I’m in the USA this summer, staying with my mother. Every time I come to this small town in Wisconsin, I can’t wait to go to the local library and read as many free books as I can. And perhaps because I’ve been thinking more about spending and financial freedom lately, I appreciate “free” in a whole new way. Unlike the US, England does not have the benefit of Carnegie’s legacy and his generous investment in public libraries. This is something I used to take completely for granted but now deeply appreciate. I am still amazed that I can check out 75 books at a time, get interlibrary loans for free, and there are no late fines. It got me wondering what kind of legacy today’s billionaires will leave us with.
But I digress, because my topic today is financial freedom. Although leaving a legacy may be in your long-term plans (it certainly is in mine), I’ve just read a book that got me thinking about a very different aspect of financial freedom: how we’re spending our money.
Rich Girl Nation by Katie Gatti Tassin, host of the Money with Katie Show, is a book I am already thinking about recommending to my daughters. I wish they would read it now, rather than discovering some of these lessons about money the hard way twenty years from now. Tassin writes primarily for American women. Some of the investment advice is specific to the US and won’t necessarily translate directly to women living in the UK. But the underlying message is universal: take charge of your financial future.
And she starts in a surprisingly entertaining place: the beauty industry.
Not long ago, I shared my dismay at discovering that my daughter had spent £126 on “essentials” like glitter to decorate a birthday cake, and body glitter. She explained that it was all for a friend’s birthday party and essential because the theme was glitter. Obviously, duh! It was all perfectly reasonable once she explained it to me, of course.
Tassin begins her book with a similar realization about her own spending. She added up the cost of her regular beauty routine (manicures, pedicures, highlights, and other treatments) and discovered that she was spending hundreds of dollars a month. Katie initially thought perhaps her beauty routine was more than most women’s. But when she looked at the numbers, she discovered that spending around $350 a month was not particularly unusual. The average American woman spends thousands of dollars a year on beauty products and treatments.
What really got my attention was what that money could become if you invested it instead. Katie did the math and calculated that if she took approximately $320 a month, the amount she was considering cutting from her beauty budget, and invested it in a broad-based US stock market index fund earning an assumed average return of around 8% a year, after 40 years it could grow to approximately $1 million.
Of course, an 8% annual return is an assumption, not a guarantee, and actual investment returns will vary. But even allowing for that, I find the calculation extraordinary. A few hundred dollars a month doesn’t feel like a million dollars. That is precisely why it is so easy to overlook. Yet the power of compound growth means that relatively small amounts, invested consistently over a long period, can potentially become very substantial sums.
And suddenly that manicure looks a little different.
What struck me about Katie’s story was not that she was spending the money. It was that she had never really stopped to calculate the true cost. That is one of the great traps of modern spending. Individual purchases don’t necessarily look extravagant. A manicure here, a beauty product there, a monthly subscription, a new outfit, a coffee on the way to work. None of them feels like a financial disaster, but add them together over a year, and suddenly you have a very different number.
Katie wasn’t prepared to give up her beauty routine overnight. Instead, she decided to gradually reduce the spending and invest the difference. That, to me, is a much more interesting approach to financial freedom than simply telling yourself you can never have anything nice again. You don’t have to eliminate everything you enjoy. You do have to understand the trade-off.
The beauty industry is a huge business. Enormous amounts are spent on marketing to make us feel that certain products and treatments are not simply desirable but necessary. Katie makes the fascinating point that beauty is one of the forms of social capital that women have been taught to value. But financial capital can actually grow and compound over time.
That made me think about my own daughters. I was recently sorting through stacks of boxes while clearing out our family home in preparation for downsizing after my divorce. There were lotions and potions everywhere. Makeup, hairspray, tanning products, waxing machines, do-it-yourself gel nail kits. All manner of beauty products that my girls no longer wanted. Ladies, we’ve been properly snookered. The really clever part is that these products don’t simply sell us a product. They sell us the idea that we might not be enough without it.
There was one bright spot, however. A colleague recently told me that the super-wealthy are apparently moving away from the elaborate gel and acrylic nails and favoring natural nails with perhaps a light polish on their toes. I couldn’t help laughing. The beauty standard has changed again, which is precisely the point. One year it’s acrylics, then it’s builder gel, then eyelash extensions, then brow lamination, then some new skincare regime that apparently we absolutely cannot live without. Trends change, so perhaps we should be careful about building our financial lives around them.
While I was at the library, I also picked up a tiny book by Ronald Balzar called The Biggest Problem in the World. It was really more of a pamphlet, but the title intrigued me enough that I had to find out what the biggest problem was. According to Balzar, before you can solve a problem properly, you first have to formulate it properly: what is actually causing the problem, what outcome do you want, and what method will get you there?
It struck me that perhaps we need to apply the same thinking to financial freedom. What if the problem isn’t that we don’t earn enough? What if part of the problem is that we have never stopped to question what we are spending money on?
I have to admit that I’m part of the problem. I recently got builder gel nails and loved them. They are sturdy and look fabulous. Unfortunately, once you’ve got them, you can’t simply take them off yourself. You have to return to the salon for a removal or an infill, at a cost of £10 to remove them and around £30 or more for an infill, with more again to redo them completely.
I can afford it, but that’s not really the point. I don’t want to spend the rest of my life reinforcing the idea that a woman needs perfectly manicured nails and toes to be attractive, well dressed or put together. And it seems a little hypocritical to tell my daughters to save their money rather than spend it on beauty treatments while I’m sitting here admiring my own rather fabulous gel nails. So I’m going back to natural nails.
I’m not suggesting that women should stop enjoying beauty treatments. If having your nails done brings you genuine pleasure and you can comfortably afford it and your retirement is funded, wonderful. The question is whether you are spending because you genuinely value something, or because you’ve been persuaded that you need it. That question applies far beyond beauty.
Women still earn less than men on average, yet we are surrounded by an enormous industry encouraging us to spend money on our appearance. I find that contradiction particularly troubling when I think about my daughters and their generation. Every £30 or £50 spent on something that has been made to feel essential is money that cannot be saved, invested or put towards their future financial independence.
When I was their age, I did my own nails. I used ordinary nail polish and even did them myself for my wedding. Of course, when I tell my daughters this, I can see their eyes glazing over. It probably sounds to them rather like the stories their grandfather used to tell. He would walk to school barefoot so he wouldn’t wear out his only good pair of shoes. We tend to dismiss these stories of doing without as belonging to another era. Life is different now, after all. And it is. But different doesn’t necessarily mean better. And new doesn’t necessarily mean necessary.
And that, I think, is one of the keys to financial freedom. Modern life is full of things that are convenient, enjoyable, and perfectly nice to have. But “nice to have” and “need” are not the same thing. Financial freedom isn’t about depriving yourself. It is about having enough awareness of your spending to decide what is actually worth paying for. And it’s about making sure you have put aside your truly essential savings for retirement BEFORE you get that manicure or what-have-you.
This is what I want my daughters to understand about financial freedom. It isn’t about living like my grandfather’s generation, walking to school barefoot so as not to wear out your only good pair of shoes. The world has changed, and I don’t want them to feel guilty about spending money on things they genuinely enjoy. But just because something is new doesn’t mean it is necessary. And just because we can afford something doesn’t mean we have to buy it.
Every dollar we spend has an opportunity cost. We can spend it today, or we can save it, invest it, give it away, or use it to buy ourselves more freedom in the future. That is the real trade-off.
Because ultimately, financial freedom isn’t about becoming rich for the sake of being rich. It is about having choices. It is about being able to say yes to the things that genuinely matter to you and no to the things that don’t. And perhaps most importantly, it is about making sure that the life you are paying for is actually the life you want to live.
And if you’d like a practical way to start designing your own path to financial freedom, you can also join my Financial Freedom online course.
