Unless you are a particularly self-aware individual, I feel like most people go through life just assuming that everyone else thinks the same way about basic concepts as you do. I'm not talking about things like politics or religion. Obviously everyone knows that each person has their own take on these more complicated aspects of life. I'm talking about things like "food is what you eat to survive", "sleep is one of the most wonderful things in the world", and "money is a pool of resources you add to and draw from".
When you meet someone for the first time and come to discover that they think very differently about a fundamental aspect of life, it's kind of shocking. The first time I met a true foodie, I thought they were joking. They really thought they were too good for fast food? Come on. I'm not saying it's healthy, but you can't beat the convenience, and it's not that pricey either. Plus it can be downright delicious. It never occurred to me that food could be this thing that almost borders on art until I met a few people that were truly passionate about cooking.
The same goes for sleep. I love to sleep. In spite of the fact that I haven't felt like I've received a good night's sleep since I was about 15 years old, I look forward to doing it night after night, and once I'm doing it, I don't want to stop. It is embarrassing the amount of things I have turned down in favor of going to sleep. When I started meeting people who hated sleep, it blew my mind. Insomniacs, workaholics, night owls who also manage to wake at an adult hour... it's all alien to me. Sometimes I'm jealous when I meet people who can function on 4 to 5 hours of sleep a night, but then I realize that I love sleep, so what do I care that I need 8 or 9?
Now, money is little bit more of a private matter. You generally don't talk about it with your acquaintances or your family, and you might not even discuss it much with your closest friends. Because of this, it's kind of hard to figure out how other people feel about money and what they think of it. I didn't meet someone I knew who saw money differently than I do until I started talking about it with my wife. It's been a process, but I think I understand how she thinks of it, and I hope I have explained to her how I view it. It leads to conflicts, but like everything else in a marriage, you can get through it with a lot of communication.
To me, money was always a single number. You had $500 in your account, then you deposited some money, and now you have $700. You spent $100, and now you have $600. Money was water, and the bank account was a bathtub. You dumped water into the tub when you earned it, and you scooped some out when you spent it. Hopefully you always had enough to cover your legs.
My wife sees money in a completely different way. To her, money isn't water. It's a book. Some books are big and fat, others are small and thin. Her bank account is a bookshelf. When she earns money, she puts that book on the shelf. When she needs to buy something, she takes a book off the shelf. But like a librarian, she is fairly meticulous about tracking which books come and go.
This discrepancy in viewpoints first came to light a few months after we got married. People had given us some checks and some cash as gifts, and I had deposited them in my checking account. I recall the conversation unfolding more or less like this:
Amanda - We should get a couch for the basement.
Dan - Yeah, that would be a good idea.
Amanda - We can use some of the money we got at our wedding.
Dan - Uh, sure.
Amanda - Where are those checks?
Dan - Um, I deposited them in my bank account already.
Amanda - What? Did you spend it already?
Dan - .... maybe?
In my mind, the moment I deposited those dollars, they started mixing with all the other dollars in a molecular swirl that was impossible to reverse. I probably spent some on lunch, some on beer, some on the rent, and there was probably still some left. But in my mind, my account still had $500 more in it today than it would have had if I had never deposited the money, so who cares? Amanda was not having it. She felt like I had already spent the money on myself. It wasn't until I explained to her how I viewed the situation that she finally felt like I hadn't done something shady.
This issue has come up several times over the past few years, and it always takes a little bit of a conversation to work through. It's funny how your brain can see something so differently than someone else, and how that difference in viewpoint can lead to arguments over the most basic things.
For example, say you receive $50 gift card to Amazon or Target. If you are a bookshelf person, you will think of all the cool stuff you can get with this extra $50. When you finally decide on what to get, you see it as basically free - you wouldn't have gotten that something if you didn't have the gift card, so why not go buck wild and get you something fancy? If you are a bathtub person, the moment that gift card arrives, your tub just went from $500 to $550. While the bookshelf person is daydreaming about a new toy, you just bought groceries for $100. Now your tub has $450 in it. Then the bookshelf person comes to you and says something like this:
Bookshelf - I want this shiny bauble, and guess what, it's exactly $50!
Bathtub - But we don't need a shiny bauble. We need toilet paper and detergent.
Bookshelf - OK, well you can go get that stuff. But I'm using this gift card on the bauble.
Bathtub - I wanted to use it for the household stuff.
Bookshelf - But it was a gift!
Bathtub - (confused) so?
Bookshelf - Who buys toiletries for a gift!? "Happy birthday, here's some toilet paper!"
I would like to advocate for the bathtub view of money, and I will tell you why. If you keep separate books of money on multiple different bookshelves, it is easy to lose sight of the overall size of your library. Imagine walking into public library where the shelves are 80% full, and then into another where the shelves are 60% full. The gaps are sporadic, and the density varies from section to section, but it's obvious some books are missing. It's just not obvious how many are missing.
Now imagine you visit two public pools. Again, one is 80% full, the other is 60% full. It will be much, much easier to tell at glance which pool is more full than the other. It will be much easier to decide if you can afford to take a few gallons out of the pool than if you need to choose whether or not you can take a few books off the shelf.
I'm not advocating for lumping all your money into a single account and calling it a day. You don't have to change a thing, just your mindset. I have a spreadsheet where I total up every single asset I own, offset by all my liabilities. I do this twice a month. Sometimes my checking account is nice and flush, but that's because my credit card balance is a little higher than usual. The month after I pay the annual property tax bill out of the savings account could be deceptively kind to my checking account balance; but, if I look at my overall total, I can see the hit.
I find that looking at your money this way makes it so much easier to save, because when you put money into your 401(k), buy some stocks, or you transfer some cash to your savings account, your total net worth stays the same. If you think of money like bookshelves, you can get into this mindset where you only notice the book missing from your checking account bookshelf, and you start to cut back on your savings. I think of my money like a bathtub, and try to make sure that each month the tub has a little more water in it than it did the month before. I'd encourage you to give this mindset a shot and see what it does for your finances.
When you meet someone for the first time and come to discover that they think very differently about a fundamental aspect of life, it's kind of shocking. The first time I met a true foodie, I thought they were joking. They really thought they were too good for fast food? Come on. I'm not saying it's healthy, but you can't beat the convenience, and it's not that pricey either. Plus it can be downright delicious. It never occurred to me that food could be this thing that almost borders on art until I met a few people that were truly passionate about cooking.
The same goes for sleep. I love to sleep. In spite of the fact that I haven't felt like I've received a good night's sleep since I was about 15 years old, I look forward to doing it night after night, and once I'm doing it, I don't want to stop. It is embarrassing the amount of things I have turned down in favor of going to sleep. When I started meeting people who hated sleep, it blew my mind. Insomniacs, workaholics, night owls who also manage to wake at an adult hour... it's all alien to me. Sometimes I'm jealous when I meet people who can function on 4 to 5 hours of sleep a night, but then I realize that I love sleep, so what do I care that I need 8 or 9?
Now, money is little bit more of a private matter. You generally don't talk about it with your acquaintances or your family, and you might not even discuss it much with your closest friends. Because of this, it's kind of hard to figure out how other people feel about money and what they think of it. I didn't meet someone I knew who saw money differently than I do until I started talking about it with my wife. It's been a process, but I think I understand how she thinks of it, and I hope I have explained to her how I view it. It leads to conflicts, but like everything else in a marriage, you can get through it with a lot of communication.
To me, money was always a single number. You had $500 in your account, then you deposited some money, and now you have $700. You spent $100, and now you have $600. Money was water, and the bank account was a bathtub. You dumped water into the tub when you earned it, and you scooped some out when you spent it. Hopefully you always had enough to cover your legs.
My wife sees money in a completely different way. To her, money isn't water. It's a book. Some books are big and fat, others are small and thin. Her bank account is a bookshelf. When she earns money, she puts that book on the shelf. When she needs to buy something, she takes a book off the shelf. But like a librarian, she is fairly meticulous about tracking which books come and go.
This discrepancy in viewpoints first came to light a few months after we got married. People had given us some checks and some cash as gifts, and I had deposited them in my checking account. I recall the conversation unfolding more or less like this:
Amanda - We should get a couch for the basement.
Dan - Yeah, that would be a good idea.
Amanda - We can use some of the money we got at our wedding.
Dan - Uh, sure.
Amanda - Where are those checks?
Dan - Um, I deposited them in my bank account already.
Amanda - What? Did you spend it already?
Dan - .... maybe?
In my mind, the moment I deposited those dollars, they started mixing with all the other dollars in a molecular swirl that was impossible to reverse. I probably spent some on lunch, some on beer, some on the rent, and there was probably still some left. But in my mind, my account still had $500 more in it today than it would have had if I had never deposited the money, so who cares? Amanda was not having it. She felt like I had already spent the money on myself. It wasn't until I explained to her how I viewed the situation that she finally felt like I hadn't done something shady.
This issue has come up several times over the past few years, and it always takes a little bit of a conversation to work through. It's funny how your brain can see something so differently than someone else, and how that difference in viewpoint can lead to arguments over the most basic things.
For example, say you receive $50 gift card to Amazon or Target. If you are a bookshelf person, you will think of all the cool stuff you can get with this extra $50. When you finally decide on what to get, you see it as basically free - you wouldn't have gotten that something if you didn't have the gift card, so why not go buck wild and get you something fancy? If you are a bathtub person, the moment that gift card arrives, your tub just went from $500 to $550. While the bookshelf person is daydreaming about a new toy, you just bought groceries for $100. Now your tub has $450 in it. Then the bookshelf person comes to you and says something like this:
Bookshelf - I want this shiny bauble, and guess what, it's exactly $50!
Bathtub - But we don't need a shiny bauble. We need toilet paper and detergent.
Bookshelf - OK, well you can go get that stuff. But I'm using this gift card on the bauble.
Bathtub - I wanted to use it for the household stuff.
Bookshelf - But it was a gift!
Bathtub - (confused) so?
Bookshelf - Who buys toiletries for a gift!? "Happy birthday, here's some toilet paper!"
I would like to advocate for the bathtub view of money, and I will tell you why. If you keep separate books of money on multiple different bookshelves, it is easy to lose sight of the overall size of your library. Imagine walking into public library where the shelves are 80% full, and then into another where the shelves are 60% full. The gaps are sporadic, and the density varies from section to section, but it's obvious some books are missing. It's just not obvious how many are missing.
Now imagine you visit two public pools. Again, one is 80% full, the other is 60% full. It will be much, much easier to tell at glance which pool is more full than the other. It will be much easier to decide if you can afford to take a few gallons out of the pool than if you need to choose whether or not you can take a few books off the shelf.
I'm not advocating for lumping all your money into a single account and calling it a day. You don't have to change a thing, just your mindset. I have a spreadsheet where I total up every single asset I own, offset by all my liabilities. I do this twice a month. Sometimes my checking account is nice and flush, but that's because my credit card balance is a little higher than usual. The month after I pay the annual property tax bill out of the savings account could be deceptively kind to my checking account balance; but, if I look at my overall total, I can see the hit.
I find that looking at your money this way makes it so much easier to save, because when you put money into your 401(k), buy some stocks, or you transfer some cash to your savings account, your total net worth stays the same. If you think of money like bookshelves, you can get into this mindset where you only notice the book missing from your checking account bookshelf, and you start to cut back on your savings. I think of my money like a bathtub, and try to make sure that each month the tub has a little more water in it than it did the month before. I'd encourage you to give this mindset a shot and see what it does for your finances.
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