How an attitude adjustment can make the biggest difference in your finances.
I'm not saying I made all the best financial choices, but I followed my heart. I'm a working class guy from Florida who, with huge dreams of being an opera singer, found himself in love with the man of his dreams in Boston, Massachusetts.
At some point I got tired of waiting tables and decided to go for it. I mean my only income for a period of time came from music gigs. I mean, I cannot tell you how absolutely broke I was. Oh and DEBT? Forget about it! I would go grocery shopping at the Dollar Tree because canned food was, well, $1 each. Not only was I broke, but I was a hard worker who was broke. Which was heartbreaking.
Day after day (including weekends) I was zipping around town from funeral to wedding to choir/opera rehearsals. Fast forward to 2021 and I still consider shopping at the Dollar Tree. Not because I can't afford my usual groceries at the [insert larger grocery chain] next door, but because, well, the canned food is only $1.
All of that is to say this: I'm looking at my upcoming budget and I'm like "Why do I only have $20 of 'Fun Money'?!" It feels like I'm still that kid who thought living on $400/wk could cut it in one of the most costly American cities. Don't do the math. It will make you cringe. But looking at how aggressively I'm attacking my debt while simultaneously being absolutely as aggressive as humanly possible at funding my savings and investments I find myself living on the bare minimum.
Sure, the COVID-19 pandemic absolutely helps with this. There's no monthly transit pass, no eating out/drinks with friends, or trips to Ogunquit, ME for a weekend with the boys. But there are also no new video games, no (or hardly any) Grubhub orders, and certainly no Etsy packages arriving. It's not that I'm not spending money on this stuff because I have self control. As if. It's because I've left myself with no money.
An interpretation of Parkinson's Law suggests that you will adjust what you spend but how much you allow yourself. Here's the scene: you've got 5 days and $50 until payday? You'll spend it all. Two weeks later with 5 days and $100 until payday? You should have $50 left on Thursday, right? Yeah. Right.
After you've stopped laughing because I know you know exactly what I'm talking about we can all acknowledge this happens to us all the time. We are constantly shocked at how quickly that bonus check disappears into various purchases. We also sweat it out when we forget about a bill and are left with $20 to last four days...but we do it.
So what if instead of saving money that may or may not be left at the end of the month ,you set up automatic withdrawals into your savings account on the day/after when your direct deposit hits? Get an extra $200 from a gig? Put it in the savings - don't attach it to a card you can swipe at a taqueria. Have an HR Dept. at work? Ask them to up your 401K contribution by 1% -- you won't even see the money as it's growing and growing for you. Try it for a month. If you really need the money to make it the last few days before you are paid again you can always transfer it (from your savings NOT your 401K) back to your checking. No harm, no foul.
But I am positive you'll adjust your spending without even much noticing. You'll be cooking a really tasty meal that would've cost $12 -- and yours has 2 days' worth of leftovers! You'll find that you're really good at Super Smash Bros. because that's what you have and that's what you play. So you impress your friends when you (finally) get to hang out with them. And someday you too will look at your budget like me and ask yourself if you can manage to loosen the belt a bit. And you'll probably say no like me, because you've realized the joy of building wealth far exceeds whatever you're buying short term.