I have to pause here for one small, tangential rant. As the parent of young children, I’m perplexed and vexed by the insanity surrounding birthday parties today. When I was a kid, I could count the number of birthday parties I had on one hand, and they were humble affairs. A pizza parlor, some arcade games, a few presents—done. Today, it seems like every birthday party has to rival a Fortune 500 gala event. You rent a venue or hire entertainment. There are plates and party favors themed from Care Bears to Indiana Jones. The pizza alone for a decent-sized group can run over $200. Every kid “needs” a favor pack ($5 to $10 each). It’s hard to host a kid’s birthday party for under $400 these days.
Worse yet, these parties are viral. It’s not just about keeping up with the Joneses. It can become a virtual birthday party arms race. Who comes out ahead in the end? Not the hosts, who are out several hundred bucks. Not the guests, who paid $20 and up for not-quite-the-cheapest thing at Target. And not the birthday boy or girl, who end the event with a pile of plastic and cardboard junk piled waist-high, half of which will never be played with. It’s utter hyper-consumerist lunacy. We delude ourselves and justify the madness by looking over all of the event’s photographs and thinking about all the wonderful memories that have surely been created. But once again, here’s the secret of living with greater financial responsibility: If you go in with the right attitude of love, you’re going to have great memories no matter what. I remember being delighted with my homemade chocolate birthday cake that had the number 5 written on its top in M&Ms. I remember my parents taking me to any restaurant of my choice on my birthdays and us having a great time just being together. On the other hand, I can’t remember a single birthday present I ever gave or received at a childhood party.
The only people who truly benefit from this insanity are the purveyors of goods and services, that island in the corner of the Bermuda Triangle of Personal Finance that caters to children’s birthdays. But just like in an arm’s race, no parent wants to be the first one to pull back, to look like the cheapskate, to risk hearing his child dejectedly say, “Aww, everybody else’s birthdays were so much better than mine.” So the race goes on every year, getting incrementally more expensive in a perennial game of one-upmanship.
In the end, it’s the love and friendship that matters. A bunch of games played in the park for free can be more fun than renting out the local inflatable fun house. If everyone on the RSVP list kicked in $5 before the party to get one or two really nice, wanted presents collectively, would the birthday kid feel cheated or elated at being able to afford exactly what he or she wanted? It would be a win-win for everyone involved. Try it. I bet you’ll discover that, just as financial lunacy is infectious, so is financial sensibility. We all want to spend less on stuff we know isn’t needed. Within your social circle, you can strike the first sledgehammer blow against the Berlin Wall of Peer Pressure Spending.
I’ve indulged myself in this rant to emphasize a bigger point. Changing your financial numbers means changing your lifestyle habits. We all know that habits are hard to break—or even bend. Habits have weight. The longer you’ve practiced a habit, the bigger and heavier it gets and the harder it is to move. Fortunately, the more people you have helping you, the easier it is to break down those old habits and build new ones. This is why I avoid counseling married people on financial management individually. You can’t have two people in a marriage practicing opposing money habits. That’s a recipe for disappointment and, unfortunately often, divorce. So it’s critical to have your spouse in step with you as you start changing your money habits. If you can get your friends to join in, the cycle of positive reinforcement only gets stronger.