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Wednesday, October 22, 2014

Can’t Save? Stop Blaming the World

Posted by Tim Stobbs on January 17, 2013

I normally try to be respectful of other people’s point of view, but I have to admit this article “Can’t Save? Here’s Why” at the NYTimes really got under my skin.  If you haven’t read it, I suggest you go have a read.  I’ll wait.

Done? Good.

It took me a while to understand what was driving me nuts about the article, but I finally worked it out.  While I agree that wage stagnation and increased costs like housing isn’t helping people save more, there is more to the story than that.  The simple fact of the matter is the writer is comparing apples to oranges when comparing housing over the decades.  Ideal average house size in the 1950′s was only 983 square feet in the US, meanwhile in 2010 that value is 2100 sq feet (see here).  So yes obviously the house prices would exceed inflation since they are double the size!

Our issue is our expectations have increased around our lives.  It’s normal to live in a bigger home, it’s normal to have multiple TV and computers in every home.  It’s normal to own a smart phone or tablet or both. It’s normal that a lot of people live alone (which of course costs more).

Yet what brothers me most about this article is the tone that people can’t save for all these reasons and then basically it isn’t your fault.  The defeatist and blame the system attitude isn’t helping people save.  Take some responsibility for your own lives and you make the choices to get the life you want. Yes the world might tilt your options one way or another, but you are still in charge of where you want to go in life.  You can save, you just have to want to do it.

The first way to save: stop living like everyone elseGet rid of normal.  Live in a way that makes sense for you, perhaps you don’t need a car since you live close to everything you need.  Or perhaps you get a roommate for a while to pay off that credit card debt.  Or perhaps you start a new trend with your friends where you rotate hosting dinner parties rather than eating out every Friday.  Yes keep what matters most to you on your little luxury spending on life, but don’t pour money down the drain on crap you don’t care about.

So yes, perhaps you keep spending on your lattes and keep part of your cable package.  Or perhaps you toss your TV in the trash and drink tea instead.  Find your own path to savings, yes it means some work, but don’t blame the world.  You are not saving because it is your own fault.

Stop Bitching & Save Already

Posted by Tim Stobbs on September 15, 2011

I really do try to sympathize with others, but if I read just one more comment on a financial website about someone complaining that  ‘they just can’t do it, it isn’t realistic‘ I just might have to scream.

Come on people, let’s call a spade a spade and realize you screwed up. Perhaps you picked a crappy career with limited income prospects or perhaps you bought way more house than you could realistically afford.  Or maybe you had some crappy investment choices with 2.5%+ mutual fund fees.  I don’t really care what the reason is, but stop bitching about it and start saving already.

You know all that time you spend bitching you could be making your life better easily.  How you may ask?  Well here are just a few ideas.

1) Work Harder (or Smarter) – If you really want to earn more than work for it.  Go beyond your job description and be valuable to your business.  Then you stand a chance of getting noticed and promoted. Or if that won’t work, look to start your own business.

2) Turn Off the TV - According to a 2008 survey the average Canadian watched 1497 hours of TV that year.  That is 28 hours a week!  Even if you cut that in half you could easily pick up second part time job and earn more with almost no loss to the rest of your life.  Your TV ‘friends’ in the screen won’t even notice: I promise.

3) Don’t Go for Sainthood with Your Kids – I love my kids, but I don’t give them everything or try to turn them into super kids.  Thus they cost a fraction of what most people spend on their kids.  A reminder: an iPod Touch or iPad is not a NEED! Basic clothes, food, water, a place and love are NEEDS.  When in doubt less toys and more time together at the park rather than the mall.

4) Get Educated – No one on the planet cares more about your money than you.  If you leave that to your bank they will approve a higher than required mortgage and sell you over priced mutual funds.  This makes you poor and me as bank shareholder richer.  If you want to change that you have to learn about money and that doesn’t cost you a cent.  See the library (click on the book review category to find some titles) or read some blogs (see the blogroll sidebar on the right).

5) Spend Less Money on Crap – People often say to me “I would like to retire early, but I just don’t have the money.”  What they should be saying is: I would like to retire early, but I already spent the money on crap.  If you don’t use it daily, you should think about for at least a week before buying it. Better yet, just go shopping less often.  Get some exercise instead and take a cooking/writing/….insert your hobby here…class instead.  Buy experience over stuff the majority of the time and you will be able to save more and be happy doing it.

All of the above is easy to do and also easy to determine if you are doing it well.  Are you happy with your life? Are you meeting your long term goals? If you answered yes to both then you are likely on the right track.  If not, stop bitching and start saving already.