Our spending will track our income unless we consciously say and do otherwise. That’s why changing our relationship to and behavior with money matters. You can dig through this site and find tons of ideas on how to save money and free yourself from it’s bondage. But I want to address the 3 biggest wealth destroyers that are worth tackling immediately.
The 3 Biggest Wealth Destroyers
1. Eating Out
Without fail, this is the hardest category to control for my wife and I. All it takes is one month of weddings and travel for us to spend literally over 14% of our take home pay on eating out. Which is absurd. This includes coffee out, drinks out, meals out. It’s all SO much more expensive than doing it at home. And more times than not, by purchasing these things out, you get worse quality than you’d find at a very reasonable price at a grocery store.
The Ramsey folks did a study of 10,000 millionaires in the United States and found that on average they spent no more than $200 eating out each month. Let that sink in.
2. Social Media
How does a completely free mobile app make over $20 Billion in revenue? By getting you to buy things that you probably wouldn’t have bought otherwise.
I’m not sure what else I can add to this one, because I think the above is pretty self-explanatory. The only way Instagram could make that kind of money is if advertising on their platform worked and worked really well. I think the number speaks for itself here. Please do not think that Instagram is some kind of altruistic, social gift to the world from people who just wanted to create a cool photo app for people. Nope, it’s an advertising superpower that gets us to spend our money. Are there plenty of good things that come from the platform? Sure, but at the end of the day it’s all about making money and getting us to behave in opposition to the goals of controlling our finances.
3. Keeping Up With the Joneses
Bought a house that you plan to “grow into”? Just gotta have that luxury SUV in your 20’s? Got used to mom and dad’s standard of living and not ready to give it up? You know, everything Lululemon, Apple, Patagonia?
There’s a reason that our country became the economic superpower that it is today, despite only existing for a small fraction of the time of other countries. And our behavior with money explains it all (Okay, maybe just a lot of it.) Yes, finance can be good. Yes, I love living in a booming economy. But, we must be careful not to be blind sheep.
You want out of the rat race? You want a comfortable, steady life and retirement? It’s going to require you to sacrifice today for a better tomorrow. And often times that means not having brand new designer things all the time. Buy quality, it lasts. But make sure you realize the benefits of buying quality.
Bonus: A False Narrative
“I know I should be saving and investing for my future and my children’s future, but we just don’t make enough money. Once I get that raise, I will start saving and investing.”
This is a lie that keeps us from ever taking action to procure for our future. It’s a lie that so many of us tell ourselves. We all have a narrative to justify behavior that we know is not serving us. I always say this in conversations about charity, but it applies to saving too.
If you can’t live below your means when you’re making crap money, you won’t live below your means when you’re making bougie money. I know this because I lived it. Not because I’m throwing shade.
Money makes you more of what you already are. Don’t give and save when you’re broke? Won’t do it when you’re loaded. Our spending is a boat afloat on a tide called income. Unless you capsize that ship, it will always stay right there on top of the water.
A Fool and His Money Are Soon Parted
There you have it! My list of the 3 biggest wealth destroyers plus a nice little bonus!
I’ll admit, I got a little fired up while writing this post. But I care a lot about this stuff. Unfortunately, financial freedom requires more discipline than knowledge. And sometimes harsh realities must be faced about why we fail to procure for our financial future. Be smart with money when you have little. Learn the habit of living below your means, saving, and investing. That way, when we do come into greater wealth in the future, it will not slip through our foolish fingers.