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If you’re a resident or a new attending with a negative net worth trying to live like a resident or just somebody in the early stages of building wealth, this post probably isn’t for you. Go ahead and skip it. There’ll be something better tomorrow, I’m sure. This is mostly for those who are already rich but suck at spending money.
There are five money activities to master in life:
Earning
Saving
Investing
Spending
Giving
Most of us are better at some of these than others. I’m actually pretty darn good at four of them, but I definitely have a weakness: I have a hard time spending. It’s not really a logical thing. It’s an emotional thing or a subconscious thing or something. I’m just naturally cheap/thrifty/frugal. I guess I get more of a dopamine rush from padding an investment account that I’ll probably never spend than actually spending money on something that’ll improve my life.
My Progress as a Spender
I’m getting better. I’m actually pretty proud of myself, because honestly, we spend quite a bit of money. I bought a new truck recently. I didn’t even really need it when it was ordered, but when it finally showed up 20 months later, my old Sequoia was definitely on its last legs. We bought a tiny share of a very nice houseboat we used for the WCI retreat last year. We took the kids to Peru for Spring Break, and we went to Africa to go backpacking and safariing with family for Thanksgiving. I’ve come up with all kinds of ways to deal with my cheapness and spend more money. I use credit cards to minimize the pain or use one-click ordering on Amazon. It’s not that hard for me to spend on something needed to pursue one of my hobbies, but everything else seems harder somehow. Mostly, I let Katie (or someone else) do the physical spending of money. I don’t mind it being my money that is being spent; I just don’t really like the act of spending it.
Losing money is even worse than spending. Maybe it all goes back to when I lost $5 as a 10-year-old biking to the grocery store. I was probably scarred. I don’t know. I’ve been deliberately working on becoming a better spender for the last 10 years or so, most of which we’ve been financially independent. I’ve made a lot of progress, but our trip to Peru was a wake-up call to me that I’ve still got a long way to go.
More information here:
Spend Intentionally
Loosening the Purse Strings
Slumming It as a Jet-Setter
Foreign travel to developing countries, even middle-income countries like Peru, can be wonderful. You get to meet some cool people, experience some cool cultures, and see things you simply cannot see staying home. It’s not the same watching a YouTube video as actually walking the Inca Trail to Machu Picchu or spotting monkeys, caimans, giant otters, and tarantulas in the rain forest. You can’t fish for piranha at home or be invited into the home of a Uru family living on a floating island made of reeds on Lake Titicaca. I even got to see one of the three Teslas in Lima. I’m not much of a foodie, but checking out the cuisine of another country is still pretty cool.
However, traveling just about anywhere makes me feel rich. That wasn’t always the case when we were younger. Back then, traveling meant sleeping in a nicer bed, having a nicer shower, and driving a nicer car than we had at home. Not anymore, though. We’ve upgraded our home life too much. Now, when I travel, the car I ride in, the shower I use, the bed I sleep in, and the internet service I suffer with on a trip are universally worse than what I enjoy at home. It doesn’t matter if I’m in Florida or rural Mexico; it’s a step down.
Traveling feels like slumming it now instead of living it up.
Sometimes, it’s a REALLY big step down to see how other people on the planet are living. Take, for example, the Urus, an indigenous Peruvian people. In their home, they were trying to sell me a handicraft I didn’t really want. It was pretty, but I don’t know what I’d ever do with it. It took this lady a month to make, and she was only asking $20 for it. Their staple food is the same totora reeds from which they make their houses, boats, and island. The six families living on an island the size of my house . . . one floor of my house . . . were pretty excited to have a couple of solar panels and a small skiff with an outboard motor in addition to the reed boats.
Faced with that level of poverty, it’s hard not to feel rich, although I’m being completely honest when I say they seemed extremely happy with their simple life of fishing, hunting, making handicrafts, entertaining tourists for an hour once a week, and maintaining their now 11-year-old reed island. But there’s a reason none of their kids, who attend high school on the “mainland,” want to come back and live the traditional lifestyle.
Wealth and Frugality in Peru
Here’s the part of the blog post where I make fun of myself in an effort to become a better spender. Feel free to laugh along. But I bet a lot of you have similar issues.
Katie handed me a 5 sol coin to buy a drink on one of the islands on Lake Titicaca. Did I buy it? Nope. To be honest, I wasn’t all that thirsty, although I did sip a little from the kids’ drinks. And I didn’t really want to walk across the plaza at that moment after huffing and puffing up a hill at nearly 13,000 feet above sea level. So, I put the coin in my pocket, figuring I’d use it later for a tip. Well, on the boat ride back to town, I was wrestling with the kids on the roof of the boat and somehow lost that coin. No big deal, right? But it actually bothered me. A sol is like 27 cents, so this was like $1.30 or so that I lost. It was an absolutely trivial amount of money, and three days later, I was writing about it for you to read.
On the way home, we accidentally left my youngest daughter’s headphones on the plane because I was too tired after that redeye flight to really look around before rushing off the plane. I don’t know what they cost. Twenty dollars, $50 maybe? Probably not $100. Not sure. That bothered me, too. It felt like such a waste. Never mind that I just pissed away thousands on a silly trip to Peru, I cared about those $30 headphones that I don’t even personally use.
Katie does a great job planning trips for our family. Just like she arranges every detail of my speaking gigs, she plans every bit of several international trips a year. She always nails every detail. I think she really enjoys the planning process, and when she arranges it, it also means she has the control to do whatever she wants on the trip. We’re just along for the ride. It’s usually a pretty fast-paced ride, too, as she likes to pack in just as much as she can. (We were only gone nine days but went on nine different flights and visited six different towns in Peru.) The rest of the family, especially me, is just happy not to have to do any of the planning. (I make up for some of it by doing the planning and preparation for our local adventuring trips.) At any rate, Katie is really good at this stuff and almost never makes a mistake.
Well, she made one on this trip.
We had flown into Lima from Juliaca Saturday morning, the last day of our trip, and stashed our backpacks at the airport for the day for $10 a bag. I think she thought twice about carrying them around all day, and I was so proud of myself for insisting that there was no way we were going to do that when it only cost $60 to leave them all at the airport. We paid the $60 and headed out on the town in a taxi. A few hours later while Ubering around, she used the Delta app on her phone to check us in for the long flight home that night. She suddenly realized that she had not booked tickets leaving Saturday night as we had planned. Instead, she had booked them for Sunday night.
Oops.
I had a shift to work Monday morning on Day 2 of a new EMR in the hospital, and I don’t think anyone would have traded into that shift—certainly not on 24 hours’ notice, even if I had the cell phone data and time to arrange coverage. The kids also were supposed to be back at school on Monday, and we were frankly all ready to get home at that point. I mean, the bags were already packed and at the airport. We didn’t want to go get them, find a hotel for the night, and then go back to the airport and leave them a second time to tour Lima again. So, while I was in front chatting it up with the Uber driver, she was quietly rebooking our flights. She didn’t even tell me about this mistake until we got out of the car, and all of the flights were rebooked. As I write this, she is still refusing to tell me what this little mistake cost us, but I did get out of her that it was more than $500 and less than $10,000. Maybe I’ll know by the time this post runs. She did agree to email Delta and beg for a little mercy as a Platinum Medallion member, and that made me feel better. I guess I shouldn’t be surprised that it was expensive to buy an international flight for five people at the last minute.
We can obviously afford to lose a 5 sol coin and $30 headphones. Logically speaking, we can afford to pay for a mistake that costs us a few thousand dollars without any more effect on our financial lives than losing that 5 sol coin. But I can’t tell you how many times in the last three days I’ve had to remind myself of that.
This story gets worse, too. For some reason, our connecting flight in Atlanta was later than it really needed to be. It was the third Atlanta-to-Salt Lake City flight of the day, resulting in a 4 1/2 hour layover. We landed early, so we hustled over to see if we could get on the first flight or at least the second one instead. We discovered that Katie could make the change free with her status but that it would be $75 a piece for the rest of us. We hesitated, seeing if we could save that $300 by chatting with somebody on the Delta app or trying to talk the gate agent into slipping us on.
Time slipped away. The open seats on the flight were filled with standby passengers, and we found ourselves on the second flight of the day two hours later (although for free). Is my time worth more than $150 an hour? Absolutely it is by any logical measure. But we didn’t do a good job trading our money for time in that instance. It’s bizarre what we do to save $300 on travel when we have seriously considered a NetJets subscription before. I mean, we sat on the back row of the airplane on all of our in-country LATAM flights because we were too cheap to select seats in advance, and where else would they put a family of five?
More information here:
It’s a Lifestyle, Not a Vacation
8 Ways to Spend More Money
WCI Travel Club: Magical Trips to Peru, Portugal, and Disney World
A Stewardship Mentality
I think part of the difficulty I have with spending money is that I don’t necessarily view it as all my money for me to do with it whatever I please. I view myself as a steward of that money, stewarding it for my descendants, future me, Katie after I’m gone, God, and the rest of the world. I want to do the most good I can with the money. Instead of spending $2,000 (or whatever it was) on a last-minute ticket change, what if we had given that $2,000 to those Urus? That’s more than the annual income of those six families combined. It’d be life-changing money. And we blew it just so we didn’t have to spend another day inconveniencing ourselves in Lima and so we could go home and bang our heads on a keyboard in EMR frustration. It’s no different at home. It’s $300 on a super nice meal or 150 malaria-preventing mosquito nets? Another $600 shell jacket for skiing or 1,200 meals for starving people in developing countries? You can’t take it with you, but that doesn’t mean YOU should spend it. Ahhh . . . the existential dilemmas of financial freedom.
I hope those of you out there who can relate to this issue got something useful out of this post. If not, well, I’m sure we’ll have something tomorrow that will save you some taxes so you can become the richest person in the graveyard.
What do you think? Do you struggle with spending? What are you doing to get better at it? Do you feel any guilt spending money that you can afford to spend instead of giving it away?
The post Musings of a Cheapskate appeared first on The White Coat Investor – Investing & Personal Finance for Doctors.
