Money Dogma and Hard Work

Mark and Jesse share a snippet of a long conversation about the nature of opportunity cost in budgeting. They broadly divide people into two different personality types: the accumulators who diligently follow the rules of budgeting and amass cash, and the spenders who focus purely on what that cash can buy them -- experiences, memories, mementos, etc.   Both camps face a hard challenge in budgeting. The accumulators may have a lot of cash, but at what cost to their relationships? What opportunities did they miss or forego to continue accumulating wealth? On the other hand, the spenders face a very concrete cost, that is, the money that they spent to acquire the things they wanted. Perhaps they lack financial stability, or safety, as a result of their spending. Either way, the hard work in budgeting really boils down to understanding what cost you bear in your spending decisions. The above examples are the extremes of a spectrum, but wherever you fall on the line, there is a cost to your current behavior, and understanding that cost -- and aligning that cost with your values and priorities in life -- is the key skill to a fruitful financial life.   Mark Butler, Virtual CFO The Money School: https://moneyschool.works https://markbutler.com https://letsdothebooks.com   YNAB https://www.youneedabudget.com