I admit it. I’m a hypocrite. The first time I wrote a post on saving money on college expenses, I listed several savings options that I not only didn’t follow myself, but also that I would rather not see my son follow when he gets to college. While I can recognize the importance of frugality in general, there are some specific areas where I am perfectly willing to pay dearly in return for an experience. College is probably my most expensive example of frugal failure (as my still-high student loan debt can attest), but it’s not my only one. Here are some of the pieces of advice that I have given—but I don’t necessarily follow myself:
1. Do It Yourself. When it comes to basic home improvement and maintenance work, as well as car maintenance, it’s clear that doing it yourself (within your abilities) is going to save you big. The problem is that sometimes I just don’t wanna. Case in point, each fall my husband and I have a battle over leaf raking. I recognize that a couple of afternoons of raking, gathering and pitching our leaves is a small price to pay for being a homeowner, but I still troll for local teens who are willing to do the job.
Call me hypocritical, but there are some things that I am just not willing to put the time into. I’d rather spend my money.
2. Have At Least $30,000 Put Away for Retirement by Age 30. At two years past my three-decade mark, I still haven’t reached this goal. While the specific numbers that you hope to have put away for retirement will change from individual to individual, I have always felt that having 30K in retirement savings for that big birthday is a relatively reachable goal. And yet, I ignored my retirement for most of my twenties, and continue to only be lukewarm about those savings goals, whereas I’m constantly checking how my son’s college savings account is faring.
I know I’m falling down on the job here, but retirement is an amorphous and far-off goal—while my son’s education is only 17 years away and I can have fun thinking about where he could go with the money we’re putting away for him.
My plan is to make retirement more concrete for myself. For years, my retirement accounts were not easily accessible online (unlike all the rest of my money information). I’m meeting with a financial advisor to get things streamlined so I can get just as excited about checking my retirement status on a weekly basis as I do about my savings and checking accounts. I know what motivates me financially, and I simply haven’t been doing it with my IRAs and 403b.
3. Spend Less Than You Earn. While in effect I do this, I must admit that my checking account balance is for all intents and purposes $0 at the end of each month. Much of my monthly “spending” is putting my earnings into various savings accounts, including our emergency fund, but I don’t build much of a cushion into my checking account. I do this because I want to maximize every dollar, rather than let it languish in a bank account that earns me no or minimal interest.
I do this because I’m a money nerd and I balance my checkbook once a day or so. (Really! I actually enjoy it). However, it does mean I sometimes goof and have to borrow money from myself, either by using a credit card for a purchase or by moving money out of one of those carefully built-up savings accounts. That being said, I have never overdrawn my account—I’ve just had to redirect money from its intended use.
At various points in time since I’ve become a card-carrying grown up, I have tried to not “use” all of my money every month, and I always come back to this strategy. It works for me, even though I know I end up spending more than I’m earning in interest once a twice a year when I make a mathematical error. I prefer to feel like I’m using my money well, and I’m willing to pay for the lack of a cushion on the rare occasions when I need one.
For the most part, I try make my money decisions with self-awareness and recognition of why I am ignoring the prevailing wisdom. Even the experts will agree that not all advice will work for all individuals.
What personal finance advice do you ignore?