When I was a kid, my mom used to remind me that I would never get rich by spending all of my pocket money. She was absolutely right. Saving is a crucial part of staying in the game financially and ensuring solvency and financial stability once we’re in old age. As I got older though, things often felt a bit more complicated. Saving was great but I also realized that this us only 50% of the battle. At some point you also have to think about making more money too and doing that often requires creating the right image, including clothing, dress, charity involvement and where you spend your time. It means that you have to “speculate to accumulate”. These things are not always cheap but can make a big difference. I had a friend once who told me that his boss explained that he needed to get a new watch as the one he had was so shabby that clients might see him as a sloppy. Yikes!
The question though is at what point does looking presentable and caring for your community turn into “acting rich”. By this I mean living beyond your means and doing things that really won’t help you get into the financial position that you need to be in to reach your goals. It might be buying too much clothing to make yourself look way better off than you are, or not investing in good quality clothing that is actually going to last. It might mean donating to the million charity races and activities your friends are doing. I have been guilty of these things, so I don’t want to be too judgemental. At the same time, it is important to think about how to make it work.
If you’ve seen the recent film “How to be Single”, you might recall the last scene where Rebel Wilson’s character invites her friend over. Her pal, played by Dakota Johnson, is shocked at her Wilson’s large apartment and fancy surroundings. Johnson’s character exclaims that her friend lives so well given that she is unemployed and that that Johnson had been paying for everything. Wilson’s character says that she had came into money, which is why she doesn’t work and that she never spends what she has. I know a lot of people who are smart like this! No, before you all run off and refuse to pay for your round of drink or buy birthday gifts, I do think there are ways to be smart about giving and taking. Some examples:
- Just say “no” to expensive dinners and events and suggest equally good but lower cost alternatives. Maybe you can even invite people over for drinks or to a picnic
- If you can’t bear to downgrade, meet people for lunch or have heavy appetizers at the bar rather than a full flung dinner in the restaurant
- Choose a couple of charities or events to support and let friends know that you like to target your giving to charities that have a special meaning for you
- Instead of giving money to the charity, consider giving time or helping them make connections instead
- Let your friends know if you have a financial goal in mind e.g. “I would love to join for dinner but as I am saving for a house, I might just meet you guys for drinks” could be one way to put it.
- Look for really cool events that are affordable like hiking or public concerts
- Don’t annoy people by “talking poor”. If all you do is talk about what you can’t do then people will stop inviting you out with them – join where you can and don’t complain
- Go through your closet to see what you already have to wear rather than buying a lot of new things. I bought two dresses for a recent charity event only to return them both. I wore some separates that I had never worn together – to rave reviews I might add.
- Instead of lots of clothes, go for accessories to change the look and feel of an outfit and give it some added “zing”
- Take your credit card out of your wallet and set all online auto or one-click payments to go to your debit card
If you are a regular blog reader (and I hope you are), you’ll know that I am in the middle of doing a series of 30 day challenges and my first one, which covered cultural activities, went quite well. As I am planning to buy a house after I get my UK citizenship in the next two years, I am currently in saving mode – putting away 50% of may take home pay and trying not to spend too wildly. I struggle with the question of how to avoid letting my money fritter away while still creating balance, so a big part of this blog post is about how I think about how this can be done. One of the reasons for starting this blog was to focus on how to enjoy the lux life while on a budget and living in an expensive city. So, my challenge for April will to be avoid spending any money outside of a few areas such as food, rent, transport, and phone bill. If I go out, I can’t spend more that £20. No clothes, make up, shoes, etc. I already have enough decent clothing and accessories (don’t get me started on beauty products) to look respectable – what I really need is a down payment for a Zone 1 Flat. I want to look and feel good but in a way that helps me reach my goals, and I know I can do it!
Now, this doesn’t mean that I will stop blogging, tweeting, instagramming, posting on FB and pinning about cool restaurants and things to do. They will just be different and refocused on what I have already. Should be a fun and interesting month!