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Ah, it’s good to be home and finally getting back into something of a routine. As part of that routine, I’ve been reading hundreds of e-mails, including quite a few reader questions — like this one from Annie. Annie writes:

I’m 25, and starting to take personal finance seriously. I’m in graduate school, and am very fortunate to have an educational trust that allows me to do this without loans. Knowing how lucky I am, I live well below the means the trust could provide, hold an intense part-time job, and am working towards a career that will (hopefully) make sure my kids are given the same gift I was — the freedom to get the finest education they can manage without major debt.

Between my job and my trust, I have a good deal left over every month. I know I should do something productive with this money, but right now I’m mostly spending it on other stuff.

For example:

• I’m using some of the extra money for a CBT therapist.


• I bought myself a ticket to a museum gala I’ve always wanted to attend.


• I’ve decided to buy myself a massage once a month.

I don’t spend a lot on clothes or waxing or anything like that, because I’d rather do other things. I rarely go out to eat. I don’t have a car. I live in an unfashionable part of my city. I have no debt, and I save about $400 every month.

I think I’m doing okay, but I’m spending so much on “self improvement”. Heck, right now I’m also looking at brushing up on Spanish and taking an econ class (for fun!). Plus, I’m thinking about going back to the personal trainer I had for a while to jumpstart my physical fitness.

Here’s my big question: How much do people spend on “self improvement” and cultural stuff? How much becomes indulgent? Will I end up regretting all of this later? Does all this dabbling make me a trustifarian dilettante?

Leaving aside Annie’s awesome financial situation (cue Napoleon Dynamite voice: “Lucky!” — I wish I could have been a trustifarian dilettante), I want to address her main question: How much should a person spend on self improvement?

I’ve wondered the same thing. It’s no secret that I’m something of a personal-development junkie. I love reading about self improvement. More than that, I love putting what I read into practice. (Heck, there’s even been a self-improvement category at GRS since day one!)

Still, I recognize that there’s a lot of useless information out there. Plus, people like me are inclined to spend on self-help material…and then never act on it. (I may have read tons of books on self improvement, but I’ve only acted on a handful.)

Is it okay to spend on on self improvement? Absolutely. But you have to be smart about it. I give myself a little more lee-way for self-help spending — but not too much. It’s as easy to spend foolishly here as anywhere else.

Here are a few rules I’ve made for myself to be certain I’m paying for actual personal development and not for pipe dreams:

• Focus on one thing at a time. I know from experience that it’s tempting to tackle a lot of self improvement at once. This is a recipe for disaster. The more I try to change at once, the less I change at all — and the more I spend. Instead, I’ve learned to limit my ambitions. Just as I pursue only one resolution every new year, I try improve just one or two aspects of my life at a time. Otherwise, I end up spending a lot of money to do nothing.




• Pursue your goals. I want to do everything. I want to speak fifteen languages, play a dozen sports, fly an airplane, and sail a boat. But some of these things are just daydreams. Why do I want to fly an airplane? Instead, it makes more sense to spend my time and money on improving things that help me meet my goals. Since I want to travel, for example, I really should learn a language or two. And because I want to lose weight, it’s great to spend on a gym. But as much as it appeals to me, there’s no point in paying for woodworking classes or power tools. Sure, I’d love to make my own furniture, but that doesn’t really mesh with my long-term plans.




• If you don’t use it, stop paying for it. A lot of spending on self improvement is based on wishful thinking. We sign up for a gym, promising that we’ll go every day. Then we only go once, but we keep paying. This is foolish. Know yourself. Signing up for a gym won’t make you fit. Paying for a computer class won’t teach you programming. You still have to put in the time and effort. If you see you’re not doing this, ditch them. (And don’t worry about sunk costs.)

Also, it’s important not to delude yourself. In general, a massage is not a self-improvement expense; it’s a luxury. There’s nothing wrong with indulging in luxuries now and then, but don’t pretend they’re something they’re not. (I got my first massage two or three years ago because my doctor prescribed it as part of my physical therapy — I had a running injury — but subsequent massages are luxuries, pure and simple. If only there weren’t a massage therapist in the office next door…)

But to get back to Annie’s question: How much do you spend on self improvement and cultural activities? I’m not sure what’s normal, and I’m curious to hear what GRS readers have to say. (I suspect answers will vary widely.) Kris and I don’t spend a whole lot on cultural stuff (except for when we travel), but I probably spend a few hundred dollars a year on self improvement: books, classes, computer programs, and so on.

What about you? Do you pay for personal development? What sorts of things do you buy? How much do you spend? Which costs are worth it, and which are not? What rules have you developed to be sure you’re not wasting your money? What advice can you give Annie about deciding which expenses are worthwhile?

In my fantasy life, I’m an organized guy. In the real world, that’s just not the case. I do my best to stay on top of things — I make lists, use a calendar, ask Kris for help — but there always seems to be something slipping through the cracks.

Before we left for Africa, for example, I hid my wallet. I always do this when we go on a long trip. (I don’t use my wallet when I travel.) And every time, I have trouble finding it when I get home. You’d think I’d develop a system — but no.

I’m not the only one with problems like this. Sure, there are folks out there like Kris and her sister — people who never let anything fall through the cracks — but they’re few and far between. Most of us need to develop systems to help our lives run smoothly.

Developing systems that work

I’ve read dozens of books on time management, coping with clutter, and getting things done. But I’ve never found a magic cure-all for disorganization. The trouble is, as with personal finance, there’s no one right answer. Each of us is different. We have different strengths, different weakness, and different aims in life. There’s no one system that’s going to work for every person.

For years, my motto at Get Rich Slowly has been do what works for you. I don’t mean by this that one choice is as good as another. There are best practices for paying off debt, saving for retirement, and buying a used car. What I mean is that there’s no one system that works for everyone. The debt snowball helped me get out of debt, but it may have you treading water.

I’ve found that the key to developing systems that work for me is to take bits and pieces from other people’s ideas, and to remix them in ways that fit my goals and strengths. This is true for all aspects of my life, including fitness, finance, writing, travel, and more.

I’ve noticed, though, that there are three elements that seem to be part of every successful system in my life: routine, automation, and simplicity.

The Power of Routine

By far the most important key to my success is establishing routines. Why have I managed to lose so much weight in the past year? Because I made it a habit to get up at 5:30 every morning so that I could be at the gym by 6:30. How did I manage to buy my Mini? I made saving a routine.

Valuable financial habits or routines include:

• Paying yourself first


• Tracking your spending


• Checking your receipts


• Controlling impulse spending with the 30-day rule

When something becomes routine, it becomes a natural part of your life. It’s not something you have to force yourself to do. It’s almost automatic, which makes it easier to do the right thing instead of letting your emotions get the better of you.

I’ve also had great success by foisting my routines onto the poor, unsuspecting computers around me. Automation helps my systems run smoothly.

The Power of Automation

When I was younger, I had a heck of a time remembering to pay my bills on time. Even when I had a set routine — for years, I paid bills on the first Saturday of every month — I’d sometimes forget to follow it. So, whenever I find a way to automate some part of my life, I do it.

Removing me from the equation just makes thing run so much more smoothly. That’s why I’ve spent the past several years developing a paperless personal-finance system, which includes:

• Automatic bill payments. All of my regular bills are automatically paid electronically.




• Automatic saving. Every month, I have money automatically transferred to my savings accounts. (Remember, I keep multiple savings accounts to pursue different goals.)




• Automatic investing. Well, I don’t actually do this now — I’m making manual investments at the end of every tax year — but for a long time, my retirement accounts automatically pulled from my paycheck and/or checking account.

This automation is an essential part of my financial system. It helps prevent stupid errors — like forgetting to pay a bill before vacation. Plus, I’ve found the automation keeps me motivated. The money for my bills is going to be pulled on specific dates, so I’d better be sure my accounts are funded.

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