A year’s worth of money wisdom
Giving advice to strangers is a tricky business. With a few precious column inches to make a point, there isn’t a whole lot of room for subtlety.
To dispel any illusion of false certainty, it’s time for my annual confession of money mistakes, bloopers, and lessons learned.
I didn’t make any embarrassingly dumb financial decisions in 2019, which is a relief.
But I did update my previous opinions on a few important topics.
1. RELAX A LITTLE
As usual, I tracked all my expenses throughout the year. In 2019, I spent a grand total of $22,000 (here’s the full breakdown). That was a big increase from the previous couple of years, but I don’t feel the slightest bit guilty about it.
I reckon that once you have solid money habits locked in – no debt, streamlined outgoings, a sensible savings plan – it’s OK to loosen your belt and enjoy life. There are no prizes for being the most puritanical.
On the other hand, ‘lifestyle inflation’ is an insidious force. If you catch me making the same excuse next year, that’s a sign I need to pull my head in.
‘For many people, work is a rich source of meaning and identity.’
2. FANCY STUFF IS SOMETIMES WORTH IT
I still think the folk wisdom that buying high-quality stuff is an ‘investment’ is bad advice: most of the time, cheap and cheerful is the way to go.
But I’ve learned to make exceptions for two categories of stuff: anything you use every day (mattresses, laptops, kitchenware, tools of your trade), and anything that protects your life and liberty (tyres, safety gear, footwear, contraception).
I call this the ‘barbell strategy’ for buying stuff: either invest in the best-in-class, or get the cheapest version, but stay away from the middle ground.
3. DON’T MAJOR IN THE MINORS
I started this column with a focus on small saving hacks: the classic example being ‘ditch the daily latte’.
This approach served me very well, and I still believe in the power of making lots of cumulative lifestyle tweaks.
But my updated view is that cutting back on life’s small pleasures should be the last priority, because it’s a constant drain on willpower. It’s much more fruitful to make big, permanent changes, like choosing the right KiwiSaver, getting rid of vehicles, and reviewing all utility bills and subscriptions.
4. EXTREME PERSONAL FREEDOM IS OVERRATED
I don’t really expect anyone to believe this – my younger self wouldn’t have – but drifting along with no obligations or responsibilities is not a great way for humans to live.
This is something I’ve been reflecting on after quitting fulltime work in 2016, and has weakened my enthusiasm for the ‘early retirement’ movement: if you fixate on reaching some distant number with the expectation that it will magically change your life, prepare to get flattened by a steamroller of ennui.
A meaningful life requires the presence of something positive, not just the absence of a negative. Perversely, that might even come from work.
5. WORK IS... GOOD, ACTUALLY?
For many people, work truly is a miserable slog. There’s nothing remotely noble or fulfilling about it. Sometimes it’s dangerous or physically ruinous. And so, it makes perfect sense to view it as something to escape from.
But it’s also true that for many other people, work is a rich source of meaning and identity.
You might consider this a failure of imagination: in a post-scarcity world, no doubt we’ll derive our sense of meaning elsewhere. I’m looking forward to Fully Automated Luxury Gay Space Communism as much as the next guy! But in the world we actually live in right now, we have to work with what we’re given.
These days, my vision of the best path through life looks more like shifting into satisfying work – for a broad definition of ‘work’, that might include study, athletics, or raising a family – rather than grinding away for decades trying to save enough money to escape. This won’t be possible for everyone, but it’s an underrated strategy.
❚ Thanks for reading this year, and for all your messages and comments: they were insightful, moronic, funny, heart-warming, and everything in between. See you in 2020!