Tag Archives: overspending

Are You Overspending Today Because Of A Future Inheritance?

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Overspender

Always Broke

 

I have a friend at work who seems to have holes in his pockets!  He is always broke and deep into credit card debt and doesn’t have any equity in his house after paying into his mortgage for over ten years (he keeps refinancing, taking the equity out).

Just this year, he’s bought brand new leather living room furniture, a new expensive washer and dryer, a new zero turn riding lawn mower (so now he has 2 of them in total),a full house backup generator, and well over $1,000 in paintball guns and equipment.  Oh, I forgot that he remodeled his master bedroom, buying hard wood floors and had someone come out to rebuild his deck, oh and bought expensive new bikes for him and his wife.  This is just that stuff that I’ve heard about!

My friend is a clever guy and a peer, so I wondered how we could be so different…  So one day, after his incessant complaining to me about his lack of savings, I asked him why he always spend so much money on new expensive things all the time.

He leaned in close and told me that he plans on inheriting a good chuck of money from both his parents and his wife’s parents.  In fact, he mentioned that his wife’s parents are really loaded.  I hope the expression that reflexively popped on my face didn’t reveal my feeling on his line of thinking…

I think that it’s risky and horrible to overspend today while waiting to receive a future inheritance for these reasons:

  • The parents could give the bulk of the money to charity, leaving my friend a much smaller amount.
  • Some financial disaster could happen and that money could evaporate (think Bernie Madoff or Enron)
  • Some medical problems could eat away at their parent’s money too.
  • Perhaps their parents aren’t as rich as they appear to be.
  • It’s a sucky way to live life waiting for your parent to die to get money, very sad really…
  • Their parents could decide to spend the money, going out in style as they age.
  • You risk becoming your parent’s pets the entire time they are alive.
  • You miss out on trying to establish your own financial empire (lol).
  • You begin to view your parents as an investment instead of your parents.
  • You might be stressed whenever they spend money.

I admit, I envy his lifestyle, and I’m a bit disappointed that I’ll never catch up to him or surpass him financially since he has huge advantages.  That said, I do feel that I’m accomplishing my own financial future by living more within my means and my by financial planning over the years.

So should I hate my friend because he’s overspending today because of a future inheritance?

Naw, I hope the best for him, after all he is a friend first.  I just wish deep down inside I wouldn’t think he was such cold-hearted reptile.  I wonder how long it will take them to blow through their inheritance once the do receive it?

Do you know anyone similar to my friend?  What is their deal?

MR

Creating a Spending Budget To Spend More Money

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The significant percentage of people have problems with spend more money than they have, so they usually overspend.

To counter their overspending habit, the more prudent ones typically implement some sort of budget.  I’ve never implemented such a budget, but my situation is a bit different that other!

My problem is I underspend!

So while most folks go to the store to go shopping and bring home bags full of items bought, I often come home empty-handed.  Oh I’ll spend 1/2 to a full hour looking at the item I want to buy, but often in the end, I leave telling myself I’ll wait for it to go on sale, or that I’ll get the next newer model when it comes out.  I’ve been doing this process for years with the flat HD TVs.

Some people would say: “Oh, you’re just cheap”, but those people don’t see what I spend on my kids.  I’m much quicker to loosen the purse strings when the kids come into question versus anything else.

How Does My Wife Handle My Underspending?

Surprisingly very well, but then again, she is even more frugal than I am.  So I’ll suggest something that we need and she’ll mildly question it, and I’ll then gladly, quickly backpedal, saving me the bucks!

While this is a positive for a financial perspective, it also leads to a less than optimized lifestyle that I’m trying to fix.  I’ve been encouraging my wife go out during the day when the kids are at school to meet with friends for lunch once a week.  She seems to enjoy this little (new) tradition.

Now that I have enough money generated from my Free Lunch Experiment, I might go out to lunch with people or friends, once a week too!

So that all said, with both my wife and I going out once a week for lunch, surely I must be spending more, but not so fast!  You see, my wife has a small (around 8 hours total) weekly job, where she uses the money to spend on herself and the kids, so this doesn’t cost me.  And the Free Lunch Experiment provides me money from the dividends so I don’t have to pay for those 1 or 2 lunches that I eat out once a week!

So I’m really not paying from my income either of the weekly lunch out sessions.

A Budget For Spending:

This is where a Budget for Spending would be ideal!  The idea would be to determine that amount of money we want to spend on entertainment at the beginning of the year, and make a spending budget to make sure that money get spend on those goals.  Of course, the money can come from any source (income, investments, dividends, money found, etc).

Thinking about it, I can imagine the following Budget Goals (Kids activities, vacations, entertainment, house projects, Gifts, etc).

Is there any readers out there that have “Nospenditis” like I do?

-MR

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Advice for Spendthrift Friends in Debt

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While reading a post on GetRichSlowly.org, I came across an article called: “You are your own worst enemy“.

We all have friends like the “Gillian” that is described in the article.  Often time (at least in my case), we are too polite to say “What is wrong with you!  You can’t afford that!!!

Well, I finally found a funny but relevant advice video to show your friends and close ones that have this problem.

So the next time someone asks you your opinion about buying something “crazy expensive”, and they are in over $10,000 in debt to the credit card companies… already…  Have them watch the above video on youtube.com (search words”  Newhart Stop It”).

😉

-D