The Urge to Splurge

The Jared Dillian Letter | February 8, 2024

Getting on a flight to Kansas City tomorrow morning. Never been to Missouri… or Kansas. I hear they like football there.

To preface this, for the last two years, I have been undergoing something like austerity. I’ve been saving money for my new house, so I haven’t had much in the way of discretionary income. But we’re getting close to the finish line, and the house is coming in well under budget (when does that happen?), so I figure I have a little extra money for the first time since 2021.

As I’ve probably mentioned before, my favorite designer is John Varvatos. Needless to say, South Carolina doesn’t have a John Varvatos, so I go when I am in New York or Miami. The Miami store is on Lincoln Road and has been there for years. It sells a surprising amount of outerwear considering the temperature never gets below 70.

Anyway, I didn’t intend to do this, but I did when I was in Miami last weekend: I picked out four jackets, a belt, a pair of boots, a pair of jeans, and a scarf. I went a little nuts. The total: $8,200.

It felt good. I haven’t spent money on myself in over two years. Don’t get me wrong, I have enough clothes, but some people collect guitars, some people collect cars—I collect clothes. I will have a monster closet in the new house to keep all this stuff. I am the most fashionable fat guy in South Carolina.

It feels good to spend money on yourself. Just to be clear, I don’t often allow myself such indulgences, and before you think this is a pattern, that is the most money I have spent on my wardrobe in one sitting in my entire life. I’m here to tell you that it’s okay to do this occasionally, provided that:

• You have no non-mortgage debt.

• You have an emergency fund.

• You contribute 20% of your income to savings and investments.

• You have life insurance.

• You can afford it.

• Etc.

If you do all these basic things, then you can splurge on yourself sometimes. If you already have a ton of credit card debt, it is not advised.

Delayed Gratification

In the United States, we are all descended from the Puritans, so we practice something known as delayed gratification. You earn first and spend later. Some people get this backward; they spend first and earn later. Don’t do this in the wrong order.

Other people take it to an extreme; they delay gratification (and delay and delay), and they never get to the gratification part. Then they get to the end, and they have a huge pile of cash that they never spent.

Let’s be clear: The purpose of money is enjoyment. The key is to get this in the right order. In the first half of your life, you want to be accumulating assets. In the second half of your life, you want to be decumulating assets. 

I am turning 50 next month, so I am in the decumulation phase. I would rather have four jackets, a belt, boots, jeans, and a scarf than the money. The decision matrix was quite a bit different when I was 25. Up until I started interviewing for jobs on Wall Street, I didn’t have one article of clothing that cost more than $20. In fact, I did some of my best shopping in discount stores. I saved what was left over with a vengeance and invested in stocks and bonds and real estate. 

Now it is time to have a little fun. I’m sure you’ve been in the mall and bumped into a woman in her 20s with a designer handbag and designer clothes. That is a walking 600 credit score.

The Economic Cycle

A word of warning: You don’t want to spend too much. Why? Because bad things can happen. The stock market could crash tomorrow. We could end up in a war. Taxes could go up a lot. You could lose your job. Your spouse could lose their job. You could have an unanticipated large expense. 

It’s a bit like gambling—you only want to bring to the table what you can afford to lose. If you are going to spend a lot of money on a fancy watch, you want to be pretty darn sure that even if everything went to hell, you’re not going to need the money.

Be smart, in other words.

No Worries (the book) is still rocking and rolling. If you like these weekly emails and haven’t pulled the trigger on the book yet, I can tell you that the book is much better. I had a really good editor for the book. Not that I don’t have an editor for the newsletter—he’s really good. But you know what I mean. When you publish a book, every word has to be perfect.

Buy the book, or I’ll make you watch Charmed reruns with the sound on.

Jared Dillian, MFA