You may be thinking, “It's only a damn coffee,” it's really not that serious, sir. Well, let me tell you that you don't know what you're talking about. I mean just look at this beautiful creature…
This is nothing short of the modern day form of ambrosia. For those of you not in the know, ambrosia was the drink of the Greek gods brought to Mt. Olympus by doves that granted immortality to those who were lucky enough to take a sip.
Now why would you want to give this up???
Before I lose you, envision the Caramel Macchiato as a metaphor for the fun and exciting things in your life. It seems that fun and excitement are often forgotten in the world of personal finance. I'm tired of blogs, books, and professionals that talk about saving for retirement and being frugal, all while forgetting about the life you need to live in between.
I kid you not. Blogs and books these days always talk about spending less on something insignificant in order to change your life.
I wish bloggers would cut it out with that crap. Seriously! I'm a huge fan of the happiness list and the 50-20-30 rule. I've lived my entire adult financially savvy life under the guidance of the 50-20-30 rule.
The 50-20-30 Rule
The rule is simple: Live on 50% of your income, save/invest 20% of your income, and spend 30% of your income.
Now, this is a general guideline, and I don't care what you cut out to meet the ratios, but make it happen. Believe it or not the most important number in the 50-20-30 rule is the 30%.
Why? Well, you can't cut out all the fun in your life to come off as financially savvy. I repeat! Do not cut out the fun in life just to save a few bucks.
Remember this from the movie Forrest Gump?
Well, I know exactly what you're going to get if you give up all your happiness to save a few dollars for a mythical retirement. You are going to get a life full of misery and missed experiences. Forrest Gump lied!
You need to identify what you're not willing to give up. Exchange the Caramel Macchiato for whatever that tickles your fancy. For example, your Caramel Macchiato may be hair care, nail care, education, cars, vacations, hell, strippers, even! What makes you happy?
Personal finances are personal. Remember that!
Once you have your “not going to give it up” aka happiness list cut out all the stuff that doesn't matter within reason taking into consideration the opportunity cost.
What do I mean by this? Well you don't have to have the best of everything for the things you do not care about. For example, if you do not care about cars, why are you buying a mercedes? If you could care less about shoes, why are you buying Allen Edmonds or Alden?
Be ruthless in your approach, and have a plan for generational wealth. Now, I can expound upon the generational wealth bit, but that will take away from this rant about Caramel Macchiatos, and I do not want to take any light away from the drink of the gods. However, being frugal for the sake of frugality is pointless and will not make you wealthy or happy.
I'm not speaking from a position that I do not know… I grew up 2 cups of oodles and noodles from poverty and was able to amass a net worth of 1 million dollars by the time I turned 30.
I would not change having fun with 30% of our money for the world. You're only going to get older ya know, so don't give up your Caramel Macchiatos or whatever else makes you happy!
What about You?
I know I'm going to raise some hackles with this one, so tell me what you think about the 50-20-30 rule! Also tell me what's on your happiness list. What are you not willing to give up in your budget?
Dominique Brown is a husband, father, financial planner, author of the book How to Fix Your Credit, author of the blog Your Finances Simplified, owner of S&D Capital Holdings and a landlord. Mr. Brown’s advice can be found on the Huffington Post, Business Insider, Yahoo, Madame Noir, HR Block, and Ebony Magazine. He holds a bachelor’s degree from George Mason University in IT security. He wanted to be a computer scientist at one point in his life. However, after his mother faced misfortune after a divorce he switched focus to financial planning in order to ensure his family will have financial independence and generational wealth. His hobbies include posting too much on Facebook, daily pictures with his daughter on Instagram, creating hilarious recaps of trashy reality TV shows, playing too much, and wearing suits.
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