Black Friday: the biggest consumer spending day of the year. And also the day with the most annoying advice in the world.
Seriously, guys, you would not believe how many press releases I’ve gotten about how what a terrible, scary, foreboding day this is going to be for our country. And every “expert” is eager to take advantage of it.
“Americans are spending too much!” these so-called “experts” will cry. “They just need to _____ (keep a budget/stop spending/resist evil marketers).”
They’ve been repeating advice like this for decades, but has anything changed?
No. We spend more and save less than almost ever before.
When your entire philosophy rests on urging Americans to NOT do something they want to do, chances are very good that you’ll fail. It’s like trying to push back a tsunami.
These so-called “experts” neglect the most important parts of personal finance — automation and psychology — and instead appeal to our fragile willpower. Bad move. It’s intellectually lazy and it doesn’t work.
For example, what happens to your willpower when you see that the flatscreen TV you’ve been dreaming about on sale today at for 80% off? Sales work — they work really, really well. And marketers are extremely sophisticated and can literally engineer desire to crush your willpower. I know because I’ve run these tests myself.
Rather than chastise you for spending — which evokes guilt for 20 minutes, then you learn to adapt/ignore it — I’d rather have you spend consciously on the things you love, as long as you cut costs mercilessly on the things you don’t.
That means you don’t try to say “no” to everything. You say YES to the things you value/love, but your system automatically saves, invests, and shows you how much money you have to spend guilt-free. This is the system I outline in extreme detail in my book. For example, many of you know about my friend who consciously spends over $21,000 per year going out — after handling all the rest of his finances. I personally spent more than DOUBLE that in 2010 on self-development.
It’s not a shameful thing to buy something you love — no matter how many personal finance pundits make us feel guilty about it. But if we focus on conscious spending… then we know exactly WHAT we can spend money on, guilt free.
Tonight, I’m on PBS talking about so-called “experts” lecturing us
Tonight, I’m going to be a guest on the PBS’s Nightly Business Report talking about all the critics bemoaning Americans spending habits. Check it out tonight (11/26) if you want to watch me illustrate why the same old advice doesn’t work. Here’s the schedule.
***[Update: The show aired on 11/26. Here’s a link to the video (I’m at the 23:13 mark): PBS NBR 11/26/10 and the transcript: “Overspending on Black Friday… Not a Deal Breaker”]