228 | How to Buy a Car

Buying a car never starts with 0.9% APR.

If you're trying to be cost-conscious, then you only have two options...

1. Milk more out of your existing car
2. Lower your standards by make or model or year or feature

Option 1 works unless it's gone, dangerous, doesn't function, or...the squishier.."no longer drives contentment".

Option 2 is a delicate balancing act between purchase price and maintenance. New cars are expensive, old cars break down.

Of course, "financing" is absent here, because the cost doesn't change whether we pay it now or over 72 months.

Once we've vetted our options, we can only trust our judgment and jot down our "whys" to protect us from our future self that likes to forget the uncertainty of the past.

• Why this make and not others?
• Why this model and not others?
• Why new or used?
• Why this level of features and not others?
• Why electric, hybrid or neither?
• Why now?

Then…

• Why cash or finance?

If the financing question comes first, we're not being cost-conscious.

226 | Love Letters: Why NYC?

We can't know the future before it happens.

And its unfolding can lead us to second-guess what's come before.

Especially when we're spending large amounts of money.

So to care for our future self - by reminding him what the past self knew at decision time and why he did what he did - we can write a "love letter" to him.

To be a warm hug when the future disappoints.

To be a good laugh when the future surprises.

To be a slap-in-the-face when the future makes us question.

To be an encouragement when the future gives us another decision.

Here is my love letter - to future Richard - about why we have chosen to spend July 2025 living in New York City...

Why NYC?

• So that Sara Brooke, Charlie, and Caroline (and both adults too!) experience a place that will astonish them, make them uncomfortable, expose them to a world they have never seen, see their parents fail and scramble to figure things out that we don’t know how to do, and so many other things that are hard to replicate at home
• It stands alone from any other city in its ability to mesmerize all ages
• Sam lives there right now and it is one of the few chances we have to live close to him for an extended time
• To reset the grooves that have formed in our minds and bodies around abundant space and convenience and transportation
• We have been to it before and (sort of?) know what to expect
• It is accessible by car

Why a month?

• To be able to experience the city in a daily-routine-kind-of-way and not a tourist-for-a-weekend-kind-of-way
• To experience a study abroad type setting as a family
• The cost of a week in an AirBnb was between $5,000 and $6,000 whereas a month is a little over $9,000 - at many properties the cost of a week is the same as what we are paying for our month - frankly, a month sounds less overwhelming and tiring than a week!
• It allows us to experiment with remote work and working independently
• It gets us out of our daily routine at home in an even more dramatic way than a week at the beach
• It allows us to invite family to stay with us and join us in our adventure

Why now?

• Sara Brooke and Charlie seem to be an age that they will be amazed and impacted and Caroline seems like she will be able to age up even if she won't remember it in detail
• Our family life (especially our summers) have not become as busy as our peers with other extracurriculars and this seems like an experiment in charting a new path away from typical busyness
• It feels like it provides some incubator space to allow RwM to continue growing via writing, website design, preparing for advisory council conversations, etc.

Why Brooklyn?

• It has a neighborhood feel that is different from most other places in New York City (we first discovered this visiting Sam in September 2023)
• The Brooklyn Promenade and Brooklyn Bridge are two of the most magnificent locations to experience the beauty of the city on a daily basis
• It is close proximity to Sam

Why our specific AirBnB?

• Three bedrooms allow guests to stay without having to pay for their own accommodations
• It has an outdoor space on the rooftop which feels vital as a post-bedtime escape from close living quarters
• It is extremely well connected to subway lines that lead into all of Manhattan without transfers
• The hosts allowed Sam to visit in-person and even give a FaceTime tour of the property so we could be confident before paying
• The hosts are three young folks - two teachers and a photographer - renting it out while two of them get married over the summer - way better to pay them than an anonymous person or business!

220 | Financial Fingerprints

Good spending is trading money for contentment.

And contentment is about as unique as a fingerprint, but more, because you can't see it.

Some of us, whether we know it or not, define it by the clock.

How many hours of contentment does a dollar generate?

Of course, there's simple math like...

A $7 beer that lasts 30 minutes is $14 per hour of contentment.

A $15 cocktail that lasts 15 minutes is $60 per hour of contentment.

A 4-hour round of golf for $80 comes in at $20 per hour, while a 20-minute paragliding adventure for $200 is $600 per hour.

A $100,000 kitchen renovation might only be $10 per hour, and a $1,000 mattress could be less than $0.10 per hour.

But then there's the calculus of it too...

"Expectation equity", or the positive feelings around the anticipation, camaraderie, and preparation for something in the future - think about the last time you made a dinner reservation or bought tickets to a sporting event.

And to borrow from Clay "memory dividends", or the lingering positive feelings associated with money well spent - think about the stories that are re-told forever or the relationships that blossom from shared experience.

Once "expectation equity" and "memory dividends" enter the equation, hours of contentment turn into days, months, and years.

And it becomes a little easier to see contentment as a financial fingerprint.

216 | Out on a Limb

Everything comes back to spending - we earn to spend now, we save to spend later, we invest to spend more now and later.

Spending is as central to life as breathing.

And this is what makes "getting ahead" or "staying ahead" or “catching up” so elusive.

We can't outrun the uncertainty or feelings that creep up any time money goes out the door.

When you spend, there's always a chance...

• A better alternative exists
• A cheaper alternative exists
• Someone else will buy it too
• No one else will buy it
• Someone will have something better
• Someone will have something worse
• You're tired of buying this thing
• You didn't think you'd have to buy this thing
• You've never bought this thing before
• You haven't done enough research
• You've done too much research
• You still don't know what you don't know
• You don't actually know what you want
• Your preferences change
• It goes on sale after you buy it
• It doesn't work like you hoped
• You don't get what you expect
• You don't end up needing it
• You never receive it

It doesn’t matter whether you're 10 or 33 or 54 or 82 years old...

When you spend, you're stepping out on a limb.

212 | You Don't Need a Budget

A budget is too rigid - you either pass or fail which leads to fleeting pride or enduring shame.

It's too arbitrary - cars don't breakdown and musicians don't go on tour because our budget said they should.

It's too lifeless - budgeting stats don't typically make it on headstones.

But you have to track your spending.

Because spending is too important - all the color of life flows out of how we spend.

It's too emotional - we have to validate (or challenge!) all those feelings swirling through our heads.

It's too unpredictable - some is fun, some is obligatory, and some makes us sick. Some spending repeats and some doesn't, but no matter what, it's helpful to distinguish which is which.

And once you track, you have to reflect.

"Interesting...we spent that much last year on that thing."
"I'd love to spend less on this, so we can spend more on that."
"I wonder if that's how much we'll spend this coming year too."

With each reflection, we add a deposit to the "I-feel-freedom-in-spending" bank that an "I-missed-the-budget-again" slap on the wrist can never match.

There's even a chance that once we track it, we might get a better sense of what to expect next time.

But please don't call that a "budget", because then we're right back where we started.

193 | The Spending Tracking Spectrum: Final Reminders

If a level isn't serving you, then move back to a previous level.

Move between levels as seasons of life change.

Or stay at one level forever.

Do what feels good to you as long as you're moving up the hierarchy of insight.

From data, "here is the list of things we paid for".

To information, "here are some themes of our spending".

To knowledge, "this spending moves the needle the most, so it should get the most attention".

To understanding, "this is why we spent the way we did and we would or wouldn't do it again."

To wisdom, "our spending reflects who we want to be, or it doesn't, so we will change it."

Because if we aren't spending well, what's the point of making and saving money in the first place?

192 | The Spending Tracking Spectrum: Level 5

We'll call this the "Buffet Level" because you can get whatever you want and your plate can be unique to you.

Within the categories of Level 4, you can make all the subcategories your heart (or stomach!) desires.

But we have to be careful - most "budgeting" efforts come to die at Level 5 because we treat it like Level 1.

“We need to budget better.”

“If we just had a budget, then I’d know what I could spend, and I’d do it.”

“How does our spending compare to other people?”

So we find ourselves diving in at Level 5 before we've perfected the other four.

And then we get discouraged because we "fail" or we accumulate a ton of data that never turns into wisdom.

Which leads to hopelessness and finger-pointing and a host of other things.

Which leaves us with a trunk full of emotionally-charged spending baggage...forever.

But if we proceed with care, after perfecting the other four levels, then the freedom of Level 5 can be real.

A freedom that makes it easy to pivot because you're grounded in reality.

A sneakier freedom from choosing to spend less in one area, so you don't have to spend less in every area.

And sometimes even a freedom that comes from seeing that you're spending as well as you can in a particular season.

Of course, Level 5 is not the holy grail of tracking spending, but only one point on a spectrum of spending well.

191 | The Spending Tracking Spectrum: Level 4

We'll call this the "Storytelling Level" because there's finally enough detail to tell a compelling story about where our money goes.

This level sharpens the focus of Level 3 without the unwieldiness of Level 5.

And it's an ideal landing spot if you want to be more intentional.

The outcome will be something like...

I spent $6,500 this month – $800 was taxes, $900 was giving, $100 was professional fees, $500 was medical, $1,500 was fixed home costs, $300 was utilities, $300 was car, $500 was variable home costs, $900 was food, $300 was kids, $200 was gifts, $100 was fun, and $100 was travel.

Of course it's more effort than Level 3 - because of the categories.

But it's also more informative than Level 3 - because of the categories.

The tiny bit of categorizing pushes us to reflect on contentment, not just viability.

Because we're capturing the character of spending, not just the amount.

This is the first level where the money story in our head begins to interact with the money story on paper.

Which can affirm where we're heading or help turn us around.

190 | The Spending Tracking Spectrum: Level 3

We’ll call this the “Rudy Level” because we’ve moved from watching from the sidelines to playing the game.

There's a chance you might need some "walk-on" energy to make the leap to this level too.

This is the first level with groups, but it's only three - enough to help us acknowledge what we can and can’t control without torpedoing our efforts.

The outcome will be something like…

I spent $6,500 this month – $1,500 was income dependent, $2,800 was less discretionary, and $2,200 was more discretionary.

The first group is spending that increases when you make more money.

For us, these are taxes, giving, and professional fees.

You don't need to beat yourself up when you make more money, you're more generous, or you invest in your career.

The second group is spending that's fairly set in stone or would be painful to change in a big way.

For us, these are medical, some home costs (mortgage, property taxes, and home insurance), utilities, and car.

A handful of decisions in these groups tend to cement lifestyle expectations. And another handful are just a result of how the cookie crumbles.

The third group is spending that is the simplest to change and where most of the color of life resides.

For us, these are all the other home costs, food, kids, gifts, fun, and travel.

Often, these are small, but common purchases. And they tend to differ the most from year to year as preferences and seasons of life change.

At this level, we're more focused than Level 1 and 2 without the effort of Level 4 and 5 - a fine place to land if you’re trying to make sense of ballooning spending.

189 | The Spending Tracking Spectrum: Level 2

We’ll call this the “Fisherman Level” because we’re only talking about the big ones.

Glance through the transactions from Level 1 and begin to note the largest ones.

The outcome will be something like…

I spent $6,500 this month – $1,500 was the mortgage, $500 was a car repair, $800 were flights for a weekend trip, so everything else was $3,700.

Allow your natural curiosity to govern how far you go, but know that the risk here is getting lost in the weeds.

As you glance, you’ll start to appreciate what’s actually moving the needle and slowly whittle down the black hole of "everything else".

Going forward, notice how the total changes. Notice the individual items you've highlighted in prior months. Even notice how “everything else” is changing each month too.

For most people, this is as far as the venture needs to go because further adventure will lead to injury.

188 | The Spending Tracking Spectrum: Level 1

We'll call this the "Caveman Level" because there is so little to track that it could go on a rock wall.

Add up the withdrawals from any active bank accounts (this will inevitably include what you paid towards any credit cards) for the past month.

The outcome will be something like...

I spent $6,500 this month.

Notice whether it feels like a number that is larger or smaller than you expected.

If you’re feeling wild, glance at some of the bigger transactions and ask yourself, “Would I spend it again under the same circumstances?”.

Remembering that "under the same circumstances" is not the same as "based on what I know now".

Pat yourself on the back because Level 1 is a higher level of tracking than most people.

Repeat this for as many months as it takes for it to feel easy and constructive.

If this is the highest level you reach, it still counts as tracking your spending.

187 | The Spending Tracking Spectrum: Richard's Rules

Having no system for tracking spending tends to "work" for two groups of people:

• Those with income that dramatically exceeds their spending, OR
• People who are resigned to being perpetually stressed out about finances.

For the first group, the level of income tends to address concerns of viability, but not necessarily contentment.

For the second group, the experience is as peaceful and predictable as driving a car with a broken fuel gauge.

But tracking spending is not the same as budgeting. It's less emotional and more practical.

A few basic rules can allow you to track without losing your mind...or a relationship.

Richard’s Rules

1. Start with Level 1 and only proceed to the next level once you feel like a master of the current level.
2. Never skip a level - most frustration comes from trying Level 4 or 5 when Level 1 or 2 is all you need.
3. If you progress to a level and become overwhelmed, then return to your prior level knowing that you've found the bookkeeping equivalent of your favorite cozy sweatshirt.

Richard's Reminders

• Any tracking tool will work – usually the hunt for the best tool is a clever way to procrastinate, AND
• Reflecting on...monthly spending is mostly useless, annual spending is interesting, and multiple years begins to tell a story.

186 | The Spending Tracking Spectrum

"We need to budget better."

"If we just had a budget, then I'd know what I could spend, and I'd do it."

"How does our spending compare to other people?"

If I had a nickel, for the number of times I've heard those phrases...

But I don't think any of them are the answer.

They are too black and white. Too arbitrary. Too disconnected from reality. Too one-size-fits-all. Too lifeless.

Not only is spending well hard to do, but bad spending tends to undermine all the effort that went into acquiring the funds in the first place.

So, of course, it's a never-ending search for an answer - for everyone.

We can speculate for a long time, but without a doubt, a large part of the answer comes down to some system of tracking, not so you can budget, but so you can reflect.

Because tracking and reflection are the only way to address the two sides of the spending coin - viability and contentment.

But we must be careful and intentional with how we go about it.

Because for some people, tracking spending is the thing that sets them free.

And for others, it's the thing that stops them in their tracks…forever.

Tell me there's nuance without telling me there's nuance.

And where there is nuance, there is a spectrum.

And as long as you're on the spectrum then you can spend well.

183 | A Couple Questions on Second Homes

We all think a second home is about the numbers, but that’s maybe 10% or 20% of the conversation.

A larger chunk of the conversation revolves around the people in your life and your calendar.

How will it impact your existing community?

And I’m not referring to all the people you’ll be able to host, but more so the relationships at risk of being diluted.

Two locations inevitably mean two communities which means both will never be as deep as one community would be.

How will it impact the way you spend your time?

And I’m not referring to all the ways you’ll get to use the new home, but the existing activities and hobbies that will be cannibalized by the new venue.

Even with a time traveling machine, activities in the pre-second home life are going to be squeezed into tighter windows or struck from the calendar regardless of our best efforts to preserve them.

Whether we like it or not, a second home tends to be an either/or more than a both/and.

Not inherently good or bad - just helpful to know when you’re thinking about buying.

179 | “He/She Takes Care of the Money”

So, you experience no financial stress?

No second guessing?

No disappointment?

No disorientation while searching for "enough"?

That feels unlikely.

There is no such thing as one person "taking care of the money".

Maybe one person is more curious - or feels more obligated - to engage in investment shop talk.

But if you spend money, then you are on the "care" team.

There's really no way around it, because our entire financial life is organized around a single, recurring experience.

To be able to spend money now or sometime down the road.

176 | Ratcheting Up Regret

A big home project can make you want to fix everything at once.

"It'll cost more if we come out twice," says the contractor.

"You don’t want to deal with the hassle again," says the neighbor.

"Interest rates might move in next few years," says the lender.

Why stage a master plan when you can do it all at once?

But that ignores the reality of regret.

There's always a chance that you don't know exactly what you want. Or that what you want might change. Or that what you get done just doesn't meet expectations.

And then regret becomes an unwanted squatter in our financial lives.

Every additional dollar spent tends to ratchet up the risk of regret.

Just like every bathroom done today, instead of tomorrow, cranks it up too.

Staging it isn't the same as dragging your feet or kicking the can down the road. It’s certainly not the easy way out either.

But it helps limit the risk of regret even if that cost isn't as easy to measure as the dollars spent.

175 | Leading or Lagging?

A couple of indicators can speak to the quality of our spending – both are hallmarks of the best spenders.

Freedom is a leading indicator – something that can only be assessed before the dollars are spent.

Do I feel freedom to spend even though the future is uncertain?

The tricky part with freedom is figuring out how to feel it when there is no objective way to measure it.

Contentment is a lagging indicator – something that can only be assessed after the dollars are spent.

Given a second chance, would I spend the dollars the same way?

The tricky part with contentment is that your future self will always know more than the prior self that went out on the limb.

We can't forget they are two different questions and they can't have the same answer.

174 | Green Means Proceed

Carl Richards has a saying and sketch that says Profit = Permission.

Profit is the evidence that what you're doing is good and can continue to be freely pursued.

On the other hand, lack of profit is direct feedback that something must change.

Of course, there is insight for our own personal financial lives too.

Spending decisions (real and hypothetical!) come with a financial conscience that pesters us with the question...

Is this responsible?

And oftentimes, we imagine that better budgeting, more accurate projections, or more money will silence the little voice in our head.

But time and time again, we get discouraged by a missed "budget", we get lost in projections, and more leaves us feeling like we have less.

The only practical way that I know to answer the question is to see if the spending will allow you to keep saving.

If green will be gone, pause before you go on.

If you'll still have green, feel freedom to proceed.

167 | The Amazon Box Effect

My hypothesis is that Amazon boxes on the doorstep create more tension in a relationship than bad investment performance.

One person orders something, then the other person sees it on the doorstep, and then the benefit of the doubt is rescinded.

ANOTHER box?

How much did it cost?

P1: What did we get?
P2: I'm not sure what's in THAT one.
P1: You mean you've bought so much you've forgotten what you ordered?

But most Amazon purchases fall in the last one or two $10,000s.

They feel like an easy litmus test for assessing spending, but it's a little bit like using gas prices to evaluate the state of the economy or the president's approval rating.

Just because it's in your face, doesn't mean it's a useful indicator or has to have the last word.

*Thanks to GH for the inspiration on this post!

160 | Why It’s Hard

From the Wall Street Journal on May 19, 2024 at 8:00am...

The Downside of Delayed Gratification

And then a couple hours later at 10:00am...

“What Was I Thinking?” The Big-Ticket Items People Regret

The same publication posting both articles before the eggs in the buffet line can get cold feels less like an ignorant editor than it feels like an unintentionally poignant acknowledgement that it's hard to spend well.

From the first article, “the mere act of saying ‘not now, maybe later’ triggered an instinct to keep putting [something] off and waiting for a better moment” which leads to a “specialness spiral” where you never actually pull the trigger on spending money for special things.

The only way this one could have struck a louder chord with me was if the author had been kind enough to open it with “Dear Richard:”.

And just as I'm really getting stoked about saying “yes” once and for all to special things, the second article knocks the wind out of the sails in two lines, “While it may be true that money can't buy happiness, that doesn't stop people from trying. And then wishing they hadn't.”

On one end, we have regret because we’ve waited too long to spend on special things.

And on the other end, we have regret because we spent and then realized the things weren't as special as we expected.

Woof...

No matter who you are, spending well is hard to do.