Lessons from a Six-Year-Old Credit Card Statement

Yesterday’s article, The Financial Noise, was originally a very, very long draft that included several specific stories from my own life where I talked about the realization of the negative financial impact of “noise” in my life. Although it didn’t really fit in the article, I wanted to share this particular story on its own, because this one experience has really highlighted for me the value of cutting through the “financial noise.”

Recently, while cleaning out our filing cabinet, I came across a six-year-old credit card statement. I had opened it and paid the bill, but it looked like it had been opened just once and barely examined before being stuffed back in the envelope and put aside.

Ordinarily, I’d just toss such things right in the recycling bin, but for some reason, I opened up the bill and looked through it. I was curious as to how I was spending my money six years ago.

What I found rather disappointed me. Even though, at the time, I considered myself pretty frugal, it was kind of rough to read through it.

Why? A large portion of the charges on there were both unnecessary and unremembered. They were for silly things in the moment, like a purchase at a convenience store that was probably a snack I didn’t need. They were for hobby items that, frankly, blur in with many, many other hobby items, completely indistinct in the big scheme of things. There were a number of meals eaten out at completely forgettable places.

Why couldn’t I have just checked out those books from the library?

Why couldn’t I have just eaten at home?

What on earth did I spend $248 on at Target?

I can’t even remember what almost all of these expenses even were – it’s completely forgettable. I assume that some small portion of those purchases were actually necessary and I just don’t remember them, but an awful lot of the purchases listed on that credit card statement come off as completely purposeless.

My life would be strictly better today if I hadn’t made most of those purchases. There’s no question about it. It’s not just the money saved on that bill, but the fact that the same phenomenon is likely true for every credit card bill from that year and from the years around it. So many of those expenses are basically useless in hindsight, and having that money today would push me much closer to actual life goals and big meaningful experiences instead of small, forgettable stuff.

Here’s the thing to remember: This isn’t about beating myself up for the mistakes of the past. The past is gone. I can’t rewrite it. There’s nothing to be gained from being hard on myself for those past mistakes.

Rather, those past mistakes should be used to inform my spending behavior today. That old credit card statement is a big clue as to how I should be spending my money right now.

In short, this credit card statement is showing me the importance of considering my “future self” when evaluating purchases I want to make right now.

What will I think of this purchase I’m about to make when I look back on it in hindsight in six years? Will I look at that credit card statement and not even remember it at all? Or, if I do remember it, will I wonder why on earth I spent my money that way? If that’s the case, then I should rethink this purchase because it’s not adding any long term value to my life.

That’s not to say that the long term perspective should always win. The issue is that the short term perspective – buying what I want in the moment with no long-term consideration – wins too much. In most of the purchases on that statement, I’m pretty confident in saying that I didn’t even consider the long term impact of that purchase. I didn’t even think of what I would think about that credit card statement five years from now.

My solution to all of this is simple. I’ve been doing an 30 day challenge for the month of October where, for every single thing I’m purchasing, I’m simply asking myself what would I think of this purchase looking back on it five years from now?

In a lot of cases, I’m finding that I respond by thinking, “You know what? This is a pretty useless purchase,” and I put the thing back on the shelf or empty out my online shopping cart. Often, this convinces me to find another approach to the problem. I’ll see if a book is available from the library, or I’ll ask my local tabletop gaming group if anyone has a copy of it, or

Sometimes, it is readily apparent that I will care about this in five years – this is particularly true when something is filling a need, like basic food items.

Then there are a few things that I know are short term oriented that I’ll find myself arguing on behalf of rather strongly. Often, it’s something that I feel will have lasting impact, or it’s something that’s part of something deeply important to me, like visiting a roadside attraction with my kids or a dinner with an old friend. I probably won’t remember the specifics of those things five or six years from now, but they’ll be a part of the fabric of something I hold dear – my relationship with my children, or my connection with a lifelong friend.

Thinking of that “future self” might seem like a bother, like that “future self” is a nag sitting on your shoulder. Whenever I feel like that, I just think back to how I felt as I was reading through that credit card statement and looking at all of the expenses I couldn’t remember, the meaningless purchases that really added nothing to my life, and I realize that my life is strictly better when I get rid of those things entirely.

I’m not perfect with it, nor will I ever be. Like most things on our life’s financial journey, it’s trying to hit a constantly moving target. I like to think of it as a spiral of constant improvement, where you’re aiming for a target and sometimes you shoot a little off to the left or a little high, but each time you’re getting closer and closer to exactly where you want to be.

When you’re thinking about purchases this month, take some time to consider your future self in that equation. Imagine sitting down and looking at your credit card statement six years from now and this expense is on that statement. How would you feel about it? If you wouldn’t like that expense, then maybe it’s not really a worthwhile expense at all.

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