Hey Money Hoarders, There's the Door (Next to the New PS5)
I’ve been watching something really fun (and sad) play out on social media over the last week. With the recent release of the new PS5 (and it's $400/$500 price tag), I can’t go 20 minutes without seeing a personal finance guru talk down to people who have or want to buy one.
“If you invest that $500 in the stock market, it would be worth $16,000 by the time you turn 65”….blah blah blah
“Instead of wasting your time playing video games, you should be reading business books and building your empire”…..blah blah blah
“You should deposit that money in your emergency fund where it will give you security instead of buying something that will be in a landfill 8 years from now”……blah blah blah
“Instead of buying a Sony Playstation, you should buy shares of Sony so you can make money off all the other suckers who are buying PS5s”….blah blah blah
Maybe this is a sign I should better select who I follow on social media? Yikes, we’ll save that one for another day.
Back to the PS5. Am I going to buy a new PS5? Probably not. Or at least not right now…..maybe sometime down the road. But here’s the important part about what I just said: my answer is only applicable to me, in November 2020. Personal finance is just that, personal. For me, it’s not worth the price..…right now. However, it’s not about the price tag of a PS5. I could afford a PS5, but right now there’s probably something else I’d like to do with that money. We’re planning to take the family to Thailand sometime soon (c’mon COVID, you’re killing me!). That will easily cost $3,000 for the plane tickets. I’d like for my wife to have the opportunity to start regularly getting her nails done again sometime soon. I’d like to spend a couple hundred more per month going on date nights. So it’s not about the money. It’s about what’s important to my family, and in what priority.
Oh yeah, and also, since when did we start making all of our life decisions around math? I’m a finance guy. If I made all of my life decisions based around how much wealth not buying ____ product or not having ____ experience, I’d have WAAAY more money than I do now. I’d also be considered a hoarder.
I’m kind of a broken record on this, but it’s worth mentioning. In order to have a healthy relationship with money, we need to be able to save, give, AND spend. All three are important. We live in this crazy culture that says saving is wise, giving is good, and spending is irresponsible. I think that’s toxic thinking. We NEED to be able to spend if we want to have a healthy relationship with money. For you, that might mean a sweet new PS5. Or some new clothes. Or a memorable trip. Or that watch you’ve had your eye on. Or that fun dinner with your friends or family. But you get to choose.
I was once in a coaching meeting with a 40-something couple. The wife said “I know this is irresponsible, but we spend about $2,000/month going out to dinner.” Then, her smile was washed away by a look of guilt. Before forming an opinion on this crazy-sounding expense, I asked if we could push pause on that specific topic and come back around to it after we’ve gone through the rest of their financials.
Here’s where we landed. I encouraged them to continue spending this money each month, for the following reasons:
Going out to nice dinners with friends brought a lot of joy to them and they enjoyed treating their friends and family to these fun experiences. It was also valuable together time away from the kids.
They didn’t really care much about cars, stuff, or travel. Those expenses were intentionally low in their life.
They were extremely generous and were continuing to give more and more.
They were saving for future needs/wants and had prepared well.
They didn’t have any debt and lived with a lot of margin.
Spending this money on going out to eat truly added value to their lives!
It’s not what I would have done. It’s probably not what you would do. But it was the right thing for them. Personal finance is always personal. Had this family not spent on restaurants or aggressively pursued generosity, they could have easily turned into hoarders. After discussing this idea, they actually admitted hoarding is in their family background and they can see how their wiring could easily push them down that hole.
So here’s the question: should you buy a PS5? Maybe. Maybe not. It really depends on why you’re doing it, how much value it will add to your life, and whether you’ve made wise decisions to be able to afford it in a healthy way.
I was recently talking to a former youth group kid. He’s a typical broke college student. Crappy apartment, eating ramen, donating plasma for some extra cash. He told me he ordered a new PS5. I responded, “whoa, how did you afford that?” Inside, I was afraid he was going to say “I just put it on my credit card.” Instead, his response caught me off-guard. He explained how way back when, probably 5-6 years ago, he took my youth group money class when he was a sophomore in high school. I was teaching about how one way to make bigger purchases affordable (like cars, college, tech) is to break it up into a monthly savings plan. He said shortly after that, he decided to start saving $10/month and would probably use the money to buy “video game stuff.” Fast forward to today, that $10/month had accumulated to around $600……which just so happens to be enough to buy a new PS5.
This young person grasped onto a really important financial concept, understood what would add value to his life, had the discipline to save every month, had even more discipline to not blow that money somewhere along the road, and today he was rewarded with a pretty cool purchase. Yeah, I’d say that guy did some good work! And I’m so glad he didn’t other people in his life convince him it was “irresponsible” to buy it. This was an amazing lesson for him, and it will surely help propel him to bigger and better things down the road. I’m proud of him!
So for everyone out there admonishing people for buying PS5s, or going on a trip, or going to a fun restaurant, or buying some new clothes, calm down. You can continue to hoard if you want, pursuing more wealth and an ever-earlier retirement. That’s cool. As for me and the people I have the privilege of serving, we’ll continue down our “irresponsible” road of living a balanced, healthy, meaningful life.