A Letter to the Man Who Just Got His First Raise

Congratulations. I mean it. A raise is a good thing, and I want you to enjoy it.

But I also want to write you a letter, because the thirty days after the raise are where most men make decisions they will regret for the next ten years. The paycheque grows by a specific amount. The lifestyle grows to match it almost immediately. And the raise disappears into an apartment that is a little nicer, a car that is a little newer, subscriptions that multiply quietly, and the vague sense that you are earning more and feeling about the same.

I am going to tell you something that will probably sound strange coming from a man who writes about personal finance.

I drive a 2002 Toyota Camry.

It has a sunroof, which I use. It has heated seats, which I use more. I bought a Bluetooth receiver that plugs into the auxiliary port so I can take calls and play music from my phone. I have a magnetic charging mount on the dash. The car is twenty-three years old and it is, by any honest measure, a great car. It starts every morning. It gets me where I am going. It has cost me almost nothing in the last three years besides oil changes and one new battery.

I bought it for cash.

I want to tell you what that means, because it is the single most important thing I can pass along to a man holding a new paycheque.

When I pull into a parking lot, I am not making the monthly payment on that car. Nobody is. It is mine. The money that would have been going into a payment on something newer is going into our TFSA. Every month. Without me doing anything. That is a specific kind of freedom, and it is not small.

The difference between a $500 monthly car payment and nothing is six thousand dollars a year. Six thousand dollars a year invested in a TFSA for the next thirty years, assuming reasonable growth, is about six hundred thousand dollars at retirement. That is not a typo. The man who drives a Camry and invests the difference arrives at retirement with a completely different financial picture than the man who drives the newer car and does not.

Stay with me. I am not writing this to shame anyone into a Camry. I am writing it because I want you to understand something that the advertising you consume every day is designed to prevent you from understanding.

Your car is not who you are.

It is a tool that gets you from one place to another. The number of people who will be impressed by your car is small. The number of people who will assess your entire identity by your car is smaller still, and those people are not ones you want to be performing for anyway.

The Thing Ramit Sethi Calls Guilt-Free Spending

I learned something years ago from a book by Ramit Sethi, a secular personal finance writer who is not a Christian but who has put his finger on something worth hearing. He calls it guilt-free spending, and the idea is simple. You decide what you actually care about. You spend freely on those things. And you cut brutally on everything else.

The insight is that most of us have it backwards. We try to cut spending on everything and end up vaguely deprived and still broke. Or we spend freely on everything and end up with lots of stuff and no margin. The middle path, the one that actually works, is to decide what gives you life and spend real money on those specific things, then notice what you do not actually care about and let those line items go.

I care about coffee. I will happily spend money on good coffee. I do not care about new cars. So I drive the Camry and enjoy the coffee. I care about taking my family on one real trip a year. I do not care about a large wardrobe. So we plan the trip and I have three pairs of pants. Somewhere between those two poles is the man I actually am, and my spending tells the truth about him.

Jesus said it in Matthew 6: where your treasure is, there your heart will be also. He was talking about something more ultimate than a car, but the principle scales. Look at your bank statement from the last three months. The categories where the dollars went tell you what you actually loved, regardless of what you said you loved. If the car payment is larger than your giving, it is worth asking why.

Spend More on Experiences Than Stuff

The other thing I have absorbed from reading widely - from Christian writers and secular writers alike - is that the return on experience spending is almost always higher than the return on stuff spending.

A new couch will feel new for about four months. Then it is a couch. A weekend away with your wife will be a memory you come back to for the next decade. Dinner with a friend you have not seen in a year will shape a conversation you will still think about when you are sixty. A vacation you cannot quite afford but go on anyway, with the people who matter, is the kind of thing that becomes part of the family mythology.

I am not saying go into debt for experiences. I am saying that when you have the margin to spend on something above the baseline, spend it on experiences more often than on stuff. The math on joy works out better.

The Shift That Comes in Your Thirties

Here is something I want you to understand early, because nobody told me and I figured it out slower than I should have.

There is a point at which the next dollar of financial progress does not come from cutting expenses anymore. It comes from earning more.

In your twenties, spending discipline is everything. You cannot save what you spend, and most men spend everything they earn in their first few years of work. Getting that under control is the primary lever. Dave Ramsey and Ramit Sethi and most sensible people agree on this.

But at a certain point, you hit the floor of what you can reasonably cut. You are already driving the old car. You are already making coffee at home. You are already on the cheap phone plan. There is not much more to squeeze out of the spending side, and every additional dollar of savings you are trying to wring out is a dollar taken from something that actually matters to you.

At that point, the conversation shifts. The next dollar has to come from the income side. A raise at work. A side project that generates revenue. A skill you sharpen enough that someone is willing to pay more for it than they were willing to pay last year.

Here is the part I want you to absorb. You have something valuable that someone else is willing to pay for. Other people are willing to spend more money than you would on things you already produce or skills you already have. I am often a cheap person - I would not pay $300 for a service I am used to providing myself for free - so my instinct is to assume nobody else would either. That instinct is wrong. Other people have different budgets, different priorities, different time constraints. If you are adding real value, they will pay, and the number they will pay is higher than the number you would pay in their position.

Stop pricing your work based on what you would spend. Price it based on what the work is actually worth to the person receiving it.

Take Advice From More Than One Person

One more thing before I close.

If you are learning about money from one teacher, you are going to end up with a one-dimensional understanding. Dave Ramsey will give you fantastic instruction on getting out of debt and not much useful guidance on growing wealth beyond a basic mutual fund. Ramit Sethi will give you excellent instruction on guilt-free spending and a thinner theological framework. Randy Alcorn will give you a deep understanding of the theology of generosity. John Piper will give you the category of Christian hedonism and how to think about joy and money together. CCEF counsellors will help you see what your money patterns reveal about your heart.

No single teacher has it all. Read widely. Take what is useful. Hold what seems right against Scripture. Keep what endures.

The Point of All This

You have a new raise. You have a slightly bigger paycheque. You have a thousand small decisions to make in the next three months that will set the direction of your financial life for the next decade.

Here is what I want you to do.

Drive a car you bought for cash. Put the difference into your TFSA on automatic. Spend freely on two or three things that genuinely give you life. Cut brutally on everything else. Pick experiences over stuff when you have the choice. When you hit the point where spending cuts stop producing results, work on growing your income - and do not apologise for what your work is actually worth.

There is a specific kind of joy available to the man who has fewer things than his peers and more freedom than he expected. The lifestyle escalator promises a richer life at every rung. What it delivers is more expensive maintenance on things you stop noticing.

Stealth wealth, it turns out, is mostly stealth freedom.

Drive the Camry. Pay cash. Save the difference. Enjoy the coffee.