(Guest Post by Jason)
For years I followed the status quo: spent lots of money and accepted living paycheck-to-paycheck, not saving for retirement, and racking up credit cards as the normal way of operating my finances.
This fabulous way of living led to years of partying, having a blast, and included numerous front row concerts, sporting events, and eating out at every fine dining establishment that Kansas City offered.
Despite the fun that my glitz-and-glamor lifestyle provided, it came with a consequence: serious amounts of debt that piled up, waiting for the right moment to drown me. Throughout my college years I borrowed as much money as I could which was followed by years of maxing out credit cards (thank God they had low limits) and taking out personal loans. When all was said and done my personal debt totaled $60,000.
While I’ve learned a lot in the last 6 years, the biggest lesson I’ve learned is that following the status quo only leads to disaster. As a financial advisor and personal finance coach, I’ve been given the unique opportunity to see what traps people fall into and discover areas within their finances that cripple most families.
While I’m unquestionably cheap, I’m also a business owner and an efficiency freak. I’ve found in my years of coaching that there is a correlation between managing time well and managing money well. Many people that are strapped for time and lead unorganized lives, very often have trouble managing finances and even finding the time to do so.
While some of these categories may be sensitive subjects for you, eliminating some of these things from your life will prove to save you both time and money. As I told my brother years ago: it’s often best to watch what everybody else is doing and do the exact opposite.
The 5 Biggest Wastes of Time & Money
1. Kid’s Select Sports
Who in the world thinks it’s okay to pay $2,000+/season for your kid to play traveling baseball or be on an AAU basketball team? What the hell is wrong with you?
Your kid won’t make it to the big leagues. They’ll even be lucky to get a scholarship to go to college! If your child is really “gifted” then maybe this is okay, but only if you’re not going into debt, saving properly for retirement, AND saving for your kid’s college.
I have a novel idea: how about you encourage them to read and use the 5 nights a week of practice to study for school. How much time could you save if you weren’t playing the role of a taxi driver running your kids to a different function every night?
As our country has grown and cities have expanded in geographic area, it’s not uncommon to meet people that drive 30-45 minutes each day to work.
Driving is literally a waste of time and money. You might as well flush the cash down the toilet or make it rain like “Packman” Jones – at least the latter would prove to be a wiser use of your benjamins.
My wife and I recently decided we’re sick of accepting long drives as the normal way of living. We’re currently working on selling our house to move 25 minutes closer to our jobs. We’re looking at saving $200/month on gas, thousands of miles a year of wear-and-tear on our cars, and adding 1 hour of “free time” to our daily schedules. This small change also means we’ll add years of usage on our cars; who wouldn’t be down for saving $15k-25k every 5 years when taking into account all we’d be saving?
3. High-End Cell Phones
The Apple/tech cult is almost as bad as the Dave Ramsey brigade. Don’t get me wrong: I’m a fan of technology and the advances that allow our lives to be lived more efficiently, but you can’t deny that the status quo has just gone overboard in regard to all things tech related.
I recently wanted to slap myself when I discovered that I could take my $200/month cell phone bill and pare it down to all of $80/month. How? By giving up the iPhone/AT&T combo and pimping a package from places like Cricket or Page Plus Cellular. This isn’t to blatantly promote these companies, but I had no clue I could get unlimited minutes, unlimited texting, and 100MB of data for $40/month.
4. Cable Television
It’s hard to live without cable…I know that. I haven’t had it in over 2 years.
But how can you say you’re a dad when you spend every free minute of the day sitting your ass on the couch soaking up the mind-numbing crap they put on the TV these days?
Play with your kids, read a book, cook a meal, talk to your wife gasp!, and go do something productive.
5. Luxury Cars and Fancy Houses
Feeding your ego and self-image is a problem no American has sarcasm, but who really needs 6 bedrooms, 14 bathrooms, two man caves, and a wine cellar that holds 1000 bottles of wine? Unless you’re going to be the next “Kate Plus 8” and starring on TLC then I’d suggest that you’re just wasting your money.
While it’d be nice to drive around in a Porsche, Mercedes, Lexus, BMW, or the even higher-end luxury cars, you should know you’re not fooling anybody but yourself. If you’re trolling around in one of those cars then statistics tell us that it’s more likely you’re a high income-earner (or simply upper-middle class) and not somebody of any real wealth. Stop stroking your ego and trying to “say something” to your friends and coworkers. Save yourself some money, buy a Honda or Toyota, and start investing the difference in things that don’t drop faster than Bill Clinton’s pants. Sorry, had to borrow that from Leno.
What things irk you that have become accepted by the masses? Has following the status quo ever lead you in the wrong direction?
Jason is a financial advisor and Dave Ramsey-trained counselor that blogs over at WorkSaveLive. He aims to educate his readers on a variety of financial topics while sharing his family’s journey out of debt.