Being a budget coach people always want to rationalize their purchases to me. If I’m sitting with a family who has always had a $70 a month cell phone plan and it suddenly jumps to $200 a month they feel they need to rationalize why they got smart phones.
“We neeeeeded it!” they cry.
Ok, fine. I’m not even going to argue. You needed it. Who I am to say you didn’t neeeeeeed it. My question isn’t why did you buy it. My question is this…
“What did you give up to get it?”
Hmm… tough one. Most people can’t answer that question. But you gave up something. $200 a month on your cell phone bill is $200 a month that isn’t going someplace else. Unless you have a money fountain in your basement you gave up something. What was it?
Did you cancel your cable? Have you stopped eating out? Are you skipping your family vacation? Will you give up some of your time by getting a part-time job? Or are you giving up your retirement savings? Your debt freedom? Your kid’s college education?
Which is it? You gave up something. If you gave up today’s cable for today’s cell phone then that’s a wise choice. If you gave up food in retirement for a cell phone today then that’s not a wise choice.
So don’t rationalize your purchases. The why is meaningless in the end. Instead think about what you are giving up.
My full-time job pays for my cell phone now but it wasn’t always that way. Our cell phone bill was $70 a month. When my job started picking up that bill we increased the automatic transfer to our retirement accounts up by $70. We thought we were so smart. But looking at it through the “what were we giving up?” lens it’s pretty clear that we were giving up saving $70 for retirement in order to have a cell phone.
Ouch. I like to think I’m smarter than that. Truth is I would like to save more. So why am I giving up savings to buy stuff? I wish I bought less stuff and saved more money. I need to look hard at myself on this one. Life is a constant balance.
But make sure that you aren’t balancing today’s WANTS for tomorrow’s NEEDS. Make sure you first get tomorrow’s needs satisfied. Then at least you are balancing today’s wants for tomorrow’s wants. At least that’s a fair fight.