"Everyone Doesn't Have A Boat?"
What with the murmurs of tax cuts and the divisive income line resting at $250,000, it can be a bit challenging to summon much sympathy for those whose incomes fall above the line but still consider themselves to be struggling. UChicago law professor Todd Henderson is one of these people, who published his musings on being a member of the “super rich” and became the victim of an internet backlash. His post has since been taken down, but conversation lives on.
Advice For Henderson Works For Everyone
Brett Arends of The Wall Street Journal takes a kinder approach than the general outrage and condemnation—he compiles a list of advice from a financial planner to manage Mr. Henderson’s expenditures. While we have neither earned the “super rich” moniker nor ignited the internet to a fit of author-trashing, we can still recognize wisdom in some of the Journal’s advice.
It’s All About The Mindset
Topping the list of ways to reconcile income and spending is adjusting our expectations. So many of us are under the impression that an SUV is the only car, Europe is the only vacation destination, and private is the only school system. So we need to adjust our expectations—easy, right? Arends’ financial planner says otherwise. Apparently, our mindset is the biggest impediment to reshaping our lifestyles and therefore our costs… which comes as no surprise to those of us with a pair of jeans in our closet from 2001, which we’ll wear again “someday.”
An Expectation Is A Hard Thing To Change
Also recommended are the usual steps—little things like tracking day-to-day spending, and bigger steps like considering relocation, refinancing our home, rethinking cars and schools, and consulting an accountant. But the psychological angle really caught our attention—we’ve already tried to explore the difference between necessity and luxury, but where else are our delusions costing us money? And how can we figure it out? One way is through a series of money challenges meant to cut down our spending, like the one undertaken by Lauren, our financial planner-in-residence. Another way is through careful, conscientious budgeting. But it’s a hard truth that when it comes to money—or dating, or fashion, or school—adjusting our expectations is a challenge in itself.
Tell us in the comments: What’s the most effective strategy you’ve used to reduce your spending?
