I’VE DECIDED TO SELL some of my investments and buy a Bentley. The one I admire would cost about $300,000, including taxes and fees.
Just kidding. Besides, I couldn’t face my four children after such an indecent splurge, knowing that they’re dealing with high-deductible health plans, saving for college and socking away money for retirement—just like millions of other Americans.
While that Bentley purchase would be possible in theory, it would substantially reduce my assets, plus the insurance, maintenance and gas would mean giving up more frivolous things—such as eating. Indeed, a major purchase is rarely just a purchase. There’s usually some other expense that goes with it: maintenance, repairs, interest payments, insurance, opportunity cost or—who knows?—all of the above. That’s why, before any significant purchase, we ought to consider the long-term consequences.
That’s no fun, of course.
How many times have you heard the phrases, “It’s only money” and “You only live once”? I laugh when I watch a game show and the host asks, “What will you do if you win the $10,000?” Last night, the answer was, “I always wanted to go to Australia and New Zealand, and I’m going to take my family for a month or two.” Are they planning to swim both ways?
I have yet to hear a contestant say, “I’m going to pay off my credit cards” or “I think I’ll contribute to my IRA.” There was little chance of him winning the $10,000, anyway. To the question, “What war did the Boston Tea Party precede,” he answered, “World War II.” Mensa candidate, he wasn’t.
It doesn’t take a genius to know that spur-of-the-moment, emotionally driven buying can be risky. And it doesn’t have to be Bentley-level spending, either. Vacations are easily rationalized and put on a credit card. Such splurges seem almost reasonable when they’re couched in terms such as “who doesn’t deserve a break” or “who wants to disappoint their family,” or framed as the desire for “quality time” with loved ones.
I’ll concede that I’m an emotional buyer at the supermarket, especially when I don’t want to cook. You can spend a lot of dollars wandering the supermarket aisles. I recently bought store-prepared chicken and roast potatoes that cost $24—just because I was lazy.
Not buying isn’t easy, and resistance is sometimes futile. My wife and I used to travel through Europe with another couple. We would be in Paris, Madrid and London, with all these amazing things to see. The other couple went shopping rather than visit museums, historic sites or the London Eye, the enormous ferris wheel alongside the River Thames. They’re in their 80s and still working.
Emotions can be powerful. While on a trip to Spain, we wandered into a Lladro store. There was a porcelain figure of Don Quixote. Not a big deal, except our first date was to see Man of La Mancha, our wedding song was The Impossible Dream and we were at that moment on a romantic vacation in Spain. What could we do except purchase it? Besides, it was only a few hundred Euros—not real money.
As British philosopher Bertrand Russell wryly noted, “It has been said that man is a rational animal. All my life I have been searching for evidence which could support this.”
Since we know not buying is rarely our first inclination, here are four strategies that might help:
Richard Quinn blogs at QuinnsCommentary.net. Before retiring in 2010, Dick was a compensation and benefits executive. Follow him on Twitter @QuinnsComments and check out his earlier articles.
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At 75, there is little that I need and even less that I want. Nevertheless, I worked for over 50 years before I retired and have more than enough money to last the remainder of my life and don’t have a big desire to make my kids wealthy. As a result, better meals, travel and nicer clothing cause little guilt as a reward for a lifetime of work.
I’m nearly 80, I worked 50 years, with a pension and SS I can’t outlive my income or money. I put my children through college, my wife and I eat out at will, travel and I guess we have nice clothes- I don’t buy clothes and don’t pay attention to what my wife buys.
My goal is to leave our children as much as possible because they don’t have a pension, struggle with health care bills plus it’s a very different world. Nobody has a chance to work 50 years for the same company and build up all types of equity.
I don’t have a pension either, and I’m a tail-end boomer.
What have I learned?
If I would have had and followed that advice when I was younger, I would be considerably better off right now!
Interesting advice and useful as well.
Thank dog[sic] Amazon and most other retailers have a generous return policy. It’s allowed me to take back many impulse buys.
The author wisely focuses on “baubles,” and is entirely correct.
Another category of non-essential purchases that is somewhat different is adding to long-held collections. For example, a lifelong coin collector shelling-out $2,500 for an MS65 1909 S-VDB penny is perfectly reasonable, if he can afford it. That would not apply to a one-off bauble in some gift store.
I worked with a fellow years ago that drove a Porsche he could barely afford. When asked why a Porsche he said, “You can sleep in your car, but you can’t drive a house.”
Every time I see a young person driving a BMW or other expensive car I wonder, have they fully funded their retirement account?
You need to discover the $4.99 rotisserie chicken from Costco. It seemingly never goes up in price, no matter what inflation is doing.
Ah, but mine was chicken Marsala. COSTCO is a good deal though.
Well, if you’re gonna live in your car, it might as well be a Bentley.
And you can get a massage on the heated seats at the same time.
Just make sure you don’t have to pay a subscription for that benefit like some manufacturers’ scams!
I remember my late father telling me that many of the travelers on the tours my parents took spent most of their time shopping – and the stuff they bought in Europe was readily available in the U.S.
Yup, but then you can’t say you brought it back from X. Of course, no matter where you are, what you buy is likely made in China. My wife bought a miniature red phone booth with a clock in it in London. Made in Japan – oops
Hi Sir Richard! That first bit about the car made me do a double take! NOOO, not Rich!!
Then I laughed at the second. 😉 HA!
I know a lady that took her kids to Mexico and the shop keeper showed her some T-shirts with some ‘From Mexico’ message… with a Fruit Of The Loom tag. Not her cup of tea.
My vacuum of several decades finally wasn’t fixable anymore. Of course I went to a social media ‘for sale’ site and am buying from someone who needs to sell as they put in hardwood in the home. That kind of buying behavior for a lifetime, allows me to put big money in real estate. Can’t take it with you, but can leave something of value behind!
https://www.cnbc.com/2016/08/29/janitor-secretly-amassed-an-8-million-fortune.html
There are vast disparities.
“What war did the Boston Tea Party precede,” he answered, “World War II.” … Well, given the wording, he’s not wrong. He could have picked any war in U.S. history.
A valid point, but he still didn’t get the $10,000🤑. Maybe I missed “immediately” in the quote.
I thought the same thing! “Directly” precede, ah, the importance of wording!
It entirely depends on your income and assets. If you can stay within your budget, and save a considerable portion of your income, then buying nice things is fine. Some retirees have more money than they can ever spend, although there probably aren’t that many of them at Humble Dollar. Just know your limits.
I would say if you are well-off, you can probably afford to buy something that costs 1/10 of 1% of your net worth two or three times a year. The Bentley, therefore, would require assets of $300 million. Enjoy the drive!
Well that ain’t happening, but an interesting formula.
Prior money choices become crystal clear, if you’re blessed with decades of life to have a large rearview mirror.
I know I purchased too many toys and clothing for our sons. My penance was having annual garage sales!
I do agree about curbing unbridled spending enthusiasm, especially while in front of a computer. However, I’m a proponent of taking trips as they are good for the soul. Augustine’s quote “the world is a book and those who do not travel read only one page” is my touchstone.
Our family enjoyed dozens of trips and the only one I regret is a jaunt to Cleveland. (Not that Cleveland isn’t a fine city, but because I couldn’t stop thinking about work.)
The older and wiser Stacey Trip Rules:
1. BEFORE you begin a trip, free your mind from work and other worries as quickly as possible. Stay late at work your last work day and write a very long to-do list–that’s your ticket to freeing your mind.
2. Visit new places more often than returning to favorites.
3. Allow yourself the pleasure of buying art or décor while on a trip. It will keep the trip’s memories front and center AND it decorates your home.
4. Avoid buying keychains, magnets, and shot glasses.
My children never listened to that advice.
I consider it a victory that my daughter and husband buy refrigerator magnets and keychains for their souvenirs. Much cheaper and space efficient than anything else they would buy. The hunt for the perfect refrigerator magnet is now part of our vacation ritual which we enjoy. I am grateful that these doodads have replaced any decor they would choose and we would have to look at and dust for the next 20 years. To each their own.
Give local Art Fairs a shot next time you travel. Small prints, pictures, and paintings can easily fit in a carryon.
After 3 keychains (SF, Hong Kong, and Hawaii) plus buying some with our sons’ names, I cried uncle. Enough for me! At least they’re small.
Have fun with your collecting memories!
If you are going to spend money, travel is the way to do it IMO. I love travel and while we are slowing down – those dreaded no go years – I hope to never stop. Money well spent.
There are so many places in the news that we have visited and can better relate to – Russia, Crimea, Ukraine, Northern Ireland, Israel for example – and better understand.
On the other hand, going into debt to visit DisneyWorld not so much. 😃
Agree, not a Disney hater, but 2x was enough. We should have skipped the 1st time, as our oldest was only a toddler. Not our best financial choice, but my parents were with us, so a joint memory for all.
Even better, make photographs your souvenirs. My first trip to China I bought a beautiful jade dragon in Shanghai. While I still treasure it, lugging it home taught me that souvenirs should be small and light and maybe non-existent. It helps that I hate to shop, especially when bargaining is involved.
We both actually like to shop, but dragging our stuff around for an extended period, as opposed to just back home from vacation, is a strong deterrent.
Thus why I buy small décor! Except for a stained glass window from Burlington Vermont… 🙂
I bought a huge Chinese gong at Yu Gardens in Shanghai and brought it home. That sucker is more than two feet across and weighs about 30 pounds. You should have seen the expressions on the faces of the Customs people when they X-rayed the box.
We use it as a dinner bell. I still love the way it makes the house shake, and I have no regrets. But, like you, I would never do something that silly again.
I think that’s fabulous!
mytimetotravel –
my wife and i have had the benefit of traveling extensively as a couple and also with our 2 kids. and my wife happens to be an excellent photographer. she has taken tens of thousands of photos over the years during our travels and enjoys picking out the best of them to then display around the house in digital photo frames that change every 30 seconds or so. those are our priceless souvenirs.
Good point, photos are my 1st choice. I’m always the one lagging on a walk.
The key is to remember to revisit viewing them. Google Photos and Shutterfly help with their reminders.
Stacey,
+1000
All 4 of those points are EXCELLENT advice!
Especially number 4. Personally, though, I’m a sucker for magnets with pictures of places we visit. My wife says I should either STOP buying magnets. Or buy another refrigerator. 🤪
Thanks for the great insight!
Oh Winston, I had a weak moment in St. Croix. I caved and now am the proud owner of an “I love Oscar” wooden paw refrigerator magnet.
I appreciate your kind comment!
I am aquatinted with a family living in Texas. One adult son whom lives with them and his girlfriend and a new born. In the garage are a Corvette, a Mustang a Dodge Challenger and more. All are less than one year old. The annual earnings are near 350, 000 for the four workers. Everything they have is heavily leveraged, the savings accounts, retirements are empty. Zero savings. They are in their fifties. The house is worth 750,000 and they are trying for a million dollar new home. Total cash hovers around 1,000 after all of the monthly bills are paid. Just the facts, ma’am , just the facts. I cannot comprehend that level of spending. A friend recently passed away, here in Massachusetts. He never earned more than 12 bucks an hour, had two kids. Never took out any type of loan, no credit cards, no auto loans, etc. He left an estate worth a bit over two million, and that was in 2007, Just the facts, ma’am.
My X wife and I volunteered to deliver Thanksgiving dinners to needy people. I remember an older couple that were so surprised and truly thankful! They said they didn’t know if they could even have a good meal before the delivery. Then, as we drove up to another home, I was shocked at all the cars, boats and a motor home in the yard!
No, I cannot comprehend that level of spending either, but I also cannot comprehend the level of saving by your Massachusetts friend. I wonder how many wondrous experiences he denied himself and his family in order to save $2M that he couldn’t take with him when he died.
There is a middle course, and I try to stay in that lane without veering too far off in either direction.
I’m amazed at the vacations of some of my young friends and acquaintances. I know they are spending hefty percentages of tbeir income. It’s sad to think of the regret that’s on the way. Not many of us can imagine the needs of our future selves, though. The emotion that motivated me to save was imagining age 65 with no savings.
I suspect Covid is a large piece of their “travel now” attitude as it has become with more adults. While we all should have expected travel to increase dramatically after Covid, it’s been far higher than anyone or any business anticipated. I know a number of 20-somethings who have decided to prioritize travel today instead of tomorrow. I won’t begrudge their different line of thinking about how they want to live.
What amazes me is what young couples spend on weddings and go into debt to pay for them.
Average cost is $30,000. In 2023, according to The Knot. I won’t even get into “destination” weddings, where guests typically pay for their own travel and accommodations.
Me too, but I have found out extravagant spending on weddings is a Northeast thing and perhaps some of the west coast. The heartland seems more sensible.
We just celebrated our 40th anniversary this weekend, so I was looking back at our wedding photos and thinking about the wedding. We had about 200 guests—our college friends, relatives, my parents’ friends.
We were married in my parents’ church and used the parish hall for the reception. No charge for church members. My dad knew the caterer and the baker who made the cake, and they both gave him hefty discounts. We had champagne for toasts but no open bar. The invitations ended up being free because the printer made a typo on the first set. And—a big savings—I wore my sister’s eighth-grade graduation dress. It was long, it was white, and it was pretty. My friend took all the photos, didn’t charge us, and we paid him just for film and developing expenses.
The caterer charged $5 a head for a spread of gourmet appetizers. The cake was $500. The biggest items were the champagne and the flowers. I think the whole event out the door cost my parents no more than $2500. This was in California.
My sister-in-law’s first marriage celebration was brilliant–a potluck! My jaw dropped at the time on her etiquette, but it was fun.
Her 2nd marriage was on a boat in Austin, Texas.
Her third was even more unique: separate “ceremonies” in her hometown, in Mexico (groom’s hometown), and in southern Texas, due to travel limitations of some of their guests. All were family/picnic style, no fancy restaurants.
I hope there isn’t a fourth…