Thursday, July 31, 2008

What Are You Embarrassed About?

When you put your financial life out there in a blog like this, you have to be prepared to accept lots of criticism. You'll get nice, encouraging comments too, but often people will say "why would you spend so much money on that" or "why don't you donate more money to charity" or "why did you make that stupid investment decision?"

I have never tried to portray myself as some kind of financial expert on this blog. I am not perfect, I am not always particularly frugal, I am not well-informed about many aspects of investing. I make good decisions and bad ones. The one thing I know I do well is to live within my means, but even that doesn't necessarily mean I am saving as much as I'd really like to for a secure retirement.

In the context of the personal finance blogosphere, I often feel a bit abashed about revealing certain things I've done. It's not like I'm writing some kind of trainwreck blog where I spend like a madwoman and laugh all the way to debtor's prison, but sometimes I read other people's blogs and I think, wow, they are much better at pinching pennies than I am, or wow, they really seem to have a very informed strategy for picking mutual funds. Meanwhile, I'm just bumbling along trying to make things work while still spending over $20 a month just for a storage locker at my gym so I won't have to carry certain items with me each time I go, or blowing thousands of dollars on a vacation trip. Maybe "blowing" is the wrong word to describe spending money in order to have a wonderful, memorable experience, but some people will surely disagree with prioritizing that over an equal amount spent on charitable donations, or directing the money to extra retirement savings given what the market is doing to my 401k lately. I sometimes think it was crazy myself!

When you think about finances as much as I do, it's easy to second-guess yourself and question your own decisions, and when criticism is aired in this public forum, it can raise the level of doubt, leading to a certain level of embarrassment. But you don't have to blog to feel that way-- do you ever feel embarrassed about your financial actions and decisions?


Heidi said...

I am embarrassed by credit card debt. I chose not to live within my means for quite awhile (while I was a student, which leads me to my second embarrassment - the massive amounts of student loan debt I have).

I figure by being honest about my mistakes I can serve as a cautionary tale to those without debt and a 'how-to pull yourself out of a financial hole' guide for others in the same boat.

Erin said...

I don't know if embarrassment is the word, or if it's actually regret, but either way I'm not happy with my only debt - Student Loans. I had a high school teacher that drilled it into my head that student loans were fine. So I insisted on going to the best university in the country for my major and just talking out loans. With $55,000 in loans, and a $400 a month payment I really wish I would gone to community college for two years and transfered in.

Taylor said...

I am embarrassed that I dine out too much, and rarely take my lunch to work. I feel like I should always have enough energy to cook a meal or make a sandwich, however simple, shouldn't I? Despite working at a 6 figure job (litigation attorney) and managing three rental properties?

Middle Class Hick said...

When I was a Junior in college, I took a college course (Business 101, an elective for my major in Computers). I may not remember a lot about that course, but one thing stuck out in my head, and I actually live my life by it. The concept of "Sunk Costs". A sunk cost is something that the money is already spent and you will not be able to get anything back from it. The professor drilled into us that when we make a business (or in your personal life) decision, if there are sunk costs, ignore them. Don't throw good money after a sunk cost (This product doesn't work, but we already own part of the suite, so lets buy the rest of it). Don't be afraid to walk away from a sunk cost (just like a sunken ship .. it is at the bottom of the ocean .. you might get something from it - but it might be more expensive - so just leave it be).

So my point is that when I spend something - I don't dwell on it. If it made good sense at the time, then I can only say "such is life". Have I been taken advantage of? Yes. Do I have things that I would not have bought knowing then what I know now? Yup. But you cannot dwell on those things as you cannot change them.

So what am I embarrassed about? Well if someone looked at my credit card statement and saw that I spent about $600-800 bucks a month on food, they would have their jaws hit the floor. Guilty pleasure. My son and I eat out a lot and I eat out every day at lunch. I get away from work - get an hour of stress free time - and I don't have to rush in the morning to make a lunch that will hold me over until dinner. I pay off my credit card each month - so it is not something that I cannot afford, however, something that could be spent on something else.

I am really not embarrassed but more depressed that I have not made any of my savings goals this year. I was forced to move last year (my parents moved in with me - and a two bedroom house - with me and my son already there was not going to work). I had to spend 8 grand to get the place ready to sell and it still has not sold. So I have been paying two mortgages, utility bills, etc. so that on top of the 8k I spent already has killed my retirement savings for 2008. Once that turkey is gone, I can get my savings back to what I want it to be.

So .. I guess that is my embarrassing story .. because I have not sold a house in almost a year (with a real estate broker for a sister and a home construction company owner for a brother). Before anyone asks .. yes I listen to their advice and do what they said (thus the 8k I spent on the place before I put it on the market) and have priced it right for the market. I am in computers - not home construction :)

stackingpennies said...

I blog, and I get a lot of comments on my rent. To anyone not in a high cost area, it sounds like a fortune (I know, because I came from cornfields), and they assume I'm living in a luxury high rise (sooo not true). I feel defensive about it, because people think I didn't make a responsible desision, when in reality, my options were limited.

I don't really donate to charity, and I don't feel bad about it.

asgreen said...

I do. Starting a pf blog has helped me focus on my goals and I love it. But at times, after I make a bad decision I do get embarrassed and sometimes I don't want to post about it. However, I find "coming clean" helps me not make that mistake in the future.

Peachy said...

As long as you can learn from mistakes, that's all that counts.

Kate@LivingtheFrugalLife said...

I guess in some ways I'm embarrassed by my rather abrupt financial about face when we bought our home and got our first real taste of debt with a large (though not irresponsible) mortgage. Suddenly, I shifted into frugal mode and started watching every penny, because I hate having that debt hanging over our lives. It's almost as if I found Jesus and became a born-again.

I try to keep my mouth shut in real life most of the time, because I know no one wants to hear it. But the changes have been profound and revelatory for me. So I'm sorta kinda embarrassed by this hidden fervor in myself, and there is also some chagrin about the way I spent money before. Though I only had a few years when I carried credit card debt, and some student loans, I never put aside enough money in savings. I spent money in ways I wouldn't dream of doing today. And I knew in my gut even back then that I wasn't making smart choices. I just quashed the feeling and carried on.

I don't think we frugality bloggers should be embarrassed though. We're just ordinary people, trying to buck the spendthrift trend, and being fairly honest about it. I've yet to encounter a frugal blogger who sets themselves up as an model of perfection or an absolute authority. Trying to help others with either our successes or the lessons of our failures is a worthy pursuit. Let the naysayers fall by the wayside, say I.

Emily said...

I quit reading most personal finance blogs for just that reason. I think I was reading them to find reassurance that I was doing okay, and of course that's not what I found. Instead I read about how no matter how much you save, there's always someone else out there who is raising a family of six on $27k a year while owning their house free-and-clear and saving Western Civilization at the same time. It made me feel guilty that I wasn't trying as hard.

But their goals aren't my goals, and I'm pretty happy with the goals I picked for myself, as it happens.

I still read this one because I like the stories.

I think just as one aspect of financial security is letting go of the need to "keep up with the Joneses" so one aspect of financial peace may be letting go of the need to "save like the Smiths."

Anonymous said...

I donated a lot to charity (especially a NPO I like) , especially these two years, not beyond my ability though. Recently I had a miscarriage and lost my baby. I was so unhappy and kept asking "why me", thinking I have done nothing wrong, I always help others when I could....It should not happend to me...Of course I found no answer.
Donation to charity is a noble behavior. But sometime we might trasfer unconsciously it from economical norm to social norm. We might feel good about it, but don't let it judge your life.

Anonymous said...

I hate to hear that you ever feel guilty about the spending you blog about! Lots of PF bloggers I read are saving way too much, cutting corners, and missing out on life. Balance, folks! I know that I spend "a lot" because I have a nice gym membership, I buy high quality clothes and organic food, and I travel whenever I can. I also spend a lot of time cooking and working out. Should I use my resources differently? Never, never, never, as long as I'm happy with and responsible for what I'm doing.

Hazzard said...

There's a reason they call it "personal" finance. :)

I have felt exactly the things you have mentioned. I ended up removing my net worth figures because friends discovered my blog. I still find myself feeling embarrassed about some of the purchases I've made. I have finally kicked my moronic car purchases which has helped me a lot but I still buy electronics etc. The key here is, and you already mentioned it, living within your means and achieving your goals. You could always save more, just like I could, but then you'd be missing the whole strategy of living your life in moderation. I've been reading your blog for a long time and have never once questioned your purchases in my head. I have seen how disciplined and automatic you are with your saving and investing and know that you spend as much time as I do deciding whether to make a big purchase.

MEG said...

I think it's easier to feel embarassed - or guilty or whatever - within the PF blogosphere than in "real life" as a whole. In real life, there are a lot of things that matter, a lot of varied priorities, a lot of perspectives and goals and habits. In the PF world, everybody is incredibly focused on maximizing their net worths and incomes, pinching pennies, etc. above all else.

If I read diet/health blogs all the time, I would feel really really bad about the fact that I have not prioritized working out or eating well AT ALL over the last month because I'd be comparing myself to intensely focused dieters and exercisers. Instead I feel moderately ashamed that in the last month I spent $1,200 to obtain one designer handbag and pair of sunglasses.

Come to think of it, maybe I should start reading a few health blogs...

dollar incense said...

For a long, long time I felt embarrassed about my financial situation (high cc debt, living paycheck to paycheck, no 401k, etc).

I woke up one day and realized that the shame was keeping me from feeling enabled to change the situation. So I started telling my friends, and I started to take steps to change the situation.

There were a lot of friends in the same situation I was, and we've been able to encourage each other by letting go of the shame.

43k in cc debt last Oct has turned into about 6k today. :)

Eric said...

I sometimes feel ridiculous about my rent in Manhattan, which is over half my take-home monthly pay. But the nice accommodations (for a studio) and the three-block commute is worth it to me.

The other thing I get mocked for is going out for a gourmet meal (e.g. $300+) once a year or so. But it's such a singular experience that it's worth the occasional splurge to me, although very few of my friends see why.

electronicvictim said...

I am embarrassed by the fact that I have investments in a large brokerage firm that sells loaded mutual funds. I am embarrassed by the fact that I have some money tied up in a variable annuity inside a roth IRA. To top it off, I am embarrassed by the fact I know I should take money out of this and put it all in low cost index funds, but I'm afraid to pull the trigger.

Doctor S said...

What am I embarrased about? I dont think there is enough space here for an adequate answer but I can throw out the shortened version.

-Overall amount of credit card debt (now payed off but still eats at me).

-The fact I did not get a part time job during college to help with tuition, now facing 100k+ in student loans. But I am managing.

-The amount of money I USED TO SPEND going out and drinking, because majority of those times I drank so much I do not even remember what I spent it on. But thats college and its in the past, i hope.

Great post though, everyone has something they are a wee bit bashful about!

Anonymous said...

Like Heidi, I am embarrassed about my credit card debt, which is actually now personal loan debt because I took out a loan to pay off the debt. For me, this was a good decision (much lower interest!) and I'm chipping away at paying it off. I also now have a very nifty system for tracking my day-to-day spending, so I know running up the cc won't be a problem again. I have learned from the mistake, for sure.

I also have student loan debt but I'm not embarrassed or troubled about that, probably because 1) most people I know have it, and have much more than I do and 2) I incurred it to get an advanced degree which has not only made me a better teacher, but also caused my salary to go up considerably.

I feel embarrassed about the personal loan debt because I feel that that spending was frivolous, wasteful, and indulgent while my student loans have provided me with valuable knowledge and a bigger paycheck!

Anonymous said...

I am like the person with the mortgage who is a little embarrassed about their frugality. My friends are all spenders and a lot of times I feel cheap. When I was in grad school I had an easy excuse. Now when I am invited out to bars and expensive restaurants it is hard to know what to say because I basically don't want to waste all of that money on frivolous stuff.

Another Personal Finance Blog said...

I actually am finding myself getting less embarrassed about how I handle money since I began blogging. Before, I would have rather paid more money than make a fuss about how much I owed when splitting a check or prompting someone pay me back for an expense I covered. I have more ownership now over my money since I have taken more interest in it, and I feel empowered by the knowledge I have gained.

Sara said...

Sometimes I feel embarrassed, and maybe a little guilty, about my car. I am leasing a new luxury car.

I consider myself a pretty frugal person and I read a lot of personal finance blogs for ideas on saving money, and almost all of them think buying a new car is a huge waste of money ("Buy a late-model used car!"), and leasing a new one every 3 or 4 years is even worse ("Buy a Honda or Toyota with cash and keep it for at least 10 years!"). I have actually had people (not PF bloggers) tell me I'm stupid for leasing a new car.

I put a lot of thought into my decision, and I felt that leasing a new car is best for me, and it is one of the few areas where it's worth it to me to spend more money to get something I love. I can afford the payments, thanks in part to my frugality in other aspects of my lifestyle. Still, I sometimes feel like people are judging me for my extravagance with cars.

Lisa said...

I am embarrassed about the fact that even though I have come through a 3 year Chapter 13 bankruptcy, repossession of my house and a very hard struggle - I still see dealing with my finances as a chore rather than a choice. I am just a big baby!

KiddFresh said...

I'm embarrassed that instead of paying off credit cards I go to Atlantic City to try and "double up" thinking I'll be able to pay them off faster.

Gord said...

I think when I was a lot younger and reading all these comments I'd have plenty to be embarrassed about. But the truth is, if you have defined your values and are convicted by them, then there is nothing to be embarrassed about.

I'm so impressed by those of you in your 20's 30's and 40's that have got your finances in order. When you find yourself facing retirement, having lost some of your pension to an exspouse, you wonder why it took so long to wake up and face reality. Had I been more productive and had a higher net worth, cutting it all in half wouldn't have hurt much. When Donald Trump payed his ex 130 million, it didn't really hurt him and I should have taken a cue from that.

Now, if I knew what I should be doing and refused to do it, then I deserve to be embarrassed. But I probably wouldn't be. I'd be oblivious.

If I could pass one thing on from my mentor, it would be this. "Discipline weighs ounces, regret weighs tons." Jim Rohn

SandyVoice said...

I am embarrassed that I have credit card debt again, when it took me so long to get out of credit card debt 19 years ago. I'm embarrassed that, even though I'm an intelligent adult who knows what she should be doing, I'm not always able to follow my own advice. I believe that, logically, intelligent people should have more self control, but logic doesn't seem to have much to do with it. It's easy to make plans to do the right thing, and it's easy to start off well. It's not so easy to continue when the excitement of a new resolution has worn off, especially when "stuff" comes up, like an illness, or a new apartment, or, or, or ... I know there's no point in being embarrassed -- it doesn't help you fix the problem, and it might even make it worse -- but I can't seem to help it.

GrnMtnGirl said...

I'm more often embarrased for coworkers who can't understand why we agonize over each and every expense. Their comments include "Just use your credit card" and "Rent is just wasting your money" when those comments are NOT true for us.

However, friends and family sometimes make me feel embarrased because we have to say "We can't afford that" and they know what our jobs (and thus roughly what our salaries are) and they know what they "afford" and it makes for a really awkward explanation.

We stick to a budget. We save a lot of money for retirement in that budget. We have a fully loaded emergency fund.

They don't really want to hear that though. So, if we could find another excuse rather than "We can't afford it" then I'd prefer that.

RDS said...

I love Starbucks.

I am generally quite thrifty, am well on track to funding my retirement and my daughter's education, have adequate cash reserves, and have no debt but my mortgage. So, my occasional splurging on lattes and mochas isn't a financial problem. That being said, within financial responsible circles beating up on Starbucks and $4 lattes is such a popular activity that I am ashamed to let others know of my indulgence.

Now you know my secret.


Anonymous said...

I'm embarrassed to be 40 years old and not a home owner.

I should have bought 10 years when my friends were. I had no interest in the responsibility of it; I was enjoying just living my life without a huge commitment like a house.

I eventually 'got it together' so to speak but the market went nuts and now I can't afford anything. I stay in my tiny, yet adequate apt in a great neighborhood, because I dont want to "waste" $300+ a mn for place that is nicer - because I should save it in my house fund.

I am still embarrassed...even though a great deal of my friends bought with barely any money down, have zero retirement savings, and keep racking up debt to deal with house issues. I'm the boring conservative one - min. of 20-25% down payment, large EF house fund, 15+% savings every pay, buying cars outright so no car pymt, etc. Owing a lot and owning nothing scares the crap out of me. And regardless of what any bank tells me - I know what I can and cannot afford a month - esp. with taxes (high here) and insurance.

For now, I just keeping saving for that eventually house. If I had gotten smarter about money sooner, I'd be able to pay cash for a modest one - something I kick myself for often.

pkzcass said...

I am not a PF blogger, and this blog is the only one I read. I am amazed at the things people are embarrassed about here. CC debt...yes, I understand your embarassment. But student loans? If it hadn't been for grants and student loans, I'd have never gone to college. My parents couldn't afford it. And I wasn't a good enough student to get a scholarship. And being embarassed about staying in a smaller apt because you'd rather put the extra money into a house fund? That is something to be PROUD of. Everyone's frugality and financial security I've read about here is something to be proud of, not embarassed. And Madame X, YOU should be proud of your financial situation, and also the fact that you could afford to take an extravagant vacation without going into debt.

Simply having the financial awareness and then taking positive steps to correct a bad situation is something that everyone who has posted hear should be proud of. You all inspire me, and make me feel like I'm doing the right thing when I debate long and hard before making a purchase.

Anonymous said...

I'm embarrassed that it took me until my late 20s to realize I was in over my head financially and needed to make changes. I'm embarrassed that I always assumed "things would work themselves out."

But here I am in my late 20s, making $37k with very little in the bank, practically nothing saved for retirement, and scared stiff that one emergency will set me back too far.

I'm also embarrassed that I can't seem to stop spending so much money on dining out and drinking with friends. Wow those beers add up fast!

What I'm not embarrassed about is my line of work (nonprofit social service sector) and my volunteerism (20+ hours per week running a volunteer nonprofit I co-founded). My pay may be low for my age and location, but at least I can say my job helps people and I'm not in some soul-sucking career making money for "the man."

Anonymous said...

I'm embarrassed by the amount of our mortgage - it is almost 7 figures. We purchased a 2 family home and rent out one floor of it so we saw the house as an investment too. Neither of our parents are in the NYC area and would not understand how we could possibly spent so much on a house that needed so much work.

Anonymous said...

Oh Yeah! Right now I am horribly embarrassed by the huge amounts of stuff (clothes and shoes that have never been worn) I'm bringing to Goodwill. I just bought a house and am determined not to have stuff "stored" in the garage, but I swear some of this stuff doesn't even look familiar.

SF Money Musings said...

i'm embarrassed by my frugal habits, saving the ends of vegetable trimmings and sorts for soup instead of throwing them away. we have no compost bin at the apt, avoiding paper towel purchases, green living habits and being anal about turning the lights off in the hallway my roommate leaves on sometimes without thinking twice or reusing ziplock bags. im embarrassed of seeming too frugal with bringing my lunch - a can of sardines, a piece of bread and some vegetables are my no-time-to-literally-cook lunches that i grab. most people would just go out to eat ... i mean a $5 subway sandwich isn't a big deal right?

i'm embarrassed my room and my apt have bare bones furnishings and decorated sparesely with old concert posters and flyers. i haven't purchased a bed frame and just yesterday acquired a nightstand and a nice looking lamp for free. in my kitchen you wont see fancy art but printouts of photos i took from trips and a nice long dining table/chairs that i acquired for free on craigslist. most of my dishes/utensils were mismatched given to me by my gma until someone nearby my apt unloaded their studio and gave me a set of bowls, dishes,plates, cups and brand new pots/pans.

but i dont think its so terrible. my friends cant tell if the bowls/utensils are mismatched. and i waited for a few months to see how my roommate situation played out before stocking up on redundant items. why spend money on some of those things when people are giving it away all the time?