categories like food, clothing, and utilities, you spent $100 less than you expected. Most of the time, that $100 would just disappear, remaining in a checking account for another day. Here are a few ways to look at that $100 and turn it into something positive.
Roll it forward. Apply the $100 to next month’s budget and let it be a cushion for your spending.
Splurge. While not best for your financial growth, creating rewards for yourself for sticking to your budget is a good way to keep yourself motivated.
Pay off debt. Adding $100 to your Debt Avalanche can save you money in interest.
In our interview with J.D. Roth earlier this month, J.D. pointed out that year-based budgeting is more effective than month-based budgeting. I think that month-based budgeting is easier to keep track of, but when you look at your expenses on a month-to-month basis, you miss expenses that come up at certain times during the year. For example, when you design a budget, you’re not necessarily thinking about spending on gifts for your family, but if you create your budget based on what you spend in February, when December comes around you may find that you haven’t planned properly. Basing your budget on the expenses you need to cover across an entire year will help you think about what you might be forgetting on a month-to-month basis.
From there, you could take your annual budget and divide by twelve to determine your monthly spending, and when that happens, flexibility of time is necessary. You could calculate that your gift-giving budget amounts to $80 a month, but when it comes time to spend that money, most of it might be spent towards the end of the year. If you start spending $80 for gits each month because it’s in your budget, you won’t have anything left over when the December holidays come around. So annual budgeting takes a little more discipline to make sure you’re spending at the right time, and it emphasizes the point that what you don’t spend in one month can be added to the next month’s budget.
The more dire the situation is, the less flexibility you may have to work with, but some flexibility and the right approach could make budgeting much more effective. Aim for a positive approach with flexibility to move between categories rather than strictness and an approach based on money scarcity, and your budget will have a better chance of succeeding. With budgeting success, your financial condition will continue to improve, and at some point in the future after long periods of good habits and increased income, a budget will be less necessary for your future overall financial success and independence.
Geneen has appeared on national television shows including The Oprah Show, 20/20, and The NBC Nightly News. Geneen is the author of eight books, including The New York Times bestsellers When Food is Love and Women Food and God: An Unexpected Path to Almost Everything.Lost and Found is her newest book, published in March.
Consumerism Commentary Podcast #103
Lost and Found: S04E25 / 126
[00:00] Introduction from Bryan J Busch [00:37] Interview with Geneen Roth
– [00:51] Initial impressions about money
– [03:15] Investing with Bernie Madoff
– [06:38] When it started to seem too good to be true
– [08:17] Avoiding a downward spiral of depression
– [12:29] Enough isn’t a quantity
– [16:30] People spend money the same way they eat
– [20:11] Buying fun things or saving to fill a hole
– [24:38] End
We always welcome feedback from listeners. If you have any comments for this episode or for any other, or if you have suggestions for future episodes, please leave us comments here or email us at podcast at this domain name.
Bryan J Busch: On today’s episode of the Consumerism Commentary Podcast we take a step back and look at the belief systems that influence our behavior with money.
[music]
Bryan: Welcome back to the Consumerism Commentary Podcast. I’m Bryan J Busch. My guest today is Geneen Roth, author of Lost & Found: Unexpected Revelations About Food & Money. Welcome and thank you for joining us on the Consumerism Commentary Podcast.
Geneen: Glad to be here.
Bryan: In my experience, people think there are only two way to act around money; you can either be smart and save what you need to or you can be foolish and not save enough, but from your book I gathered that our money decisions can date back to our very childhoods and that it’s not enough to attach education about saving to our existing beliefs. What’s really going on in our brains when we are making bad decisions?
Geneen: I don’t think it necessarily has to go back to early childhood; although because money was a factor and it was a daily part of life when we were growing up even though a lot of adults can’t remember hearing about money until they got to a certain age, because of course when you’re really young you don’t know what money is.
By the time you figure out what money is, what’s going on in your family with your parents or caretakers and your siblings depending on their particular situation, that is something that you understand. They get that across, so it’s gotten across to you even on a non-verbal level in terms of if there is enough, not enough, if there is a fear around it, if there is a sense of scarcity, whatever the issues are about money you imbibe somehow and those lay down some kind of structure or a blueprint, or a foundation for subsequent money beliefs and decisions that you make.
What I’m saying in Lost & Found is that all the good financial advice in the world is great; except that the problem is that for so many of us there is something that keeps us from following that advice. In my own case, I was told to diversify, diversify, diversify. It didn’t matter how many people told me to do that, I had a particular set of attitudes towards money beliefs about money and myself and that allowed me to block out all the good advice in the world.
Bryan: What were those beliefs that stopped you from diversifying? Just for our audience’s benefit, I’ll let them know that you were forced to examine your relationship and beliefs about money when 30 years of savings got wiped out in the Bernie Madoff Ponzi scheme.
Geneen: Right. I think it would be good to say at this point, because this came up in a book reading I did recently. Somebody stood up and asked me, “Didn’t you need to have millions of dollars in order to invest with Bernie Madoff?” I realized that people have misconceptions about the range of investors that were involved with him.
We had people in our fund that could invest anywhere from $5,000; I think $2,000 was the lowest and then as much as you wanted to up from there. It wasn’t only rich and mega rich people who could invest with Bernie Madoff. Our friend whose father had been involved with Madoff for 30 years felt as if he was doing something kind and generous when he invited his friends into a family fund, which is what we were involved in.
Yes, he and his family had put all their money with Madoff because they had been invested for 30 years and had done quite well, although it seems as if Madoff made a subjective decision about the kinds of returns he gave to whom. People who invested a lot of money with him seemed to have gotten 25%, 50%, 75%, 100% return on their money. When you were invested as a part of a feeder fund; which is what they were called, depending on how much money they had of that fund put in we’re finding out now resulted in the kind of returns you got.
We got about 6% or sometimes 8% on the money and that seemed better to somebody as financially unaware as I was and as financially unaware and unconscious as I really wanted to be, because truthfully, I didn’t really realize this but I didn’t want to think about money.
I wanted it to be easy. I wanted somebody to be able to make decisions for me. It’s much like how people feel about food. Just tell me what, when and how much to eat and I’ll do it. Give me rules to follow and so the people around me, the people in my immediate world, all, it turned out, I didn’t realize this when I first met them, had all invested with Madoff through this particular fund and so I did too.
I didn’t listen to diversify because it would have really meant doing some investigation. I investigated the fund but really investigating into why I didn’t want to diversify and what was it that I wanted to be unconscious about.
Bryan: Was there any point at which you thought, “This seems too good to be true?”
Geneen: Getting 6% didn’t seem too good to be true. The only time it seemed too good, because we’ve got 6% when other people were getting 15% and 20%. When it started feeling like it was too good to be true was when everything started to crash in September and October of 2008, but that’s what Richard had said to us for many years, “The great thing about investing in this fund is when the market is doing great, you don’t get the highs but when the market is not doing great, you don’t get the lows either.”
It seemed a bit too good to be true and that point, we put in our request in to get our money back but it took a couple of months to get the money back and we were slated to get it back on January 1st and of course Madoff confessed on December 11th, a month before.
Yes, and it was devastating. It was terrifying and devastating to hear that we had lost; my husband and I had lost 30 years of life savings and I know many people are experiencing this now to a lesser degree. My husband and I; he likes to say took the express elevator down to the bottom in one fell swoop and many people are going through this kind of discomfort, pain, suffering, fear, terror in smaller or larger amounts now, but we’re all feeling it.
Bryan: Now, you were in a fortunate position or more fortunate than others when it came to experiencing that terror. Could you tell us how you were able to bring yourself back from spending all day being mad?
Geneen: Well, I was no more fortunate than anybody else. What I did, every single person can also do. I thought I was going to go mad. I didn’t see how I was going to live inside my own skin because I had no idea how we were going to survive. I thought there was a chance we would be homeless.
A friend invited us to move in with her; my husband and I and our 60 lbs dog in their 6 x 8 dining room, which of course would have been a pleasure and an amazing gift to have gotten, so I don’t want to put that down at all the fact that somebody was willing to have us move in with her was incredible, but I didn’t know how we were going to live and I realized that the only way to live through that was to focus on what I hadn’t lost, on what I could find on a day-to-day basis in my immediate environment.
It was very simple, concrete things. The kind of things that we take for granted every day; things like being able to take a hot shower, things like being able to drink tea from my favorite blue tea cup with the big red rose on it, things like being able to watch my dog still play, being able to see the hummingbirds flock to the feeder outside the backdoor or to actually take steps to breathe, to have a body, to still have a roof over my head for that moment.
Those were things that were necessities for me to focus on and those are things which most of us take for granted every single day and I hear a lot of people saying to me, “That’s easy for you to say. What about the fact that I’m scrimping and saving?” or somebody wrote to me the other day and said, “What about single mothers who have three children are scraping to get by?”
This is true across the board and the reason it is is because focusing on what you do have instead of what you don’t have allows you to maintain some kind of equilibrium and it allows the brain chemistry; all that work on neuroscience that’s being done right now shows that when you begin focusing on positive things, we’ll call this positive, then your brain chemistry changes.
When your brain chemistry changes, you’re actually able to make more objective decisions about what you can actually do instead of focusing on that old run or fight or flight mechanism that we get into. That’s a case of absolute survival hypervigilance. And in that case, your whole body is geared for a fight and geared for an emergency; but if you have to make decisions that are objective, decisions over the long run, that kind of state of emergency and terror and fear that’s so negative we’re living in right now doesn’t actually help, doesn’t help us have any clarity about our situation and certainly it’s utterly lacking in joy.
Bryan: I learned in the book that our survival instincts; coming from the lizard brain, actually have a direct relationship with things that you wouldn’t except. For instance, let’s say that lately I’ve been wanting to get an iPad 2. I don’t need one and I can’t afford one but I want it anyway. Why would my brain do that to me?
Geneen: First of all, we are living in a consumer culture. We’re living in a culture in which your self-worth is pretty much defined by your net worth, so to speak, or the amount of stuff you have. It’s very difficult. It takes awareness to disengage from that. If you think you’ve got to have one for what? The question is, what do you believe would happen if you had one?
We associate happiness or a feeling of sufficiency with a quantity or a thing and really, it turns out that it comes down to is that enough isn’t quantity. It’s not in anything you can touch or buy or have. It’s really a relationship to what you already have.
If you made a list of the ten happiest people you knew, it probably wouldn’t be the ten richest people you knew. In fact, financial advisors across the board have told me when I interviewed them for Lost & Found, my book, that no matter what somebody had, no matter how much money somebody had, when they ask their clients what they would need to feel safe, comfortable, relaxed, happy, it was invariably twice as much as they already had.
And then, when they got to that twice as much mark for those fortunate, for those financially fortunate ones who did; and they were asked the same question again. They wanted twice as much.
I think it’s important to know off the bat that once you got the iPad, it would be something else. It’s not the iPad. It’s not the money. It’s not an amount. It’s not the thing itself, and I think that is so hard to get. It’s so hard to understand. It’s so hard to believe, but anybody who’s had what I call in Lost & Found a deathbed moment, a crisis moment and I’ve had a lot of them; I had a medical test a couple of years ago and I almost died. In fact, I did die for about two minutes and when I came back I couldn’t believe how fortunate I was. I lost all of money, I was in a car accident a couple of years ago where I ended up in a wheel chair. I’ve had disasters.
I’ve of course written about my relationship with food in Women, Food & God forever about how I gained and lost 1000 lbs and how I was anorexic and then hugely overweight, so I’ve really taken it to the extremes in terms of my life and have gone to the extremes because of situations I’ve been in, and in each of those crisis moments; those deathbed moments or crisis moments, I’m aware of what’s really, really important and yet, which is right here right now, what do I see? What do I have? What does my life depend on? And yet, it is so easy to forget and just to want that iPad and believe your life would be good if you had iPad.
Bryan: You talk in the book about stealing pleasure. What does that mean?
Geneen: Some of the chapters in the book have to do with our relationships with food and money because I’ve always said in my work with food that people live the way they eat; that if you really want to know what a person believes about life, about scarcity and deprivation and joy and pleasure, happiness, what they are allowed to have or not allowed to have, whether they’ve given up on themselves or not given up on themselves, all you have to do is look at the food on their plate.
What I now understand; which I didn’t get before, even though I’ve studied the relationship with food and my students’ relationships with food for 30 years, I didn’t understand that people also spend the way they live or spend the way they eat, but our relationships with food and money are almost exactly the same. This was staggering to me to discover, staggering to me to see that in the same way that we diet and binge or some of us do, we also are strict with money and then splurge, or we rationalize about food; broken cookies don’t count because when the cookies break the calories break or anything eaten with a diet soda doesn’t count because it cancels out the calories; same thing we do with money.
If I can amortize it over 20 years and it only costs me two cents a day; well then, how could I afford not to buy it? Or if it’s on sale, I can’t afford not to buy it. Those are some of the patterns and the feeling of never having enough food, the stuff that we really, really like to eat or money.
One of the patterns I see with food and money is that we feel like we don’t deserve to have it. If we’re overweight, we don’t really deserve to enjoy food so we better eat salad without dressing and dry toast in front of other people, and then steal pleasure while nobody is looking and I think the same is true with money.
We have this set of beliefs about money; unconscious beliefs for the most part, we want it, we want it, we want it. We can’t have enough of it, we don’t have enough of it, we believe our life would be better if we have it and yet, many of us without knowing that we believe this, believe that money is sleazy or dirty or it’s the root of all evil or responsible for all that’s wrong and we don’t want to be like one of the bad guys who rip people off and slice and dice up those crazy mortgages where people ended up losing their houses because they signed on for it, things like that.
And so, because we have this money split we end up feeling like we’re not supposed to have but we really want it and if we want it, I call it stealing it. We have to get it behind our own backs and that’s where all the subversive behavior around money comes.
Lots of women tell me, for instance, they go shopping but they run into the house and put all the stuff under their beds before their partners get home and it’s not that they couldn’t tell the truth; it’s just that there is this whole subversive game, this belief that if we’re going to give it to ourselves and we feel like we’re not supposed to, we’re going to have to steal it in some way which means eating and/or buying it behind our own backs and behind the people we live with backs.
Bryan: You mentioned earlier that enough isn’t a quantity; meaning, I’ll never have a number where I can look and say that’s enough, so there is a hole somewhere in my soul, so to speak, that I try to fill with saving or with buying gadgets and I have to accept that that’s never going to work? What will work instead?
Geneen: I think that’s a really good question and I think the first thing to understand, even before we get there, is to understand that more financial advice isn’t going to help you fill that hole, so to speak. The only thing that’s going to help is to actually address what’s going on, because financial advice is like when you’re not actually addressing what’s actually going on, it’s like I tell my students it’s like putting whip cream on a piece of wood and trying to make it edible. It doesn’t work.
If you don’t want to listen to the advice because you’re trying to fill something that you desperately believe needs to be filled and that you feel as responsible for the pain or discomfort or hurt or suffering in your life, then you’re going to get that thing regardless of whether you can afford it or not, or you’re going to keep wanting it whether you can afford it because you believe that if you have it you’re going to be happy. So it’s important to start there, to realize that the reason why we don’t want to follow a lot of this advice is because we’re using money for emotional reasons that we’re not acknowledging or addressing.
As long as you’re doing that all the good advice in the world is not going to be able to work for you, and so the first thing to do is acknowledge it. The second thing to do is to see if you’re feeling empty — let’s just say there is a hole there. It’s like, “That’s interesting, you believe there is a hole there.” Somebody said to me recently, “Well, I’m using money to fill the emptiness and it’s not doing it.” Somebody else wrote to me the other day and said, “I was feeling empty so I ate a piece of cake and that didn’t work, so I bought a pair of shoes and that still doesn’t work.”
Right, of course that’s not going to work. Those things don’t actually address why you’re doing what you’re doing. Let’s just go directly to what you’re feeling before you eat the thing, buy the thing. And if you’re feeling empty, and this is the other thing that people sort of say, “What?” I say, “What’s scary about just letting yourself feel empty?”
People feel like if they let themselves actually feel their feelings of what is going on they are going to dissolve, they are never going to be able to get off the bed, they are going to fall apart, they are not going to be able to take care of their kids. That’s not true. Emptiness; if you just let yourself feel it, feels like a lot of space. That’s all it feels like.
We react to our feelings without actually letting ourselves feel them. And if you actually feel them and sometimes it takes doing it with somebody and with support if you haven’t ever done this, but if you do do that you’ll find, “I’m running from my own shadow here.”
I had a friend who tells a story about her 6-year old friend who would say to her, “Imagine you’re in a room filled with tigers. What would you do?” And she said, “I don’t know. I would try to run or I would get a gun or I would hide or I would try to chase the tigers out. What would you do?” And the 6-year old friend said, “I’d stop imagining.” And I think that’s what most of us do.
We imagine that these feelings will kill us instead of stop imagining what the feelings are going to do for us which then all that imagining leads us to buying and eating and doing all these things we can’t afford instead of just stop imagining. Just notice, “I’m feeling sad. I’m feeling lonely. I’m feeling empty.” Okay. Feelings pass, they come and they go. They are like clouds.
Bryan: That’s a nice way to put it.
Geneen: I know. That’s a novel approach.
Bryan: Thank you very much for spending time with us on the show today.
Geneen: Thank you so much.
Bryan: That was Geneen Roth, author of Lost & Found: Unexpected Revelations About Food & Money. Find out more about Geneen and her several books at her website, geneenroth.com. She is also interacting with people every day at Facebook at Facebook.com/geneenroth. Join us again next week for more great personal financial advice and information.
Thank you for listening to today’s episode of the Consumerism Commentary Podcast. We’re looking for feedback. Please email us at podcast@consumerismcommentary.com. To subscribe to the podcast or listen to this or other episodes, visit us at ConsumerismCommentary.com/pod.
This is a guest article by Sam, the author of the blog Financial Samurai and the founder of the Yakezie Challenge and Network. He writes a column for Consumerism Commentary every other Tuesday.
This past summer I went to my friends Peter and Stephanie’s wedding in Hawaii. Peter is 35, but looks 25, and works as a manager at a boutique strategy consulting firm. He probably pulls in between $300,000 and $400,000 a year, but you’d never know it by the way he casually dresses outside of work. Peter is a jeans and a t-shirt kind of guy and was once the quintessential super-motivated boyfriend. Stephanie is 31, but actually looks 22 and makes women jealous because she is so petite. Stephanie is also a manager at an accounting firm and earns between $100,000 and $150,000 a year with much better hours than Peter.
With roughly half a million a year in combined income and no family to support, Peter and Stephanie are surely considered well-to-do, even in an expensive city such as San Francisco. One would think that Peter and Stephanie would throw a lavish wedding of 200 or more people at some fancy resort for $80,000 to $100,000 like every other couple I know who makes that much. Not so.
Stephanie is even more conservative in her spending habits than Peter. Stephanie’s favorite store is Target, where twice a year she’ll splurge anywhere between $100 and $200 on her favorite clothes. She’s not into jewelry and her biggest vice is collecting $2 magnets and used stamps whenever she goes on trips. Stephanie is as low maintenance and non-material as it gets — a guy’s dream!
Lest you think Peter and Stephanie are cheap, I assure you they are not. They donate more than $10,000 a year to a charity I’m involved with, and they don’t skimp on their vacation adventures abroad.
The wedding
After reading their backgrounds, how much do you think they spent on their wedding? How about $50,000, or just one tenth their gross annual income? Nope, not even close. Including airfare, they spent $2,050, or just 0.4% of their annual gross income! Let’s break down the costs:
Airfare for two from SF to Kauai: $1,100
Wedding ceremony with ukulele player and minister: $250
Photographer with CD of photos: $300
Beach venue: Free
Hawaiian lunch reception for 20 where Peter first took Stephanie out on a date: $400 after tip
Peter and Stephanie invited their immediate family and closest friends. They didn’t want to make their wedding a big spectacle at all. For those who were able to fly out, fantastic. For those who weren’t, they threw a 50 person house party for them upon their return.
The wedding was absolutely magical. There was no stress and such a casual way about everything. The sun shined warmly and you could hear the palm trees ruffle in the breeze as the ukulele hummed and the minister preached. I’ve been to around 20 weddings, and this one was the most memorable by far.
What’s with the massive spending?
I don’t really understand the point of spending much more than $5,000 on a wedding, no matter what your income is. Sure, you want your moment to be magical, but the magic is more about surrounding yourself with magical people than thousand dollar floral arrangements and lobster tail entrees.
Instead of spending $20,000 (the average cost of an American wedding), you can use the money towards a house down payment or new household items. Invest the $20,000 in your retirement or in your child’s education. There are countless better ways to spend $20,000 than on a wedding that lasts half a day.
Like my one-tenth rule for car buying, perhaps each of us should adopt the one-tenth rule for wedding expenses. If you make $100,000, spend no more than $10,000 on your wedding. The rule helps ensure that you focus on what’s truly important, while maintaining sound finances. If you want to spend that typical American wedding amount of $20,000, make it a goal and try and make $200,000 or more before you get married. Peter and Stephanie spent 0.4% of their gross annual income on their wedding; surely you can spend 25 times their percentage and still have a grand time too!
How much did you or would you spend on a wedding? Do you believe it’s right for a couple to ask their parents to pay if they can’t afford the wedding themselves?
My girlfriend and I are spending this week on vacation in Myrtle Beach. It’s my first visit to this area, and we are enjoying it. I’ve never been a big fan of the beach, but that may be only because most of my experience involves the Jersey shore. I’m learning to appreciate the “do-less” vacation, ... Continue reading this article…
Do you have a 5-year financial plan? What about just a general idea? Do you know where you want to be financially in 25 years? Have you ever set a financial goal? If you decided you wanted to save $5,000 this year, could you do it? Far too often we get into situations where we ... Continue reading this article…
Every Tuesday, Smithee presents an article about his own experiences with credit cards and observations about the credit card industry. So, nobody’s perfect. After my recent embarrassing splurge that included a digital camcorder, an audio mixer, three microphones and a new Apple MacBook Pro, I was feeling pretty down on myself. My credit card debt ... Continue reading this article…
Here are several articles I’ve enjoyed this past week. What Do You Splurge On? My answer, as given in this article at Get Rich Slowly, is my preference for dining out with co-workers for lunch every day. Making Your Own Laundry Detergent: A Detailed Visual Guide. When I asked if frugality necessitates missing out on ... Continue reading this article…
Content on Consumerism Commentary is for entertainment purposes only. Rates and offers from advertisers shown on this website may change without notice; please visit referenced sites for current information. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise.
