I’m about 3/4 the way through “Stop Acting Rich” by the same author of “The Millionaire Next Door“, Thomas Stanley.
The good news is that for the most part, my consumption and spending habits match exactly with the frugal millionaires (or Toyota Millionaires) that Stanley lusts over.
I don’t even drink Vodka, but if I did, I’m sure it would be the $10 bottle brand, not the $60 grey goose brand.
I drive a Toyota, which is good according to the book (well built, not flashy, good value). And I don’t lease. My car isn’t totally paid off yet, but I hope to have it paid off at the end of this month. Then I’ll go buy a new Mercedes….
Just kidding. My fiancee and I will probably keep my Scion Xb (a Toyota brand) for years to come. It’s a great little car.
Now, the one part of the book that worries me a little bit is that Stanley statistics show that the area you live in determines your spending habits. Not a shocker, but I think this will be a struggle for me when I move. We are planning to live in a nicer neighborhood in Portland, though will be renting. I don’t think our spending habits will change, but according the “Stop Acting Rich” they most certainly will.
I know for a fact our food budget is going to go down. It’s always been my Achilles heel. I’m just not much of a cook, and I’m willing to part with dollars to get food. I love food. So, our food budget has been way too high for a long time. Living together however, and without the stressful job my fiancee has now, I think we will cook a ton more. In fact, I know we will. As cliche as it is, she is looking forward to cooking more, and I’m looking forward to eating! (and doing the dishes of course!)
Why do so many people, especially my age group (young professionals), “Act Rich”.
Well, we think that to be “Rich” you have to drive a Mercedes, and buy a fancy condo. We don’t drive around town with our savings account balances as our hood ornaments, but maybe we should.
So, as I prepare to live in a nicer part of town after I’m married, both me and my wife will vow to not “act rich”. One, because we aren’t. And two, because being rich isn’t about status symbols. It’s about freedom, and the ability to sleep at night without worrying that the Repo man is taking away your leased Mercedes.
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Any book giveaway?
My food budget keeps going up! I would love to get it to go down.
This topic came up last night at the Financial Peace Univ class night night. We allow other people (Joneses) to define our values for us and then the debt pit just gets deeper. It’s about living out your plan…not trying to compete with someone else. Good post and be sure you stay focused on your goals when you move into town. Good post!
This is an AWESOME post!
1st- The Millionaire Mind and The Millionaire Next Door are 2 of my favorite books. I cannot wait to dive into his newest masterpiece.
2nd- I’m living proof of this “where you live determines what you spend” syndrome. I live downtown Chicago and am starting to realize that if I keep doing what I’m doing, I’m not going to get where I want to be financially in terms of saving and buying a home. I’m also realizing that the draw to city life is going out to new bars, restaurants and having constant entertainment right outside your door. The pressure to dress stylish is there. The sales tax is 10% in the city vs. 7% in the suburbs, drinks are $10+. None of these things are going to get me anywhere financially, regardless of how much I’m making.
Therefore, people like me who are almost addicted to the city lifestyle need to evaluate their goals and decide where they want to be and how they’re gonna get there. This might mean moving to the- GASP!- suburbs, or going out much less which are both very scary things for city dwellers like me. I know for a fact my salary would stretch MUCH farther if I lived somewhere else.
Yeah , young people need to “GROW UP AND ACT THEIR WAGE” I live in so cal, and keeping up with the jones is a plague, part is demographics , part is image probally by rappers ..spending money aint no thang! make it rain , play on playing christal etc. very foolish credit cards is a national crisis and aallows people to live well above their means. so I can get a louiss vutton for $1000 and all i have to do is afford $20 a month , 30 days from now? awesome! oh If i open a new card save another 15% where do I sign up? everyone wants to be a debt slave. Labels ,brand names the “hottest items” are a must.I work with a bunch of 20-30yr olds with 200+dollar a month cell phones, really ? is a phone made to talk? or set your dvr from work , do you have to have the internet or be able to project movie trailers on the walls. Just act your wage is what i say.I make decent money,I support a family of 5 3kids me and the wife on 1 income in so cal rent 1800 to put in perspective i am 32 yrs old with out a cell phone by choice since 2001 how could that be? easy simple good living no tv or internet either, we have netflix and music the music is better to raise kids on we interact more play more. I have no credit cards since 2001 , i was a collector now a financial counselor it would be alil hypocritical i feel. but i do love my life i added you to my blog role Keep up the good work
We live in the western suburbs of chicago, and it is crazy to see the expectations for clothes, cars, and houses. A lot of folks out here make a boatload of cash, but I wonder how many are strapped with debt because they are just trying to keep up. Its touch, because there are times where we literally could not spend time with certain people because we had such different ideas about where to go and what to do. When the local teens at the high school mainly drive betters cars than you, it can be tough not to go out and get that newer car. Reign it in and realize that long term happiness is so much more important that fitting in to a certain social class.
Sometimes I wish that for one day everyone would have a floating sign over their head with their debt load on it. It would be a good reminder not to follow certain people’s spending habits.
Congrats on the move! Portland sounds like a lovely city (lots of great restaurants with organic / local food, I’ve heard). I think “acting rich” comes when people start to make more money and feel like they deserve to get nicer stuff. Not to mention, once you get used to a better car and a more spacious apartment, it’s always more difficult to downscale. And when your neighbors and friends all have the latest smartphones, it’s harder to be satisfied with a regular ol’ phone (and of this, I speak from experience).
I’ve come to realize this year that my finances have to take priority over everything else. My friends and I are all young professionals, and I got into a really bad real estate deal two years ago that has destroyed my finances. I’ve spent the last 5 months trying to recover from it, and I’m finally on my way, but I’ve had to make some big sacrifices. For one I stopped going/eating out. I don’t drink nearly as much and I’ve down graded my living situation, and moved in with a few people to save $300 /month on rent. And I’ve even started to freelance to earn some extra money on the side. By the end of the summer I should be in much better shape financially than I was even two years ago, I just had to take action and make some real changes in my spending and behavior.
I like this post. We recently moved to a new city where friends live. They tried to talk us into moving in their neighborhood. Homes there were 100K – 300K more than what I wanted to pay. A bank would say we could afford it but I didn’t. My first comment to my husband was, “With granite columns in the entry way and 4000-5000 sq ft can you imagine the furniture we’d have to buy to make that look good?!!!” So we went for my very modest, although still quite nice house, on the opposite side of town. My neighborhood is very middle class as opposed to the upper scale neighborhoods we chose to skip over. I go to sleep every night with a clear mind and know that if my husband lost his job we’d be fine for a while without messing up our retirement savings. We paid cash for our cars. A toyota and honda!!! We read Millionaire Next Door and I’m going to have to read Acting Rich because sometimes I feel we do act rich. I buy my favorite French jelly and I’m embarrassed about it. Coming from poor stock and having had a debt problem in the past I have buyers remorse over the jelly!!! But it’s whole fruit, no sugar, and we have diabetes in the family and lost a bunch of weight so I justify my $7 French Jelly. I find I’m unique in my neighborhood. They are getting foreclosed on in both sides of town, financed cars, credit card debt, etc….. I feel alone in my financial freedom. We’ve saved for vacation at Disneyland with the kids and I feel embarrassed that my neighbors might find out we’re flying out to California for vacation. Although we used FF miles my DH racks up while traveling for work.
There is strange thing I realized recently. Living with this financial freedom (being debt free) feels a fraction of what I feel winning the lottery must feel like. We’re not free to retire from work forever at this point but I am free from all the stresses and worries that being in debt brought. That’s the best kind of millionaire for me right now.
Hey their debt kid!! I have enjoyed reading your blogs, it seems like you have found economical and sensible ways to save money and reduce debt and congradulations on sharing this with everyone.
I have noticied that my bank balance keeps going into overdraft, and find I spend months trying to get back on top of the bills. I resisted today from buying two t-shirts which I really want! I think perhaps I have a mild spending problem, I know I cant and shouldnt buy some new clothes, but likely will! can you offer any advice for me from buying these shirts next week???
Thanks
Ugh, I agree about city living. We decided not to buy a house in our city (DC) because it will never be worth it, instead we made a plan to leave the city in 20 years and buy a house elsewhere in cash. Instead we chase happy hour specials and free festivals, but yes, we have groups of friends who alternate btw bbqs and $200 bar tabs…we bow out *most* of those events.
DK – You’ll find that cooking is self perpetuating! When you cook, you realize how bad most restaurant meals are (salty, buried under cheese, no spices), and not want to eat out as much. Also you eat smaller portions at home, so restaurant portions will begin to seem huge, which means you’ll share an entree.