Saving Vs. Sparing: Giving Meaning to Your Money
Me Poupe! – 10 passos para nunca mais faltar dinheiro no seu bolso. Sextante.
Nathalia Arcuri is a journalist that became a phenomenon in finance in Brazil. Her YouTube channel now has more than six million subscribers. She wrote a book called “Spare Me!” where she shares that she achieved one million in her bank account at the age of 32. What is the reason for this success? How has the economy turned out to be interesting for Brazilians? What is her process to teach people about money? All these answers can be solved by reading the book “Me Poupe!” (2018). It has since sold over 500,000 copies.
The answers start to be found early in the reading process of the book. Arcuri emphatically talks about how finance is not part of the common knowledge of the Brazilian population and understands as a challenge that more than making people turn to be rich, her goal is to make people think about money or even better, not fear money. To reach it, she introduces key ideas at the very beginning to motivate the reader to keep going through the whole book journey. For example, try to read the book at the same time as your friend, decide on a deadline for finishing the book, and scan your financial life at a superficial level to get an overview of the situation. All these steps are advised to be written down during the reading.
The little exercise of taking paper and pen to write things downturns into a habit for the reader. It’s the very first of many. Although the book has a very empathetic way of communication, it doesn’t mean the reading time for the reader will be easy. A lot of practical exercises come up and participation in them is essential to absorb content and keep going to the next step. The book has ten steps to never miss more money in your pocket. In fact, the full title of the book is: “Spare Me! – Ten Steps to Never Miss More Money in Your Pocket”.
One empathetic way the journalist found to talk about the missing knowledge on finance is to invite the reader to check if they suffer from “moneyphobia”. Often, the difficulty to talk about money and the incorrect ways to treat money is compared to this fictional condition the book calls “moneyphobia”. Wait, no panicking! Arcuri assures you that there is a cure for it, and you should follow step by step of the book as a remedy to heal “moneyphobia”.
Early in the book the importance of self-knowledge is pointed out. In effect, psychological finance is present all the time and at least for me, it was an indispensable part. How can we change our habits if we don’t know the positive consequences? How can we save money if we don’t have a goal? How can we focus if we don’t know our values? What are our values? Have you ever thought that they are strictly connected to your consumption habits? Arcuri lists six values connected to money and gives an exercise to pick three of them: freedom, security, love, status, respect, and recognition. I decided to choose only two of them: security and freedom.
After defining my values, I was able to go further and think about the five important questions when consuming a product or service. What do you want to buy? Very simple answer, strictly the product or service. Do you know why? Here is why for me it was important to have my values well settled. The purpose of this purchase needs to be aligned with my values, if it’s not, I can stop the questions right here and not keep asking more. OK, let’s say it’s an essential service and it’s aligned with my values, then the next question Arcuri gives to us is when? It’s an interesting thought because we (or is it only me?) want immediate solutions for our wishes and sometimes, they could wait a little longer. How much? When this question comes up while reading the book, you probably can answer straight away how much your dream house costs but you are not considering your savings, your income, your time etc. All these things need to be considered when answering how much something costs for us. And last but not least, the question raised in the book is who is paying for it? If you have financial independence and live alone it might be simple to answer but when you have your finances connected to someone else or even more than one person, it can start to be tricky.
It might sound like a lot of work to reflect on all these topics deeply, but it was not. The structure of the book permits me to first understand that I have bad financial habits, then it provides tools and manuals to change the habits and most importantly, how to feel comfortable facing them. After all, who doesn’t want to organize the finance party of your own life?
My main takeaway from the financial psychology mindset was one of the tips to keep your purpose and goals alive while working to achieve them. The idea is to put Post-its on the refrigerator door or change the screensaver of your phone or computer to always remind you of your goals. I was familiar with the screensaver tactic because I did it unintentionally during the application process of my current job. It had been four long months since the first email until the final offer call, watching the photo of the office I now visit every day. I can confidently say, it works.
After this long preparation, it’s time to act. From the fifth step of the book, things start to be interesting for those who never invested – or even worse, who thought investing was something only for rich people.
The first subject Arcuri covers is the difference between saving and sparing money. While saving is only the action of keeping your money somewhere rather than using it, sparing is explained in a way that finally helps us to understand the title of the book. Sparing here doesn’t mean not using money. Instead, it means to give meaning to the money when you use it: to know why you used this quantity last month and why you want to keep using it next month. Arcuri is not against using money. She actually talks happily about the pleasure of buying something but emphasizes how delicious it is when you plan, work for it and finally accomplish the purchase. Satisfaction.
However, before investing, we still need to know how much is available in our pocket to do so. At this point in the book, I found what I consider the most valuable exercise of the book. It’s a technique that I’m working on now and I’m hoping to use it for the rest of my life. I’m talking about the 30/70 formula that Arcuri created. Thirty percent for the future, seventy percent for the present. Inside the thirty percent we have a division of one-third for retirement and two-thirds allocated for goals, short- and long-term goals. Now for the present time percentage, we have the division of fifty-five percent for essential costs, five percent for education, and the most satisfying one, ten percent for whatever you would like to use.
It’s worth saying that the essential costs should include absolutely everything that’s essential in your life. No shame. If having five beers every weekend is an essential use of money for you, then it is. The point is to be honest with yourself and try to fit your finances inside the formula. The only concern we should have at this point is to be sure our living costs successfully fit in the formula. If you struggle somehow, it means you are spending more money than you should. Maybe time to review your expenditures?
I like that education has a relevant percentage in the formula. Thinking long-term, the only way to increase your money is to increase your income and it’s hard to get a better salary when you have the same skills for years.
I would like to highlight more about this book: although it provides a cost formula, it doesn’t have a defined way to reach your financial goals. The book incentivizes the reader to be creative and search for what could work for them in their own reality. Ask for a raise, sell sweeties at universities, and sell your services as a cleaner; it doesn’t matter. The book only gives valuable tools, but each reader should identify what would work for themselves.
There are still many other exercises and reflections about money in the book, as well as tips about investing in Brazil, showing that almost anyone could start it today, even with a small amount of money. However, I would like to wrap up and emphasize how excited I am about this book and how much I want to present these ideas to my family, friends, and of course, my team at Proakatemia. I would like to present these ideas not only as tips but also as ways of thinking about money.
Activities involving money should not be a struggle; they should be a pleasure, and more than anything, a planned decision. While I talked a lot about the exercises and the main formula, I didn’t talk about how the money should work for you. I thought it was not valuable content to dive into since the book focuses on the Brazilian investment background. Yet, it is one key point when thinking of sparing money. The idea of sparing is not only to save money, it is to make the money work for you while investing.
I really like how the book ends by using psychology once more. Take little steps instead of overwhelming changes, start to assume responsibility for your actions, the consequences being positive or negative, and one more worth mentioning: to be grateful for bad events in your life. It sounds strange at first but with some reflection, it makes sense. Would you be interested in reading this essay if your financial situation was stable? Would you learn the value of money if you inherited thousands from your parents? These are examples from finance, but you can apply this way of thinking to any area of your life. The book is an easy read, and the content is so valuable that I feel like reading it again and putting the exercises into practice. I hope by now you are wishing to spare money instead of only saving it and even better, excited to read this book!
Arcuri, Nathalia. 2018. Me Poupe! – 10 passos para nunca mais faltar dinheiro no seu bolso.