246 | Wise Spending

If your spending isn't growing wiser, I'm not doing my job.

But real enlightenment requires both of us.

Good spending is two things: 1) is the amount we spend responsible? and 2) how do we know we're spending well?

I'll cover #1 every January - a few good data points reveal more than you can imagine.

But #2 is on you.

Only you know what you spent and why.

And a simple way of tracking is the only hope for remembering.

I can help make the tracking easy, but it's still in your court.

Our efforts combined lead to wisdom.

245 | The Master Stroke

Every spending decision has three phases.

The first is every moment before we buy - sometimes minutes, sometimes years.

During this phase, anticipation and hope often add to the magic, while obligation and dread risk hogging the mic.

The second is the precise moment we spend.

The magician loves this phase because it draws all the attention and, to the naked eye, appears to be "financial freedom".

But the third phase - the far side of the decision - is the overlooked master stroke.

Because an infinite loop of first and second phases falsely promises "freedom" that only post-purchase reflection can provide.

The freedom of knowing you'd spend the same way again or honestly acknowledging that you wouldn't.

240 | How to “Check Yourself”

“Check yourself before you treat yourself” sounds clever, but how in the “h-e-double-hockey-sticks” do you do it?

It’s only natural to assume that strict guidelines are needed.

But it’s less rules, and more reflection if we’re trying to build a habit that can last a lifetime.

And once we’ve proven we can spend less than we make, that reflection can be simple.

With any spending decision…

• Is it a small amount or a big amount?

• Is it a one-time occasion or will it repeat?

• Is it something we can change easily or are we making a commitment?

If it’s small, one-time, and easily changed then it probably doesn’t need more attention (even if it’s fertile ground for moralizing preferences!).

But if it’s big or likely to repeat or putting us on the hook, then extra reflection is wise…

• Will it provide lasting value or only immediate value?

• Will it positively impact multiple people or only one?

• How is this spending more like an “investment” than an “expense”?

As we ponder these questions, we allow ourselves to begin measuring wealth by more than money.

And we disconnect the decision to spend from the fickle reward of earning.

239 | Homebuying Series: Sprinkle, Don’t Pour

It’s an interesting moment.

Home prices at record highs, and interest rates higher than Millenials imagined possible.

A brutal combo if you’re evaluating a move - particularly away from a pre-COVID interest rate.

But there is an opportunity.

A morale-boosting modification to your current home might be the highest ROI available.

Because $10,000 or $20,000 or even $50,000 is nothing, if it keeps you from doubling your mortgage and doubling the months left till it’s paid off.

Instead of pouring money into a home you might sell, see if sprinkling a little money into it can slowly change your perspective.

And if it does, feel free to sprinkle a little more - your future self will thank you.

236 | Love Letters: Why a Kitchen and Living Room Remodel?

I wanted to write this before the project started, but life got in the way, and I’m writing it a little more than a week after we have moved back in.

It is hard to put myself back in the shoes of May 2025, but I still think this is better than not doing it at all.

So here is the love letter to my future self about our decision to remodel our kitchen and living room in the summer of 2025…

Why now?

• It feels like we have deferred a kitchen renovation for eight years and it is time to do it to stay ahead of middle school and high school age kids needs

• Our income level is at an all-time high and we don’t know if that will continue forever given the general uncertainty of life and career transition plans

Why not move?

• It is hard to envision a different neighborhood that we would like to live in within Winston-Salem right now

• Our mortgage interest rate is 2.75% and if we were to move and finance the purchase it would be in the 6.5% to 7% range

• A move would introduce hard costs associated with the actual move as well as lifestyle creep costs associated with a bigger house in a different location - in some ways, it feels like we are capping our housing cost in ways that will provide significant flexibility for other parts of life that are more important to us

• Restarting relationships with new neighbors and dramatically altering relationships with existing neighbors would be a tough pill to swallow

Our top priorities?

• To create space to comfortably host and seat 8+ adults in our primary living space

• To have an island in the kitchen

• To extend the runway on this house and its viability for our family

Why not more?

• We quoted a sunroom/living room over the existing deck and a second story on top of that and the entire project would have been between $300,000 and $350,000 - that felt like too much to commit to this house at this point in time, and it also seemed to take the house out of the current neighborhood price range

• It seems like we could revisit a real addition of square footage at a future date as our family demands it as the layout of the kitchen would still allow us to easily transition to the deck if needed

• We want to believe that our home choice forms our children in ways that are hard to see with a naked eye, and we don’t want our home to be out of place in the West Salem neighborhood

234 | Taxophobia

I hate taxes.

And it’s not because I have to pay them.

It’s because of the way they keep us from turning real financial wealth into other forms of wealth.

Fear of paying taxes loves to keep us from a better version of our life - “taxophobia” if you will.

You know the cycle…

Make money. Yay!

Realize later on that you have to pay taxes. Noooooo!

This cycle is disappointing, but not necessarily life altering.

It’s when we’ve made money, but still have control over when we will (or won’t!) pay the taxes that’s the real monster under the bed.

The sale of capital gains that would trigger a tax bill.

The withdrawal from a retirement account that would be complemented by taxes.

The cancelling of life insurance policies that would add to what we owe in April.

And so wealth tends to accumulate forever without being used for anything more than its “security” because we’re afraid to pay the tax.

Inevitably, you will pick a side - taxes as feature or taxes as a flaw of life on earth.

If you’re courageous enough to see them as a feature, it’s easier to experience the freedom your wealth provides.

Picking the other side often makes you stingy, skeptical, and grumpy.

233 | X-Rays

We tend to think of tracking spending as counting calories.

And since calorie counting is usually a tool for weight loss, tracking becomes nothing more than a discouraging way to limit your spending.

One that amplifies guilt or shame, restricts freedom, and feels like a repetitive slap on the wrist.

But this robs it of its purpose and power.

Tracking spending isn’t calorie counting, but an x-ray machine.

X-rays carry no judgment.

They give no snarky self-talk.

They provide no critique or restriction.

They can even come back negative because nothing is broken.

No combo of rest, ice, compression, and elevation can touch the peace of mind and clarity that comes from a quality x-ray.

A quick peek under the surface is the most painless route to full activity levels.

232 | The Curse of the Raise

There is a curse that comes with every raise.

Because beyond a basic level of income, financial freedom is only a matter of expectations.

And our expectations often change with every passing hour and every dollar spent.

In our finances, our expectations are best defined by our spending - how much do we spend, what do we spend it on, and do we expect it to continue.

If we spent $100,000 last year to live daily life - that’s the best representation of how we “expect” life to be and feel.

With $1 million, we can live that same year 10 more times.

With $500,000, we can repeat it 5 times.

Quickly, you see the math of financial freedom is nothing more than what you expect compared to what you have.

But herein lies the curse…

Spending $20,000 of a $25,000 raise often bumps a $100,000 lifestyle up to $120,000.

And then our $1,005,000, only supports the newly minted lifestyle expectation for 8.5 years.

And $505,000, gets us just past 4.

And then, very truly, our much-anticipated raise actually bites us in the @$$.

Don’t turn down a raise or bonus - just check yourself before you treat yourself.

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.