Lately my husband has been spending huge amounts of time researching investment strategies. While we’ve both been committed to long-term savings goals for years, he’s really been getting into the nuances of it lately, and it’s made our retirement portfolios much more interesting to look at (of course they haven’t been much fun to look at this week, but that’s how it goes). Between our various savings accounts and the extra principal payments we make on our mortgage, way more than half of our income goes into savings, and the new things we’re learning about investing just make us more motivated to keep it up.
We were talking today about how so many people with incomes similar to ours end up spending most of what they earn each month. It would be easy to do, with payments on two newer vehicles, a more expensive home with a larger mortgage, several meals/movies out each month, some new (as in, not second-hand) clothes here and there… we started tallying up the money that an average middle class family could easily spend each month and it got high very quickly.
Then I started thinking about why people spend so much of their income rather than saving it. For us, a healthy IRA balance is FAR more exciting than a new car, but I know that this isn’t the case for a lot of people. In addition, a lot of people really don’t like their jobs, and feel huge amounts of stress over trying to balance work, family, fun, and all the rest of it. But those same people might have brand new living room furniture, top of the line kitchen appliances, a new car, and a house with lots of custom upgrades. The disparity between what they own and how they feel is striking. Many of them are working at a job they don’t really enjoy, just to pay for all the things they own.
Some things are worth the money. If a thing brings you great pleasure or gets used all the time, it was probably worth the money you spent on it. My VitaMix blender is a good example. It cost nearly $400, but I’ve used it at least twice a day (sometimes a lot more) ever since I got it in 2008. It came with a 7 year warranty, and I can’t imagine my kitchen without it. Each of us have things like that – a super comfortable piece of furniture, an outfit we feel great wearing, a vacation that created awesome memories… But a lot of us have things that we bought because we figured they would be impressive. And often times, it wasn’t ourselves we were trying to impress.
This made me start thinking about my friends, and our relationships with each other. I have friends with a wide range of incomes. Some have fancy houses filled with fancy stuff, and others have apartments with futons that they’ve had since college. And I can say for sure that I don’t care at all about any of it. They’re my friends because I enjoy spending time with them. They make me happy, and that doesn’t have anything to do with whether they have impressive “stuff.” Think about your own life and the people you love. Chances are, your friends and family don’t care about your stuff either. When they come over to visit, it’s to see you, not your new living room set or big screen TV. If you had to choose your five favorite people, my guess is that they would be the people who make you the happiest, who make you laugh, who provide a shoulder to cry on when you need it. And whether or not they have a new car or a house with granite countertops probably has nothing to do with it.
Just food for thought for the next time that the urge to buy something impressive strikes (and yes, it strikes me sometimes too, although I’ve gotten pretty good at recognizing it for what it is and moving on). The people who love you will love you regardless of what possessions you own. The people who would like you better if you had more fancy stuff probably aren’t worth keeping around anyway. And a secure financial future will get you a lot further than anything you can buy at the mall.
Ok, I’m stepping down off my soapbox now. Hope you all have a good weekend!