Blog – Page 13 – Mark Noldy

In a previous article, I mentioned money dials. At least a few people sent questions to questions@marknoldy.com. What follows is my best attempt at explaining money dials So here goes... What are money dials? Ramit Sethi coined the term money dials in his best seller I Will Teach You To Be Rich. This is on my recommended reading page. Money dials are our personal finance hot points that allow us to live our rich life. Ramit Sethi describes money dials as personal finance areas where we have a natural tendency to spend money. Look at your spending habits over the past few months, and you will probably see a pattern of spending that reveals the areas of your rich life that are important to you. That is, you will learn your money dials. Living your rich life - which is what the author calls it - is the goal learning bout your money dials. Most individuals have a handful of different money dials. What does Ramit say? The goal is to learn your money dials. Then... spend lavishly... And guilt-free... on those things that are important to you. In the meantime, you will be cutting mercilessly on the things that are not important. He says to do this to move toward what he again calls your "rich life." Here are the ten most common money dials. Naturally, there is some overlap. Health and FitnessRelationshipsConvenienceSelf-improvementExperiencesLuxuryTravelGenerosityFreedomSocial Status Health and Fitness Some people spend as much as $199 a month on a cross-fit memberships. Maybe another $250 a month on supplements. This is a health and fitness money dial. So spend lavishly without guilt while cutting mercilessly in other areas of your life. Chiropractic care also falls into the Health and Fitness money dial. To others, spending like this on health and fitness may seem nuts! But it's not their money dial. It's yours! Get it? Let's check out some other money dials. See if you relate to any of them. Relationships For some, no dinner is too expensive. No proposal too extravagant. No baby reveal too creative. This is a relationship money dial. I think this money dial can overlap with the Experiences money dial. I keep seeing this about the money dials. There is a lot of overlap. Convenience This is a huge money dial for Carol and me. We used to have Home Chef delivered to the house weekly. (Then the pandemic screwed them up...) With something like Home Chef, no grocery shopping was needed. Just cook what was sent. I also don't mind spending an extra buck or two by going to my locally owned hardware store, Horn's for my needs. It's closer to my home, I can immediately find a staff member to help me, and I avoid the long lines of the big box. Having a house cleaning service also falls into this category. As they say, time is money. Time I don't spend cleaning my home is time I can spend doing something else like writing these articles or making YouTubes. Self-Improvement The self-improvement industry is a multi-billion dollar industry. If you read a lot of nonfiction or participate in premium online courses, this may be one of your money dials. Fortunately books are relatively inexpensive. As any student can tell you, my "grab desk" is strewn with all sorts of reading material for them to borrow. I try to share self-improvement ideas that I like with classes that I think should find it beneficial. Experiences (see Relationships above) When you're on vacation, do you spend an extra $500 to swim with the dolphins, go zip-lining through the jungle, or rub elbows with celebrities on a yacht? These are positive experiences for those with this money dial. I think this one also overlaps with travel. Luxury Do you love to drive a nice vehicle, like an Audi or a Mercedes? Have you ever flown first class? Do you prefer to drink Heineken or Amstel Light? Or maybe you love to go for manicures, pedicures, and massages. These are luxury items and services. This is the luxury money dial. Travel Maybe you've been to every continent on the planet? Backpacked across Europe? Climbed the ruins at Machu Picchu? Do you just love visiting exotic locales? The beach? The Caribbean? Travel may be one of your money dials. So don't fret about booking that expensive river cruise! Spend lavishly if this is your money dial. (This overlaps with experiences.) Generosity Many individuals get joy from sharing God' blessings. GoFundMe campaigns for down-and-out friends. St. Judes and Shriners for sick children. Folds of Honor for gold star kids' educations. SPCA for the puppies. You name it. Donations to these places indicate a generosity money dial. Freedom Freedom is just what it means. The ability for someone to do what they want when they want is one of the most common money dials. The FIRE crowd (that's Financial Independence Retire Early) wants freedom more than anything. These (typically) millennials are living frugally and investing massive amounts of money (often more that 50% of their take-home) to achieve freedom. Social Status People who join country clubs, social organizations, etc. are turning up the social status dial. There is overlap her too. Anything that is bought for status (BMWs, McMansions, etc.) are controlled by your social status money dial. Leisure (my 11th bonus money dial for you!) Let's say someone loves watching movies. They may subscribe to premium channels on cable TV (HBO, Showtime, etc.), multiple streaming streaming services (Netflix, Hulu, Sling, etc.), and have memberships to the local cinema ale house. The leisure money dials is all about resting, relaxing, and escapism. Conclusion Knowing your money dials will help prioritize your spending and budget. As Ramit says, spend lavishly and guilt-free on your money dials, and cut with a vengeance in other areas. People can usually identify 3-5 money dials, although there are those living in la-la land that want to have their cake and eat it too! So choose what is important to you and eliminate (or drastically reduce) the rest.