Sometime not too long ago, my wife and I had lunch with my brother and a friend of his. It was our first time meeting this friend, so we got into all of the usual pleasantries that come with meeting someone – what do you do, where do you live, and other things like that. When I said that I was a lawyer and my wife was a dentist, we got the usual “wow” type reaction that we often get when we introduce ourselves by way of our professions. People always seem to be impressed by the lawyer/dentist combo.
At some point in our conversation, we got to talking about our home and naturally, we were asked about how we handle the winters in Minnesota. Anyone from Minnesota knows that this is a common question you get from people not from a cold state. After all, how do people live in such a hellish landscape?
“Isn’t it super cold there?” we were asked.
“Well, we really try to get outside and just embrace the winter. We bought some cross-country skis a few years ago, so we try to cross-country ski when we can.”
“Do you ever go regular skiing?”
“Not really,” I responded. And then, without really thinking too much about it, I said, “We don’t really know how to ski and we can’t really afford it anyway.”
This seemed to puzzle my brother’s friend, and she leaned over and whispered something to him, which made him laugh. As my brother later told me, his friend had asked him this:
“If they’re a lawyer and a dentist, how come they can’t afford to go skiing?”
It’s actually a good question – lawyers and dentists are viewed as two professions that generally make good money. What do we mean that we can’t afford to go skiing?
I think it all comes down to how we view the word “afford.” It’s about what we can and what we choose.
What You Can Afford Versus What You Choose To Afford
What you can afford versus what you choose to afford might sound like pretty similar concepts – but they aren’t the same. The distinction lies in the word “choose.” It’s all about intentionality – what you can versus what you choose.
The truth is, most of us can afford pretty much anything we want. You really only need to do one of three things to afford something:
- Figure out a way to make the money
- Get someone to give you the money
- Borrow the money
No, I probably can’t go out and buy a Tesla today. But, I probably could one day, if I really wanted to. The same is true of other ludicrously expensive things. Dental school can cost $500,000. Law school cost me $87,000 (even with a 50% scholarship). And yet, anyone with the qualifications can afford to go to dental school or law school – if they want to.
It’s the choice of choosing to afford the things you want that actually matters. Most people don’t understand this fact and let things choose them – the house that’s too big, the car they don’t really need, the clothes they never wear. You can afford it, but it’s up to you whether you want to afford it. You get to choose!
A few things that I can think of that I can afford include:
- A new phone
- A new laptop
- Nicer clothes
- A bigger house
- A car
There are things on this list that I do have. There are other things that I don’t. I don’t have my own car, for example, because that’s something I just don’t care about. I can afford it, but I choose not to. My wife and I could go skiing, but we don’t because we’d rather choose to do something else that we can afford.
Your own list of things you can afford is probably different. What matters is that you are choosing your list.
Be Intentional – Choose What You Can Afford
You can buy anything you want. It’s not really that hard. The harder part is figuring out the things you actually want.
I went for years without understanding this. Looking back, I actually made a decent chunk of change over the course of my college career – over $20,000 by my count. I had one summer during law school where I made over $20,000. And yet, when it was all said and done, I had nothing to show for it in the end – just a bunch of stuff that I could afford (shoes, clothes, and things like that). But nothing that I really chose to afford.
The essence of financial independence is pretty simple – it’s all about making deliberate choices. Choose the things that you really want. Ignore the things that you don’t really want. The nice thing is, you get to make this list. So make it a good one.
Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the sharing economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.
Kevin is passionate about earning money using the sharing economy and you can see all the ways he makes extra income every month in his side hustle reports.
Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:
- Personal Capital. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps Kevin uses to track his financial accounts.
- SoFi Money. A really good high-interest checking account with absolutely no fees. It also reimburses all ATM fees worldwide. Even better, you'll get $75 if you open an account and have two direct deposits of at least $500 each.
- M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. It's great for a taxable account or if you are looking for a place to create a Roth IRA.
- Dobot. This is a great microsaving app that monitors the cash flow in your bank account and saves away small amounts for you each week. It's free and you'll get $5 when you use it.
- Credit Karma. A free credit monitoring app that everyone should use. It'll notify you of any changes to your credit report and is the best credit monitoring app out there.
Feel free to send Kevin a message here.
This is so true! We’ve been contemplating selling our condo and people are confused why we haven’t bought a house already. The problem is we are trying to find the Goldilocks sized house at a Goldilocks price. We don’t want to spend too much on a house and risk it being a bad financial decision, so we haven’t moved yet. Everyone else thinks we can afford far more house than we do. It’s a bit frustrating! I’d rather retire in our 30s than buy too big of a house.
The house thing is so tempting. Everyone assumes you have to have the house that matches your profession. Bigger isn’t always better though.
Great post Kevin, I love the line at the end: “The essence of financial independence is pretty simple – it’s all about making deliberate choices. Choose the things that you really want. Ignore the things that you don’t really want.” Perfectly said! I tell my wife this sometimes, that just because we have the money for something or CAN buy something, doesn’t mean we can’t search for a more cost effective option.
I think the word “afford” in this type of conversation can bring about some confusion, like with your brother’s friend. She probably could’ve benefitted from hearing about your line of thinking, saying something along the lines of “we choose not to go skiing because we prefer to spend in other areas.” I’ve found myself approaching conversations with my friends in ways like this, for example saying we “choose to not eat out very much, so that we can put more money towards travel.” I think it has helped show that it’s a deliberate choice we’re making to be able to support other goals.
Thanks Matt! Yeah, I do get into the mistake of saying things just by habit, without actually meaning exactly what I said. It’s a choice, not that I literally can’t afford it.
I think it’s just generally more socially acceptable to say “I can’t afford it” vs “I don’t want to spend on it”, so that’s what we say. We don’t want to offend the person who suggested X Y or Z activity, particularly if it’s an invitation, so we just say we can’t afford it.
Yeah, it’s like an automatic impulse – I feel like there’s a lot of that in the personal finance world, where we say one thing but don’t actually mean what we said. Like how I always tell people I want to retire early – that’s not exactly accurate, I want to be financially independent, not necessarily “retire.”
Hi Kevin! Thank you for all you post and share with us, you really do inspire and guide me in my financial journey. One thing that came to mind while reading this post was how I wish you would consider translating your blog into other languages, in my case to Spanish. My girlfriend came to mind while reading about your brothers’ friend. She believes that because you have the means to purchase somthing you can “afford it”. Our first language is Spanish, although, because of her current occupation she speaks Spanish 905 of the time. She is put off by reading in English, as much as I would love to send her links to your posts, I know that she would most likely ignore them, simply because they are in English. I even though about translating the article myself, just so she would read it. Now that I think about it, I could actually help you translate your posts if you wanted. Let me know what you think.