Look around. What do you see? I see packed buses, traffic jams, busy open houses, expensive restaurants with only 9pm seatings, and friends finding new jobs again. Double dip recession? I don’t think so. With the Dow over 10,500 and the S&P 500 over 1,020, it’s as if last year was just a bad dream.
Yet, it is exactly during good times, when we must be more diligent about our finances. It’s so easy to forget how bad things were and stray. Rather than spend more money, save more money during upswings so that we can spend more money during downturns.
When times are good, it’s not necessary to spend more money to create any sort of additional fulfillment or pleasure. We’re getting paid more, the opportunities for promotions are greater, and the demand for our services surpass our supply.
In essence, we feel good because we feel wanted again. It’s when a downturn hits when money can help balance the mood out a little with some retail or food therapy, or maybe even a vacation. In essence, spend money counter-cyclically for better returns.
DAY DREAMING TO RELIEVE DESIRE
There’s an exercise I like to do every now and again, and it’s called “Indulgent Reminding.” In one minute and not a second longer, type out all your material wants within reason if you didn’t have to worry about money.
My Indulgent List Of Things:
* Two Tennis Racquets ($400)
* 5 tailored three-ply dress shirts ($300-500)
* Sports jacket (blazer) ($500-$800)
* A couple tailor made suits ($1,000-2,000)
* Brown loafers & dress shoes ($200-500)
* Digital SLR Camera ($1,000)
* Macbook Pro 13″ ($1,200)
* 42″ LED TV ($1,200-$1500)
* Panerai Submersible Stainless Steel Watch ($8,000)
* Audi S5 Coupe in Silver or Black ($60,000)
* A vacation for two to Greece ($10,000)
* A weekend getaway to Napa’s Auberge Du Soleil with full spa experience for two ($2,000)
In one minute, I’ve been able to come up with $85,000 worth of stuff to spend on! It gets me giddy thinking about all the goodies I must admit. The feeling of splurging without having to actually spend money is what financial daydreaming is all about!
After you’ve written your list, try to come up with several conclusions as to what these things reflect. My list says I like action and appreciate expensive adventures. Pretty standard guy stuff frankly, not to mention pretty shallow stuff too! $8,000 watch? Come on!
Now see if you can come up with a new list with a much cheaper set of things. See how many of the items you can also happily do without. Looking over my list again, all I really need are a new pair of brown loafers since my current ones have holes. Ahhhh, saving $84,700 sure feels great!
I don’t know what it is, but I get the greatest satisfaction out of using things I already have, over and over again until they die. Take my car Moose, for example. He’s 10.5 years old now, with a finicky CD player, and a broken electrical passenger seat. With 130,000 miles, it brings me greater satisfaction that he can still bring me from point A to point B just as well as a car 10X the price.
Once you start buying things out of pure desire it’s hard to stop. Marketers are brilliant at getting you to buy more than you really need. From shoes, to sporting equipment, to clothes, it’s a never ending list of things you can buy. You’ll never be satisfied. Hence, best to just use what you have, and do a little day dreaming to keep your desires at bay!
Readers, when times are good do you feel you tend to spend more or save more?
What are the things you like to do to keep your wants and desires in check?
Anybody else have the condition of really loving the stuff they already have?
Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”
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