The Personal Finance Topic No One Talks About
There is one word that is noticeably absent from personal finance content. I’m sure someone’s written about it, but I can’t remember reading a post on it in the two years I’ve been blogging. We hear the buzzwords repeatedly: side hustling, decluttering, values-based spending, travel hacking, card churning, zero sum budgeting, and more. But what about the real root that gets so many of us into trouble when it comes to money?
I mentioned it in “5 Money Euphemisms to Avoid.” Interestingly, it was the one term that no one commented on. It’s almost a dirty word. Yet it’s something we’re all prone to.
I hardly expect greed will ever become a buzzword. It can’t be good for SEO. But I think it’s important to broach this taboo that can seriously stymie our financial progress, or limit our happiness even if we are swimming in money.
Admitting the Scrooge in All of Us
The Greek philosophers’ concept for greed was pleonexia, an over-desire. Inordinate desire. A wish or drive out of proportion with what the thing can deliver. An unhealthy appetite. We think that car purchase, sleek device, or rising stocks will make us happy, but these things disappoint. It’s not because those things are inherently wrong, but because we’re wrong for placing our trust in them. Can so much metal, silicon, or stock value change our well-being for the long-term? That’s simply asking too much of too little.
I’m a naturally frugal person, but greed still finds its way into my heart regularly. Sometimes I wish for a more beautiful home even though we have a nice place with more space than we need. Sometimes I dream of new clothes or furniture even though what I have is perfectly passable. Sometimes I desire more savings although we’re filthy rich by global standards. And I know my generous, thrifty husband at times longs to own more land, a nicer car, or a bigger nest egg.
Sometimes yearning for more is a healthy impetus to work hard and live wisely. I’m not talking about such a contented quest to do the next step well. Greed is by definition discontent. Let explore a few examples.
My kids always want more. They have more toys than they have time to play with, but they want everything they see in the store. I know that’s “how kids are.” But isn’t “how kids are” a glimpse into raw human nature?
Credit card debt is often the result of greed, though there can be other factors. I can have something I can’t afford, and I can have it now.
Or take car loans. Unfortunately, they’ve been normalized to the point that people cannot see this. Taking a car loan is saying, I want a nicer car than I can purchase in cash. So I’m just going to get it. For an alternative approach, check out How I Spent $8000 on Cars in 17 Years of Commuting.
Mortgages a.k.a. death pledges are a bit different, since homes are an appreciating asset. Still, it’s all too easy to get greedy with the mortgage, especially when you’re offered loans much bigger than you need or can comfortably afford. Surely the housing market crash of 2008 demonstrated how pervasive greed can be in this arena. During our house hunt we almost purchased a home which would’ve made things tight. It all looked fine on paper but in retrospect I’m glad we went with something less expensive.
Greed is also the stuff Black Friday is made of. Again, there’s nothing wrong with Black Friday, and I know lots of people purchase only gifts or items they’ve planned for. But Black Friday would not be nearly as lucrative if it were not fueled by both consumer and corporate greed.
Responding to Greed
Greed could be for more savings, more travel, more experiences, perhaps even for more “freedom.” Again, it’s not the object of desire that’s a problem. It’s our attitude toward that thing. This attitude is uniquely hard to decipher in a society where greed has become normalized, institutionalized, and celebrated at nearly every level.
Where’s the line between normal desire and greed? That may look different for everyone, but it certainly crosses the line when we start acting on it, practically putting our faith in those things which cannot ultimately deliver.
It’s okay to admit you fall prey to greed. It may just be in your thoughts, or it may limit itself to insignificant purchases that don’t do much harm. It may be a gray area, but it’s there. And I think we’d experience more freedom from it if we could just admit it.
I know it’s scary, but think about the possibility of greed next time you:
- Think about charging something you can’t afford.
- Consider taking a car loan.
- Spend on “wants” while living in debt.
- Put off giving until you’re “comfortable” or “better off.”
- Check your investments constantly.
We can guard ourselves against acting on greed with the following measures:
- Giving consistently and sacrificially.
- Setting a budget and sticking to it.
- Paying off debt as quickly as reasonable.
- Avoiding new consumer debt.
Anyone brave enough to admit how greed affects you? What do you do to combat it? If I’ve missed any good posts on greed, please share them!