The Problem with Being Budget Minded is Other People
| October 8, 2010 | Posted by Roshawn Watson under Uncategorized |
By: Roshawn Watson
Budgets are powerful tools. If followed, they force us to realistically evaluate our income and outgo to develop a rationale spending plan in line with our household or business goals. However, one of the biggest challenges to operating on a budget, past the initial dread budgeting in the first place, is that other people don’t. Thus, if you follow a budget, “they” (family, friends, society at large) will call you a zealot, fanatic, and extremely frugal. I’m convinced though that the problem isn’t you my friend, it’s them!
Our Societies and Our Need For Approval
We live in an overtly critical society. Go to nearly any entertainment or political news website, and the discord represented in the comments is phenomenally depressing. Everyone is so anxious to share their dissent about this or that regardless of how banal it is. At least on the internet though, you often don’t really know who the critics are. It’s an entirely different dynamic when the critics reside within your real life inner circle.
I was reading a story recently where a lady saw a beautiful piece of furniture that she would have loved to own except for the fact that it was out of her budget at the time. Her mom said “that’s fine. Use your emergency fund to purchase it.” When the daughter refused, her mother called her a miser. Her mom’s thinking was so warped that she misconstrued being fiscally responsible with miserly behavior. Personally, I think the real difference between this daughter and mother is quite profound. The mother can’t think beyond instant gratification. Obtaining what she wants right now is her priority. In contrast, the daughter is thinking about her risk tolerance and financial future. The mom’s inability or refusal to think ahead is commonplace among the poverty-minded. In creating phenomenal wealth over time, we discuss using the opposite mindset to build wealth long-term. The long-term implications of consistent fiscal conservatism to your balance sheet is remarkable. Being budget-conscious doesn’t make you any more miserly, than being a spendthrift makes you a giver.
Interestingly, there is another important issue at play. By the daughter’s refusing to embrace her mother’s advice for handling her finances, she is expressing a quiet dissent towards reckless spending (her mom’s path). Since people don’t like to be reminded that money needs to be managed well, this criticism was ill-received.The mom didn’t like the challenge and lashed out with a passive-aggressive statement, which is really thinly veiled manipulation through hostility.This story highlights the often dysfunctional relationships we have with our family and friends with regard to money. Fortunately, the daughter had the wherewithal to set a clear boundary for her condescending and unsupportive mother. However, all too often we give into the pressure, blow our budgets all in the name of maintaining approval.
Let’s Challenge Them
Well, I say forget their approval if it is contingent on “fitting in” financially. Relationships with friends and family members should not be based on whether or not I do what you want but rather determined by your love for each other. If they are so lame that they can’t stand you being responsible with your money, then it may be time to limit their exposure to your life in most financial matters. Two men cannot walk together unless they agree, and this explains why your income typically will reflect that of your 5 closest friends. The old adage is true: birds of a feather do indeed flock together and go to the same destination!
Your goals are vitally important because they will decide the direction of your life. Some people will be a hindrance to nearly everything you try to accomplish financially.Whether intentionally or subconsciously, they will take you down with them if you let them. Often, they will be dismissive of your wisdom while simultaneously asking for your financial help. While they certainly do have a right to not listen to you, they also need to respect your rights to keep them out of your wallet. However, instead of supporting your decision to not go out and have fun or help them, they will typically demonized you for not enabling their irresponsibility with your subsidies or for being too tight.
Such parasites, leaches, people generally don’t like me too much anymore. If they hang around me for too long, I’m gonna hold them accountable for their misbehavior (if they give me an adequate opening). I wouldn’t do this out of malice or spite, in fact it’s just the opposite. For example, I supervised someone at a company where I made nearly 7 times more than the person I was supervising, yet he was the one driving the Benz and couldn’t afford to get it fixed when it subsequently broke down. Rather than risk losing his social standing by purchasing a car that he could afford, he was broke and sometimes had to take the bus when his car wouldn’t start.The thought processes that people use to justify spending all that they have goes beyond my comprehension.We obviously had very different goals. I really wanted to say something to help when I first noticed the Benz but never got a chance. This is essentially watching a disaster waiting to happen but being told to be quiet (don’t warn them). I have learned not to stuff food down the mouths of the non-hungry, but it doesn’t change my compassion for them just my approach. If they are comfortable enough to air or discuss their ignorance, then I can be comfortable enough to tell them no (if applicable) or tell that they are making a mistake.
Stick To Your Plan, You Are Smarter
Additionally, I often think people misunderstand my motive for endorsing conscientious consumption. Frugality for frugality sake doesn’t interest me. Even more undesirable to me is frugality for the sake of living a high-consumption lifestyle (i.e. after you become debt-free, the money that was sent to Chase Auto now gets spent in its entirety on going more fancy vacations prior to building any real wealth). Here’s a thought, why go through the trouble of becoming debt-free only to blow tens of thousands of dollars a year on crap you don’t need without building any substantial wealth. Those aren’t reasons that would motivate me to live frugally. However, budgeting for the purpose of making my dreams happen is a different matter entirely. For instance, instead of spending money on a depreciating Benz, I would rather own additional dividend-paying investments. This isn’t an attack against owning nice things either, but their purchase should fit within your budget, values, and overall goals. I’m convinced by my own experience and those of countless others that if you operate frugally long enough, earn a reasonable income and control your expenses, you build wealth. This is the path towards having some serious financial game! As I have said before, according to the 400 richest Americans (Forbes 400), 75% believe “the best way to build wealth is to become and stay debt-free.” That’s a plan that I can live with: sacrificing to win.
Thus, before you give in to the pressure, thinking that something is wrong with you, realize that debt and consumerism have so infected most people that fiscal responsibility seems downright radical. It appears radical if you say “I’m going to go to school without student loans,” “I am going to buy a car without payments,” “I’m not going to eat out at restaurants four days a week,” or “I am going to live without worshiping at the altar the the great FICO.” In fact, there is an outright hostility when you suggest anything other than the aforementioned status quo.
Don’t yield into intimidation or manipulation. Refuse to allow others to set your household budgetary agenda. Normal is broke, so following their financial advice can be deleterious. If your family and friends or others are bullying you to discount your budget, consider this your call to action to develop enough of a backbone to tell them NO! Tell them you will not be manipulated into spending more just because they are out of control and won’t feel validated until you join them (okay maybe leave off that last part, but you get the point). You set your family priorities. You diligently pursue your goals. You reap the rewards!
The only thing wrong with us is our refusal to embrace this stance sooner!
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Another great write-up Roshown!
I'm hooked! I think we are both going in the same direction with our financial paths 🙂
I didn't hear about that statement
"according to the 400 richest Americans (Forbes 400), 75% believe "the best way to build wealth is to become and stay debt-free."
before, that's awesome! Thanks for that!
Great story about mother and daughter!
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You cover a lot of topics here. Peer pressure from friends and family can derail people from their goals in a hurry. Good to keep the discipline. Debt is usually not a good thing, and there is a reason banks and credit card companies have been so successful.
Shawn, thoughtful post! Great job.
If only more would embrace your philosophy, which is dead on!
Great post Shawn. If "normal is broke", I'm happy to be an oddball! It's funny how we sort of assume we've outgrown peer pressure once we become adults. I guess it's just a little more insidious once we've grow up.
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Shawn, very well written. I loved the picturesque vocabulary. Above all RIGHT ON in all statements. It was shocking to me the first time to be pressured and bullied when trying to set some boundries. I didn't realize that I was making such an offensive change. A wealthy relative was much hated because he would not pass his money out like candy to those not willing to work as hard as he did or manage as diligently.
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I can tell that this was an inspired post. 🙂
I personally don't share most financial details with most of my friends. I don't share how much I make, and I don't share how much I have in my RRSPs or at the bank. It keeps the relationship simpler.
Since people don't really know what I spend my money on or how I save it, they can't really find sticking points to criticize me on for either being frugal or being a spendthrift, and I like it that way. As for when I see them doing things that I find questionable, I will give advice if asked, otherwise, I will lead by example and a friendly tip. If someone is not ready to eat, trying to stuff their face won't help. The hard school of experience which makes them hungry, will!
The mom could learn something from the daughter. I don't know about buying furniture qualifying as an emergency 😛
Great post! I feel sorry for the daughter having to get grief for trying to get ahead financially.
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Really good post. I have to say, as the years go by, I'm caring less and less about what others think of my money habits. At some point, you have to listen to your gut and do what you think is best. I would like to think that I've reached that point, and hopefully the daughter in the example you mentioned can get there too.
Agreed, our interest payment builds their wealth. If we keep that in mind and avoid "working for the banks," we will do quite well (especially in the long run). This assumes that we also build wealth, which is a lot easier to do without debt.
My recent post The Problem with Being Budget Minded is Other People
There is a VERY high correlation with clipping coupons on groceries and building wealth. 49% of millionaires (n=733) clip coupons, so your family are in very good company.
My recent post The Problem with Being Budget Minded is Other People
Thanks so much for the kind comment. I really appreciate your feedback. That's means a lot to me!
My recent post The Problem with Being Budget Minded is Other People
That's right, and it is so juvenile. The Martin's have a new 5 series, so I need one. Ha! Who cares what the Martin drives. It is probably on payments anyway (statically true). However, even if they are the rare exception and paid outright (unlikely), they still likely purchased after building wealth not before.
My recent post The Problem with Being Budget Minded is Other People
Thanks so much Carol for the feedback. That's a very kind thing to say.
The peer-pressure issue is a reality, and it is quite sad that we can be controlled with anger and manipulation. It's completely rubbish to ignore the social dynamic as it relates to money. Some people are impervious to it, but most of us do care to some extent (even if we aren't controlled by it).
Your example is quite funny and sad. They felt entitled to your wealthy relative's money, despite having little to nothing to do with its accumulation. Isn't that rich (no pun intended). It highlights how we must restore common sense and boundaries with respect financial matters. it doesn't make common sense for them to feel that he or she owes them anything but love and admiration. If he or she chooses to express that sometimes with material that's fine but not a requirement.
My recent post The Problem with Being Budget Minded is Other People
Inspired indeed (unfortunately, I think we all experience this to a certain degree my friend).
Yes, I don't share my financial details either. They know that we do "okay" and that we are debt-free, which is nebulous and how I like it. It is funny listening to all the rumors that get started because you don't talk about stuff like that. Someone said I heard that you … I typically just smile and say "do I now?" (unless it is a gross exaggeration to which I then say that's untrue) .
My recent post The Problem with Being Budget Minded is Other People
It's quite sad indeed. Some people really don't know what it is like to have $1000, $10,000, $30,000, or $100,000 just sitting in the bank for an emergency. It can just provide a comfort that going on a shopping spree to Neiman Marcus couldn't compare to. I think the mom is just not use to having money (hence poverty-minded).
My recent post The Problem with Being Budget Minded is Other People
Squirrelers, I completely agree. As a teenager, I cared a lot more than I do now. I think it is part of maturity and it made me feel so proud of myself to tell people close to me no. It hurt but it also made me feel empowered. No. That's a very beautiful word and is also a complete sentence. By itself, it has the power to restore boundaries and order to your life.
I think the daughter found solace in her online community. She was venting to which I believe she found therapeutic. As she continues to enforce boundaries, I do think it will become easier.
My recent post The Problem with Being Budget Minded is Other People
Great article Roshawn. If one wants to stick to your budget and be financially responsible, one must surround oneself with debt haters and budget lovers! The old saying: you can't choose your family, but you can choose your friends
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Thanks so much for the comment. That saying is very true: we can decide the people who populate our social circles. Why not create an environment that enhances our chances for success by choosing people who align themselves to your goals?
My recent post The Problem with Being Budget Minded is Other People
The mother daughter story was very powerful. It reminds me that most children adjust their financial habits based on the example their parents show them. Although my MIL doesn't care about saving as much as we do, her parents grew up during the depression. She saw many examples of her parents depriving themselves even though they had "plenty" of money in the bank that never got spent to the day they died. We are now swinging the other way.
I personally don't really care what people think about my spending habits and I try not to care about others. It's hard not to be critical when someone's lifestyle doesn't align exactly with your own. (Either more frugal or more spendy)
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What a great post! We all have to deal with social pressure one way or another. The most important thing is to decide for ourselves if our friends, relatives, family can and should tell us how to spend our money. My friend used to ask me "What do you do with your money. What do you mean you cannot afford it?" I had to tell her quite a few times to stop counting my money.
Hey Sandy,
I agree that there does need to be balance with respect to saving, investing, spending, and giving. To have "plenty" of money but not enjoy it means that they still might have been controlled by fear (just as someone without any money).
In terms of criticism, I definitely understand the challenge. I have to keep myself in check too. I try to flip the situation around in my mind and say if I am going to disregard what others say (in terms of criticism), then why would I send that negativity someplace else. That said, there are some hot button issues where not commenting is more challenging than at other times!
My recent post The Problem with Being Budget Minded is Other People
Thanks so much Aloysa for the comment.
"Stop counting my money!" That's sounds like enough explanation to me. I agree sometimes people are just not use to respecting a different perspective. We definitely have to guard ourselves from bad influences, especially from within our inner circle because often their opinions carry more weight to us!
My recent post The Problem with Being Budget Minded is Other People
Instant gratification is what drives our economy and our society these days. It is just ironic that it was the mother, typically from a more sensible and frugal generation, who would spend so willy nilly, and the daughter from the instant gratification generation who would not.
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You are so right. There is inherent irony in the daughter schooling the mother! It's quite sad that the daughter would have to endure that type of pressure from the person who should be teacher her how to protect herself.
Thanks for the comment!
My recent post The Problem with Being Budget Minded is Other People
I liked your story Shawn. Instant gratification is a great saboteur on the way to one’s financial freedom. And knowing how to manage money is the single difference between the poor and the wealthy. How true is it indeed, that poor people share the same mentality with the guy you were supervising in that company. Most people would rather keep their fake social standing than become financially free and become the millionaire next door.
Hey Matt,
Fake social standing is absolutely right! People drive their "debtmobiles" like a badge of honor, but that's not impressive. It's rather depressing to be honest. Also, I think the mom's encouragement could have easily caused a weaker-willed person to cave, but I am glad that the daughter stood strong.
BTW, I'll reply to your email a little later.
My recent post The Problem with Being Budget Minded is Other People
This is an excellent article! I agree with you that when most people object to your saving habits and frugal living, it's because they are trying to defend their own irresponsibility!
It would be a terrible thing to let people like that bully us into decisions that we aren't comfortable with!
Thanks so much Khaleef!!! It's sad but true, the "personal attack" has more to do with them than you and is a form of bullying or manipulation. I say lets launch a revolt against such tactics!
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