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When our daughters were little, we read them the Laura Joffe Numeroff book, "If You Give a Mouse a Cookie.'' The young protagonist indulges a hungry rodent and discovers that the more he gives the mouse, the more the mouse wants. He needs milk with the cookie, a straw with the milk, and so on until the boy is left reeling and exhausted. Absent the really cute illustrations, this sounds like many of our lives.
When my wife and I graduated from college, we had ideas of the kind of life we would want. These were the dreams of young kids, both of whom put themselves through school, who saw opportunities as limitless. While things did not always go as smoothly as we originally imagined, we managed to meet many of our goals.
Eventually a funny thing happened. We were like the mouse with the cookie. As we got older, we desired less of what we thought was important when we were starting out. We instead found remarkable enjoyment using many of the things for which our taxes pay -- the state parks, the lakes, the bike paths.
What happened? We have slowed our consumption.
"No matter how productive we become, abundance remains an impossibility so long as our wants are boundless," writes Stephen Marglin in "The Dismal Science -- How Thinking Like an Economist Undermines Community.''
Boundless wants cannot be satisfied. Worse, wants seem to feed off of each other at an exponential pace.
Some of my clients have been very good savers. Some look around them, though, and cannot figure out how their peers have so much more than they do. They don't necessarily want those things; they just want to feel that they could have them. In other words, they are being negatively impacted by the consumption of others.
I can almost guarantee that those friends have a lot more debt, a lot less savings, and potentially a lot more stress. But they also have more possessions.
This has been a difficult economy for many people. The average person may be having a tough time paying the bills as wage growth has slowed, mortgage costs have adjusted and food and gasoline expenses have soared. But it is also a time when we are constantly bombarded with images of the great wealth or luxurious lifestyles of the rich and famous. These people have earned their money and have the right to display it as they wish. But do we really want to be watching?
"The Prisoner's Dilemma" has been a central tenet of game theory since its creation in 1950. Two prisoners are interrogated separately. If neither confesses, each will serve six months in prison. If they both finger the other, they each get a five-year sentence. If one turns on the other, the betrayer is free to go and the betrayed gets a 10-year sentence. The point is that if the prisoners cooperate with each other, they have the lightest sentence. Interestingly, this dilemma occurs in society in the sense that our lifestyle can affect how others view their own lifestyle.
How can we be more conscious of our spending choices? First, I suggest that you take some time and determine whether your spending reflects your true values. If you find yourself running on the "wanting more'' treadmill, try cross-training. Keep a money journal of any purchase over a certain dollar amount.
Six months from now, sit down and review that journal and determine how much better your life is after buying those things. See if there is consistency in those things that did enhance your quality of life and those that didn't. Then create a plan for ending those unnecessary purchases.
Second, make an effort to increase your charity. There is not a correct amount to give, but the act of giving is regenerative. For example, rather than buy a knickknack for a birthday or anniversary, make a donation to a cause that you care about.
Third, Marglin says, "One of the important tasks of the 21st century is to find a better balance between the claims of self and the claims of others."
Each of us has worked for whatever we have. But one of the things to truly think about is how you are choosing to conspicuously spend your money. If you are buying things because they truly bring you long-term pleasure, then go for it. If you are buying things because you think that it somehow elevates you in the eyes of the community, think twice. And if you are buying something simply because you can, recognize that you have an effect on others.
Fourth, say "Thank you." You were born into a country where lives are long, resources are abundant, opportunity knocks, hope springs eternal and where you can chase down that cookie with a glass of fresh milk.
Spend your life wisely.
Ross Levin is the founding principal of Accredited Investors Inc. in Edina. He is a certified financial planner and author of "The Wealth Manage- ment Index." His Gains & Losses column appears on the fourth Sunday of each month. His e-mail is email@example.com.