Pumpkin Spice Latte Financial Planning

Yes, I am exploiting the PSL (Pumpkin Spice Latte) seasonal bandwagon. I’m not the first in the financial business to do so. One of the weirdest was a link from a credit union offering Pumpkin Spice Loans. In the years since, media outlets are hijacking the seasonal treat to link to their own brands. You can also follow the PSL at Twitter-@TheRealPSL.

Now, we all know that there is just a little pumpkin (used to be none at all) in this drink, so I can use pumpkin photos to spice up this post.

Ingredients in this latte:

Pumpkin: Vegetables and Fiber (Needs)

Dairy/Dairy Substitute: Protein (Infrastructure of the Plan)

Sugar: Energy and Taste (Motivation to Act)

Seasonal Spices: Extra excitement (Yes, you can have Wants!)

Whipped Cream: the initial exposure, getting a fresh credit card in the mail, a new job or a raise or (Treats and Rewards.)

Needs

What are your monthly financial needs? Consider the Maslow hierarchy, in which his original definition consists of “air, food, drink, shelter, clothing, warmth, sex, sleep”.

1. Rent or Mortgage (cost of shelter)
2. Utilities and Communications
3. Groceries and Food (Groceries are needs-meals out are wants)
4. Clothing (jeans, er pants, are a need-a specific brand is a want)
5. Time to rest and sleep (hopefully no double shifts)

Financial Plan Infrastructure

1. Spending Plan
2. Income and Expense Monitoring
3. Revise and Adjust
4. Musts:
   1. Data Security (online banking and credit accounts)
   2. Credit History Report Maintenance and Annual Monitoring
5. Financial family meetings or date nights
   1. A family meeting can be a useful way to involve everyone in planning a summer or winter vacation.
   2. I am a big fan of financial date night. It doesn’t have to be expensive, but it is a terrific way to catch up with your sweetie on monthly goals and progress to date. It is also a way to have a planned conversation about cash flow, credit use, and new expenses. Proactive chats, not reactions are, in my experience, easier on a relationship.  This is especially important if financial tasks are divided between a couple or you handle your own money separately from each other.

Motivation to Act

1. 1. External events: job change or loss, promotion, relationship status change, current events, goals achieved, change in incentives from work or hobbies, marketing convinced you, peers or affinity group, family member asked 
   2. Internal events: ruminating, growth, illness or treatment for same, goals achieved, goals or needs changed (See Maslow)

Yes, You Can Have Wants!

1. A new thing come across your path, such as a puppy, product, food or type of entertainment, ideas.
2. Your friends and neighbors have this thing and you want it!
3. You want to replace or upgrade a thing that you own. 
4. More income or cash via a raise, promotion, casino winnings, sold items online, other windfall, found money via an Unclaimed Property website such as www.missingmoney.com   .
5. Whomever you share your financial life with wants this thing, or to experience something like skydiving… 
6. Marketing creates a desire to act-Starbucks sends a text to buy a latte on this day and get more stars! Or an offer comes via your favorite social media or email newsletter urging you to act, before XYZ goes away at 11:59pm.

Treats and Rewards

Yes, they might overlap with wants.

1. Do you bargain with yourself about doing X so you can get Y?

2. Consider any mental accounting, such as “I can spend this money, because look how much I am saving! (60% off)

3. But did you need it before you saw the sale banner?  

4. Be aware of the law of diminishing returns too. (one more drink, truffle, or that last ski run – mine once led to an injury.)

The nature of marginal benefits can change with different applications. For a restaurant, the marginal benefit of serving one more meal can be defined as the revenue that meal produces. For a consumer, the marginal benefit of one more slice of pizza can be considered in terms of the additional satisfaction the pizza will create. But whatever the nature of the benefit, marginal benefits generally fall as quantities increase. https://open.lib.umn.edu/principleseconomics/chapter/6-1-the-logic-of-maximizing-behavior/

Be honest about whether you are treating others, or yourself.

Advertisement