When I was around 7 years old, I asked my mom for a candy bar at the checkout line at the grocery store, and she replied, "We can't afford it." I thought to myself, "Yeah, right." We lived in a pretty nice house by average standards, went on above-average vacations, and the holidays were always filled with gifts.
So I decided to push a little. "I know we can afford it, mom. We go on these nice trips and have a nice house."
She cut me off, replying in a stern voice, "Your dad and I didn't get that nice house and aren't able to take you on those nice trips because we spend all our money." I really had nothing left to say. As a kid, my mom was like Tom Cruise in A Few Good Men. Even a drunken Jack Nicholson couldn't stand up to her in the candy isle.
We've all been in that situation, when we want to buy something and we know we shouldn't. We think that it'll make us feel better if we have it, and it does -- at first. But that gratification goes away quickly.
Some people are addicted to alcohol, some to drugs, some to shopping. I have what some might call a car problem. For years, I would buy a used car every 12 to 18 months or so, on average. In college, I used to buy cars at the auto auctions that needed cosmetic fixes and then turn around and sell them for a profit.
At least, that was my justification at the time. As I started my career, made more money and my time grew scarcer, my car habit had nothing to do with turning profit. It was all about satisfying an obsessive desire to get my next fix.
Finally, my wife told me that I needed to put my habit on pause and focus on something smarter -- like perhaps, an appreciating asset. Our business was growing fast and our tax bills even faster. Now, I no longer habitually buy another car.
Today, I'm the proud owner of a paid-off! 9-year old auto. Not exactly the automobile euphoria I'd hoped for at this point in my life, but the experience has taught me a few things:
1. Women blow money on many, many small items -- especially if they're on sale -- and there's an additional bonus justification if the purchase is for children.
2. Men argue that they don't spend money like women, but then they waste a ton of money on a stupid depreciating asset that they don't need. The new car likely costs three times as much as all the little on-sale stuff for which their brides bargain-hunt.
3. Men also spend hours, even days, researching a lawn mower that costs them $500, but they lay out $5,000 for a stock investment they heard about on the radio or from a friend at work.
4. Some people are really good at budgeting and saving, and they typically rank in the top 10% wealthiest individuals in the country. Most of them don't even know how well-off they are. What's more, they don't like hearing about their wealth. Why? They don't want to get complacent and change their disciplined mentality.
Regardless of your rank in the world of• wealth, the harder you work for something and the longer you wait, the more fulfilling the ultimate destination.
How do you get spending discipline?
• Put together a list of everything you spent your money on since Jan. 1. Banks and credit card companies make it easier to divide your statements by category. Add up what you spend on restaurants, work lunches or coffee. When you see where your money goes, it blows you away.
• Then, once you know what you spending, cut back on at least one thing that you could either live with less of -- or without. Take that money and put it in a savings account -- or better yet, use something like Capital One's 360 account, which pays 0.75% interest (you're probably getting a lot less at the bank).
• Finally, use that money to reward yourself with a nice vacation, or better yet, save it for later, when you'll surely n! eed it mo! re than you do today.
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Adam Koos, CFP, is founder and president of Libertas Wealth Management Group in Columbus, Ohio, and is a member of the AdviceIQ Financial Advisors Network, which is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.
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