My mother's interest in money is almost exactly the same as her interest in gravity. She's glad to know it's there, but can't imagine why you'd want to talk about it.
Yet she taught me everything I needed to know to keep my financial life in balance with one word: Value. If you apply that word to all of the purchases you make, chances are good that you'll buy less and appreciate it more.
Of course, value has two meanings.
The obvious one relates to quality at a good price, which is why you'd never see my mom in an American Apparel store buying cheap t-shirts for $40. There's just no value there.
What about the prestige value of that name brand? My mom would wonder what's prestigious about being too stupid to know that you could get a better quality t-shirt at H&M or Target for $10 instead of $40. If that's what your friends value, she'd tell you, you need some new friends.
The more important definition has to do with determining the big things that you value -- the deep soul searching of what has real meaning in your life.
When you contemplate the big value picture, you start asking yourself about the choices you make. Do you want a BMW or do you want enough freedom to take your kids to the park in the afternoon? Do you want the big house or do you want the modest house and have more time playing Monopoly by the fire? In reality, every thing you buy demands work, which demands time, which usually means time away from the people you love the most -- the things that have the most value.
So you ask yourself: what do you value more -- products or people?
To be sure, you need a certain number of products. You need a home to keep your family safe and warm; you need a car to get to work and school. You need food on the table and savings to ensure that those things will always be there. But once you have enough to buy those basics, everything else is a choice between the things you want vs. the things you want more. It's about what you value the most.
No contest for me. I'm happy to buy the ability to take the kids to the park by not buying other things that chain me to debts that I'll have to work more hours to pay off.
When my kids were small, I had them think about the same choice.
For the sake of background: I work from home but found myself so buried in projects that it was hard to spend any real time with the kids. (That's easy to do when you work from home because you never really leave the office.)
I decided that I needed to put the kids on my calendar and dedicate an hour or two in the middle of the day to taking them to lunch or the park or to my mom's house to swim. It was my "lunch hour" and whether it came at noon or 3 in the afternoon, it was time dedicated to stepping away from the computer to take time with the people I value the most.
Once the kids got acclimated to the notion that they were the focus of the lunch hour and could direct what we were going to do, they started asking to go to Disneyland; Magic Mountain; Raging Waters. Okay, I told them. But all those places cost money, which means I'll have to work more to buy the tickets. So we can do those things, but we'll have fewer "lunch hours" because I'll be working more to pay for them. Your choice, I said: What do you want the most?
Fortunately, my children made what I considered to be the right choice. So we spent a lot of hours on swings and slides; throwing baseballs in the backyard and doing inexpensive crafts.
They're grown now. My daughter is in college and my son is in his senior year of high school. I am so glad that we decided that time together is what we value. I have never missed the BMW, but I wouldn't have missed those days at the park for the world.
Better yet, while other people lament about whether they'll "have enough" in retirement, I know I will. Why? Where I live, the car I drive, the clothes I wear -- those are all nice, but not particularly important. I know I will have enough because I have my kids, my family, my friends and that's everything I truly value.
Thanks, Mom. Happy Mother's Day.