Cutting the cord

Money – How to be Both Ruthless and Indulgent

First off, you should know that I’m a huge fan Ramit Sethi. He’s the author of I Will Teach You To Be Rich. One of the things he preaches is that everyone should be pursuing their rich life. According to Ramit, this involves being both ruthless and indulgent when it comes to your money. This means that you should be ruthless about cutting expenses that don’t mean anything to you. By the same token, you should indulge in those purchases that allow you to live your rich life.

I love this philosophy! It so very much aligns with my belief that you should prioritize your money in a way that brings your dreams to life. You work hard for your money. In turn, you should be spending your money in ways that satisfy your heart’s truest desires. You are the only person who knows what those desires are. Nobody else can accurately fill in the details of what you want with as much precision as you can. You should be answering the following questions every week, and taking the baby steps necessary to get to the end result that you want.

What brings you the most joy?
When were you the happiest in your life?
Are there things you want to see-do-explore-taste-experience during your limited time on this little blue ball we all call home?
How are you going to make those things a reality?
Do you need money to make your dreams come true? If yes, how much?

Spend Money Where It Matters Most

I’ll use myself as an example. Pre-pandemic, I loved to travel to new places. Each year, I would spend thousands on overseas trips and I did not hesitate to try new things/excursions. I had no idea if I would ever be in that part of the world again, so I indulged myself and said “Yes!” to whatever was on offer.

Saying yes to an indulgent whim was how I was able to be one of the very first visitors to a magnificent, family-owned olive farm when I was in Spain. Chocolate ice cream drizzled with extra virgin olive oil would never have touched my palate otherwise… and I am ever so glad that it did! While in Ireland, I indulged myself after casually strolling into the most wonderfully smelling leather good store in Galway and buying a beautiful wallet that I use to this day. And Italy…ah, Italia! A beautiful, glorious country where I left no carb undiscovered and drank atleast two glasses of wine each day. I said “Yes!” to everything while I was there.

How did I do that? I did it by saving money before heading to the airport. Flights, accommodation, food, and souvenirs were all paid for in advance. The spending money I took with me could be spent freely on whatever happened to catch my eye. Travel is one of those areas where I indulge with abandon because it’s important to me. A nice chunk of every paycheque goes into an account designated for travel. That way, I have money waiting for me when I get itchy feet. Travel is part of my rich life, as Ramit Sethi would say.

Stop Spending on Stuff That Doesn’t Increase Happiness

I’ll be very honest. It became a lot easier to save for my heart’s truest desires after I took a switchblade to my budget. I cut out spending on stuff that didn’t make me particularly happy. The first thing to go was cable TV.

I’m a cord-cutter of long-standing. Truth be told, I haven’t much missed channel-after-channel of nothing to watch. Nearly a decade ago, I realized that cable TV is terrible. The shows on streaming services aren’t much better, but they are definitely way cheaper. For the same quality, a whole lot less money, and slightly less variety, I could still watch TV in my spare time. I had to ask myself why I was paying so much every month for cable TV, something that I didn’t particularly enjoy? Since I’m not a huge sports fan, there was really no reason for me to pay for cable every month. So I stopped paying for it.

The second thing to go was breakfast from the coffee shop. Way back in the day, I would buy a coffee and a muffin on my way into the office. It was my breakfast, and it was only $6/day. That was $30 per week, which was $1500 per year. I planned to work for 25 years, so that’s $37,500… Wow!!! After doing the math, I realized that I didn’t want to spend that much of my life’s energy on coffee and muffins. Investing $1500 per year at 6% for 25 years yields $82,296.77. Hmmm….coffee or satisfying my deep and abiding desire to have a very comfortable retirement? Decisions, decisions!

It should come as no surprise that I choose to wake up a little bit earlier so that I could eat breakfast at home. Guess what? I’m perfectly capable of baking my own muffins and making my own coffee. Now that I’ve started doing more meal prep each week, I’ve even started making pancakes and eating a couple in the morning before I leave my house. If I can buy frozen, processed pancakes from the grocery store, there’s no reason why I can’t make and freeze my own. Who doesn’t like a warm breakfast in the morning?

Getting to my office is atleast 30 minutes in one direction. Parking that started out at $5/day years ago is now up to $25/day, depending on the location. Each year, the cost of parking goes by $1-$3. Was $5 or $6 per day really such a hardship? When I was younger, the answer was “No”… but I had to admit that spending $12/day – parking and breakfast – was $60 per week! On top of parking, I had to fill my tank more often and I had more wear & tear on my vehicle. It was very, very easy to switch over to taking transit. Believe me when I say that $108.50 for a monthly bus pass is much, much cheaper than $250 or more for monthly parking. My gas costs are much lower and traffic problems are someone else’s to manage.

In order to find the money for one of my deepest desires, I ruthlessly cut my spending in these three areas. I don’t regret my choice one little bit! Missing season after season of Survivor has not diminished my life in any way, shape, or form. (Honestly, how is that show still on the air?) As for sports, sometimes my local sports team wins and sometimes they lose. Either way, I hear all about it during the morning-after chitchat on the radio and at the water-cooler. And should my local sports team be so lucky as to make it to the final game, the one for all the marbles and a year’s worth of glory that comes with winning The Big Game, I usually watch that game at the home of a friend for the low, low price of bringing snacks and dessert.

Are You Willing To Be Ruthless And Indulgent?

You’re the only one who can honestly answer that question for yourself. Whatever you decide is up to you, since you’re the one who has to live with the answers. I’m not here to tell you how to amend your current spending. Rather, I’m suggesting that you consciously decide how to spend your money so that you can maximize its use to acquire as much of what you really, really want as possible.

If you’re already satisfied with your spending, bravo!

However, if you think your money is going to something that doesn’t get you any closer to living the life you want, then be ruthless. Cut out whatever spending that doesn’t make you happy. It’s worth experimenting with cutting such expenditure(s) from your life for a little while to see how it feels. After all, the purveyor of the whatever-it-is that you trimmed from your budget will always happily take you back as a customer. And if you find that you can live without the aforementioned whatever-it-is, then you can redirect that money towards indulging on the things that bring you the most joy.

Figure out what it is that you want most and start arranging your money so that you can get it. Being both ruthless and indulgent with your money is a very effective way to ensure that your heart’s desires become your lived reality.

Time for a Mid-Year Check-up!

Tempus fungit. It’s a Latin phrase that means “time flies”. Truer words have never been spoken, in any language. It’s already the middle of 2022. How is your money doing? Are you on track to meet your financial goals? If you don’t know the answers to these questions, then it’s time for a mid-year check-up.

Emergency Fund

You need not share your answer with the class. However, you definitely have to be honest with yourself. Have you had to dip into your emergency fund this year?

If yes, then I hope you’re taking steps to refill it. Trust me when I say you’ll have another emergency at some point in the future. Emergencies don’t do your the courtesy of giving you fair warning. They happen unpredictably so you need to replace any monies that you’ve used from your emergency fund this year. Make it simple on yourself. Set up an automatic transfer so that you’re sending $50 or $100 (or whatever your budget will allow) to your emergency fund every time you get paid. If you already have an automatic transfer in place, increase it by $50-$100, or by whatever amount your budget will allow.

If no, then add another $1000-$3000 to your emergency fund. In case you’ve been living on another planet for the past few months, allow me to be the first to say “Welcome back! We missed you! Oh, and you should know that inflation is up 7%-8%. This means that your emergency fund needs to be a little bigger since paying for your emergency just got a little bit more expensive.”

Achieving Your Goals

Cast your mind back 5.5 months to early January. What were your financial goals for 2022? Are you on track to achieving them?

Assess your spending for the past 6 months and determine if your money choices got you closer to, or further from, meeting those goals. Congratulate yourself if you’ve met some or all of those goals already. You did the work so you deserve some recognition of your efforts.

On the other hand, maybe you haven’t been able to meet your financial goals. Do you have any idea why? To answer this question, you must assess your spending to date. The most efficient way to complete this assessment is to review your expenses.

I hope you’ve been tracking your money, whether on a spreadsheet, via an app, or with a pen & paper. Myself? I’m a spreadsheet person. The method really doesn’t matter. Tracking your expenses clarifies whether your spending habits are aligned with your priorities.

And if you haven’t been tracking your expenditures until now, then you should start. Every time a nickel leaves your wallet, record its destination. No one has ever been harmed by knowing where their money goes. Information is power. Seeing a written record of where you’ve spent your money will assist you to align your money with your most important objectives. At the very least, you’ll be able to determine if you’re sacrificing your goals by spending money on that which you’ve decided is less important to you.

You can only spend each dollar once – either it goes to your goals or it goes to your not-goals. The choice is yours.

Check your subscriptions

Summer is here. And it will be gone far too soon. Maybe you’re spending more time outside. If that’s the case, maybe you want to eliminate some of your subscriptions for the next few months. I cut the cord several years ago, but I continue to use other streaming services. Now that I’ve got my garden going, and have many little chores to attend to after work, I could probably cut those services from my budget for a few weeks. It wouldn’t hurt me. I’m very, very, very confident that the service providers will happily take my money in the fall when I move back inside.

You know yourself better than I do. Could you live without some of your subscriptions for a few weeks? No one is telling you to give them up forever. I’m simply suggesting that you live your life without them for a few weeks while you’re doing other things that don’t involve staring at a screen and scrolling endlessly for something to watch. Again, it’s your money so you get to decide how to spend it. I’m simply nudging you to consider whether it’s a waste of money to pay for those subscriptions during the summer if you’re going to be outside soaking up the nice weather while it’s here.

Cut yourself some slack.

No one is perfect. And this goes doubly so for money decisions. You’re doing the best you can with what you know. There are other things going on in your life and they’re probably taking up a lot of your time, energy, and attention. It’s not always easy to pay attention to your money, even though you know it’s important. I get it. I’ve been there too. However, I promise you this – when you know better, you do better.

This mid-year check-up is meant for you to identify any areas that might need some effort. If you’ve veered off-path, then you can course-correct sooner rather than later. Make tweaks as needed, then go back to the business of building the life that you truly want for yourself.

In 2015, I decided to eliminate my subscription to cable TV.

Was it easy to do cut the cord? NO! It honestly took me close to a year to call my cable provider to cancel my subscription. It took me another 6 weeks to return my cable box and the various cords that connected my TV to the world of limitless channels, endless commercials, and the repeated experience of there being nothing on TV that I wanted to watch.

That first Sunday without The Walking Dead was torture. I was very consumed by thoughts of Rick and Darryl and Maggie and Glen and Michonne and Carl, and the many other hangers-on who hadn’t yet been killed by the zombies. Fear not, Dear Reader! The human mind is such that nearly any change can be accommodated once it has been in place long enough. By my third cordless weekend, I was asking myself why I’d ever cared so much about fictional characters who were being chased by zombies. Amazingly enough, my life was still completely satisfying without knowing all the details of the challenges, tribulations and triumphs of the merry band of imaginary folks who devoted their time and energy to avoiding the jaws of the ravenous undead.

So why did I get rid of cable?

Believe it or not, my reason for doing so wasn’t driven by my budget. I have the money to pay for cable television but I chose to cut the cord anyway.

My choice to eliminate cable was driven by my spending priorities, one of which is to not spend money on things that don’t make me happy. Many TV shows are simply garbage – I no longer wanted to pay for garbage. In the same way that I wouldn’t spend money at the grocery store on rotting meat, I didn’t want to direct my hard-earned money to the purchase of subpar television shows.

Despite the increase in diversity on TV (yay!), the vast majority of the plot lines continue to be unrealistic (boo!). I cannot relate to them. The storylines are not reflective of my life or my priorities, so I was no longer invested in the characters or their particular challenges and conflicts. I found myself watching TV to solely kill time – I definitely wasn’t being entertained! I’m not likely to be engaged in a foot pursuit of bad guys down busy streets, nor will I be trying to uncover various conspiracies week after week. Everyone in my world is human so plot lines with extra-terrestrials or mythical creatures aren’t always relatable to me, although they can admittedly prove to be entertaining every so often. As for sitcoms and rom-coms, they generally wear thin after sooner or later since there are only so many ways for the they-used-to-hate-each-other-now-join-in-the-celebration-of-their-wedding-story to be told.

For example, I love Grey’s Anatomy! As with everyone on television, except the news, the people populating the screen are exceptionally attractive. The good doctors at Grey Sloan Memorial Hospital are forever finding empty closets or lounges at the hospital where they can have sex with each other. And when the hospital is full, they’re inclined to have sex in their cars in the parking lot. More often than not, I wondered how the hospital wasn’t sued for sexual harassment every week. In my world, my employer has very strict rules against sex in the work place!

The questions that I had about the characters were never asked or answered. Specifically, I could never stop wondering about the money aspect of Grey’s Anatomy. Exactly how much did the doctors earn as they progressed through their residencies? How did the hospital make money as a private business? Most importantly, how did their emergency room patients pay for their treatments? No one ever asked them about insurance or sought any kind of payment, yet they received topnotch care from everyone at the hospital for weeks or months on end depending on the storyline. Did they all have supremely good health insurance? On top of the compellingly-written storylines and their associated emotional traumas, were any of the patients or their families thinking about the money?

One of the more beautiful aspects of TWD is that money was no longer a concern so I easily believed that those folks had no financial worries. One season, they even found a newly-built subdivision that had been completed just before the zombie apocalypse so everyone was able to move into a brand-new beautiful home without the hassles of saving for a down payment, arranging for financing, and paying to hook-up their utilities. Even for a show about zombies, this was a bit un-realistic.

Have no fear – I still watch TV. I simply do so on Netflix and CraveTV.

Truth be told, I can consume most of the same programming for a much cheaper price through Netflix and CraveTV. (And if I ever learn how to stream over the Internet, I’ll be able to watch even more shows!) It’s simply smarter to pay the lower amount for the same thing. I looked at cable television the same way that I looked at toilet paper prices. If one grocery store has the same brand on sale for a lower price, why would I go to a different grocery store to pay more? My favourite shows on Netflix are the same whether I’m paying several hundred dollars a month to a cable provider or whether I pay $11 per month to Netflix. Why pay more for the same product?

The exact same shows on Netflix are devoid of advertising. Hooray! I’m now able to watch an episode of my favourite show from beginning to end without the interruption of loud commercials at critical points. Of course, there’s nothing to be done about the embedded advertising within the TV program itself. As a result of consuming fewer commercials, I find that I’m also a lot less inclined to go shopping or to believe that my life is sorely lacking because I don’t purchase a particular shampoo. For me, consuming less advertising translates directly into consuming less stuff. How awesome is that?

And while my decision to cut the cord wasn’t motivated by money, I cannot ignore the fact that saving over $100 per month has been very good for my other financial priorities. Since cutting cable, I’ve saved atleast $3400. It might even be more since I’m sure that my former cable provider has implemented a couple of price increases since 2015 when we parted ways.

And what did I do with that extra $100 per month? Like I said, fewer commercials has translated into less shopping. My former cable TV payment was re-allocated within my budget. I used some of it to pay for my Netflix subscription and I used the rest of it to increase the amount of money that I contribute to my retirement and investment funds.

How about you? What would you do with the money that you’d have if you were willing to cut the cord?