How To: Spend Money
James P. Tomasovich, CIMA®, AAMS® XPYRIA Team Insights
I spent my childhood working career with Tomasovich Construction. The business consisted of an owner, general manager, supervisor, coordinator, and laborer… all covered by one guy, my dad. Upon turning 12, I began to join him on job sites, specializing in clean-up and trash removal, as well as earning the coveted title of “Gofer”. For those of you not familiar, it’s pronounced “GO-fur”, as in “Go fer this and go fer that” and “Go fer some coffee”. Over the years, I graduated from Gofer (however never really losing the title) to many other specialized roles such as carrying the shingles up the ladder to the roof (then put them on and finish the roof), carrying the drywall up/down the steps (then hang, mud, finish, and paint), and how can I forget, post-hole digger (then, you know, put a post in the hole). I enjoyed doing all of this while sticking to my father’s leading belief of “An honest day’s work for an honest day’s pay”.
After work, like any teenage boy in the 90’s, I would hop in the car with my buddies and drive around aimlessly looking for fun. All the while finding out that “looking for fun” was the most fun of all. Inevitably, my colleagues would be showing off some new shoes, a fresh hemp necklace, or ridiculously oversized jeans they just bought with their KFC paychecks. Meanwhile, I would be seeking out the latest deals at my local Goodwill.
OK, well nice story Jim, but what is this all leading to? Well, based on the work it took for me to earn my pay as a kid, I always found it just as hard to spend it. I’d think to myself “Sure, I could have this new widget, but is it really worth 10 hours of digging post holes in the hot sun”? Inevitably the answer was almost always NO!
So now that I’m working as (what the young me would call the old me) a Pencil Pusher: (noun) a person who figuratively and literally pushes around a pencil all day with nearly no physical effort, why is it so hard to spend money?
Let’s fast forward to breakfast at a local greasy spoon a few weeks back. A few good friends and I met up to discuss and solve the world’s problems and began to talk about taking a new radical approach to financial planning focusing on LIFE (more details to come). One of the key standouts was living life to its fullest, and not just saving for a day that may never come. This led a colleague to share an article that I found potentially life-changing for the few of us which I find in my position of struggling to spend (as opposed to the ever-popular struggling to save). The article: Why Is It So Hard To Spend Money? by Fritz Gilbert, posted on his website TheRetirementManifesto.com on 4/27/23.
I’d like to encourage anyone who is struggling to spend, or struggling to save, to head over to Fritz’s article and enjoy reading about his journey in spending. I did, and thoroughly enjoyed it. I’d like to share what Fritz calls his “5 Questions that will help you overcome a lifelong habit of frugality”. I also feel that if you are one who has no trouble spending, this checklist can -- nay, must-- be used to make important financial decisions.
Fritz’s 5 Questions To Make It Easier To Spend Money
- Will the purchase materially impact your wealth?
- Will this purchase improve your life experience?
- Will you have regrets if you don’t make this purchase?
- Have you done your homework, or are you being spontaneous?
- Are you getting good value for your money?
As a chronic saver, I found that reviewing these 5 questions and really thinking about them really put my frugality into perspective. While my cost-conscience spending has gotten me to where I am today, living a care-free budget-less lifestyle (I wish), was this really any way to live? Was I sacrificing enjoyment, for myself and my family, for an undetermined future goal, that when it arrived, I would push off to the next? Maybe, I thought, just maybe…
I’d like to take you on my own journey of decision making, answering these 5 questions for myself, on a recent purchase I’ve been pondering. Much like Fritz’s mountain bike decision (did you read his story?), I am currently in the middle of making a spending decision of my own. While I don’t know the outcome yet, had you asked me before I read and considered these 5 questions, the answer had been and would continue to be, NO! Now that I’ve been shown the light, we’ll see if I soften up, and make the buy. I know my kids who will never read this write-up are cheering for a positive outcome! Either way, I’ll follow up with a post to walk though my decision-making journey, and let you know how it has helped or hindered future me.
So, while I sit here and ponder if a young me would have been better off with a new pair of Jordan’s, a fresh new jacket, or obscenely oversized jeans, I encourage you to reflect as well on the “things” you’ve bought and/or money you’ve saved over the years, and how it could have been different. Do yourself a favor and list a few of those items from your past, walk through the 5 Questions, and see what the outcome looks like today. Then follow through and learn from your successful purchases and woeful mistakes, and work on being a better YOU. Why? To help you and your family live a more fulfilling life, through both SAVING & (ugh) SPENDING!
About the Author
James P. Tomasovich, CIMA®, AAMS®Senior Client Advisor
Mr. Tomasovich is a Senior Client Advisor at XPYRIA, and a member of the Firm’s Investment Committee. He has fiduciary responsibility in client relationships, requiring actions and recommendations to be based on the best interest of the client. Jim advocates for his clients in designing and maintaining cost effective financial strategies, reflecting the unique needs and objectives of each relationship.