Ahh, that old chestnut. I am the very definition of penny wise, pound foolish. For the most part. Okay, maybe “the very definition” is a bit of an exaggeration. Let’s just say that I am capable of being frugal, and am inclined to be so, with a few exceptions.
One of the “exceptions” is something of a Death Star planet killer. Or plan killer, as the case may be.
It just couldn’t be easy, could it?
1. Eating out at restaurants is my Achilles heel.
When left alone, I will choose to eat my own food most of the time. It is when coworkers or friends want to go out to eat, and socializing revolves around food, that I break down. I love food. I love good food. Restaurants are awesome and I love them. It is hard for me to turn down an invitation to go out.
2. “Big opportunities” for myself and/or Junior.
It’s a class, or a trip, or some other experience that may or may not ever come our way again. I took Junior on a big vacation last summer. Total blowout, and it was amazing. Ridiculously expensive. We had the times of our lives, and if I had to choose between that and retiring a year earlier, it would be pretty hard for me to make that decision. I’m extremely grateful I had the means to give him that experience. Would he grow up to be an amazing human being even without having had it? Absolutely. That is what will make me more cautious in the future.
3. Manic, foolhardy schemes.
“Let’s start a business!” is a good one. My next best favorite is, “It’s 2008! Let’s sell our little condo and buy a house! What could possibly go wrong? Let’s just go ahead and sink $15k into repairing and prepping our place and start renting somewhere else while it’s on the market. It’s okay, we can afford to pay our mortgage AND the new rent for a while—it will be worth it once we get our dream home!”
It didn’t go as planned.
The psychology of it
I grew up with very little, in a very rigid, ignorant, and controlled environment. My parents did not manage their money well, they weren’t particularly ambitious when it came to making money, and the primary lesson they taught me about money was that it is scarce and hard to get. So when I got older and found a good job of my own, and was soon making money hand over fist (at least by the standards I’d grown up with), I found I could do pretty much anything I wanted. The thing is, the only thing I wanted was to be loved.
(Ewwwww. I shudder to even say it because it sounds so Hallmark Channel. You’ll have to forgive me though, because this is the “real life” segment of the program.)
So what did I do? I landed in relationships with people who loved what I could provide for them. I had a really difficult time saying “no,” and was easily manipulated. I’m not saying I don’t bear any responsibility—the responsibility is 100% mine. I am saying that I was throwing around my money willy-nilly without really understanding why I was doing it, and then looking at my bank account and reinforcing what I’d grown up believing: money is scarce and it is hard to get. The evidence? I obviously didn’t have enough of it.
Many years, many relationships later, it dawned on me: “Hey, I am making more than most people in the United States. Maybe money isn’t the problem here.”
That led me to make one simple decision that completely changed my relationship with money.
I have enough.
After shedding the belief that money was scarce and hard to get, I was able to reflect more on my own behavior and eventually, what other beliefs and assumptions I was holding onto. I started reading about financial independence and how to manage my money. How to invest. I talked to people. I learned a lot, and started going in the right direction. Finally!
And then, on the road to financial stability, I came to a traffic circle.
After battling depression most of my life, I was finally diagnosed with Bipolar II, which is the flavor that doesn’t involve complete psychotic breaks. It’s the kindler, gentler Bipolar, if there could be such a thing. For the most part, my issue was depression, but when I was told about the symptoms of hypomania the bigger picture came into focus. There was definitely a pattern. My medications have been tremendously helpful in improving my overall quality of life, and made it possible to make positive lifestyle changes. It doesn’t magically cure depression and hypomania, but the episodes are much further apart. The swings are much less severe, the lows aren’t as low, and the highs are not as high.
Which brings me back to my point. While I believe 100% I can overcome my craving to eat out at restaurants, and will be able to steer clear of expensive vacations, I am still nervous, I’ll admit, about finding myself in another “I JUST CAN’T LOSE” frame of mind. My capacity to self-sabotage is truly astounding. I’m a bright person, and can rationalize just about anything when my impulse control button is broken. This is the pound foolish plan-killer part that could realistically be an issue as I make this journey toward financial independence. I don’t really have a plan yet for how to mitigate that risk.
I’m pretty sure they don’t teach CFAs how to advise clients on these sorts of things.