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actyourwage2010-04-23 09:31 am
jamethiel) wrote in actyourwage2010-04-23 09:31 am
Entry tags:
Catch up post and a bit more talk about the psychology of money
Hello everyone! How did your weeks go? Did you succeed in not eating out?
I didn't. I got sick (again. Or still. Stupid ears) and that led to me just being too damn tired to make the right choices. I did have dinner at home every night but that was mostly cooked for me and sometimes consisted of canned soup.
Lunch was where I really fell over. I am craving take-away food like there's no tomorrow. High fat, high salt, high in chilli. I bought lunch probably six times over the past two weeks.
But, it happens. With the ferocity I was craving stuff, I decided to go with it. It's not the best decision in the world, but it's not the worst either. Stuff happens and you deal the best you can.
I really debated whether to make this a separate post or not, but I guess I'll stick it under a cut tag at the end so as not to spam your reading lists.
I am two months away from getting out of credit card debt.
I also have enough RIGHT NOW to buy a yearly public transport ticket.
I've actually had to weigh up whether it is more advantageous financially and psychologically. On one hand, the money that is for the ticket could completely wipe out my credit card debt. That would certainly free up a significant monthly expense. Also, I am so committed to getting this debt gone it would be a huge psychological relief. However, doing that would only save me... well. By now, about $5 in interest charges, if the debt goes by the time I expect it to.
Buying the yearly ticket will save me approximately $8 a month. So there's a point right there in the financial column. It will also free up a portion of my monthly expenses--not as much as the credit card, as I have to plan ahead and save for next year's monthly ticket. But it would give me a little bit of wiggle room. It's an expense that I have to pay anyway--I can just choose to pay more by the month, or all of it upfront and save. I travel to and from work every day and into the city on weekends by public transport and this is not going to change in the next year.
I've wanted a yearly ticket for ages, but saving up little bit by little bit, things happen and my savings get chipped away. This month I am due to have three paychecks, and for the first time I have the money right there.
If I use the money to wipe out my debt, it will take me three months to save it up again, using the extra funds saved up by getting rid of the credit card payment. That's assuming nothing else happens, which it always does.
I may have talked about this before, but it's a direct application of Samuel Vimes' Boots Theory of Economic injustice, which runs as follows:
At the time of Men at Arms, Samuel Vimes earnt thirty-eight dollars a month as a Captain of the Watch, plus allowances. A really good pair of leather boots, the sort that would last years and years, cost fifty dollars. This was beyond his pocket and the most he, Vimes, could hope for was an affordable pair of boots costing ten dollars, which might with luck last a year or so before he, Vimes, would need to resort to makeshift cardboard insoles so as to prolong the moment of shelling out another ten dollars.
Therefore over a period of ten years, he, Vimes, might have paid out a hundred dollars on boots, twice as much as the man who could afford fifty dollars up front ten years before. And he would still have wet feet.
Without any especial rancour, Vimes stretched this theory to explain why Sybil Ramkin lived twice as comfortably as he did by spending about half as much every month.
So. When your finances are stretched and you DON'T have enough money to take advantage of bulk deals, you spend less in the short term but more in the longterm. And saving up money for a long-term goal is HARD when finances are tight and when you have your rat brain going "But it's only one DVD!"
I've had to put aside my emotional commitment to paying off my credit card debt and say "Paying off my credit card now saves me $5 over the next two months. Buying a yearly ticket saves me $95.80 (compared to the cost of 12 monthly tickets) over the next year (which I had in my budget anyway) not to mention if I put the money aside and it stays in an interest bearing account. Which works out as an extra $152.10, at a lower interest than I'm currently getting. So that's an overall gain of $247.90"
So, I went with the option that made financial sense over the one that is giving me more emotional satisfaction. And I'm proud of myself for doing so. Of course, both options here are good, so it was really a no lose option.
What are the areas where your emotional involvements take over past financial gain?
I didn't. I got sick (again. Or still. Stupid ears) and that led to me just being too damn tired to make the right choices. I did have dinner at home every night but that was mostly cooked for me and sometimes consisted of canned soup.
Lunch was where I really fell over. I am craving take-away food like there's no tomorrow. High fat, high salt, high in chilli. I bought lunch probably six times over the past two weeks.
But, it happens. With the ferocity I was craving stuff, I decided to go with it. It's not the best decision in the world, but it's not the worst either. Stuff happens and you deal the best you can.
I really debated whether to make this a separate post or not, but I guess I'll stick it under a cut tag at the end so as not to spam your reading lists.
I am two months away from getting out of credit card debt.
I also have enough RIGHT NOW to buy a yearly public transport ticket.
I've actually had to weigh up whether it is more advantageous financially and psychologically. On one hand, the money that is for the ticket could completely wipe out my credit card debt. That would certainly free up a significant monthly expense. Also, I am so committed to getting this debt gone it would be a huge psychological relief. However, doing that would only save me... well. By now, about $5 in interest charges, if the debt goes by the time I expect it to.
Buying the yearly ticket will save me approximately $8 a month. So there's a point right there in the financial column. It will also free up a portion of my monthly expenses--not as much as the credit card, as I have to plan ahead and save for next year's monthly ticket. But it would give me a little bit of wiggle room. It's an expense that I have to pay anyway--I can just choose to pay more by the month, or all of it upfront and save. I travel to and from work every day and into the city on weekends by public transport and this is not going to change in the next year.
I've wanted a yearly ticket for ages, but saving up little bit by little bit, things happen and my savings get chipped away. This month I am due to have three paychecks, and for the first time I have the money right there.
If I use the money to wipe out my debt, it will take me three months to save it up again, using the extra funds saved up by getting rid of the credit card payment. That's assuming nothing else happens, which it always does.
I may have talked about this before, but it's a direct application of Samuel Vimes' Boots Theory of Economic injustice, which runs as follows:
At the time of Men at Arms, Samuel Vimes earnt thirty-eight dollars a month as a Captain of the Watch, plus allowances. A really good pair of leather boots, the sort that would last years and years, cost fifty dollars. This was beyond his pocket and the most he, Vimes, could hope for was an affordable pair of boots costing ten dollars, which might with luck last a year or so before he, Vimes, would need to resort to makeshift cardboard insoles so as to prolong the moment of shelling out another ten dollars.
Therefore over a period of ten years, he, Vimes, might have paid out a hundred dollars on boots, twice as much as the man who could afford fifty dollars up front ten years before. And he would still have wet feet.
Without any especial rancour, Vimes stretched this theory to explain why Sybil Ramkin lived twice as comfortably as he did by spending about half as much every month.
So. When your finances are stretched and you DON'T have enough money to take advantage of bulk deals, you spend less in the short term but more in the longterm. And saving up money for a long-term goal is HARD when finances are tight and when you have your rat brain going "But it's only one DVD!"
I've had to put aside my emotional commitment to paying off my credit card debt and say "Paying off my credit card now saves me $5 over the next two months. Buying a yearly ticket saves me $95.80 (compared to the cost of 12 monthly tickets) over the next year (which I had in my budget anyway) not to mention if I put the money aside and it stays in an interest bearing account. Which works out as an extra $152.10, at a lower interest than I'm currently getting. So that's an overall gain of $247.90"
So, I went with the option that made financial sense over the one that is giving me more emotional satisfaction. And I'm proud of myself for doing so. Of course, both options here are good, so it was really a no lose option.
What are the areas where your emotional involvements take over past financial gain?
no subject
I am socking away as much money as I can for emergency (most likely: my computer kicking the bucket or requiring expensive repairs--although I'm hoping they're not too bad, once I am at a point where I can relinquish my computer for testing) and potentially living expenses if I don't get a job soon after my summer internship ends. If the job thing works out well, I'm going to throw most of that at my credit card debt next fall. Emotionally, I'd really like to do that now, but since my job future after August is so uncertain, it would be really stupid.
no subject
It's really hard when you're committed to wiping out debt but common sense tells you otherwise. But I'm sure you'll get there on the long run! I really hope the job thing works out for you.
no subject