Wednesday, March 7, 2018

Personal Finance and Pride

When Sarah and I were shopping for houses, there were some houses that I essentially wouldn’t even look at. I’d look at the picture and then quickly find some reason not to bother with even visiting that house.

Why? Pride. I wanted a house that I would be proud to own and proud to have people come and visit.

Here’s the thing, though: my best friend lives in a very dilapidated house, one that he knew was a complete fixer-upper. It was almost scary to visit him at first, but I still did. Now, it’s looking like a nice house, but even if it still looked beat up, I’d still visit him.

I didn’t think of him as weird or as a lesser person because of the house he bought. I thought of him as my friend, who wanted a fixer-upper to live in.

In the end, it was really my weird sense of pride that drove us to avoid a number of houses in our home search, and it was pride that probably helped us pick the house we live in now.

Pride cost us money. Pride cut off options.

When I was young, we didn’t have a whole lot of money. There were points when we were probably eligible for some kind of assistance. I know quite well from the words of my parents that they didn’t want such assistance, even though the entire program was pretty much designed for the situation they were in. I’m very sure that they never even looked at the option with any seriousness.

The thing is, their lives would have been much easier had they looked for every resource available, but pride kept them from doing so.

Pride cost them money. Pride cut off options.

Over and over again, pride becomes a financial obstacle to people. From the house they live in to the car they drive to the clothes they wear to their actual financial decisions, pride comes to the forefront and helps guide financial choices.

But what is pride, and is it misplaced here?

The best definition of pride I’ve found is this one:

Pride is a feeling of deep pleasure or satisfaction derived from one’s own achievements, the achievements of those with whom one is closely associated, or from qualities or possessions that are widely admired.

Pride adds up to three things in one here, so let’s break them down.

One part of pride is a feeling of deep pleasure or satisfaction derived from one’s own achievements, which is something I’m on board with. If you’ve worked hard to achieve something in your life, you ought to feel good about it, and that good feeling is often going to push you toward more good achievements.

The second part of pride is a feeling of deep pleasure or satisfaction derived from the achievements of those with whom one is closely associated, like, for example, a parent being proud of a child’s achievements. To me, this is less important. I can understand pride in one’s parenting efforts, but feeling proud because someone else did something is a bit of a stretch.

For me, it’s the third definition that’s the real problem. The third part of the definition of pride is a feeling of deep pleasure or satisfaction derived from qualities or possessions that are widely admired. Right here, pride ceases to be about you and instead begins to center itself around what others think of you. It’s no longer about your values, but about the values that you think others have.

This wheels right back around to one of the most fundamental rules of personal finance, in my view: You have to stop worrying about what other people think.

That’s a hard thing to do, particularly if you’re a social person. We all want to be perceived as having value. We all want others to think well of us and want to interact with us in positive ways.

The thing is, if you live by reasonable values – and really live by them – that will happen anyway.

Think about the people in your life that you really, truly respect and like. If you really drill down into those people and think about what you respect and like about them, it’s usually that they have some sort of internal values that they live by and that those values are the core of the things they’ve achieved and how they interact with other people.

When I think of people I really respect and admire and like, they’re just good people, and it’s not because they dress well or have a beautiful house or anything like that.

It’s because they’re kind. It’s because they treat other people well. It’s because they take basic care of themselves. It’s because they’ve worked very hard to achieve things in life, whether those things are financially lucrative or not.

I immediately think of a guy in the community in which we live. He’s an older, retired fellow. He spends most of his time doing volunteer work and is usually wearing this old, red, beat-up (but clean) hooded sweatshirt and jeans. He’ll talk to anyone and, in fact, makes a point to grab people who seem like they need someone to talk to and take them out for coffee and a chat and he just listens to them.

Do I care that this guy dresses in clothes that look like they came from a Goodwill rack? Do I care what kind of house he lives in? Do I care what kind of car he drives? No, no, and no.

I admire this guy because of who he is and the values he has and the fact that he acts on them. That has nothing to do with any of his physical possessions.

I also think of that best friend of mine that I mentioned earlier, the guy who bought the run-down house that was almost scary when I first visited it. I didn’t turn up my nose at him because of his house choice. Instead, I was happy to visit it, because I knew of the quality of the guy that lived there.

When I go through, in my head, all of the people I really care about, my care for them and respect for them wouldn’t change if they drove a brand new car or a dilapidated rust bucket. It wouldn’t change if they dressed in a $5,000 suit or a sweatshirt with a hole in it. It wouldn’t change if they lived in a mansion or a trailer.

For me, a much approach to pride is to have pride in your achievements, have lesser pride in the achievements of those closest to you, have little or no pride in your possessions or what others think about them, and have a set of core values that govern how you act in the world. Treat others as you would like to be treated. Keep yourself clean and presentable, but let your character speak the loudest. Be friendly and listen to other people, and help them when there is an opportunity.

You can certainly take pride in living by those values, as long as the pride doesn’t drive you away from those values.

If I had taken that approach to pride earlier in my life, we would probably live in a different house right now. I certainly would not have purchased the first car that I did (though my current automobile, a car we purchased off of Craigslist secondhand almost a decade ago, would probably still have been a smart buy).

Instead, I would have put more effort into trying to live by my values, first and foremost. Spend less than you earn. Treat others as you would like to be treated. Listen and ask questions and be friendly.

Those kinds of things are harder than simply buying showy possessions, but when you live up to them, you don’t need possessions to win friends and influence people.

Take pride in who you are, not what you possess. Take pride in what you’ve accomplished, not the things you’ve bought. Take pride in what you can make out of the opportunities in front of you, not in your ability to turn up your nose at some of those opportunities. You’ll find that when you take that perspective, a lot of things in life just click together smoothly.

Good luck.

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