Shifting your mindset: getting from “I can’t afford it” to “how can I afford it?”
Those who have known me from childhood know I can sometimes be a bit frugal. I grew up in a good, middle class family and my parents always taught my brothers and I not to waste food, to buy only what we really need, and to keep expenses low. Combine that upbringing with the fact that I studied Supply Chain in college and you get someone who really can cut down on waste and unnecessary expenses.
Even into my late 20’s, I still take the extra 2 minutes to find free street parking and try to avoid paying for the $20 parking lots when I go out in Downtown Houston. However, I’ve learned how to splurge on things I want to splurge on, things that are important to me. I’m the type of guy that buys in bulk to save money but won’t hesitate to drop $2400 on skydive certification classes (I actually saved $400 overall by paying the total amount upfront, so you could argue I even saved money on that deal). I also stay with friends or family when I travel sometimes so that I can spend $400 on getting scuba certified in Koh Phi Phi, Thailand.
Splurging on things you want feels good. But you must do so in moderation. Never let your lifestyle exceed your means. If you’re making $100K and living like you’re making $1M a year, you’re going to run into problems. If you’re making $100K and live as if you make $50K, you’ll find yourselves stashing up savings quickly and being able to use money for vacations or a few nice things that you want and can easily afford.
People ask me all the time “how can you afford to go on these amazing trips?” or “don’t you have student debt or car payments?” I’m pretty happy to say that I’m totally debt-free (other than my mortgage of course). My student loans are paid off, my Honda Accord is paid off, and the full statement balance of my credit cards is paid in full each month. What people don’t see is how I usually wear basic clothes that aren’t really name brand (unless Zara counts). I cook most of my meals and get something reasonable when I do go out to eat, which saves a ton of money. For $50 that you spend eating a mediocre dinner, you could get enough groceries to feed you for a few days. You can get chicken breast, ground turkey, and vegetables for probably around $20.
I truly appreciate everything I’m able to experience since I better understand the value of money. I feel like a few kids I’ve known that always got anything they every wanted from their parents take so many things for granted. For the average kids who don’t get their every wish granted, working hard and being able to afford those things later on in life is that much more rewarding.
I feel that the frugal mentality that has been ingrained into my head from my childhood will never truly leave. Even as my savings grow and when (not if – Law of Attraction at play) I become a millionaire or billionaire one day, I feel like I’ll still live within my means and spend my money on experiences over things. Because at the end of the road, we can’t take stuff with us. But hey, if you’ve got the money and that Ferrari makes you feel happy, go for it!
Before You Splurge, Ask Yourself Some Questions:
Do you need it?
If not, why are you getting it? Do you want it? If so, how badly do you want it? Think about if you’ll have buyer’s remorse after spending your money. If you really want it and think it’ll be worth it, go for it.
Can you afford it?
If you have to check your bank account to see if there’s enough money in there to pay for something, you can’t afford it. When you’ve saved enough to where you can comfortably buy something with cash on the spot, you can likely afford it and can consider moving forward.
Will you remember it 5 years from now?
If you want it and can afford it, see if you’ll remember it 5 years from now. A new cell phone or TV probably won’t bring a smile to your face years from now. A one-month backpacking trip through Southeast Asia definitely will.
Will the opportunity vanish soon?
Are you planning on getting married, having a kid, or starting a career that will hinder your ability to do something you want to do? If so, consider jumping on the opportunities available to you now. Take that trip before starting your full-time career or pop 3 kids out. Go skydiving, drive a moped in Vietnam, and sleep at a train station in Germany before you end up taking yourself too seriously.
What I like to splurge on:
- Good food at highly rated restaurants – I don’t eat out often, so when I go to a nice restaurant from time to time, I try to get whatever is recommended even if it means paying a little more.
- Experiences – skydiving, scuba diving, parasailing, traveling, tours, and more. I love doing things that make memories (and also great photos).
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