[2022-05-04] Rich life
On this morning's walk, I listened to an episode of the very good podcast I Will Teach You To Be Rich—yet another terrific resource recommended by my wise daughter.
In this particular episode (39. "She waited until we were engaged to reveal $100k of student loan debt"), host Ramit Sethi interviews Alex and Nicole: Alex manages their finances while Nicole is disengaged in the couple's money matters and adheres to the philosophy that you only live once (aka YOLO).
Ramit notes that it's very common for a couple to be made up of one person who manages money with an eye to the future and one person who doesn't focus on money and instead spends as they earn. He tells Alex and Nicole:
Typically, I find that the YOLO person, deep down, they like nice stuff. Fine, I have no problem with that. You want to buy nice stuff, you want to have children, you want to live in a nice house or travel? Awesome! I'd love to talk about that. I typically find that there's just a few small tweaks we can make so that the YOLO person can still live a really good life, but they start to understand how their decisions connect with their bigger rich life. They often discover that some of the things they've been spending money on—it's almost like a sugar high. It's stuff that they don't even remember a week later.
Far from taking the side of Alex (the responsible money manager), Ramit works with both Alex and Nicole to help them understand where the other person is coming from and why they have the relationships with money that they do. Alex reveals that she would like to express her own YOLO personality and used to before getting engaged with Nicole and learning that the latter had $100,000 in student loan debt. Nicole feels that her views on money and spending are dismissed, but also recognizes that she needs to take more ownership of the couple's finances, beginning with her debt.
As his quote indicates, Ramit has no problem with Nicole's desire for nice things. What he tries to do in their conversation is to help Nicole connect with the bigger rich life she wants—a dog, a house, a family—and not just the immediate rich life she is focused on.
I love the balance Ramit strikes between enjoying some things today and saving for some things tomorrow. As someone who falls squarely in the save-today-spend-tomorrow category, I have had to remind myself that I can be so focused on having money for the future that I forget to enjoy today.
When I turned 23, I was single, living in an apartment and debt-free, having paid off my student loan within six months of graduating from university. Two years later, I was living with Chris and our first-born, Shane, in a house with a mortgage. Baby Melanie would arrive a year and a half later. This was a lot of change in a very short period of time, and our resources were stretched in the early days. Fortunately, Chris and I had similar approaches to financial decisions. Buying a house made more sense than renting. Eliminating debt made more sense than saving. Even living common law rather than getting married offered financial advantages in the early years.
When they were young, my kids thought that we were poor because we didn't go to Disney World or live in a big house like other kids they knew. For many years, our summer vacations were spent in the Saguenay-Lac-St-Jean region of Quebec, where Chris' parents lived. We continued to live in a small house and have only one vehicle, even as our household income increasingly outpaced our expenditures. We bought small luxuries but, for the most part, focused on paying off our mortgage, improving our home, making purchases in cash, and saving for priorities such as supporting our children through university.
Did we make all the right decisions regarding money? Perhaps not. There's something to be said for enjoying the moment, while you can.
But there's also merit in balancing short-term wins with long-term goals. We always tried to think about the bigger picture when deciding whether spending money today was more or less desirable than saving for an even bigger expenditure tomorrow. Our kids appear to have followed in our footsteps, making wise decisions with their money with little input from us. Our choices and theirs give me peace of mind, and that's worth its weight in gold.
