Whatever you do, don't follow the herd! - The Broke Professional

Whatever you do, don’t follow the herd!

I really need to get something off my chest about the thing that bothers me the most around holiday time.  It’s not the busy roads or hordes of people mindlessly flocking to the mall.  It’s not dealing with people everyday who are stressed out to the max.  It’s not even the barrage of Christmas colors and songs that hits you everywhere you go.  All of those things suck.  But it’s not what annoys me the most.  The thing that annoys me the most is…garbage day.

Yes, garbage day.  The day the nice garbage men come around and collect our built up waste for the week.  It is usually on an assigned day of the week.  In our neighborhood it is Friday morning, meaning you put it out on the curb Thursday evening.  Sounds simple enough.  Now, even those nice garbage men need days off.  They work for the county after all, so they get all major holidays off.  Which means the day they don’t work, the garbage doesn’t get collected.  They made a system for this that has been in place since the dawn of time: if your collection day is on the holiday or after, your new collection day will simply slide to the next day.  You can even go on the county’s website and they have a nice little chart that will tell you the EXACT DAY when your trash will be picked up.  Sounds easy enough right?

WRONG!  This is not easy for about 50% of the people living in your neighborhood.  (I have driven through my neighborhood and verified this percentage like a crazy man.)  They have lived in this neighborhood through many holidays, yet they will invariably always put their trash out the day before a holiday.  Someone will see that someone else put their trash out, and will feel the urge to do the same.  Yet they know full well that tomorrow is Christmas and nothing happens on Christmas, including the trash getting collected.  But they do it anyway.  This pattern repeats itself on New Years Day, the Fourth of July and other national holidays.

Now, there is nothing horribly wrong with putting your trash out when it’s not going to be collected the next day.  You’re stinky refuse will just be on display for your neighbors to enjoy for a day longer.  Not the end of the world.   What is disconcerting about it is the herd mentality.  It makes you do things that you shouldn’t be doing, even though you know better.  I would wager that pretty much every homeowner in my neighborhood knows that the trash is collected the day after your usual day when it’s a holiday.  I’ve seen and talked to many of my neighbors and they seem like fairly intelligent people.  Even if they don’t know when the exact collection day is, I’m sure they have an inkling that the collection schedule usually changes around holiday times.  But still, like every holiday, a lot of people will put their trash out on their usual day because other people are doing it.

Wow I just spent about 500 words talking about trash day.  The moral of the story is to avoid the herd mentality!  It makes smart people do stupid things.  This is oh so prevalent in the world of money, and it can get you in a lot of trouble.  The examples are almost endless.  The big one which gets people in a lot of trouble is Keeping up with the Joneses.  This is when people buy things that are more expensive than they need or can afford.  “Hey that cool looking guy down the street got a BMW.  Let me check online and see if there are some deals in the area.”  Before you know it you end up in a showroom and sign off on a car which will cost you $500 a month for many years.  And your 5 year old Honda was working great all this time.  This is a classic example of following the herd even though you know that money could be put to better use.

Another thing the herd does?  They don’t save for the future.  They’re too busy keeping up with their neighbors to do so.  According to a report by the National Institute on Retirement Security, one third of people between ages 55 and 64 have saved NOTHING for retirement.  That’s right, 33% of the country will have to work until they die or depend on social security or family in their latter years.  The median amount of savings among this age group is $12,000.  That’s about how much they spend taking the entire family on the obligatory 2 week long Disney World vacation.

The herd has no idea what they’re doing when it comes to saving for retirement, so don’t be one of them.  The most efficient way to save for retirement is to cut your unnecessary expenses and use that extra cash flow to contribute to your retirement accounts.  If you get a raise or sudden influx of money, funnel it into your retirement and forget about it.  You already proved you can live without that money so you don’t need to spend it all.

There are so many examples when following the herd is the wrong financial move (more future post ideas!)  Lifestyle inflation and not saving for retirement can be two of the more disastrous ones.  Don’t worry about what the average person is doing financially, because they’re probably doing it wrong.

Happy New Year everyone!  I’m so not looking forward to trash day this week.

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