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Posted: June 26, 2012

Debt and delusions

There are exactly four ways to spend money

David Sneed

I thought my student loan debt wouldn’t amount to a stack of nickels (being just a fraction of my anticipated post-collegiate earnings). And if the great job didn’t materialize, I might die young, which would clean the slate too. I’m not alone. America seems to be deluded by these rationalizations; We think that debt today is just fine because we’ll earn more tomorrow. We’ve been saying that for the better part of a century now, and where are we? Here’s what we need to understand:

There are exactly four ways to spend money.

  1. You can spend your money on yourself.

We do this every morning when we choose between the Double Non-Fat Mocha Latte - and the Vend-o-Matic in a paper cup. Depending on our taste and budget, we can pick the delicious cuppa’ made the way God intended, or we can drop six bucks at a coffee superstore.

The result? We end up with a cross between what we want and what we can scrounge up the money for.

  1. You can spend your money on someone else.

This happens when it’s your turn to buy the office doughnuts. You don’t pick a special Krispy Kreme for each of your fellows taking account of their personal preference and mood - you find yourself at Safeway boxing up two dozen glazed and, inexplicably, one apple fritter.

There’s nothing wrong with this, but price and convenience play more into your decision than what Ruth in accounting has a hankering for.

You’re happy because that was easy and cheap, even if the recipients don’t get what they want.

  1. You can spend someone else’s money on yourself.

You’ll experience this one when you have a high school daughter. After you agree to buy her a prom dress, she leaves one Saturday with your credit card. Her first stop isn’t K-mart, it’s Nordstrom. She’s not concerned with what the dress costs and will buy the smock with the prettiest bow.

Here is where we start to get into the troubling discussion of public sector spending. This method funded the GSA meeting in Las Vegas, and is how we handle American healthcare.  When someone else picks up the tab, we have no concern for the cost; only that we get what we want.

In this regard, $100 bottles of wine and an MRI to check that pesky cough are essentially the same thing. If we have to pay from our own till, no way it’s worth it. But when Uncle Sam has his credit card out, nothing’s too good for my baby.

  1. You can spend someone else’s money on someone else.

Here’s the one politicians use to win voters. If you give me someone else’s money I’ll probably vote for you. Cost?  Practicality? Who cares! This is why we have bridges to nowhere, social programs that don’t work and $300 hammers. It’s also why we have 26 lobbyists for every Congressman – all with a cause and a hand out. It’s this type of spending that increases your benefits, funds new initiatives, and is why people get things they don’t want - at a ridiculous price.

There are only four ways to spend, and the bad news is that America has been free rolling with someone else’s money for the past 70 years.  There is no good news: Our kids owe the Chinese kids $16 trillion. That’s one dollar - per second - for half a million years.

If you ask me, we need to cut back to basic cable and stop eating out so much – just like I did when I was 23. The one thing I didn’t do was realize I was broke and then offer to loan money to my friends. The Wonks may be right - we may grow the economy out of debt – but shouldn’t we practice at least some thrift as well?

David Sneed is the owner of Alpine Fence Company,and the author of" Everyone Has A Boss– The Two Hour Guide to Being the Most Valuable Employee at Any Company." As a Marine, father, employee and boss, David has learned how to help others succeed. He teaches the benefits of a strong work ethic to entry and mid-level employees. Contact him at

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Readers Respond

I haven't read the book, but I suspect he and I had the same economics professor. That's where I picked it up. I'll be looking up the book though, thank you. By David Sneed on 2012 06 26
Right on, David. Well said. I think you may have got your four ways to spend money from the book The Debt Bomb by Senator Tom Coburn (R- OK). If I'm mistaken about that, you - and every other concerned person - should read this sobering book about why America is finding it so hard to deal with its debt problems. If, after reading it, you think we'll pay serious attention to the problem before we have a major financial catastrophe in this country, I will eat my (last remaining) hat! By Graham Russell on 2012 06 26
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