06/01/2021
Extract from Book (9 min Read)
The Trinket Acquiring Syndrome (TAS)
It is impossible to talk about frugality and not address lifestyle inflation and the trinket acquiring syndrome (TAS). Lifestyle inflation comes about when people increase their standard of living as their incomes rise. While this sounds like a normal thing to do, most people get the balance wrong by increasing the living expenses at a higher rate than the perceived income increase. Say you are a Junior Developer in one of the multinationals in town earning $800 a month. Let us also say that you have been performing well and your boss is pleased with you. You receive notification that your pay has been increased by $200 to bring your monthly take home to $1,000.
To congratulate and reward yourself you decide to upgrade your ride. Since the Toyota Spacio 2002 Model you have been driving is showing signs of wear and tear, and frankly makes you feel like an Uber driver, you reason that you now have the means to afford a better set of wheels. Deep in your heart you have always admired a Toyota Harrier 2005 Model (Kawundo). What escapes your calculation is that even before factoring in the cost of buying a new car against the resale value of the one you had, you are moving from the frying pan to the fire in terms of fuel consumption. You may not know this but the cost of fuel for a Harrier alone will eat the extra increment without even factoring in the lost opportunity to invest.
The Trinket Acquiring Syndrome is about buying things you think you will need but they end up adding little to your life. The most common ones are exercise machines, electronics and fancy cars. You have to be aware of which trinkets (shiny objects) get to you, so you can instinctively know when you are at your weakest point and put up your defences.
Beating the Trinket Acquiring Syndrome to gain Financial Independence.
If you truly want to start your great rebuild after the Covid-19 crisis on a sound footing or pay off your debts more quickly, retire earlier than you thought you could, or reach whatever other financial goals that you have, then being more frugal is one path that may help you realize your goals. I believe earning more income is great, and it can help you reach your goals but what you have most control about is your expenditure.
However, some people believe that saving money alone does not work and that earning more is the only way to improve a person’s financial situation. Others believe that saving money is better than earning more. As far as saving money and being frugal is concerned, most people have room in their budget to cut back a little more, and the average person wastes a lot of money each month. And, even if you are a high earner focusing on making more money, spending less will still help you on your path to financial freedom. This is because earning more money will not solve all of your financial problems. If you solely focus on earning more money, then you may never realize that you have a spending problem. This may hold you back for years because you did not think it was worthwhile to take a moment to learn how your spending habits may be negatively impacting your life. This can lead to lifestyle inflation, wasting money, trying to keep up with the Johns yet the Johns are perpetually broke! If you cure your spending problem, it will be easier to rebuild your finances.
As already defined, the Trinket Acquiring Syndrome (TAS) is a financial disease that always makes you acquire things of little economic value thinking that they are treasures. TAS manifests in working harder yet always being seemingly unable to catch up. The harder you work; it seems the harder your expenditure balloons. If not checked, it is a sure way to fail in this game called Capitalism. So how do we beat it and gain financial freedom? We have define financial freedom as having the means to finance 150X months of living expenses which works at about 12.5 years’ worth of survival. Anyone, especially those in the developing world where the cost of living is relatively cheaper, can achieve financial freedom if they have 150 months of living costs. However, if you are living in a more developed economy like the USA you have to plan for about 300 months or 25 years of living costs. This is because the cost of living in these countries is higher.
You might accuse me of prescribing things that no one can achieve but the truth is people have done it. Even yours truly is on this journey and it looks like, God willing, we will be able to hit this goal in the next couple of years. I share this goal because many people are blind to what needs to get done for them to win at the financial game of life. If you have no goal to shoot into, it is impossible to score any kind of goal. So, as you go through the list below, keep focused on your number. What number will cut it for you to achieve financial independence is really up to you and your expenditure patterns. We are not saying that when you hit this number you should stop working. Rather, when you hit this number, you can choose to work or not work or reduce the number of hours you work, or change to a job that gives you the most pleasure. That is why rebuilding from this crisis requires that we are goal focused and head into battle knowing what we will call a win.
All of this is why I believe that the average person, no matter what they make, probably has at least a little bit more room to be even more frugal. But, for the average person, it may be difficult to become frugal if you have been wasting money for years. I hope to show you that you can be frugal and take charge of your financial life. And, being frugal does not mean skimping on what your love or leading a boring or meaningless life– it is exactly the opposite! Being frugal will allow you to focus on your long-term goals, find enjoyment in what you already have, and you may find that being frugal can lead to new and fun experiences you never knew existed.
The Trinket Acquiring Syndrome (TAS)
It is impossible to talk about frugality and not address lifestyle inflation and the trinket acquiring syndrome (TAS). Lifestyle inflation comes about when people increase their standard of living as their incomes rise. While this sounds like a normal thing to do, most people get the balance wrong by increasing the living expenses at a higher rate than the perceived income increase. Say you are a Junior Developer in one of the multinationals in town earning $800 a month. Let us also say that you have been performing well and your boss is pleased with you. You receive notification that your pay has been increased by $200 to bring your monthly take home to $1,000.
To congratulate and reward yourself you decide to upgrade your ride. Since the Toyota Spacio 2002 Model you have been driving is showing signs of wear and tear, and frankly makes you feel like an Uber driver, you reason that you now have the means to afford a better set of wheels. Deep in your heart you have always admired a Toyota Harrier 2005 Model (Kawundo). What escapes your calculation is that even before factoring in the cost of buying a new car against the resale value of the one you had, you are moving from the frying pan to the fire in terms of fuel consumption. You may not know this but the cost of fuel for a Harrier alone will eat the extra increment without even factoring in the lost opportunity to invest.
The Trinket Acquiring Syndrome is about buying things you think you will need but they end up adding little to your life. The most common ones are exercise machines, electronics and fancy cars. You have to be aware of which trinkets (shiny objects) get to you, so you can instinctively know when you are at your weakest point and put up your defences.
Beating the Trinket Acquiring Syndrome to gain Financial Independence.
If you truly want to start your great rebuild after the Covid-19 crisis on a sound footing or pay off your debts more quickly, retire earlier than you thought you could, or reach whatever other financial goals that you have, then being more frugal is one path that may help you realize your goals. I believe earning more income is great, and it can help you reach your goals but what you have most control about is your expenditure.
However, some people believe that saving money alone does not work and that earning more is the only way to improve a person’s financial situation. Others believe that saving money is better than earning more. As far as saving money and being frugal is concerned, most people have room in their budget to cut back a little more, and the average person wastes a lot of money each month. And, even if you are a high earner focusing on making more money, spending less will still help you on your path to financial freedom. This is because earning more money will not solve all of your financial problems. If you solely focus on earning more money, then you may never realize that you have a spending problem. This may hold you back for years because you did not think it was worthwhile to take a moment to learn how your spending habits may be negatively impacting your life. This can lead to lifestyle inflation, wasting money, trying to keep up with the Johns yet the Johns are perpetually broke! If you cure your spending problem, it will be easier to rebuild your finances.
As already defined, the Trinket Acquiring Syndrome (TAS) is a financial disease that always makes you acquire things of little economic value thinking that they are treasures.
TAS manifests in working harder yet always being seemingly unable to catch up. The harder you work; it seems the harder your expenditure balloons. If not checked, it is a sure way to fail in this game called Capitalism. So how do we beat it and gain financial freedom? We have define financial freedom as having the means to finance 150X months of living expenses which works at about 12.5 years’ worth of survival. Anyone, especially those in the developing world where the cost of living is relatively cheaper, can achieve financial freedom if they have 150 months of living costs. However, if you are living in a more developed economy like the USA you have to plan for about 300 months or 25 years of living costs. This is because the cost of living in these countries is higher.
You might accuse me of prescribing things that no one can achieve but the truth is people have done it. Even yours truly is on this journey and it looks like, God willing, we will be able to hit this goal in the next couple of years. I share this goal because many people are blind to what needs to get done for them to win at the financial game of life. If you have no goal to shoot into, it is impossible to score any kind of goal. So, as you go through the list below, keep focused on your number. What number will cut it for you to achieve financial independence is really up to you and your expenditure patterns. We are not saying that when you hit this number you should stop working. Rather, when you hit this number, you can choose to work or not work or reduce the number of hours you work, or change to a job that gives you the most pleasure. That is why rebuilding from this crisis requires that we are goal focused and head into battle knowing what we will call a win.
All of this is why I believe that the average person, no matter what they make, probably has at least a little bit more room to be even more frugal. But, for the average person, it may be difficult to become frugal if you have been wasting money for years. I hope to show you that you can be frugal and take charge of your financial life. And, being frugal does not mean skimping on what your love or leading a boring or meaningless life– it is exactly the opposite! Being frugal will allow you to focus on your long-term goals, find enjoyment in what you already have, and you may find that being frugal can lead to new and fun experiences you never knew existed.
Written by Livingstone Mukasa, Author “The Great Financial Rebuild” & “Investing for the Future” Contact +256772459167 email: [email protected]
