Looks Can Be Deceiving

Let’s start with an entertaining story.  While grocery shopping with my 3 boys the other day, I ran into a friend from church.  Her first question to me: “What happened to your forehead?”

For those who don’t know me, I am pretty uncoordinated.  So clumsy, in fact, that I was bending down underneath a table at my parent’s surprise 40th wedding anniversary party and came up, hitting my forehead at the top.  It hurt badly!  However, my temporary frustration quickly subsided after looking around the room … besides my immediate family, everyone traveled from afar to attend this party.  I shrugged it off and continued on with the party, forgetting it was even there.

Six days later at the grocery store, the bump and bruise looks worse than ever.  But on the inside, I’m fine.  This outward sign of distress is clearly not cause for alarm.  

Looks can be deceiving.

In the financial realm, this concept rings true too.  Someone can be driving a BMW, Mercedes, or other luxury car but also have loads of debt.  On the opposite extreme, you may find a multi-millionaire in her 70s who lives in a $250,000 home and wears the same clothes from 20 years ago.  We each have choices when it comes to money.  How we project those choices outwardly has no correlation to what is happening internally.  

This may be unpopular, but please resist the temptation to “Keep Up with the Jones”.  A few years ago, while working at the multi-family office with very wealthy families, I bought a leather Michael Kors purse to look impressive around clients and colleagues.  Purchased the purse for under $100 on clearance and still wear it daily simply because it has held up nicely.  But if you look more closely at the purse, you’ll see frays at the top from me turning it inwards -- so it won’t show “Michael Kors”.  After leaving the multi-family office, my priorities changed.  It is no longer about looking impressive to others; rather, functionality wins.  

As you consider your family’s budget, please do not worry about what other people think.  Do not reflect too much on how you’ve spent hard-earned money in the past.  Prioritize the items that matter to you now.  Want to send your children to private school?  Allocate that amount right away.  Is charitable giving a high priority?  Set this dollar amount early or consider moving it from the Discretionary to Fixed section of the budget.    

In the next blog post, we will focus on the Detailed Budget.  Since this is different from the simpler Envelope Budget, it takes a little bit of preparation and readiness.  Analyzing past spending patterns through a free tool like Mint.com may be helpful if you do not have a clear vision of ongoing, historical expenses.  However, I really urge you to look at the budget with a fresh set of eyes. Envision your goals and assess how your spending may require modification to reach these goals. Better yet, consider using this comprehensive budgeting guide from Moneymunk.

Suppose you have an 11-year old daughter in public school wanting to attend a private high school costing $12,000 annually.  That is a dramatic shift in future needs!  See if you can tweak other current expenses and start building it into savings goals now.

Another example?  Let’s say you want to travel more as a family and need to “find” another $500 within the budget.  Cut your weekly Starbucks purchases from three down to one.  Voila!

Mindset is everything.  Appearances don't matter.  You CAN pave the way to a brighter financial future for your family!

Forever faithful,

Deb Meyer, CPA, CFP®


P.S.  Comments are always encouraged and welcome.  Please share a personal story of how you managed to reconfigure the budget or how appearances can be deceiving.


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