Not Your Usual Money Lessons
By Melissa Tosetti
Over the years I’ve learned valuable money lessons from unusual sources. These lessons fall in line with The Savvy Life’s focus of looking at personal finance from a lifestyle perspective.
Here are 5 of my favorites:
1. The Muddy Boots Lesson
After feeding the farm animals one morning when I was about 12, I left my muddy boots in the garage as I headed inside to watch TV. Minutes later my grandfather walked in, raging at me for not hosing the mud off my boots.
I don’t know why that particular memory sticks with me so vividly. There are plenty of other memories I have of my grandparents reminding me to take proper care of my stuff, whether it was a clothing item or a piece of equipment around the farm.
Both of my grandparents had to leave school by the 6th grade to work on their family farms. They worked hard for what they had and learned to value their belongings at a very young age.
It wasn’t until years later that I came to understand and appreciate the importance of caring for the things I own. Caring for each them out of respect for that item and to ensure it lasts as long as possible.
2. The Lipstick on a Pig Lesson
In the early 2000’s home makeover shows dominated television. We were all convinced that in a weekend we could transform our homes with a bucket of paint and a few select items of décor.
I became obsessed with redoing our 600 square foot home, planning to turn it into a cozy cottage. I bought pictures, plants and other décor, but our house continued to look dumpy.
It wasn’t until I paid attention to each detail of the makeover shows that I understood the first part of the transformation was to declutter. I was trying to put lipstick on a pig by not getting rid of the clutter first.
It took FAR LONGER than a weekend, but I managed to slowly get rid of the clutter. As it disappeared, the new décor I purchased could be seen and I finally achieved the cottage look I was striving for.
3. The Style vs. Fashion Lesson
Very early in my life here in the San Francisco Bay Area I worked at a public relations firm. This was at the height of Gap and Banana Republic’s popularity. It was not uncommon to walk into work and have two or more people wearing the exact same blouse.
Then, Jessica was hired. Jessica never showed up wearing the same thing everyone else did. She had a tastefully, unique, pulled-together look and owned it!
I often asked Jessica where she got her outfits. On a regular basis she told me, The Salvation Army, Goodwill and vintage stores.
Jessica taught me that you don't need to spend a fortune on clothes to look great and style doesn't come from a mall. Jessica continued to be a style and financial mentor to me. Partly due to her smart shopping at these lower cost stores, at the age of just 24 she purchased her first house - in the hot housing market of San Francisco.
4. The Lousy Breakfast Lesson
In my pre-savvy days, it wasn’t uncommon for my husband Paul and I to go out to eat 3 or 4 times on the weekend. Without a plan, we often found ourselves at restaurant chains, because that’s what we could afford and we would often complain about the meal.
One morning we went to breakfast at such a chain restaurant. We waited 20 minutes for a table. The meal was so lackluster we couldn’t even call it mediocre. And the cost of breakfast for the two of us with tip was almost $50.
On the drive home I realized that I could have cooked breakfast at home, consumed it and done the dishes by the time it took us to get seated at a typical restaurant. Even more so, we both really enjoy cooking. We just weren’t organized when it came to having ingredients in the house on a regular basis.
That experience was a defining moment. We decided to get organized and start cooking the majority of our meals at home. This would allow us to save several hundred dollars each month. We could use a portion of that money to go to our favorite, more expensive restaurants a few times a month. This process turned our dining out experiences from something we did out of habit, to something we enjoyed and looked forward to.
5. The Million Dollar Paycheck Lesson
A few years ago we worked with a client making a million dollars a year.
This client had built a large amount of credit card debt and had no savings for retirement. He rented his home and leased his car. Despite the very generous paycheck, he didn’t actually own any assets and worse, was neck deep in debt.
Conversely, over the years we’ve worked with many clients making $50,000 a year who manage to fully fund their retirement accounts, have no debt, go on vacation and live extraordinary lives.
That particular client reinforced for me the knowledge that, once you hit a fundamental living income, simply “making more money” is not the solution for most people. It’s how you use the money you have that determines your success, stability and life enjoyment.
Melissa Tosetti is a cash flow planning expert, founder of The Savvy Life and author of the international bestseller Living The Savvy Life.
For the past nine years, she’s worked with over 625 individuals and families to create Spending Plans.
To learn about the Spending Plan process, visit The Savvy Life’s Home Page. If you’d like to learn about how The Savvy Life works with financial advisors and their clients visit: The Savvy Life Advisor’s Page.
