Cutting Down on Lattés vs Putting Lipstick on a Pig

Buy this car to drive to work, drive to work to pay for this car…

Handshakes“, Metric

20 years ago people didn’t buy $5.00 lattés on their way to work. 100 years ago we didn’t have air conditioning. We take jobs that require commuting 90 minutes a day, in cities with crappy public transportation, so we have to buy a car. Are you creating a life for yourself that allows you to keep the money you make? Or is it a life that requires more and more money to sustain the discomfort that comes from the things you buy and demands of the work life you get with ever increasing responsibilities? Which ultimately requires “shopping therapy”, and a bigger closet to store all the things you take home on said therapeutic outings.

This is a reaction, in two parts. One the one hand I’m trying to uncover one of the biggest catch 22s of the American Dream which are ultimately easier to solve than most people dare to imagine. And on the other, I’m looking at a point made by a blogger rome model of mine.

I’ve been reading the blog “I will teach you to be rich” by Ramit Sethi, lately. I read his book of the same title 5 years ago and took away several money planning strategies and other finance methodologies that really helped me improve my money management, savings, and created a new perspective for budgeting an enjoyable life. Since then the blog has developed into a strategy guide for becoming rich by gaming one’s career, building a company from scratch, or optimizing a small business that isn’t scaling.

All those techniques work, and have great points people should know and practice. But, something caught me off guard about the change in Sethi’s tone, where he is trying make an example of fruitless wealth management techniques. The one I’m speaking about is a reference to people who talk about cutting down on lattés to save money (one method which his book actually would advocate for). I understand that Ramit wants to direct his readers towards methods for scaling income (that’s probably a better selling point for his products), and distancing himself from other financial self improvement guides who focus on reducing spending, but it bothers me that he’s putting those methods down. If nothing else, it’s because he realizes his readers don’t want to stop buying expensive coffee drinks, they don’t want to stay in cheap hotels on their vacations, or cut back on fancy dinners and Leica time pieces. Which – fair enough – is not what everyone wants out of life, perhaps they enjoy working more to pay for more stuff, and growing their business, because that is a sign of success. But really, putting down the reining in of someones spending is a risky card to play.

It doesn’t matter if it’s lattés, designer handbags, or pricey cocktails. You can’t put lipstick on a pig; if you’re burning your ability to enjoy life by working hard, and buying stuff that requires you to work harder, you’re living an imbalanced lifestyle and you could be happier. That’s a way of life I can’t get behind because it ultimately deceives people into thinking they are on a path to becoming happier, when really they are just adding more weight to an aircraft which has a limited capacity for fuel and distance. After all, if you can’t learn to manage your consumer expectations it doesn’t matter how much income you generate, you’ll always be chasing a bigger paycheck, a higher spending customer, a larger market. Are those the things that make American culture so ugly to begin with?

While living in Germany I witnessed a way of life that I think would improve all people’s quality of life. There is an emphasis on restraint, people spend less, and they buy less, and as a result prices for many things don’t cost as much. Homes are built with concrete instead of wood and cheap materials because concrete stays cool during warm seasons and holds heat in cool seasons. Doing so allows them to avoid using air conditioning and heating energy, and literally 95% of all homes & offices in Germany don’t use air conditioning, think about the energy savings they achieve from this.

Building with concrete reduces the need for deforestation, which allows trees to continue growing, producing oxygen, and reducing greenhouse gasses. Think about that, and take a guess which country produces more carbon emissions per person? In Germany, all consumer waste is recycled with the exception of dust and cosmetic (think q-tips and feminine hygiene). Everything else is processed to be used again or converted into energy. Meanwhile back in the US, our coffee drinks get more expensive, larger, fuller of crappy chemicals, and sold in cups we usually just throw into a landfill. We make new products for people to buy with packaging they cannot recycle, and the landfills we are running out of room for, are getting bigger. We keep buying the next big TV, and hand bag. Automobile marketing companies encourage us to trade in our car for a newer bigger car, and the governments continue expanding the freeways to make room for the additional cars we all use, instead of steering cities and civilians in the direction of better public transportation, they continue feeding the beast that requires more fossil fuels, more parking lots, greater commute times, which make people have to earn more money so they can afford the stressful lifestyle they’ve taken on. And, with all that driving, these people aren’t walking much anymore, so they probably need to spend more time in the gym, or pay for weight loss programs they can’t stick to. Or get diabetes which causes tragic deaths, painful lives while we are living, and brings massive health care costs to our government.

That’s enough venting, as you can see, this topic really gets me worked up. It’s one of the most difficult things for me about being an American. We have so many programs that are working agains’t our health, or freedom, or ability to save. It’s a downward spiral that I want nothing to do with. Meanwhile people around the planet, envy our pop culture, but not our waistlines, or congested freeways.

So what’s the take away here? How can you start walking agains’t the current of consumerism that affects your health, savings, and ability to be happy? Let’s start with one simple thing. This eventually becomes a complete overhaul on your way of life, offering financial freedom, longer life, great relationships, more rewarding work, and much much more. But we’ll just start with one thing…

There is a muscle you can build, starting right now. A new skill, or trick in your back pocket. Something you can tell yourself you will do, before it happens (which makes it much easier to follow through). Find one symbolic gesture in your normal habits that starts turning the face that is the self-destructive american consumer. Be it a bike or bus ride to work one day per week, or the next time you go shopping and see yourself about to buy something you don’t need, decide to wait a few days and see if you still really want that thing. Maybe imagine a weekend of shopping and dining out, before doing so, tally up the money you’d spend on that weekend, and move that money into a savings account. Then call your friends and plan a picnic in the park, or a hike, or a home crafts day. Something that might still have a few bucks attached, but far less than that costly weekend would have been.

Now, the fun part is, just imagine how this one new skills has modified your life, if you keep it up.

  • If you’re now riding your bike to work one day a week, think about the exercise you’re getting from this, and the time you saved by not needing to do that exercise outside of work. Multiple the time you saved by weeks in a year, and years you will be working. Like a 30 minute bike ride, 1 day per week, is 2 hours a month, that’s 24 hours a year. Over 30 years, that’s 720 hours, or an entire month of free time you just got. And you’re going to enjoy that bike ride! You’ll get to work with endorphins making you happier and more motivated.
  • If it’s a weekend of diners, drinks, and taxis. Pretend you would have spend $30 on dinner, $10 on drinks, and $8 on a taxi. Let’s say you decide to cut this pricey night out of your budget twice per month. That means you can still go out and do it on the other nights if you want. But just commit to two days per month you wont do these things. $48 saved on each night, twice per month gives you $96/month saved. Over one year that gives you $1,152 dollars saved. Enough, if you invested this money in a conservative account, you’d have more than $80,000 saved. That’s enough to put a kid through college.

So there are just two examples. And I’m asking you to only make one of those changes. Think about the impact of working up to several of these lifestyle optimizations!?!

The best part is, as you learn to depend less on getting fulfillment from spending, and find ways to get more free time, you end up having the freedom to do more of the stuff you want to, instead of working. No one says they wish they’d worked more on their dying bed right? Need I say more? From the financial perspective, having more money to help cover the real costs of life such as education and retirement, means more financial independence, means more freedom to walk away from your day job and do something you’re passionate about. Or simply having the choice to say no to a promotion with more work hours and more responsibility, so you can have more time in life to be with the people you love.

Look at the benefits any way you want, it’s quite obvious that the upside is there. So what’s gonna be your one new skill? How much time or money will it save you? And what will you do with it?