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An annoying email I got

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Nathan writes:

This is nothing personal against you, because every personal finance author I’ve read says the same thing, but your advice is not for real people like me. The “spend less, save more” theory is great for singles or young married couples with no kids (and therefore, fewer attachments, expenses, etc.) I’m 30 years old, married, with two children. I make a very good wage for a 30-year old, but after a mortgage, two car payments, a wife who is a full-time student herself, daycare, and (many) other various utilities, activities, etc. there’s not much left for saving.

Granted, things will be better in a couple years when my wife is done with school and we’re back to being a dual income household. But all you personal finance gurus are people who have graduated from Stanford (or some other 1st tier school) and worked your way into a high paying, high end job. You represent about 0.01% of the population. Not that I hold that against you–I wish I had been that successful. But I need some other strategies to help me get my finances in order.

My response:

So what’s the alternative? Throw your hands up and say, ‘I give up — there’s nothing I can do’? Or are there small, systematic ways you can save more, invest more, earn more, and spend money in a conscious way?

I also pointed him to The Shrug Effect. He wrote back:

I think you miss my point. At no time did I resent your success and doubt that I ever could have done that. Had I had differing priorities in my younger days, I’m sure I would be in a much different position than I’m in now. But I chose to get married, have children, and support a wife’s dream of medical school, among other things.


My whole point, which you missed, was that most of the the personal finance articles available are not geared towards people in my situation.

Huh? I’m not the only personal-finance writer online — there are lots of other people who write about getting out of debt, frugality, etc. My response:

This is an interesting discussion so I’d like to continue on it for a minute, if it’s ok with you.

I understand your point, but I’ve seen thousands of articles about people in your situation. Few, very few articles, are geared towards young people who have everything together. Most of the articles are about how to get out of debt, how to spend less, etc.

I’m curious: Exactly what kind of advice are you looking for?

He didn’t respond, so I re-pinged him a couple days later. His final response:

After sitting on this a while, I realize that there isn’t really any advice I can be given. I want to–and do, for the most part–give my wife and kids whatever they want. Until I stop doing that, the whole saving more, spending less thing won’t work for me.

I think that’s very perceptive of him to realize that there isn’t really any advice he would listen to. Notice how at first he didn’t think any personal-finance advice was relevant for him (even though there are millions of articles online for every conceivable situation). Could the problem have been him, not the advice? Answer: Yes. So here are my thoughts.

1. If you don’t say no to things, your life is guided by external priorities, not your own.

  • If you don’t say no at work, you’re going to be resentful of your workload
  • If you don’t say no to going out all the time, it’s going to be tough to save money
  • If you don’t say no to your family sometimes, you’re not going to be able to save, much less grow your money

2. Ordinary actions get ordinary results. Look around. Do you see many rich people around you? No, because they are behaving in predictably ordinary ways: Not knowing how much they spend, not being conscious about where their money goes, and not setting investing goals. Want an easy way to see this? Go ask your friends who just went on vacation (or bought a new handbag or iPhone or whatever) this: “Wow, that’s awesome. How long did you save to be able to buy that?” Their reaction will be priceless, as if the antagonist from Saw II is holding their head in a vise and ordering them to look at the moon while opening their mouth. Try it.

As always, there are no secrets to personal finance. Fundamentally, you can either cut costs or make more money. When I say that, people roll their eyes, but they fail to dig into each part. Cut costs? That means saying no. That means being merciless with budgeting and negotiating and making smart purchases for the long term. Make more money? That means entrepreneurship, working two jobs, or asking for a raise.

The whole point of this site is that getting rich doesn’t happen to you. You make it happen. Until you step up, nothing will change.

Don’t miss my next post

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  1. this is an awesome post, and so true — no secrets to personal finance

  2. Very well said. I was in a similar situation as the person mentioned above until I woke up. Yeah, why don’t I ever have any money? Oh, because I spend it all on stuff I don’t need and I put no effort into spending less.

    It took some work, it took some drastic cutting of expenses in some places, it took getting my wife to be in agreement to live on less money, but now we are making real progress and it feels really good.

  3. I started saving for my iPhone the day it was announced. 🙂 So I’d love it if someone asked me how long I saved!

  4. I don’t know, a lot of the financial advice I read seems to apply to a lot of people. I’m 27, unmarried, living with my disabled father, making about $33k/year. We rent our home, I have a car payment, and yes the spend less than you make theory works for me.

    I’ve learned a lot from these financial bloggers, and money management is pretty much the same all around. People just tend to get more than they need, larger houses, more expensive cars, etc.

  5. I bet you that guy plays the lottery

  6. Arrrgh!

    I’ve read a number of Ramit’s posts about kicking ass and minding the small details. At one point, a few months ago, things clicked.

    My family and I tend to do very well (for a while) – we stay on budget, eat well (at home), and make a concerted effort to be effective with our family time. With predictable regularity, we’ll have “bad weeks” – work stress, aging relative stress, … and the floodgates come off. We eat out too much, stop exercising, and have “shopping therapy”.

    The “aha” moment happened when we realized those are actually the precise times to redouble our efforts – those are the times to eat well, exercise, and be frugal. We call it “kicking ass when the chips are down”. It’s the most important time to stay on track.

  7. Go you! I so agree.

    I’m 30 too and pregnant with our 3rd child. I stay at home, making us a 1-income family. And we save more than 20% of our income right now which means that money is working for us, not the other way around. We didn’t get lucky, we worked hard. We busted our butts to pay off car loans and student loans. And we do with out a lot in order to save money and avoid using credit. We say no to keeping up with the Joneses – which is hard.

    My point is that whining gets you nowhere. Making excuses get you nowhere. If you want to control your own money you have to do just that. You have to make choices that point you in the right direction. So yeah, that does mean (for us, single income, soon-to-be 3 kids) we forgo eating out, new cars, big houses, trendy clothes, new TVs, nice cell phones….a lot of status symbols. I guess Nathan needs to choose whether he’d rather look rich or BE rich.

    And I have to say that living with one income is worth more money than they could ever pay me to put my kids in daycare. You may feel differently but that is MY priority and it’s worth it to me to work for that. I think Nathan needs to find out what his priorities are and make it happen!

  8. I guess I relate to the letter writer but I have made my peace with it. I am married with a couple small kids and we have decided that we will continue to live in an expensive area (near Washington DC) and that my wife will be at home with the kids. This is not a time for being rich, except in the non-monetary way.

    Stability, health insurance, steady paycheck, getting home by 6 o’clock – these are very nice things to have. We talk about getting back on track (making more money!) in a few years when the kids are in school but for now, it’s just scrimp and save (spend less!).

  9. Interestingly enough, I find that the opposite is true. I’m a single, young (26), college-educated professional. I make significantly more than the national median.

    I get sick of reading articles on personal finance blogs telling me that I should stop buying coffee so I can safe money, or how to save $8/year on electricity by unplugging appliances that continuously have LEDs turned on when they’re plugged in. For me, all these things are so trivially small that I don’t care.

    I’d much rather read about how to manage six figure sums of restricted stock that I can’t sell yet, but I hear a lot more about how much money you can save by switching to fluorescent light bulbs.

    And incidentally, I just got back from a vacation. If someone asked me how long it took me to save up for it, I’d say “oh, a month, maybe six weeks, not too long.”

  10. Wonderful analysis, Ramit! When are people going to learn that the things they own, end up owning them?