Spending Signals
Surprise & Emotion
This is the second briefing note from an upcoming Family Review. You can find the first briefing note here.
Emotional Surprises
In our marriage, we have an inside joke where one of us will say…
Eight Bucks For Strawberries!
It’s a reference from 20 years ago. We were in Bermuda and I was surprised by the price of produce.
Back then, I can safely say my daily burn rate was closer to $800 than $8.
The information lay in the surprise, and the emotion.
The Eye of The Beholder
Being in the middle generation of my family, I’m able to see things from different perspectives:
The Older & The Younger
The Spender & The Earner
It’s been educational.
Story Time
Last week I wrote about skiing.
Eating at a ski resort is similar to being at an airport… we are captive visitors; there are limited options; and constant sticker shock.
There are frequent opportunities for my wife and me to raise an eyebrow and sigh, “Eight bucks for strawberries…”
After one of those exchanges, about an overpriced bottle of Gatorade at 10,000 feet, I noted…
The choice is not whether or not to spend $9 on Gatorade. The choice is whether we should be here at all.
If we choose to be here then we should incur the cost and enjoy the experience.
The Cost of Doing Business
…also referred to as gladly paying the taxes of life.
Consider our environments and spending:
Should we be here at all?
Do we let the small stuff reduce our enjoyment (of everything).
The answer isn’t always clear and, as I explained last week, changes over time. Good decisions of the past can be a poor fit for the family of the future.
One thing I’ve done well… when I’m getting these signals, I don’t lock myself into that environment.
Stay Variable
Inside a family of five, my decisions have a multiplicative impact on our budget.
My coping strategy:
Make a budget.
Get comfortable with the budget going up in smoke.
Set a give-a-hoot threshold. Specifically define materiality within the family’s financial life.
%age of income
fixed dollar
%age of net worth
Practice not getting involved with items under the threshold.
This works magic with our relationships (others), and the enjoyment of whomever pays the bills (ourselves).
Something worse, than paying for everything, is paying for everything and not enjoying it.
At times, we have found ourselves in situations where our host was in over their head.
Another inside joke is my wife quietly leaning over and asking…
Is it OK to eat?
Yes dear, it’s OK to eat.
In the widest possible interpretation…
If I can’t enjoy the menu then I’m in the wrong place.
The last two weeks have been about noticing where we might not fit.
Next week, I’ll share our process for considering where we are a good fit.