For years, our household has implemented a cash poor lifestyle. It’s part of our innate psychology of money. We’ve tried to focus on needs versus wants. We are proud that we have taught our children this distinction. Accordingly, we are operating in a manner to “pay ourselves first.” This includes directing maximum allowable money in pre-tax retirement accounts, such as 401(k)s, 403(b)s, and post-tax Roth IRAs. As a HouFIni magician we’ve been hiding money from ourselves for quite a long time.
Parental Mistakes
Recently, I had a conversation with my children about money attitudes and how I could be a better parent. I know that my own parenting influenced their money mindset. This includes the acting cash poor while maximizing our money rich life. I broached the subject with my children to evaluate whether they think I have been a decent parent. Plus, selfishly, I wanted the ability to correct the error in my ways, if possible, while there is still time.
In raising children I have made mistakes. Not intentionally, mind you, but there are times I know that I have done or said the wrong thing. As a parent, you want the best for your children. On occasion I have pushed too hard. Alternatively, perhaps I have not encouraged them to do or try something as much as I should.
The conversation was revealing to me on several levels.
Cash Poor and An Abundantly Fearless Mindset
Admittedly, my children recognize the cognitive dissonance I suffer when it comes to spending money. My kids are aware we are operating a cash poor household. My children acknowledge that I, in particular, typically lean frugal and focus on needs. However, my children acknowledge there are times that I spend money on things and in amounts that surprise even them.
Case in point, one Christmas, we were on Rodeo Drive. Albeit, Rodeo Drive and Financial Independence (FI) are an oxymoron. Regardless, we had what our family refers to as our “Pretty Woman” moment in the Ralph Lauren store. The juxtaposition of our family scene on Rodeo Drive was ironic for several reasons. Chiefly, several of us were sporting the Ralph Lauren brand when we walked into their store. Further, the virtually empty store made us target rich for a sale customers.
Indeed, we were trying to buy something unique at Ralph Lauren’s Rodeo Drive store. I think one of the Polo Bear coffee mugs I picked up was $125. You are reading that correctly, $125 for a single coffee cup. Granted, it had the Ralph Lauren bear dressed in a sport coat, pants, and a collared polo style shirt. Let’s just say I put that unique ceramic item down with great care. Salesclerks, and I’m sure they are trained that way, did not appreciate our wandering around looking at the merchandise. It’s a darn store and HouFIni was in a spendy mood.
When You Know You Are Being Judged As Not Up To Socioeconomic Standards
We try to act equally with people regardless of their socioeconomic status. Call it a pet peeve of mine. To the point that I often go out of my way on perceived socio-economic status. Don’t judge a book by its cover. More on that in future posts.
Moreover, there’s a fair chance that we had a higher income and more net worth than these Ralph Lauren employees. But that is neither here nor there. The point is that we felt unwelcome at the store. Further, we felt judged as not being up to the socioeconomic standards of the store. I’ll accept the apologies of the Ralph Lauren organization later.
Abundant Money Mindset and Action
Straightaway, we walked into the Lacoste store and ended up spending hundreds of dollars. “Big mistake. Huge!” as Julia Roberts famously stated in Pretty Woman. (If staff was on commission at any of these stores our purchases would certainly not make or break their day. However, the commission earned would have more than covered their lunch. Still, it all adds up).
Before you blow up my e-mail stating “HouFIni, you are a total hypocrite!” The Retirement Police can arrest HouFIni for “operating like an FI idiot!” In HouFIni’s defense, it was two day safter Christmas and I had not purchased any gifts for family members. The express purpose was to celebrate Christmas and to make any purchases on sight. This is a practice that is easier to implement when your children are older and appreciate delayed gratification.
It’s Not About the Money
In fact, I know everything would have been fine with my children without spending money in a store. Indeed, mostly we were making amazing family memories for no cost while we were in Los Angeles. These rich life experiences include walking on the Santa Monica beach. Feeling the warm sand on the bottom of our feet. Or hanging out by the pier at the end of Route 66. We all loved spending time in Malibu hiking and hanging out by the ocean. Our family detour to the Hollywood sign is a vivid lifetime memory. Being in a crowd watching our favorite NFL team onto victory with like minded people in another city. Indeed, this collective experience was not even at the actual game.
Further, experiences such as making dinner at our temporary residence after a long and beautiful day and eating as a family our part of a rich life. Huddling around a smaller television watching our favorite Harry Potter movies each night. Taking a late evening stroll to take in the beach and listen to the tide roll in and out. Catching up with friends and going on an adventure hike in a residential neighborhood that quickly transformed into hills. Watching picturesque sunrises and sunsets.
Benefits Beyond Vacation
Admittedly, there was a cost to arrive at our destination. But once we were there, much of what we actually did cost little to no money. We did not end up at the theme parks or the expensive destinations. Immersing ourselves in nature and people watching was an amazing part of our experience. As Bill Perkins of Die With Zero would say, we were building our “memory dividends.” These memories have lasted us long after our trip and were worth the investment. Additionally, we practice this abundant mindset even when we are not on vacation.
Recognizing the Abundance in Our American Life
My kids did not need or necessarily want anything Rodeo Drive or anywhere else on that trip. It’s part of the reason I will spend money on them at these unique moments. My children have no expectation of it. More importantly, my children understand that they do not “need” anything. They know that while their lifestyle is not lavish by American standards, that they live abundant lives comparatively worldwide. Undoubtedly, an amazing aspect of domestic and world travel with our children is understanding how blessed a life they live.
We believe we live in the greatest country in the world. The gift to pursue financial freedom, religious freedom, are true blessings. We belief in Thomas Jefferson’s beautiful quote from the Declaration of Independence, “We hold these truths to be self-evident, that all men are created equal, that they are endowed, by their Creator, with certain unalienable rights, that among these are life, liberty, and the pursuit of happiness.”
Authentic Experiences and the Abundance Mindset
Lacoste store salespersons took us at our word that we were just looking allowing us to wander without judgement. Further, the staff accepted our statement that we were looking for something unique.
Our Lacoste shopping happened a year prior to the nationwide trend in men’s leather dress footwear having an athletic base. Discovering cutting edge shoes cool shoes, though pricey, is part of memorable trip. More importantly, these shoes felt even better than your normal men’s formal dress shoe. It was a great purchase and these shoes have received many a high compliment. Every guy wanted a pair. We think we helped spread the trend by purchasing multiple pairs that day.
Additionally, when people asked our family where we got the shoes, we had a great story. Wearing the shoes allowed us to tell people about our Pretty Woman Rodeo Drive moment. Additionally, we purchased several other timeless fashion staples which to this day receive positive feedback.
Purposeful Abundance
Conversing with my children regarding our Psychology of Money interactions, they provided more insight. My children’s observations include my spending significant amounts of money ($100’s or nearly $1,000 without checking with my spouse in advance once or twice a year). The feedback includes I do this typically to be generous. However, they have noticed that I rarely spend money on myself in a generous way. To be clear, the financial splurges involving my children typically occur at Christmas or a significant event (graduation, birthday, etc).
I realize to many in the FI community this talk, and level of spending may seem blasphemous. I’m envisioning the revocation of my FI Card or the snapping of my HouFIni Magician wand. In my defense, I’m not going into debt for this type of spending. Further, I am charging it to my credit card to get the points and paying it all off immediately. I’m not spending money on interest for “borrowing” the money. Mostly, when I engage in this type of reckless spending behavior, it is intentional. Gently reframing HouFIni’s crazy actions as “Purposeful Abundance.”
Cash Poor Versus Complete Depravation
What I hear from my children is a message that they are concerned my cash poor psychology of money can have a chilling effect. My children believe acting too frugally actively promotes high strung behavior. Observing that I may have inadvertently numbed my own happiness or levels of desire. I can argue, or you and I can argue, about the recklessness of my spending at such moments. Could one cool gift of significance instead of two to five inexpensive gifts have done the trick?
Am I mortgaging my future with these short term, purposefully abundant generosities to my children, family, friends, or strangers? In fact, 89 months away from FI my family knows I do not believe we can retire today. Further, in our process of Family FI, we have been saving 40% or more money annually. Admittedly, we are likely capable of saving even more, but at what personal cost? We do not want to be on a death march to FI.
100 Month Journey to FI
We are in the midst of our 100 Month Journey to Financial Independence (FI). Admittedly, we are looking to break the golden handcuffs and escape from the Retirement Police. Indeed, we making progress on implementing our Two-Part FI Number. You can check out our Two-Part FI Number progress here. Our Two-Part FI Number strategy is where the personal in personal finance comes in.
We are well on our way, having discovered we are actually Coast FI. Knowing that we are Coast FI has helped our money psychology. We may still exercise being cash poor but we are acting more with an abundance money mindset. Not willy nilly spending on material possessions but focusing on enriching experiences.
*Disclaimer: The content on this video, website, podcast and any blog posts are not intended to be investment or life advice. Readers should consult with their legal, financial, and accounting specialists and spiritual and/or life coaches to provide insight on their personal and specific circumstances as each situation is unique. The videos, website, podcast and any blog posts are written for entertainment purposes only.
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