On Thrift
Roman Matveyev
"There are plenty of ways to get ahead. The first is so basic I'm almost embarrassed to say it: spend less than you earn.
-Paul Clitheroe
Why is it that some people always tend to have a bit of extra money, even in dire times, while others are somehow scrambling for pennies irrespective of how much they earn? "Give 'em money to eat, the next week he's broke" (Jay-Z - Never Change). Once you get beyond the cyclical justifications of all the emergencies, excuses for bottomless lists of absolutely necessary financial burdens that these people claim to have, what it all comes down to is bad habits. Of course, we are not talking about people facing real misfortunes, but those who tend to be careless with their finances. The good news is that like any habit, there is always the possibility for change and improvement. Allowing the virtue of thrift guide your decision making can fairly quickly transform you from a have-not to a have.
First and foremost, we must accept responsibility for our circumstances, choices and begin to have a healthy relationship with our money. Marie Forleo has a great video of how to do just that here. People who have money tend to know exactly how much they have, how much is coming in, and from where, and precisely how much of their funds are being spent, and on what. Yes, this may be burdensome at first, but it works. More importantly, the simple reason why these people have a lot of money is because they do not spend everything they earn. They save and invest what is left over. Understandably, if you are a single mother of three with a low paying job - the last bit about investing may likely not apply. As a side note, despite what we have been conditioned to think, unless we rob, cheat, or hurt others on our way to fortune, we should never feel guilty about improving our bottom lines. At the end of the day "I don't really care what you call me, just as long as you don't call me broke" (T.I. feat. Eminem - That's All She Wrote).
What tends to happen is our priorities become skewed, we blur distinctions between our needs and wants, and we resort to immediate gratification. Somehow the more we earn the more we tend to spend and reinforce Parkinson's Second Law (expenditures rise to meet income). A surefire recipe for financial ruin. The most basic microeconomics principle is that everything comes at a cost. If you have $30 dollars and you go out to dinner, the cost of the dinner is not being able to buy the shirt you want. What many of us do is buy the shirt, go to dinner and order extra drinks - all in one day, and naturally, charge it all on a credit card. Then at the end of the month we cry once the statement arrives, if we are courageous enough to open it. There's an easy solution - "if you can't pay for it don't buy it" (Warren Buffett - How to Stay out of Debt video).
Thrift really is the key to financial success. You can have much of what you want, but in moderation and you must forego some of the things you want altogether, at least for the time being. "To be without some of the things you want is an indispensable part of happiness" (Bertrand Russell). Hey, we like expensive teas, coffees, chocolate, rum, cigars, fine quality clothes, home decor and to travel well and often. But, we plan, budget and prioritize of how to spend our money so there is enough for everything. "Chains is cool to cop, but more important is lawyer fees." (Jay-Z - Never Change). The Cohiba Comador is an exceptionally fine Cigar, but at close to $30 a piece it makes sense to smoke it once every 4-5 months, while making certain there is enough change left over in the bucket for real emergencies. If you want to go on that amazing trip to Andalucia or Provence, put the Louboutins or Yeezys back on the rack. Simple as that.
Being thrifty has positive side effects too. Over time you become more goal oriented, your willpower increases, and you can finally pass the marshmallow test. You learn to appreciate the little things in life more because you no longer overindulge. Only in moderation can you truly appreciate something. A cup of Phoenix Dan Cong Oolong Tea becomes a magical experience that you look forward to - not just another cup of afternoon tea.