October 15, 2018
I have just found out that I spent $138,538.37 at Publix, $61,429.08 with Georgia Power, and $39,142.03 with ATT. At the same time, I fueled up at BP Gas to the amount of $24,289.47 and handed over $15,969.37 to CVS. You thought you were a big spender! Now before you call me an irresponsible spendthrift, I must tell you that these expenditures took place over the last 20 years. The figures came to light to me as I celebrated my platinum anniversary as a user of Quicken, the financial software system we use to manage our family finances.
My world looked a lot different back in 1998. I did not know then that my career would culminate in advising families, but I did understand I was working for the most important family I had – mine! At that time, I was enjoying my life as a capital market professional working for a top Wall Street firm until a fateful day when my new boss came to Atlanta from New York. He told me that the firm no longer felt the need for an “Atlanta presence”. I walked out of the meeting with no job and the realization I need to quickly understand where we were spending our money. Quicken was the first purchase I made as an unemployed worker. I could no longer afford to be in the dark about our spending.
Our family’s chief technology officer (my wife) soon took on the responsibility of tracking our expenses. She diligently captured all transactions whether they were by check, credit card, debit card, automatic draft or cash. And so, I am now able to take a nostalgic look back at the 20-year history of our spending. I found the results illuminating, and even a little surprising.
We have paid money to over four thousand different payees from 1-2-3 Stitch to Zoo Atlanta. Some large expenditures, like those for college and home renovations, were planned. Others have accumulated through regular life to the point where the numbers are hard to believe, such as the $3,698.05 spent at our family favorite Mexican restaurant, or the fact that we have written checks to forty-nine different doctors.
My short-term New York boss helped me understand that the way to build wealth over time starts with a simple discipline – spend less than you make. When I ask families considering their retirement plans how much they spend, the answer is often far from precise. I never ask this question to be judgmental, but to start a dialogue which emphasizes the power of knowing where you spend your money. The freedom and comfort that comes from this knowledge is very liberating. With knowledge, comes clarity.
We naturally worry about our health, our children, and our money. These worries can consume us. If understanding your spending helps eliminate a major worry, it strikes me that one of my forty-nine doctors would suggest it’s a good thing.