First appeared in USA Today and The Indianapolis Star
I’m deep into a financial literacy project with one of the largest universities in the world.
Our mission is to teach college students what they need to know about money and when they need to know it. As we research how students are currently taught about money and what the results of those teachings have been, I’ve found one major concept to be wholly absent: the quest for pleasure.
I spend a tremendous amount of time thinking about why people in our society are so financially ill-prepared for nearly every moment they encounter. Debt levels are sky-high, consumer spending (as opposed to saving) is through the roof, and retirement account balances should induce tears, if they weren’t so laughable. The financial world is seeking answers and solutions, but I’m not convinced we truly understand the problem. Collectively, our understanding of money as an economic resource, seems to be stuck at a fifth-grader’s comprehension level. No offense, fifth-graders.
It’s my belief that one of the primary causes of our economic strife is our unhealthy obsession with pleasure derived or generated via spending. But we don’t call it pleasure. We call it entertainment, leisure, luxury, blowing off steam, a vacation, or even fun money. Not only do we get a hit from the things and experiences we purchase, but we feel pleasure in the purchase itself. The situation really spins out of control when we no longer feel pleasure from our normal purchase patterns, so we crank it up and exacerbate the problem by spending even more.
Pleasure’s consequences don’t discriminate. It can crush your financial life if you make $30,000 per year, just as it can if you make $3 million per year. I’d share a story or two about the latter, but then you’d remember nothing else about this column.
We spend when we shouldn’t, because shouldn’t seems less grave than can’t. Can’t has left the building. And shouldn’t often falls prey to immaturity.
When I was in grade school, there was a very rigorous process of being granted the ability to purchase dessert. Upon eating the main course, and three sides, which included the ubiquitous government cheese, a lunch monitor would allow you to purchase a cookie for 10 cents. Should I have eaten my entire school lunch? Yes. Was I forced to eat my entire school lunch prior to being allowed to purchase a cookie? Yes. Experiencing pleasure, before pleasure was earned, simply wasn’t an option. Boy have things changed.
My twenties and early thirties are a good example of freedom gone awry. It was a period of time in which I ignored my future reality with a childish and myopic approach to spending. I had no financial past (debt), yet I didn’t completely acknowledge my financial future, because most of my funds were being consumed for my financial present.
You could say I wasn’t eating my entire lunch tray before ordering my cookie. Instead, I ordered a baker’s dozen cookies and didn’t leave room for a real meal. Like so many other Americans, my prioritization of pleasure had me on a path to financial failure. I don’t know why I woke up or how I woke up, but I’m sure glad I did.
Don’t get me wrong, I still love creating pleasure from spending. But I only do it once I’ve taken care of business. I eat my whole lunch tray before I purchase the cookie. As it turns out, there’s actually even more pleasure in making a purchase which won’t negatively impact my desired financial outcomes.
Runners often talk about something called runner’s high. It does seem a bit crazy that a person can feel actual pleasure from exercising vigorously, but apparently you can. The pleasure is delivered via a rush of endorphins and endocannabinoids in the midst of the workout. Despite what Sir Mick Jagger might suggest, it appears you can get what you want and get what you need. You want pleasure and you need exercise. Voila! You get both, when you do it the right way.
The same is true for your financial life. You can achieve pleasure, deeply satisfying pleasure, by taking care of business first. For instance, I’ve booked a vacation two different ways in my life: ignorant of my financial reality and because of my financial reality. If you are like I was, like most of America is, you’ve spent money ignorant of your financial reality. That purchase undoubtedly resulted in pleasure. But you guessed what you could afford in relation to more important goals you weren’t even funding.
Previously, if I had $10 to spend, I’d spend $9.50 and hope I could rub the last 50 cents together to put into savings. That rarely, if ever, worked. Now if I have $10, I fund my real goals first, which might take me down to $7, but then I spend that $7 without guilt or reservation. And by the way, I don’t even care that I only got to spend $7 versus $9.50. I was guessing at my $9.50 budget anyway.
Spending money is pleasureful. Spending money without reservation because you’ve taken care of business first, is the sweetest pleasure.
The next time you are feeling tempted to seek pleasure through spending, fund your goals first, and experience a pleasure you didn’t even know existed.
Have a question for Pete the Planner? Email him at AskPete@petetheplanner.com or visit petetheplanner.com.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.