Here’s one reason why I love English so much: its extensive and highly granular vocabulary. Through its Germanic roots, Saxon influences and heavy French borrowing, the English language offers its users a wider range of words and expressions than most other speakers have at their disposal. Last weekend that fact hit me again like a ton of bricks during a conversation on personal finance with an American.
Without going into further detail, the girl I was talking to made the obvious distinction between “anything” and “everything”, more specifically in the context of affording something you want. Even though the two concepts also exist in Dutch, my mother tongue, they can’t be used in the same way or even sentence – and that’s a pity.
Why, you ask?
Because it denotes a clear distinction in your view on personal finance and because it harkens back to the basic principle behind enjoying a frugal lifestyle. Indeed, I can afford anything I want in life, but I can’t have everything. The anything vs. everything distinction lies at the core of frugality and by extension financial independence.
Let’s take a look at what I mean by that.
At the moment I have a little under €70,000 in the bank, which goes a long way to affording anything I want. Barring some exceptions, like expensive cars or real estate for example, I’m able to purchase whatever my little heart desires: expensive tech, top of the range road bikes, video games – the whole lot.
Here’s what I would love to own at the moment:
- DJI Inspire 1 (€3,500)
- 55″ 4K television (€2,000)
- Marantz SR7009, including B&W speakers (€5,000)
- DSLR and Sony RX100 Mark IV (€2,500)
- GoPro (€500)
- Android Wear Smart watch (€200)
- A whole bunch of Super Nintendo games (€10,000)
- Trek Madone 9.9 (€12,000)
The list goes on and on. Really, I could continue adding things that I would love to own or play around with until my piggy bank’s stomache is all empty. And that’s exactly where the problem lies.
I can have any one or even two of the things on the list above, but I can’t have them all. Yes, it would be great to fly around a bad ass Inspire 1 drone – because, let’s face it, it’s an awesome piece of equipment – but it would be equally great to play around with a GoPro. However, even though it would seem the two aren’t mutually exclusive, they really are.
If you don’t prioritize your spending, especially the non-essential kind, you’ll quickly realize that you do indeed get to enjoy everything you want, but that you’re also starting to live paycheck to paycheck. As you can see, the difference between affording anything and everything could quickly turn into a slippery slope towards financial ruin.
Now, don’t get me wrong. I’m not advocating you forgo all luxury spending, but rather you should ask yourself “is a drone worth it?” In a previous post, I’ve referred to this very question as maximising your happiness. Besides, splurging on things you really enjoy or that add a lot to your lifestyle isn’t a bad thing. I do it too from time to time, like when I bought a GTX 970 graphics card for my PC.
However, even though I wrote that you shouldn’t feel bad when you spend a little cash on things that make you really happy, don’t overdo it. It’s not because you’ve had a great savings streaks the previous months that you should effectively cut your efforts in half by rewarding yourself the next month.
And if you really can’t help yourself, make sure there’s a financial upside to spending a ton of money on luxury items. For example, I managed to bring down the cost of my road bike, one of my more expensive hobbies, by applying for a cycling renumeration at work. As a result, I effectively spent money to make more money in the future.
Where do you draw the line between anything and everything? Do you feel like you can afford anything you want?