Adulting

The usage of the word “adulting” has increased tremendously on social media recently. It’s defined as “to do grown up things and hold responsibilities such as a 9-5 job, a mortgage/rent, a car payment, or anything else that makes one think of grown ups” on Urban Dictionary. Millenials are living at home longer, delaying marriage and having children, while also being burdened by education debt – “adulting” is deemed the actions that indicate members of this generation are finally beginning to “grow up” and act independently. While there’s nothing wrong with independence, I think often this idea of “adulting” is flawed – it’s nothing more than a challenge from manufacturers and your culture to buy products!

People hate being told “you can’t afford this” and “adulting” is a challenge to young people to spend money or go into debt to prove that they can, in fact, afford a product. However Financing is often so easy to get, and advertising so pervasive and influential, that I propose one true indication of “adulting” is your ability to NOT spend money unnecessarily.

A true adult isn’t swayed by peer pressure, advertising, or cyclical fashions – want to be an adult? Own a reliable car, maintain it well (both mechanical maintenance like oil changes, and cosmetic ones like interior and exterior cleaning), and then live your life! The same ideas can be applied to your clothes and other possessions. A car’s purpose is to get you to places where life happens! If you drive something dirty, not well maintained, impractically small or large, or so expensive/unaffordable that you worry about it being stolen or damaged, then your car is holding you back from living the life you want. A true adult wouldn’t own something so impractical or injurious to their freedom.

True adulting means being able to make important decisions, motivate yourself, contribute to society, and attain independence – financial independence often being a key component of pursuing your dreams and transitioning to a more mature stage of life.

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Why I Don’t Budget

A friend recently asked how I budget and track my spending.

I don’t – no budgeting other than a weekly review of my credit card statement online to check for any unauthorized payments. This is a thought experiment as budgets are often helpful tools, but read on to see that budgets may be useless if you don’t first control your desire to spend – similar to the old adage about rearranging deck chairs on the Titanic.

Why no budget? A budget shows how to allocate the money you have to afford the things you desire. You can go one step further – reducing or eliminating desires themselves. It’s the equivalent of trimming the weeds in your garden, or instead digging all the way to the root and pulling them out for good.

With this method, your remaining expenses on necessities (food & shelter) will likely be more than covered by even a basic salary – the remainder can then be saved toward building a solid financial cushion and saving in order to reach financial independence. Even with a complex financial life, kids, etc. this is still a valid method, see Mr. Money Moustache’s blog for more information than I could ever convey here. Some great books on eliminating desire and finding contentment include:

  1. A Guide to the Good Life: The Ancient Art of Stoic Joy
  2. Status Anxiety
  3. Stumbling on Happiness
  4. The Millionaire Next Door

In order to achieve any kind of stable, content financial life desires have to be limited and replaced by appreciation for simple, inexpensive or free, daily activities such as being outdoors, spending time nurturing relationships, and learning or giving your time to those in need. Conversely, no amount of money can satisfy unlimited desires due to the effects of hedonic adaptation and our tendency to compare ourselves to others.

Are budgets bad? Of course not -it’s important to know where your income goes each month. At a certain point I think they can become unnecessary if you choose to limit your expenses to well below your income. The cash leftover in your checking account at the end of each month will simply accumulate until you transfer it to an investment account (or have automatic transfers take care of that step for you). You may be asking “but what if all that money starts burning a hole in my pocket?” Again, back to the root of the problem – by tackling your desire to shop, having extra money, not immediately earmarked for spending, becomes a welcome side effect.

Take Away: Instead of framing money decisions as “can I afford this?” instead try to approach purchases by thinking “do I need this and will it bring me lasting happiness?” With that mindset, material purchases should become less important compared to experiential ones, which don’t have to be purchases at all.

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I’m Rich because I Buy Expensive Things!

No, not even close. This headline sounds ridiculous, right? Unfortunately I see this idea portrayed too often – in reality, the cost of someone’s possessions tells you almost nothing about their actual level of income or accumulated wealth (see my review of The Millionaire Next Door below).

The availability of easy credit allows people to spend far beyond their income levels. As your income rises, the strong values you’ve developed throughout your life determine whether you’ll tend to spend or save, and thus whether you’ll accumulate wealth and freedom, or debt and possessions.

My favorite idea is this: the ‘rich guy’ in the Porsche was richer before he bought the Porsche.

This blog encapsulates some of the healthy values that let people gain financial freedom – I hope you enjoy reading.

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Experiences Comes First

When evaluating a commercial or other advertisement, the product such as the luxury convertible or newest phone is almost always portrayed as enabling an experience: the luxury car is being driven on beautiful winding mountain roads, and the phone is sharing pictures of an amazing sunset or birthday celebration. But what happens if you don’t have a luxury car or the newest phone? The best part is – the experience still happens! Whether driving a luxury convertible or your current 2002 Honda Accord, is the windshield clean and the car maintained? The winding mountain roads will be just as beautiful!  If you forget your phone at home, does the birthday celebration still happen? Of course it does! You might even enjoy it more without the burden of taking endless pictures for internet strangers to “like.”

Life happens regardless of whether you’ve bought the latest product or received approval on social media. Experiences are often commoditized, but the world is an endless playground where you can choose to enjoy life directly, inexpensively, and with minimal distractions. Instead of buying things, DO things!

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Treating Yourself, Just this Once

Thinking about a luxury watch or your first fancy pair of shoes? Be aware of the “Diderot Effect” so nicely summarized in this Lifehacker post otherwise that single luxury splurge may cause a snowball of extra spending. If you’ve ever bought a pair of fancy new shoes only to come home and realize every other item of clothing you own is old, tacky, and in serious need of replacing, Mr. Diderot can explain why.

We’re experts at noticing tiny details, and the contrast of those beautiful new shoes highlights the faded, ill-fitting pair of worn-out pants you own. A nice clean pair of brand new tailored pants would look great! But this ratty old shirt, it’ll look awful next to a great pair of pants…uncontrolled, this cycle can continue until you’re back a square one, in a beautiful new McMansion wearing a scuffed up pair of shoes….

An example of this effect is shown in The Millionaire Next Door, where a retiring business partner finds out he’s to be given a Rolls Royce as a parting gift – he quickly realizes that car would alienate him from his blue-collar neighborhood, his casual clothing, his fishing trips, and the local Mexican joint. The Rolls Royce, in spite of being a superb car, would disrupt his lifestyle and likely inspire Diderot Effect-related purchases such as eating out in nicer parts of town, avoiding fishing trips, or moving to an upscale suburb.

If you’re seeking contentment as most COT readers are, make sure you consider the Diderot Effect before purchasing anything that would contrast negatively with your current possessions, friends, and lifestyle. Alternatively, as the article mentions, we can work to avoid such a strong identification with our possessions and instead focus our energy on positive relationships, inspiring work, and giving back. Identifying with relationships, community, and personal growth are key steps in overcoming an unreasonable focus on possessions.

Take Away: Before buying, consider what other purchases a single splurge might require or inspire. And if anyone attempts to give you a Rolls Royce….

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Necessities Are Not Advertised

Imagine all the commercial messages you’ve ever seen or read: sports drinks, beauty products, luxury cars, 11-piece dining room sets, and the latest generation smartphone. What do they all have in common? They’re for unnecessary products or services.

If you need something, you know you need it, without needing to see a shiny print ad for it. Even commercials for drugs to treat embarrassing medical issues follow this pattern – if you can’t get an erection, you’ll call your doctor, without needing to see a TV spot. However, seeing that Viagra ad places their drug at your top-of-mind, when any of the multiple drug treatments your doctor could suggest would likely be just as effective.

Remember this next time you get the urge to lay down cash – have you recently seen an ad for the product or service you’re about to buy? If so, remember, it’s not a necessity. Act accordingly.

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Stoicism – Not Just for Dead White Guys

A Guide to the Good Life: The Ancient Art of Stoic Joy by William B. Irvine

This post on the Truth. No Consequences. blog changed my life. It’s a long one – print it out, sit down with a highlighter, and enjoy.

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