“I talk to myself but I don’t listen…” – Elvis Costello

Let’s assume for a moment that every purchase is an investment.  That assumption is one of the key differences between people who understand money and people who do not, because every purchase is an investment. Whether you are choosing a car, a camera, a licorice rope or a company’s stock for your IRA, you should always try to get maximum value for your money. Getting good value requires information and discipline. 

Information is easy. We are blessed today with easy access to lots of information. Satellite television and time-shifting DVRs give us access to news and commentary from all over the world. We can find podcasts and Internet forums covering any type of investment or purchase we are considering.

Have you looked at iTunes University? It’s fantastic. Anyone with a computer and Internet connection now has access to a wide variety of college courses from reputable campuses, free of charge.

There are also organizations like The Teaching Company, which sells complete audio and video courses. For less than the cost of an annual parking permit at most college campuses, you can OWN a complete course on the history of philosophy, or any other subject that fires your imagination. Life-long learning is easier than ever.

With so much information and accumulated knowledge at our fingertips, it should be much easier to make quality decisions, shouldn’t it? But what good is all this information if we lack the self-discipline to control our impulses?  I know a fellow who consults Consumer Reports before every purchase, carefully decides which item is best for his needs and his budget, and then, when he’s ready to buy and the item is out of stock, he impulsively buys whatever similar item he can get immediately. He talks to himself but he doesn’t listen.

The greatest entrepreneurial discipline is the willingness to face the facts, admit the facts, and act on the facts. And make no mistake: managing your personal finances is an entrepreneurial endeavor. So when the marketing driven impulse for recreational shopping strikes, can we stop long enough to ask: 1) Do I really need it? 2) Can I afford it?  If either answer is “no,” we should hesitate and try to find an alternative. For the last thirty years, people have been answering both questions with “no” and making the purchase anyway. We talk to ourselves but we don’t listen. In the long run we have only debt to show for our hard work.

I’m a big fan of intuition and spontaneity, but I’m also a big fan of thoughtful deliberation. When it comes to asking someone out on a date, go ahead and be spontaneous. But when it comes to spending money, be thoughtful and deliberative. Bankers did not create our economic crisis alone; they were abetted by people eager to buy junk they didn’t need with money they didn’t have. We have been part of the problem; can we find the discipline to be part of the solution?