It’s Not the Avocado Toast

It’s not the avocado toast. Or the lattes. Or the Jordans. Or whatever we were scolding people for buying before that. Sure, it would be better if we all had the discipline and willpower to never give in to temptation, never be influenced by the millions of dollars of advertising thrown at us every day, and always make the responsible, rational financial decision. But most of us aren’t built that way.

Ok, maybe this is a little over the top.

It’s not a personality flaw or a moral failing – it’s just human nature. So chastising millennials for buying avocado toast as if that’s what’s keeping them from owning a home isn’t just insulting – it’s missing the point.

We have a finite amount of willpower. There is plenty of research on this: it fluctuates throughout the day; it can be depleted by even relatively inconsequential decision-making; and it has real world impact on the decisions you make. That’s why we focus on helping people use their willpower to create the biggest impact on their financial wellness. Find the points in your life where smart, responsible decision-making is magnified and carried forward month after month after month. It’s a form of automating good decision-making. Focus on getting those right first; then worry about passing on the latte or donut on the way to work.

Here’s a quick example: Let’s say Rachel has a good job and is finally ready to replace her car that’s falling apart. She’s shopped around and really loves some of the brand-new luxury models she’s seen. She’s pretty sure she can afford it if she doesn’t have to come up with much of a down payment, even it if will be a stretch. But Rachel does her homework and talks to her BrightDime financial coach. They go over her monthly budget, talk about the long term costs of a loan that size and how it impacts other goals she may have. They discuss the depreciation new cars have that used cars don’t and talk about why exactly she wants the brand-new model.

Next month Rachel buys a used car. She still gets a new-to-her car and in one smart choice has made her monthly payments significantly lower EVERY MONTH for the next 5-10 years (or however long she keeps paying off that car). The luxury model wouldn’t have felt new after a few months anyway. That’s a single responsible decision that will save her tens of thousands of dollars.

Now contrast that with the pop-finance advice to “bring your lunch from home.” Every day you’ve got to summon up the willpower to get up earlier to pack your lunch and not join the people from your office when they all head out for lunch. Let’s say you save $8 a day. If she can make herself do that every single day she’ll save over $2,000 a year. Would it be great to save that money? Of course! It might even be about equivalent to the car savings depending on which luxury car she had her eye on.

But which option is more realistic? That she can make a tough-one time decision that carries forward for years to come? Or that she’ll be able to wake up every day and pack her lunch, always remember to grocery shop beforehand, and never give in to the temptation to try that new sandwich place with her co-workers? And what about her “utility”? (a dry economics term for the satisfaction she’ll get from her spending choices) Would a car whose newness wears off in a few weeks really be that much better than a used car that does everything she really needs? And what’s the cost to her happiness of never going to lunch with her coworkers?

It would be great if everyone had bottomless reserves of financial willpower. Until that day advice from financial experts should help people focus on the decisions that matter the most instead of on scolding them for not being perfect.

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