It's About Choice
I read an article the other day full of righteous indignation directed at the personal finance industry, exposing it for the “sham” that it is. The writer had taken offense at an appearance Suze Orman had made on some nationally broadcast news show, speaking (as she does) about the potential that exists for people to take small steps toward gaining some financial freedom. And the millennial writer of this article wanted nothing to do with it.
Full disclosure - at 38 years old, I am technically within the range of birth years that would lump one together in the “millennial” demographic. However, I have never really found myself in that group, for a number of reasons, and I resist the application of the term to myself (particularly in the oft-used pejorative). This separation was made clear yet again as I was reading through this reaction to financial advice.
First, allow me to go on my own rant...I am a little biased, having spent a decade and a half working in public education, but the writer engaged in an entirely misguided attack on the educational role of the financial industry’s “personalities”, like Suze Orman. The writer railed against the fact that a majority of Americans are not saving for retirement, and many don’t even know what a Roth IRA is (facts which, sadly, do emerge from a number of studies on financial behavior). To their thinking, Suze Orman and others like her are just so much noise, since the average Joe has no reference for what they are speaking about. Um, hello?! That’s why they make national media appearances. That’s why they write books and host podcasts and keep up columns. They are attempting to bring the information to the people that need it! (I suppose for those of us who can remember a time before Google, it’s not unusual to think about someone needing to put their message in front of us, rather than us going to look for it). People that are as financially savvy as Suze Orman and her ilk are likely talented enough to make their millions doing lots of other things, and have already done so. They don’t need to help other people with their financial situations, they want to. We used to be taught to listen to our elders, not just because they deserve it, but because they have wisdom we don’t. As Jon mentioned a few weeks back, knowledge is not the same thing as experience! Okay, rant over...
The majority of the argument put forth in this article focused on the implausibility of the advice being given. Like many of the financial gurus out there, Suze Orman had brought up the idea of skipping coffee as a means to financial independence. The writer of this piece was flabbergasted that an entire industry could be built around such a laughable notion (in fact, said industry exists largely because we do such a bad job with our money on our own and need all the help we can get, and as all things in a capitalist society, because we pay for it!). Give up my morning latte and retire in comfort? Preposterous!
Will saving a few bucks a day by skipping Starbucks and brewing your own coffee at home lead to a life of luxury? At a savings of roughly $100 a month, probably not. But will it pay down some debt, start chipping away at some student loans, or slowly start to grow in investments or savings? More than that latte will, for sure.
By raising their ire over the coffee and avocado toast (is that really still a thing?) that Orman recommended foregoing, the writer missed the entire point of the conversation. Like so many other things in life, personal finances are about choice. As Dave Ramsey says, “winning with money is 80 percent behavior and 20 percent head knowledge.” It’s about making the choices that are going to lead us in the right direction. And about being honest with ourselves in assessing our current situation, and what those choices are in the first place.
It’s not just the coffee. If you’re rolling by Starbucks on your way to work each morning, are you also going out for lunch most days? How often are you getting take out or sit-down restaurant food for dinner each week? Drinks out at the bar? Uber home? Sure, these things are easy, but so it retiring broke. Lots of people do it.
By the way, if we’re getting coffee, lunch, and some dinners out each week, now we’re looking at closer to $600 to $700 dollar a month. For a single person. That can definitely change your long-term outlook! Add in your night-life, and we’re close to that million dollar target the writer was mocking, even just parked in a savings account.
Sure, we can’t cut all the fun out of life. You need space to do things, go places, see people. We’ve tried cutting our budget down to nothing, and it wasn’t comfortable. Actually, it kind of sucked. And sometimes it seemed to cause more problems than it fixed. But it was a choice we made at the time. The funny thing about choices is when that choice led to other choices we have been able to make. Like purchasing our last two vehicles without car payments. Like being debt-free except for our mortgage. Like being able to choose for my wife to stay home with our kids, despite the fact that we live in one of the most expensive parts of the country and even though I was only bringing in a public school teacher's salary.
It’s all about choice. The choices we make can either lead us in the direction we want to go, or lead us somewhere else. It’s not about the Starbucks coffee in the morning. It’s about being intentional with how we order our day to challenge ourselves, to move ourselves in the right direction. It’s about getting up 5 minutes earlier to flip on the coffee pot because that gets us closer to where we want to be. It’s about learning how to cook because it’s cheaper and healthier, and gaining new skills makes us a better version of ourselves. It’s about consciously making lots of little decisions each day - with our time, money, energy - that move the needle of our lives. It’s about being able to step back from those lives, judge how things are going, and course-correct in meaningful ways. And we can all do that in dozens of areas of our lives.
I know I certainly can, if I choose to...