Purchase #5 to 10 of 25

Kids are really expensive…(or can be if you want them to dress better than you do!) Note: Burberry red barn jacket is shown as an example only. I’m not crazy enough to spend $165 for a toddler’s jacket.

My Fake Budget

About  a year ago, after reading Your Money or Your Life, I created my first budget.  I dutifully added up our income and averaged regular expenses.  Certain things like rent, utilities, gas, and insurance were easy to figure out.  I had to estimate other expenses like clothing, dining out, cleaning help, gifts, etc.  When all was said and done, our expenses tend to exceed our income on a regular basis.

In addition to irregular freelance income and unexpected expenses, another (major) problem was caused by estimated expenses that were basically numbers I grabbed out of the air.  Even after one year, I haven’t been diligent enough to figure out our average costs for many fun categories.  This is hard to do because we pay cash and we are not very aware of our budget.  In other words, if we budget $100, we may spend $100 jointly and still exceed that amount due to separate activities.

If we look on track to exceed our Dining Out budget by mid-month, I may send a half-hearted email to my husband and note to myself that we must watch our budget or cut elsewhere this month.  Only we seem to not do this or we get a bill that must be paid or another excuse…  The reason I am calling this my/our fake budget is that I simply INCREASE our dining out budgeted amount to match our actual spending instead of making any hard attempts to rein this in.

I know this isn’t good because some months we’re on track or under budget and I’m very happy. Then we exceed our budget the next month and I freak out.

Budgeting is hard!

What The Most Successful People Do At Work

I’m in the middle of reading Laura Vanderkam’s new e-Book “What the Most Successful People Do At Work“, a series that follows two previous e-books about what successful people do before breakfast and on weekends. All of these short books are meant to be quick, informative reads. I think they’re all very enjoyable and most people can get good tips from them. Because work is so busy right now, it’s taking me much longer to read this! For now, I will say that I was struck by the example of a successful children’s book illustrator in Chapter 1, as I expected the successful people profiles to hail from the corporate world. I wasn’t sure if I could relate but considering that there are tons of small business owners, entrepreneurs, freelancers out there AND the fact that in many ways, in the current work world, we’re all freelancers that need to plan and prove our worth daily, I think the illustrator can be a good example for all of us. Right now the main take-away I’m getting is the importance of planning the day and your workload. I enjoy taking on bigger projects that require thought and strategic planning but it seems like most of my workday is taken up by immediate needs (and emails!).

Anyway, I would recommend this book. You can buy it yourself today and you’ll probably finish it before I do!

Frugal Substitutes: The Master Chart

The idea of finding frugal substitutes for expensive wants turned from a comment, courtesy of reader and commenter Debbie M, to a full-fledged post at grumpy rumblings.

Here’s the excerpt from that comment, and I’m called out to name my list of frugal substitutes, an idea inspired by the book “Your Money or Your Life.”

Debbie M says:

“And then there’s also strategizing about what makes you happy. If you want to feel pampered, do you need to visit a tropical island? Or would you be just as happy with an in-town spa or fancy hotel, a massage, a facial, or, in my case, fresh-out-of-the-oven chocolate chip cookies and a good book?”

…And maybe oilandgarlic can share a list of Frugal Substitutes! We can always use more of those!”

And I said:

“I’ve been meaning to respond with my frugal substitutes but I could probably do a whole post. The gist of it is that I try to figure out WHY I want the big indulgence. Am I stressed? Do I want to try something new? In the past, I would assume that the best way to satisfy my want is a spa day or travel. Now I realize that I can satisfy that need for pampering in multiple and often cheaper ways. I could do a at-home facial. I could buy flowers and put a slice of lemon in my water. I can put on relaxing music. I could convince my husband to give me a massage.”

So without further ado, here’s my handy dandy chart (sort of tongue-in-cheek), and please feel free to share your own frugal substitutes:

Story Of A Purse

I’ve never thought of myself as a purse lover.  When I look through magazines, I don’t really get excited about the new “it” purses.  I never aspired to own designer purses.  I have exactly 3 purses for work — 2 in black, and 1 fabric/brown for summer and spring, plus a few smaller ones for weekends but my “collection” would certainly not peg me as a purse aficionado.

Now for the confession which you probably could guess was coming… I splurged on a beautiful black leather bag. This is now one of my 2 black work bags.  I bought it partly because my other black bag had seen better days and I thought I needed another option.  I also loved the design and quality of this $400 bag*.  And it was on sale. And I had gotten a small bonus which I promised to use for a splurge rather than saving it as usual.

I had been eyeing this purse for weeks (months) and it was not going on sale.  It had gotten excellent reviews online regarding its quality and versatility.  I had small hopes that it would go on sale or if it did, my color would be sold out.  Of course I think that the purse may become a permanent part of the designer’s line-up as it seems quite popular. 

I’m glad I bought it.

The reason for my lack of expensive purses is not that I can’t afford one or that I don’t sometimes admire nice-quality purses.  It’s just that other than the workplace, I can usually be found running errands at decidedly normal places like Walmart, Costco, Target, CVS, and the occasional fast food joint.  I have seen women carrying expensive purses into McDonalds, for example, but it seems like an odd juxtaposition to me.  I feel like I should be dining at a nice restaurant, not throwing my beautiful leather bag on a vinyl dining booth seat.

In other words, my beautiful bag doesn’t seem utilitarian enough for my simple lifestyle (and one that involves messy toddlers, too!)  I’m wondering if others have this same thought as I do.  Do expensive purses fit your lifestyle, or do you not even consider this?

* After a 20% discount and some credit card rewards, the total was about $330 including taxes.  Shipping was free. Still high for me!

Fees, Fees, Fees

My girl friends/family and I generally don’t talk about finances.  It’s not really about privacy; it’s just that we have so many other things to talk about! However, I wish that we did share financial insights once in a while, so I’m sharing it on this public space.

I touched on this topic before but there’s a new law going into effect that makes it easier to see fund fees in your 401k plans.   With non-401k mutual funds, you can compare fees but many people ignore the impact of fees on their returns.  Once a year or so, I use the free “Instant X-Ray” tool on Morningstar to analyze my funds and compare fees / returns with similar portfolios.

The bottom line is that the fees associated with mutual funds can decimate your savings.  Choosing no-load and index funds make a big difference in retirement.

This is my public service announcement for the week!

Frugal Opposites?

I’m beginning to think that my husband and I are frugal opposites, not in the classic saver vs. spender situation, but we’re frugal in such opposite ways that we still somehow disagree on spending (and saving) priorities to some extent.

First off, we are both fairly frugal.  However, I am more willing to spend money when I think it saves time, like on like housecleaning, moving or computer tech help and the like.  My husband is more of a DIY-er especially related to household things like dishwasher installation, property fixes, etc..  even if it can take him a lot of time and it’s not always easy to figure out. And I guess since he’s more of a DIY-er in aspects that he’s good at, he’s also hesitant to spend money in areas just to save time (since in theory we could tackle housecleaning, for example, on our own).  After having kids, he did come around to hiring housecleaning help and I guess he was never completely against it; he just saw less reason for it than I did/do.

If any spending is remotely related to career or career-advancement, he will spend the money (or want to), while I still like to weigh the return on investment.  This is a tough one because there are countless job-related spending opportunities from books to classes to conferences.   As for measuring ROI, how do you know if that networking event or conference will result in leads and work? I tend to give it one-shot and that’s it.  Say, I attend one conference but if I don’t get much out of it, I won’t go to ANY ever again. My husband wouldn’t rule out all conferences that way; he would look into another conference or would still be open to returning to the same conference after some time has passed.  Since work-related events are often costly, this can become  a sore point.  I think I usually “win out” but I wonder if I’m holding him or myself back from true career opportunities.   He’s been creative at networking on the cheap (with real results) and I do try to be open-minded about pricier opportunities but I still have a hard time justifying that spending.

I have a harder time pulling the trigger on purchases in general.  My husband doesn’t really pay attention to small-item purchases but hesitates on big item purchases (like furniture or appliances).  I guess I believe that little things add up and this is why I still use coupons, look for  sales to stock up on household items, send in rebates, and pay attention to recurring expenses/bills.  I know that my husband doesn’t really understand why I call our internet/cable/phone provider every year.  However, one year, I knocked down $40+ per bill ($480 annually) and I’m pretty proud of that!  

Our different spending habits haven’t been a contentious issue, however, because we do always talk about big purchases.  Even if we don’t always agree, both of us have a say.  I also think that it’s been a fairly even split in terms of who “wins” in the final decisions.  In many cases, we reach a compromise by setting a budget that we both feel comfortable with, delaying the purchase a bit, or not spending at all, without the other one holding a grudge.

Are you and your significant other opposites in terms of spending/saving?  Are you both frugal yet still have different spending habits?