Lazy Man and Money

Are You Friends With Your Checkbook?

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signingcheck
Who couldn’t be friends with this guy?

Most of us strive to try to keep a budget each month. Everyone has fixed costs that have to be covered, such as the rent or mortgage, insurance, and food. Some people call these a “monthly nut”, but I’m not a squirrel. I like to call these “necessary expenses” and have tracked them over time. For many people keeping to a budget was easier years ago. Nowadays, are a ton of electronic payment methods available. Their convenience makes spending money we do not have that much more tempting. Impulse buying becomes easier – all you have to do is swipe either your debit card or your credit card.

This can result in a well-planned budget getting out of the water. Maybe I’m showing my age, but I remember when people would write checks at the grocery store. It slowed everything down. As one of those “quick swipe” credit card people I found this really annoying.

Looking back on it today, I have to respect it a bit. Those people actually spent time balancing a checkbook, so they knew exactly how much money they had. It was a great system for accountability reasons. With today’s credit cards a lot of that accountability is gone.

I have to admit that I’m not very good friends with my checkbook nowadays. I thought about it for a bit and here are some of the reasons why:

  1. I’m Lazy – I type thousands of words a day. It may sound crazy, but I barely know how to use a pen anymore. Adding an item to a grocery list is comical.
  2. I Don’t Need the Accountability – I spend more than enough time thinking about money by writing for this site. In return this website gives me accountability.
  3. Checks can be Expensive – Last year I switched bank accounts. It’s a long story, but since my tenants wouldn’t get out when the lease was over, I had to stop accepting payment from them in order to evict them. However, they had the ability to automatic deposit money in my bank account, which allowed them to stay indefinitely… unless I switched bank account numbers.

    So I switched, but that required getting all new checks. It was well over $25 for 120 checks of the very most basic design. That’s almost half the cost of a stamp, simply to use my own money. I decided to go home and order cheap checks online. It was much, much cheaper. Not only that, but the bulk pricing was much better my bank’s.

Sorry Mr. Checkbook, but for now we’ll just have to be occasional acquaintances.

Friends’ Influence and Money: A Two Way Street

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I often write a lot of words on saving money. Cut out this expensive item… consider substituting this other item… Sometimes I write about making more money. However, I very rarely go into the psychology behind making and spending money. Today, I’m going to venture into those waters… and hopefully avoid drowning.

I first read in Larry Winget’s book, You’re Broke Because You Want to Be, your income is typically the average of your five closest friends. Though Winget gives credit to Jim Rohn, the concept pans out when I look at my life (at least as long as I’m not only a full-time blogger). Winget makes a great point that he tries to surround himself with wealthy people.

Surrounding yourself with wealthy people is a solid idea, but it’s not like you can just make friends with folks who can afford to shop at 5th Avenue or Rodeo Drive overnight. I met most of my high-income friends in an expensive, private top 30 university. They had typically had fairly wealthy parents and went on to high paying jobs after school. Winget/Rohn seem to approach it as a egg – surrounding yourself with high-income people will help you get rich. I approach it like a chicken – I’m surrounded by high-income earners for the same reasons that they earned a high income.

There’s another side of coin that Larry doesn’t discuss in his book (at least that I recall). I have a theory that your spending is the average of your five closest friends. This is a completely untested theory – it seems logical to me and consistent in my own life. Why is it logical? Well my wife still thinks that I have a plasma television because “all your friends got them.” She doesn’t seem to factor in that me and all my friends love technology. My wife also expects me to get a high-end SLR digital camera soon – simply because my other friends have them. That’s an exception to the rule… I’m not looking to carrying around a murse (man-purse) full of lenses.

So if your income is the average of your five closest friends and your spending may be the average of your five closest friends, do you really have any control of your life? As always, I think the answer is yes – if you recognize these subconscious principles at work and make your conscious deal with them.

What about you? Is your income the average of your five closest friends? Do you feel that your income is the result of associating with those friends, or is it just “birds of a feather flock together?” Do you find your spending is the average of your five closest friends?