Have you ever felt that dieting and managing your money seem to have a lot in common? For me, it’s not because they both have to do with “self-control” or “denial.” Instead it’s because they both have a lot to do with our overall feeling of well-being.
That connection between our sense of personal well-being and our financial well-being isn’t always touched on when it comes to financial planning, but recently I read a book by a financial author who gets it: Dave Chilton.
If you haven’t heard of him, Dave Chilton is the author of one of the best-selling Canadian books of all-time The Wealthy Barber, and its 2011 sequel The Wealthy Barber Returns. He was also one of the “dragons” on CBC’s Dragon’s Den for three seasons.
Chilton not only has a sharp eye for an exciting business deal, his writing on personal finances demonstrates that he gets that there is more to money management than dollars and cents. Reading his book The Wealthy Barber Returns, I realized that Chilton understands that money management is also about dollars and sense – our sense of selves, our sense of our place in the world and our sense of gratitude.
My favourite chapter in The Wealthy Barber Returns is titled “Four Liberating Words.” In this chapter, a friend asks him for advice on controlling his spending, noting that his income can’t keep up with his lifestyle, thanks to invites to dinner, to play a round of golf or go to a hockey game. Chilton’s advice to him is straightforward, “Sometimes when people ask you to do something, you’ll have to reply, ‘I can’t afford it’."
His friend, surprised that that’s all the advice the best-selling author has to offer, agrees to give it a try. A month later, Chilton asks if he wants to go for dinner. “I can’t afford it,” his friend replies. Chilton’s friend goes on to explain how liberating it has been to start using these four words, and what a relief it has been not to feel pressured to participate in things he can’t afford.
It takes courage and a strong sense of self to say these four words. It’s saying to friends and family, “this is where I am in my life, these are my priorities and these are me boundaries.” That’s not always easy at first but as Chilton explains, it’s an acceptance of reality and using these four words is generally accompanied with a deep sense of relief.
Chilton also points out that when we spend money, we’re often attempting to “buy” status – an effort to cement our place in the world. So many of our purchases are made with the aim of making a statement: “Look at me, I’m worthy,” he writes.
I think we have all found ourselves giving into the temptation to buy a beautiful piece of clothing or the latest tech gadget because someone we admire has it or when we’re feeling a bit down on ourselves. After all, it’s not called "retail therapy" for nothing, but it’s a misguided and costly approach to establishing your worth in the world.
What’s the solution? Chilton, who is after all a personal finance expert and not a self-help guru, stops short of outright telling readers to "look within," but he does quote writer and philosopher Alain de Botton who says (loosely paraphrased) the best way to avoid retail therapy is to try to acknowledge and understand it.
What would it feel like if the next time you felt the urge to spend money you couldn’t afford on something to keep up with your friends or boost your self-esteem, you instead stopped; took a breath; and said to yourself “I have enough, I am enough?”
Your financial well-being would certainly grow and I have a hunch your overall well-being would too.
A big part of the problem is that we are “consumed with consumption” – the title of another chapter in The Wealthy Barber Returns. “Nothing is ever enough. We want more. And when we get it, we want more yet again,” Chilton writes. He notes that not only do our material quests sabotage our financial future; they also impact our enjoyment of today. We get possessed by possessions, he says. The antidote is simple: perspective.
We’ve lost sight of how fortunate we are. We live in a safe, prosperous and beautiful country. The technology in our mobile phones is more powerful than the technology used to first send a man to the moon. Compared to other nations, even to the kings and queens of wealthy empires just decade ago, we have it good, he points out.
Having that sense of perspective leads to gratitude and reduces the focus on what we’re lacking. “That goes a long way toward controlling spending,” he writes.
I don’t want to give you the wrong impression. The Wealthy Barber Returns also offers plenty of concrete advice on managing your money and planning for the future. Few personal finance authors on the market have so successfully blended humour, financial expertise and common sense to improve Canadian’s financial literacy. But for me, it’s his awareness of what motivates our spending decisions that really makes his book a helpful tool to achieving financial well-being.
Kathy McGarrigle is Chief Operating Officer for Coast Capital Savings.