Ah, it’s that time of the year again.  The lights are going up, the air is crisp and the stores are packed.  It must be Christmas!  So what’s on your wish list?  Wish lists are interesting things.  Over the years I’ve known lots of people who have wanted very specific things.  They’ve made lists, searched for days or months or years but, in the end, wound up with something totally different.  Let me give you an example.

Years ago we had some friends who were looking for their first home.  They sat down, put together a list and off they went on the hunt.  They wanted a brick home, on a corner lot, off-street parking with a garage, 4 bedrooms, 2 baths, older, with character, and a great school district.  We all pitched in and directed them to every house we thought might be a contender.  After months of searching they bought a wood frame house with 3 bedrooms, 1 bath, on-street parking, in a sketchy neighborhood.  When we asked them why they picked it, they said it had a nice front porch.

I’ve seen the same thing happen with cars.  People have asked my opinion. They’ve told me they want the best gas mileage they can get because they drive a lot.  Something nimble, great handling and reliable but, in the end, they bought a huge SUV.  They then tell me they got “a great deal” and it gets the best mileage “in its’ class”, 20 mpg instead of the 19 mpg the others get.  But I think the most disappointing choices people make are the everyday ones that lead to consequences they don’t really think out to a logical conclusion.

Folks want to save for their future, be financially responsible, not have to worry so much about retirement, but “wanting” to do it and making the day to day choices to make it happen are completely different.  It’s really all about simple math.  We are not the government.  We just can’t spend as we please and print more money when we run out or steal it from someone else.  Our finances are a zero-sum game.  You really only have two choices, earn more or spend less.  If you like to eat out 4-5-6 times a week, enjoy several nice vacations per year, always drive a new car, and give your kids everything they ask for, I don’t want to hear whining about not being able to pay for college, having no money for retirement, or me not being taxed enough.  Dave Ramsey says it best, “If you want to live like no one else later, you have to live like no one else now”.  In other words, every dollar you spend on something you “want” now is 3-4 dollars you won’t have for something you “need” later.

Let’s take the car example.  If you’ve resigned yourself to having a $250/month car payment for the rest of your life, that’s $30,000 every 10 years.  But if you spend $15,000 on the right car, new or used, and keep it for those ten years, treat it well, spend $5,000 to maintain it, you come out $10,000 ahead.  Invest that, plus the $10,000 you’ll add to it every 10 years, and you see how much you can save.

Define the goal, make a plan, execute the plan, and make day-to-day decisions within the framework of the plan.  Organizations should work the same way.  Earlier this year the Air Force came up with a poorly conceived plan to save money and restructure its’ forces.  It produced the plan in a vacuum and then dropped it on the country with little or no pre-coordination.  I think we all remember the results.  There was a blistering wave of protest from all sides and Congress sent the Pentagon back to the drawing board.  Several weeks ago the Air Force decided that, since the last method didn’t work so well, they would try a different tact.  They sent out briefers to Congressional staffers to float a trial balloon.  Nothing in writing, just “talking points”.  The problem was that there was still no strategic planning done, just political maneuvering and an attempt to appease the Council of Governors.  For example, for some bizarre reason they added aircraft back into the 908th at Maxwell but still proposed closing the 911th at Pittsburgh.  The only reason for proposing to close Pittsburgh is that they mistakenly calculated that it has less than 300 civilian positions but, in reality, the 908th actually does have less than 300 civilian positions and they could be closed unilaterally without a BRAC or Congressional involvement.  In fact, AETC has been trying to defund the maintenance and operating costs of the airfield for years which would save the Air Force budget millions per year.  This all comes back to keeping your eye on the goal and thinking long term.

There are plenty of ways we can personally and, as a nation, save money.  We need a safety net in our country but that net has become a hammock for way too many people and raising taxes never solves fiscal problems.  What works for you on a micro basis also works for the country on a macro basis, stop spending!  But that’s a discussion for another day. If there’s something you really want or need it’s never too early to start planning and saving.  Make a list, check it twice…..

Next week, more on goats.