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Abstract

consider luxury items. But maybe my idea of luxury is their idea of necessity. One money diarist, for example, spent $62 on gold sneakers on Monday and$ 1,300 on sunglasses on Tuesday.</p><p id="f20f">Yikes!</p><p id="469d">This is probably because most of the money diarists don’t have children. So when they spend $115 on a manicure or$ 630 on a trench coat, they only have to answer to themselves (and possibly their partners). But for many parents, that chunk of change is more akin to what we’d spend on child care, soccer team fees, or saving for college.</p><p id="fa49">Don’t get me wrong. I am far from frugal or selfless when it comes to my cash outlays. Last week, I spent $94 on three bottles of natural wine. And it’s completely normal for me to drop$ 350 in a single weekly visit to Whole Foods.</p><div id="54c9" class="link-block"> <a href="https://themakingofamillionaire.com/target-date-funds-arent-the-worst-way-to-invest-your-401-k-but-you-can-do-so-much-better-ed862fb8c7c1"> <div> <div> <h2>Target Date Funds Aren’t the Worst Way to Invest Your 401(k), But You Can Do So Much Better</h2> <div><h3>Four good reasons to avoid target date funds for your retirement nest egg</h3></div> <div><p>themakingofamillionaire.com</p></div> </div> <div> <div style="background-image: url(https://miro.readmedium.com/v2/resize:fit:320/1*0l7-vV_6zXMjAZzpRLM2xw.jpeg)"></div> </div> </div> </a> </div><h2 id="6eb9">A lot of people are really responsible with money</h2><p id="343b">Perhaps even more surprising than what people spent on discretionary items was what they spent on fixed items, like housing and cars.</p><p id="bf80">For example, a 37-year-old couple earning $255,000 a year only spends$ 1,500 a month on housing for their Maryland home. And a Vermont teacher earning $78,000 a year only spends$ 987 in rent.</p><p id="653b">That is far less than the average. According to the <a href="https://howmuch.net/articles/consumer-spending-in-the-united-states">Bureau of Labor Statistics</a>, the average American spends 33.1% of their income on housing.</p><p id="dc7d">Also, most of the money diarists don’t have car payments or large transportation expenses. According to the Bureau of Labor Statistics, transportation represents the second largest expenditure for most households, clocking in at an average of 16% monthly.</p><p id="56c4">The money diarists are also big savers.</p><p id="6c39">A 23-year-old government analyst living in New York City on $62,000 a year saves$ 800 a month in her 401k plus another $800-$ 1,000 per month in a taxable savings account.</p><p id="665e">And a registered nurse in Philadelphia earning $91,000 annually saves$ 900- $1,000 a month in a retirement fund plus another$ 500 a month in a taxable savings account.</p><p id="dc93">They’re also generous.</p><p id="06fd">A 28-year-old attorney from Boston earning $190,000 a year donates$ 400 to a shelter for domestic violence victims on Day Two of her money diary week, then donates another $2,400 (her and her husband’s stimulus checks) to various charities the next day.</p><p id="d14b">And a 25-year-old digital ad strategist earning$ 45,000 a year in Baltimore gives $25 to a friend in need and donates$ 30 every month to Covid relief charities.</p><p id="5dfa">Finally, I discovered that some of the highest-earning people had the lowest cash outlays for the week.</p><p id="c59d">A 31-year-old biotech analyst from San Mateo, California earning $187,000 annually only

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spent $151 for the whole money diary week, and that was just for food.</p><p id="a40d">Likewise, a couple making$ 490,000 a year in New York City only spent $751 during their money diary week, and their most extravagant purchase was$ 229 for 14 bottles of wine.</p><h2 id="d74a">What money diaries are and aren’t good for</h2><p id="7d5d">As expected, the money diaries got me thinking about my own spending. I decided to keep my own money diary for a week.</p><p id="d94a">I wasn’t surprised by where or how much I spent, but rather how much I didn’t spend.</p><p id="9f9f">The very act of recording my spending on a daily basis forced me to rethink a few purchases before I made them. I’d put something in my Amazon cart, then leave it there for a day before hitting the buy button.</p><p id="de7e">There was something about needing to write it down myself, as opposed to simply seeing it recorded in Mint, that prevented me from buying at least two things I didn’t really need. It’s the same principle as keeping a food diary to try to lose weight, I suppose.</p><p id="96f1">Long before Mint, I used to keep track of my spending this way. I think I may start doing that again just to see what happens over a longer period of time. That was a positive thing that came out of reading so many money diaries.</p><p id="5def">On the other hand, the hours I spent combing through other people’s financial confessionals didn’t really give me a sense of how I truly measure up against my peers.</p><p id="f3de">Did I really expect to learn that? I’m not sure, but what I found was that, as with essays about sex and relationships, money diaries only give you a glimpse into what someone’s financial life is like. And they only show you what that person chooses to share.</p><p id="0877">They won’t tell you how your neighbors can afford that month-long trip to Bali or if your friends are stingy because they’re strapped for cash or just cheap.</p><p id="2763">Still, I enjoyed my deep dive into the world of money diaries. And even though I think they’re just intended to be entertaining, they inspired me to revisit a useful tool for managing my own money.</p><p id="5c18"><i>Like this story and want more? Sign up for my <a href="https://piper.substack.com/welcome">newsletter</a> now!</i></p><p id="96e5">You may also be interested in:</p><div id="47b6" class="link-block"> <a href="https://readmedium.com/how-to-write-top-headlines-promote-your-work-and-remember-why-you-became-a-writer-in-the-first-dd37b6c078b4"> <div> <div> <h2>How to Write Top Headlines, Promote Your Work and Remember Why You Became a Writer in the First…</h2> <div><h3>3 articles that will make you a better writer</h3></div> <div><p>medium.com</p></div> </div> <div> <div style="background-image: url(https://miro.readmedium.com/v2/resize:fit:320/1*Ij6oK_79aXuQmBpRFwMN9g.jpeg)"></div> </div> </div> </a> </div><div id="cdab" class="link-block"> <a href="https://psiloveyou.xyz/kim-kardashian-love-letter-daf82f05c758"> <div> <div> <h2>A Love Letter to Kim Kardashian</h2> <div><h3>You changed everything for me</h3></div> <div><p>psiloveyou.xyz</p></div> </div> <div> <div style="background-image: url(https://miro.readmedium.com/v2/resize:fit:320/1*0iggrvcfbYUutma9FZB-aA.jpeg)"></div> </div> </div> </a> </div></article></body>

The Sneaky Allure of Discovering How Other People Spend Their Money

Money diaries spurred me to examine my spending — and my priorities

I’ve been spending a lot of time with Mint lately. And even though I’ve been on my best behavior, the online budgeting software always seems to find something I’m doing wrong.

Like yesterday, I bought some shampoo. And Mint was like, “You really needed to spend $29 on shampoo? Are you insane? There’s a pandemic going on. People are dying.”

And I was like, “Yeah, I know. I feel super guilty, but I get a little shot of dopamine when I pay too much for something I need.”

And Mint was like, “You know that’s a problem, right?”

And I was like, “I’m going to close you now.”

Now the truth is I’m not a shopaholic by any means. I’m pretty good at managing my money, as I’ve spent the better part of the last 20 years writing about personal finance and investing.

But I have noticed that I get into some bad habits. When I’m busy, I don’t spend money, but when I’m bored, I frequently turn to online browsing, which turns into online shopping.

A foray to Amazon to buy paper towels might end up setting me back $78 after I click my way through a few screens of items I suddenly remember I need.

That got me thinking. Does everybody do this?

The last taboo of American life

Money — how much you have and how much you spend — is one of the last bastions of privacy in American life.

In a world where we bare all, from our sex lives to our eating habits, spiritual beliefs, fears and insecurities, money is the last vestige of our lives we truly keep to ourselves.

Which is probably why money diaries have become so popular.

A few years ago, sites like Refinery29 and Man Repeller started columns where writers record everything they spend in a week. They comment on what they bought, why they bought it, and how they felt about it.

Students living on $20,000 a year to high-powered couples earning $600,000+ are highlighted.

And much like reading about people’s sex lives, it is fascinating, because it forces you to consider how you measure up.

What I discovered

Most of the money diarists are millennials, not Gen Xers like me, so everyone spends a lot of money on coffee. And gym memberships. And alcohol.

Don’t millennials need toilet paper? Laundry detergent? Shampoo? A recent trip to Target set me back $86, and the only things I bought were batteries, shaving cream, paper towels, and furnace filters.

Also, millennials are way smarter about saving than I was in my 20s and 30s. A lot of these people have six-figure retirement funds already.

Color me impressed. And depressed. I was nowhere near that financially savvy at that time in my life. They have their priorities straight and will be way better off because of it.

Yet I was surprised by how much some people spend on what I consider luxury items. But maybe my idea of luxury is their idea of necessity. One money diarist, for example, spent $62 on gold sneakers on Monday and $1,300 on sunglasses on Tuesday.

Yikes!

This is probably because most of the money diarists don’t have children. So when they spend $115 on a manicure or $630 on a trench coat, they only have to answer to themselves (and possibly their partners). But for many parents, that chunk of change is more akin to what we’d spend on child care, soccer team fees, or saving for college.

Don’t get me wrong. I am far from frugal or selfless when it comes to my cash outlays. Last week, I spent $94 on three bottles of natural wine. And it’s completely normal for me to drop $350 in a single weekly visit to Whole Foods.

Target Date Funds Aren’t the Worst Way to Invest Your 401(k), But You Can Do So Much Better

Four good reasons to avoid target date funds for your retirement nest egg

themakingofamillionaire.com

A lot of people are really responsible with money

Perhaps even more surprising than what people spent on discretionary items was what they spent on fixed items, like housing and cars.

For example, a 37-year-old couple earning $255,000 a year only spends $1,500 a month on housing for their Maryland home. And a Vermont teacher earning $78,000 a year only spends $987 in rent.

That is far less than the average. According to the Bureau of Labor Statistics, the average American spends 33.1% of their income on housing.

Also, most of the money diarists don’t have car payments or large transportation expenses. According to the Bureau of Labor Statistics, transportation represents the second largest expenditure for most households, clocking in at an average of 16% monthly.

The money diarists are also big savers.

A 23-year-old government analyst living in New York City on $62,000 a year saves $800 a month in her 401k plus another $800-$1,000 per month in a taxable savings account.

And a registered nurse in Philadelphia earning $91,000 annually saves $900-$1,000 a month in a retirement fund plus another $500 a month in a taxable savings account.

They’re also generous.

A 28-year-old attorney from Boston earning $190,000 a year donates $400 to a shelter for domestic violence victims on Day Two of her money diary week, then donates another $2,400 (her and her husband’s stimulus checks) to various charities the next day.

And a 25-year-old digital ad strategist earning $45,000 a year in Baltimore gives $25 to a friend in need and donates $30 every month to Covid relief charities.

Finally, I discovered that some of the highest-earning people had the lowest cash outlays for the week.

A 31-year-old biotech analyst from San Mateo, California earning $187,000 annually only spent $151 for the whole money diary week, and that was just for food.

Likewise, a couple making $490,000 a year in New York City only spent $751 during their money diary week, and their most extravagant purchase was $229 for 14 bottles of wine.

What money diaries are and aren’t good for

As expected, the money diaries got me thinking about my own spending. I decided to keep my own money diary for a week.

I wasn’t surprised by where or how much I spent, but rather how much I didn’t spend.

The very act of recording my spending on a daily basis forced me to rethink a few purchases before I made them. I’d put something in my Amazon cart, then leave it there for a day before hitting the buy button.

There was something about needing to write it down myself, as opposed to simply seeing it recorded in Mint, that prevented me from buying at least two things I didn’t really need. It’s the same principle as keeping a food diary to try to lose weight, I suppose.

Long before Mint, I used to keep track of my spending this way. I think I may start doing that again just to see what happens over a longer period of time. That was a positive thing that came out of reading so many money diaries.

On the other hand, the hours I spent combing through other people’s financial confessionals didn’t really give me a sense of how I truly measure up against my peers.

Did I really expect to learn that? I’m not sure, but what I found was that, as with essays about sex and relationships, money diaries only give you a glimpse into what someone’s financial life is like. And they only show you what that person chooses to share.

They won’t tell you how your neighbors can afford that month-long trip to Bali or if your friends are stingy because they’re strapped for cash or just cheap.

Still, I enjoyed my deep dive into the world of money diaries. And even though I think they’re just intended to be entertaining, they inspired me to revisit a useful tool for managing my own money.

Like this story and want more? Sign up for my newsletter now!