Frugality and life balance.
Jan. 15th, 2010 12:21 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
jamethiel posting in ![[community profile]](https://www.dreamwidth.org/img/silk/identity/community.png){kind=small}
actyourwageSo, I've been reading a lot on frugal living. In general, it's something I'm really in favour of. But you can carry it too far. I've never met a pair of darned socks that didn't give me blisters, for instance. (If they don't cause you blisters, congrats! Give me your darning secrets!)
So you've got your budget up and running and more or less on track. You've worked out a schedule of payments so that you're on track to meet and exceed your minimum repayments. You're squirrelling some money away and you've got a little bit of savings in the bank. You've worked out areas in your life where you can save money and you've instituted routines to help you do so--bringing your lunch to work, eating before you go shopping, etc.
Then you start to think "I could really use such-and-such". And you have the money saved! Right there! It's fine to buy it! It's a reward for all of your hard work saving, right?
... no. Not exactly.
Now, I have to fight a part of my brain that goes "But I DESERVE THIS." The way I fight that part of my brain? "Life isn't fair, cupcake. Suck it up."
I also deserve to have good financial habits that will mean that I WON'T be in penury when I'm retired. So it's a balancing act. I don't feel guilty about spending money and I don't think you should either. Except when it gets in the way of your other goals. At the moment, my number one goal is to get out of debt (ROLL ON AUGUST!). But even having said that, I don't put EVERYTHING I have on the credit card. I've worked out my payments to get out of debt by August. I have other things that I save for as well, because a life that isn't fun isn't really worth living. And some of that money is saved for stuff that I want, as opposed to stuff I need.
But I don't have enough to go around buying everything I'd like. So here's what I do to ensure I don't go spending willy-nilly.
I put what I want on a list.
At the beginning of each month, I start a list titled "< Insert month here >'s wish list." It's a piece of paper. I stick it in a notebook that I carry around with me. Every time I think "I really want that", out comes the list and on it goes. Then at the end of the month, I take the piece of paper out and I file it.
In the meantime, I continue saving. All extra money that I haven't accounted for goes into my savings accounts. I have four levels of accounts--my emergency fund, which is only for catastrophies, my "big expenses" fund (yearly train ticket, etc.), my housing fund and my "Shiny things!" fund. The money gets divided evenly between all four.
When I file the next month's list, I look at the previous month's list. I cross off anything I wanted then, which now seems ludicrous (case in point: a pony, from November's list. Um, no.) Then I put the list back for another two months.
At the end of the three months, I take it out again and look at it. I've got some evaluation points:
Is this something I consistently wanted for all three months? (If the answer is no, then it's probably not something that's really worthwhile).
Will I actually use it? Honestly, no fooling. If I buy something that doesn't fit into an established pattern, I make a committment to either "Use it x times in a month or sell it." I give myself three months to see if I can keep the use up and if I don't make that--hello eBay. I have very limited space and I'm not fond of junk.
Is it compatible with my lifestyle?(I love some extraordinarily impractical things. See: pony, and also this gorgeous red and gold glass vase. It would last three seconds before the cats destroyed it. So not compatible with my lifestyle)
Can I afford it? The criteria for me is: it has to be in my "shiny things" account. Not taken out of emergency or my expenses funds. If I take some of the money out of my next paycheck, I still have to be meeting all of my other financial obligations without stress.
Is it the best thing for my needs? If I've decided to spend the money, there's no point getting something cheap and crappy that will last six months and then break. I really want an iPod nano and Nike + sensors. But there's some debate over how good the sensors really are--if they're based on average pace, they're not going to be that accurate. There're problems with the battery.
Hmmm. It costs another $50, but I can get a GPS watch which tracks heartrate. Costs more, doesn't have the music functions. I'll have to read around on review sites and see which is the better buy.
Will getting this prevent me from getting other stuff? Or, how much do I want this? Balancing act. I really want a couple of hundred dollars of CDs (from artists I really admire. I fully believe that buying music is worthwhile). But realistically, I can live without them. I couldn't live without ANY music, but I've already got 22 gig. So it's not as urgent as, say, buying that embroidery course from a tutor who's coming out from overseas. But if I buy the embroidery course, I can't buy the iPod nano. It's priorities and you have to decide what yours are.
So. All in all this approach works for me. Maybe three months doesn't work for you--let me know what does! But give it a try and see what you think.
So you've got your budget up and running and more or less on track. You've worked out a schedule of payments so that you're on track to meet and exceed your minimum repayments. You're squirrelling some money away and you've got a little bit of savings in the bank. You've worked out areas in your life where you can save money and you've instituted routines to help you do so--bringing your lunch to work, eating before you go shopping, etc.
Then you start to think "I could really use such-and-such". And you have the money saved! Right there! It's fine to buy it! It's a reward for all of your hard work saving, right?
... no. Not exactly.
Now, I have to fight a part of my brain that goes "But I DESERVE THIS." The way I fight that part of my brain? "Life isn't fair, cupcake. Suck it up."
I also deserve to have good financial habits that will mean that I WON'T be in penury when I'm retired. So it's a balancing act. I don't feel guilty about spending money and I don't think you should either. Except when it gets in the way of your other goals. At the moment, my number one goal is to get out of debt (ROLL ON AUGUST!). But even having said that, I don't put EVERYTHING I have on the credit card. I've worked out my payments to get out of debt by August. I have other things that I save for as well, because a life that isn't fun isn't really worth living. And some of that money is saved for stuff that I want, as opposed to stuff I need.
But I don't have enough to go around buying everything I'd like. So here's what I do to ensure I don't go spending willy-nilly.
I put what I want on a list.
At the beginning of each month, I start a list titled "< Insert month here >'s wish list." It's a piece of paper. I stick it in a notebook that I carry around with me. Every time I think "I really want that", out comes the list and on it goes. Then at the end of the month, I take the piece of paper out and I file it.
In the meantime, I continue saving. All extra money that I haven't accounted for goes into my savings accounts. I have four levels of accounts--my emergency fund, which is only for catastrophies, my "big expenses" fund (yearly train ticket, etc.), my housing fund and my "Shiny things!" fund. The money gets divided evenly between all four.
When I file the next month's list, I look at the previous month's list. I cross off anything I wanted then, which now seems ludicrous (case in point: a pony, from November's list. Um, no.) Then I put the list back for another two months.
At the end of the three months, I take it out again and look at it. I've got some evaluation points:
Is this something I consistently wanted for all three months? (If the answer is no, then it's probably not something that's really worthwhile).
Will I actually use it? Honestly, no fooling. If I buy something that doesn't fit into an established pattern, I make a committment to either "Use it x times in a month or sell it." I give myself three months to see if I can keep the use up and if I don't make that--hello eBay. I have very limited space and I'm not fond of junk.
Is it compatible with my lifestyle?(I love some extraordinarily impractical things. See: pony, and also this gorgeous red and gold glass vase. It would last three seconds before the cats destroyed it. So not compatible with my lifestyle)
Can I afford it? The criteria for me is: it has to be in my "shiny things" account. Not taken out of emergency or my expenses funds. If I take some of the money out of my next paycheck, I still have to be meeting all of my other financial obligations without stress.
Is it the best thing for my needs? If I've decided to spend the money, there's no point getting something cheap and crappy that will last six months and then break. I really want an iPod nano and Nike + sensors. But there's some debate over how good the sensors really are--if they're based on average pace, they're not going to be that accurate. There're problems with the battery.
Hmmm. It costs another $50, but I can get a GPS watch which tracks heartrate. Costs more, doesn't have the music functions. I'll have to read around on review sites and see which is the better buy.
Will getting this prevent me from getting other stuff? Or, how much do I want this? Balancing act. I really want a couple of hundred dollars of CDs (from artists I really admire. I fully believe that buying music is worthwhile). But realistically, I can live without them. I couldn't live without ANY music, but I've already got 22 gig. So it's not as urgent as, say, buying that embroidery course from a tutor who's coming out from overseas. But if I buy the embroidery course, I can't buy the iPod nano. It's priorities and you have to decide what yours are.
So. All in all this approach works for me. Maybe three months doesn't work for you--let me know what does! But give it a try and see what you think.
(no subject)
Date: 2010-03-09 02:26 pm (UTC)I will wait longer for more expensive things to be really really sure I'm committed to part with that much money and to give myself time to shop for the best price, highest quality, most personally satisfying version of the high-ticket item, and to find an appropriate time to add it to my life. E.g.: I have been wanting to replace my (used when I got it, swaybacked, creaky, chewed-by-dog, ugly, but not uncomfortable) bed+mattress for about 5 years. At various points I could have afforded a new one but did not because a) nothing on the market was quite what I wanted, b)I was about to move house and wasn't sure how my furnishing wants would change in a new space, c)didn't have enough in my discretionary account at that time.
On the other hand, I've bought an mp3 player within a couple weeks of deciding I wanted one, because I found an excellent price on one that was close to my ideal, because I could easily see how it would be not merely compatible, useful & durable, but an improvement over the existing state of affairs (boombox & huge CD library) in those ways. And because it would be extremely useful at an event coming up soon, for which my existing sound setup would be something of a handicap. When I'm very confident that an expense meets or exceeds all the criteria, I will sometimes make a quick decision on a discretionary purchase, especially if doing so will reduce cost or add value.
I am sad that my lifestyle is inconsistent with having a pony. I think this indicates something wrong with my lifestyle. ;-)
P.s. I darn woolen socks, and find them comfy, but I find the results with cotton aren't worth the trouble. I'd be glad to discuss darning by PM--thread geek here.
(no subject)
Date: 2010-03-10 05:40 am (UTC)I think EVERYONE's lifestyle should be compatible with having a pony. Ponies for everyone!
(I mostly have cotton socks, although I am thinking about knitting some woolen ones for myself this winter. I'm just not sure about the itching!)