What We Say What We Do
🙉I cannot hear you because your actions are too loud
This post is 1,276 words, about a 5-minute read. Enjoy!
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Humans are interesting. One of our greatest strengths is our ability to think abstractly. Our ability to create stories.
This is also our greatest weakness.
I am fascinated by this in myself and the people around me. We can say one thing but then do the opposite thing and then justify why we are inconsistent. The most incredible part is that we do this without realizing we are doing it.
A great example of this is the way we tend to talk about inflation, the economy, and our personal finances.
The two biggest items that we generally talk about when it comes to our financial situation are food (groceries) and gas prices. We complain incessantly about how expensive these two items have gotten.
How we were about to buy a dozen eggs for $2.50 but now we spend over $3.25 on those same eggs.
How we spent $5 for a gallon of milk and used to pay $2.50 for that same gallon.
How last year we could buy an entire tank of gas for $30 but now it costs $40 to fill up our tanks.
By focusing solely on our grocery bills being higher over multiple years, we can easily remove ourselves from the equation and point to outside forces about why our personal finances are in shambles. We can blame the government for making the economy so hard. We can blame corporations for being greedy. We can blame experts for lying about how bad things actually are. We can blame companies for not paying us enough to be able to afford groceries without stressing.
On the surface, all those things are very true. However, it is selective amnesia. It is a story we are telling ourselves that chooses to ignore our culpability in why things feel bad.
I love to say, "I cannot hear you because your actions are too loud."
We fail to account for all the other decisions we have made leading up to our magnifying glass focus on groceries and gas prices. Here are a few miscellaneous choices we make that we tend to ignore because they tend to be inconsistent. We throw these expenses into the "one-off" categories and ignore the major role they play in our finances:
We ignore and mis-account for how much we eat out.
If a meal costs less than $100, we do not count it as "eating out" for some reason.
Everyone undercounts the number of vacations they take in one year.
We underestimate how much we spend on each vacation
Pro-tip: Multiply whatever number you think you spent on a vacation by 3 and it will be closer to how much you spent.
No one accounts for beauty care costs, laundry costs, toiletries costs, and all the other things we need to take care of ourselves daily.
Weekly haircuts for dudes
Ladies with getting their nails, hair, etc. done regularly
The seemingly cheap-ish decorations or toys or small comfort purchases we make to feel better that absolutely no one counts as expenses
We view buying new clothes for every event we go to as normal (Hint: IT IS NOT!)
These are a few things that we willingly ignore when thinking about our finances. Because when we place the microscope on these items, we are forced to deal with our own choices. We are forced to come to terms with the role we play in our financial life. Yet, these are not even the most important factors about why our finances can feel and is terrible.
The two biggest aspects of our personal finances are:
Housing Costs
Transportation Costs
Housing costs can take upwards of 40% of our monthly expenses for most people. Transportation can easily take 20% of our monthly expenses. However, with the way people decide where to live or what car to drive, you would think that these choices were in the same bracket as deciding to either buy a Twix or a Snickers bar at the checkout counter.
I have noticed that most of us spend very little time trying to think about these two things. We will use vibes and how we feel to decide on two of the biggest financial decisions we make. We ignore the most important question to ask ourselves: "CAN WE AFFORD IT?!"
One day when things feel especially difficult, it seems that we can no longer breathe. We begin looking for where to cut expenses. Typically, we start with the declaration, "I WILL NO LONGER EAT OUT FOR LUNCH. I will bring my lunch." That lasts for all of maybe a month because we see no major difference, so we lose motivation.
Our focus switches to our grocery and gas prices. We see how "expensive" things seem to have become "all of a sudden". We scream to the high heavens about how inflation is so bad, which is true but misses the point. All the while we ignore the three vacations we went on over the last 6 months. We ignore all the times we ate out in the last month because well it only costs $30.
But most important, we ignore the house we bought that is taking up almost 50% of your monthly budget when you factor in the total cost of ownership which includes insurance, taxes, maintenance, power, water, gas, internet, garbage, water, pest, lawn care, etc. (Tip: your total housing costs should be no more than 28-30% of your gross monthly income).
We ignore the car WE JUST HAD TO HAVE because we "NEEDED" it for our "family" because sedans become unsafe the moment you get married or have a child therefore you need a giant SUV. Or the luxury car or truck you "DESERVE" because you got a promotion at work or got a new job or just graduated from school. We ignore the fact that this "NECESSARY" expense is taking up 20-30% of your monthly budget because you never included insurance, maintenance, parking, taxes, registration, tolls, etc. (Tip: your total transportation cost should be no more than 8-10% of your gross monthly income).
When you understand this, you understand why most people say they want to save money but then you see that the average savings rate in the US is 3%.
You understand that although most people say they want to be debt-free, you see that about 48% of households in the US do not pay off their entire credit card balance every month.
What we say is NOT what we do.
When we use words like DESERVE or NEED, it allows us to spend money on whatever without asking the important question: "CAN I AFFORD THIS?"
It allows us to skip the important step of running the numbers before making certain purchases. It allows us to throw out the budget because we do not have to make ourselves feel guilty (at least until when life starts sucking again). We can offload those burdens to outside forces that are causing us all the discomfort and pain.
The stories we tell ourselves, and the words we use, are incredibly powerful. Be careful of the narratives that you are creating for your life unconsciously. The number 1 rule of getting good with money is BEING HONEST WITH YOURSELF! If you cannot be honest with yourself, you are in serious trouble.
Thanks for Reading
God Bless You
Remember Generosity>greed
✌🏾