This post might be more for me than anyone – I decided to reflect on those financial areas of my life that tend to trip me up the most. They say honesty is the best policy, but this might be taking it too far. . .
- spending on family. I admit I sometimes go overboard trying to “provide” for my family. I want my family to have the best and I’m sure I have spent more than I should in order to “provide” for their needs. I believe my Biblical desire to be a good father and husband are good and all, but I’m also sure that insisting on top quality (expensive) items is not really displaying good judgement. . . I insisted we get a large wooden play-set in the backyard – of course it had to be made from redwood and cedar – it was thousands of dollars – can you say over-kill?
“Over-kill is under-rated” John “Hannibal” Smith (A-Team)
I extended this same misguided philosophy to our dining room suite (had to be genuine amish oak), the family SUV – had to get the top-of-the-line package in order to get all the safety features. We bought it used but it was still way more than we should have spent on a vehicle. Our outdoor shed; my wife asked for a shed and I insisted on a 16X20 shed with a loft. You get the picture.
- technology – I like to think I need the latest iPhone every year. I suffer from frugality fatigue if I have to go more than 12 months with the same smart-phone (imagine the world’s smallest violin playing me a lullaby). I’m half convinced that I “need” a 4K television (I don’t). How could I possibly be expected to listen to my tunes without my Beats blue-tooth headphones? I’m convinced we should replace our desktop computer – even though it works fine – just because it isn’t the latest model with a super-fast processor.
- cars – already mentioned that in #1 above – also covered in a recent blog post dedicated to cars. Trust me – it’s a bad idea to go into debt to finance a depreciating asset. That new car smell will cost you thousands and reduce your net worth. Don’t do it! Buy a car you can afford – preferably with cash and preferably worth no more than 20% of your salary.
- poor planning – that’s a sufficiently vague description, so I will elaborate with some examples. It’s a surprise when I need to replace the tires on my car – who knew they would wear out? Did I plan ahead, anticipate this obvious expense and set aside money into a sinking fund? No I did not! I’m not a rocket scientist, simply not that clairvoyant. Did I set money aside when we had to replace our HVAC? – you guessed it. That same brilliant planning pretty much applies to all house related maintenance and repairs.
- private school – pretty much related to #1 above but we spend way too much on private school for our son. I think I can semi-defend this one because he has ADHD and some other unique learning differences, but nonetheless, the particular schools we have chosen are quite expensive and probably above our means. In some ways, private school was the driving reason behind my personal finance quest – a quest to save enough money to cash flow private school. We are achieving that goal – but it hasn’t been easy. I think I am arguing that this particular “luxury” is worth it. I know many folks who aren’t comfortable with the public school system (especially where we live), but think carefully before embarking on the private school route – this will require tremendous sacrifices (for most). You might still determine it’s worth it – for religious, medical, or other reasons – but make sure you consider the cost and pray about this decision before embarking unprepared.