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Farewell Money

Richard Quinn

FROM THE LOFTY perch of old age, and after a lifetime of thrift, I declare that I am qualified to comment on how not to waste money.

We’ve all heard the reports: Most Americans live paycheck to paycheck, a large number can’t come up with $400 for an emergency, and there’s no money to save for retirement and other goals.

Most of that data comes from surveys where people are, in effect, saying they don’t have enough income. My curmudgeonly reaction: Stores, fitness centers and entertainment venues are packed with shoppers, many of them buying unnecessary goods and services. If three-quarters of Americans are living paycheck to paycheck, how can they afford to spend like this? It’s a funny thing: I have yet to see Warren or Bill in one of the many local spas.

Most Americans live like no other people on earth. We have more and bigger stuff: Larger houses, bigger vehicles, more shoes. And, in my not so humble opinion, we can’t tell the difference between needs and wants, between necessities and desires—and we sure can’t defer gratification.

All this leads me to one conclusion: We’re unable to control our spending or manage our money. Here are 16 things that this 75-year-old considers big money wasters:

1. Tattoos. They’re an admitted obsession of mine. What will they look like when you’re my age? From what I’ve heard, a good tattoo artist charges $200 an hour.

2. Vacations. Hey, everyone needs a break. But you don’t need to go into tuition-level debt to have a good time. Your kids will survive if they never visit the Magic Kingdom.

3. College. Picking a college involves many factors. Affordability is one that’s often overlooked. If the cost of the school you choose will land you in debt, you’d better have a plan for paying it off. Don’t mortgage your future, just so you can have a prestigious decal on your car window.

4. Restaurants. Eating out, or buying $4 designer coffee, is expensive and—wait for it—it’s also a luxury. Skip that daily $4 coffee and after 30 years you’ll have more than $121,000, assuming a 0.5% monthly return.

5. Opportunities lost. We do it every day by failing to grab the employer match on our 401(k) plan, not investing in a tax-free Roth IRA, failing to fund a flexible spending account to pay medical costs with pretax dollars, and withholding too much from our paycheck, so we’re essentially making an interest-free loan to the IRS.

6. Transportation. You don’t “need” an SUV or $40,000-plus pickup truck to get from A to B. My four kids grew up riding in our 1972 Duster. Now they, too, all have trucks or SUVs.

7. Credit cards. When people say they live paycheck to paycheck, does that include purchases put on credit cards that aren’t paid off that month? In that case, they’re spending more than their paycheck—and what they buy will cost them the purchase price, plus a hefty interest rate.

8. Lottery. The lowest-income groups spend the most on lottery tickets, wasting hundreds of dollars a year—about the same as that $400 emergency fund they don’t have. Not to worry: 60% of millennials think winning the lottery is part of a wise retirement strategy.

9. Clothing. My new condo has two bedrooms and three walk-in closets, two of them larger than the bathroom in my old 1929 house. The average adult spends $161 a month on clothing. We are obsessed with keeping up with the latest fashions and ensuring nobody sees us in the same clothes twice.

10. Shoes. Surveys suggest the average American woman owns more than 25 pairs of shoes, which they admit they don’t need. So why buy so many pairs? It seems shopping and wearing trendy stuff makes us feel good.

11. Tchotchkes and stuff. Clean out a house after many years—which my wife and I just did—and you often hear the words, “Where did we get that?” Though relatively inexpensive per item, tchotchkes and similar stuff cost money—and it all adds up.

12. Failing to look ahead. Henry Ford said, “Thinking is the hardest work there is, which is the probable reason why so few engage in it.” I still marvel that people spend so little time thinking about retirement. After working 30 to 40 years, they reach retirement with no plan and are shocked they can’t live on Social Security alone. Planning for retirement early in your career is essential for financial security—and it isn’t that hard.

13. No backup plan. I like to think ahead about “what ifs” and how I’ll deal with them. In my head, I have backups for the backups. I recently took out a large mortgage to buy a condo. Now I’m thinking, “What if I can’t sell the house to cover the mortgage? What if I must do some upgrades to sell the house?” I temporarily stopped reinvesting my tax-free bond interest, so I can build up more cash—just in case.

14. Holidays. Somehow, every December, financial caution goes out the window and we pay for it the following year. But my pet peeve are those inflatable characters on lawns that cost hundreds of dollars. Talk about blowing money.

15. Toys. One study shows that U.S. parents spend $6,500 on toys during a child’s upbringing. The spending is even higher for millennials, who favor “smart” toys—toys that do the thinking for the child. There’s something wrong with this picture. Hey, I’ll challenge anyone to a contest dropping clothespins into a milk bottle.

16. Haircuts. The average haircut reportedly costs $28.30 in a barber shop. Many men pay a lot more. Nowadays, nearly a third prefer a “salon.” I pay $12 at my local barber. But I’m still annoyed: My hair is disappearing, but the price is inching up.

Richard Quinn blogs at QuinnsCommentary.com. Before retiring in 2010, Dick was a compensation and benefits executive. His previous articles include One Last ThingOver CoffeeGet the Point and Poor Judgment. Follow Dick on Twitter @QuinnsComments.

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johntlim
johntlim
2 years ago

It would do all of us a great amount of good if we could spend just one week a year volunteering in a 3rd world country (I’m not preaching, I need to follow my own advice just as much as anyone else). Not only would it help other people, it would show us Americans how fortunate we really are. It’s hard (impossible?) to comprehend our good fortune when we are surrounded by plenty.

freedom
freedom
2 years ago
Reply to  johntlim

The organizations that try to help in third world countries would much rather have the money than a string of one-week volunteers. How are you going to get there? Where are you going to live? What are you going to do in that week that would as valuable as the cost of your flights?

The list of wasted money could go on forever. I cut my own hair. I don’t believe that a barber could do brtter- it is simple task, making my hair shorter. I also don’t care. Not going to waste the money and not going to waste the time to go to a barber shop.

The elite colleges do have value. It is about the nature and quality of education and the doors that those open. It has nothing to do with status.

Johannes Rambonus
Johannes Rambonus
2 years ago
Reply to  johntlim

Do you know that donating used clothing to Africa has destroyed their textile economy? The road to hell is paved with good intentions. Best to tend our own gardens and resist the temptation to virtue-signal about how caring we are.

Mik Barbasol
Mik Barbasol
2 years ago

Nailed it !

NinetyNinePercent
NinetyNinePercent
2 years ago

Your privilege is showing. None of these things apply to me nor to anybody I know. As an ex-executive, you likely either always had privilege or cannot remember when you didn’t. The rest of us haven’t gotten a raise since the 1970s while the oligarchy has steadily taken an increasing portion of our income.

Why don’t you go walk through the inner city and meet some real people? Or get to know the staff of the retail establishments you frequent? (I’m assuming you do buy groceries.)

When you are done (as if you’d do this anyway), you can post your humble apology and then donate your life savings to fighting poverty, homelessness, social inequity and climate change (the biggest social injustice of all.)

Abraham_Franklin
Abraham_Franklin
2 years ago

It seems you didn’t read his list.

Dan Wicko
Dan Wicko
2 years ago

You are not the ninetyninepercent, as they do not feel so entitled as you.

Johannes Rambonus
Johannes Rambonus
2 years ago

Your envious virtue-signaling about “privilege” is nauseating. Take a hike, loser.

A Neel
A Neel
2 years ago

I am always surprised by these comments about privilege on Richard’s posts. I agree that it exists, but to say that low income people do not engage in the behaviors listed above sounds like denial in the extreme. I come from a very low income family. I took a $1 food stamp down to the local market each day of most of my childhood to buy a single cinnamon bear from the candy bin for 5 cents so I could return the change to my mother to be added up for weekly cigarette purchases. Most of my friends did the same. I stood in line for free cheese and mis-sewn free shoes every year. My family is still low income and the vast majority of every member of my family engage in most of the behaviors (if not all) listed above. I can say the same about most of my friends from childhood. If there is a town out there where you live where nobody is doing that, I find it truly amazing. I am not in poverty anymore because I took a good hard look at the behaviors of people that lived the life I wanted and followed their lead. I don’t identify with the idea of myself as a victim. No apology is needed for his post. In fact, I thank him for having the belief in people to change their circumstances by their own behavior and having the guts to say it when it is not popular to do so. I’m not looking to get into a debate. I simply want to say that these behaviors do exist at least in some places.

Langston Holland
Langston Holland
2 years ago

In regard to shoes, I have a pair of sneakers and a fancy pair of shoes for occasions I can’t get out of. My wife and I were about to go to an example of the latter recently and I documented the disparity between us on this issue. 🙂

Jonathan Clements
Jonathan Clements
2 years ago

Langston, it isn’t yet 9 a.m., but I don’t think my day can get any better. The video is hysterical. Thank you!

Thomas Taylor
Thomas Taylor
2 years ago

The one and only vehicle we ever bought new was a 2003 Ford Ranger which I’m still driving to this day. I learned to drive in a Dodge Demon (cousin to the Duster). Boy I loved that car! I’m not much on lotteries either. I’ve always felt lotteries were for people who were bad at math. Yes, someone has to win, but it probably won’t be you.

Mike
Mike
2 years ago

Great article. But why do you carry a mortgage? Why not pay it off and be debt-free? Don’t tell me that it’s “cheap money”…

Rover55
Rover55
2 years ago
Reply to  Mike

I believe it sounded like the loan was while waiting for his house to sell. Buying a rental with a positive cash flow is another good reason to have a mortgage. We bought our first rental while very low income wirh a seller financed loan as we made too little to qualify for a bank loan.

TTanin
TTanin
2 years ago

I have an aunt who constantly complains about being poor and living paycheck to paycheck, then she goes off on international vacations every year.

bart37064
bart37064
2 years ago

When you outgo exceeds your income, your upkeep will be your downfall. ~Jim B, retired banker

amandameezer
amandameezer
2 years ago

They forgot one thing; don’t get a serious medical illness. All your money can evaporate in medical bills.

Bob
Bob
2 years ago

You pay $12 for a haircut? I do my own for free (and I have a lot more hair than you). Take that, old man.

sincerely,
one of those millennial you seem to hate

Alice West
Alice West
2 years ago

Wow, this has got to be the 2019 award for dumbest list ever. Basically it’s saying work yourself to death, don’t enjoy life and hoard every dollar for 70 years in advance. Didn’t do my late husband much good after losing his battle to cancer. OMG, don’t buy your kid a toy because you may need that 17 bucks when you’re 80. No I do not buy clothes to “keep up with fashion” I buy clothes because it’s illegal in Pa to go around naked.
So if anyone wants to live their lives with no vacation, never celebrating anything because god forbid you have to “gasp” pick up the tab at the bar, be my guest. for me, my goal is NOT to be the wealthiest gal in a casket.

lol oh and the reason why you haven’t seen Bill in a local spa because he pays for his masseuse comes to his house.

I actually feel sad who feel that life is only about getting “from point A to point B”. that is not living that’s called “existing”

Was no one taught “moderation” in life?

mary
mary
2 years ago

I have several pairs of high end luxury shoes. I have earned them. I don’t make a habit of buying them all the time. It’s because of my thrift elsewhere that I am able to afford them and justify the purchases. For example, I quit my gym membership a few years ago and have since saved several thousand dollars. I keep my electric bill low by programming my thermostat and keeping the house weather sealed. I don’t pay interest on credit cards or any revolving debt; I don’t partake in the spendy subscription fad (bark boxes, beauty boxes, Stitch Fix, meal boxes). The only debt I have is a low interest 15 year mortgage and a note on a modest car. The savings from all those measures add up, enough to buy the occasional pair of red bottom heels. My infrequent shoe purchases do not affect my ability to save for retirement. Why are you picking on women in regard to shoes? Men can easily be addicted to prestige brand shoes. Perhaps it is just you who cannot tell the difference between needs and wants, and who cannot control your spending or manage your money.

Johannes Rambonus
Johannes Rambonus
2 years ago
Reply to  mary

Expensive shoes are, assuming the quality matches the expense, a good investment over the long run.

Johannes Rambonus
Johannes Rambonus
2 years ago

I’m glad to see tattoos take the top position here.

I’m in my 40s. I’ve despised tattoos since they exploded in the early ‘90s. One’s rejection of this bovine phenomenon isn’t a matter of age, but of taste. Those with no taste and no class embrace this stinking herd phenomenon. (Note: having money doesn’t mean one has taste and class; e.g., Princess Stephanie has vandalized herself with at least one tattoo.)

If my children were ever to reveal to me that they’d vandalized themselves with a tattoo, I’d thereby know that I failed as a parent. I’d then disown them.

The best critique of the absurd tattoo phenomenon of the last 30 years comes from the great Theodore Dalrymple (pen name of British psychiatrist Dr. Anthony Daniels). The essay is called Exposing Shallowness. It appeared in The New Criterion around 2000. It may be behind a pay wall now; however, it’s been posted elsewhere since then. Don’t miss it. Those conformed to today’s rot will, of course, hate this devastating essay. No matter.

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