Tag Archives: finances

Frugal Substitutes: Less Tongue In Cheek Version

A few months ago, I created a fun chart about possible frugal substitutes.  The idea was that you can replace pricey wants like vacations and massages with cheaper options that fulfill the same need.  Looking back, the intent was good but I’ve totally ignored my own advice for the past few weeks!

I went on a short trip.  I bought a new computer. I got a massage. I went shopping. I bought some clothes and a new purse.  AND I keep browsing online shopping sites.  In short, I have been choosing expensive wants instead of examining the reason behind my sudden desire to buy, buy, buy.  The only possible exception is eating out but my husband and I did some of that, too.  It just hasn’t been a budget buster because we still eat home most days or tend to choose inexpensive places when we do go out.

I cannot justify my choices but I really needed a vacation!

 

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!

Has A Comment Ever Changed Your Final Decision?

When you blog regularly, it’s common to ask readers for advice for everything from financial to purchases to travel decisions.  Is crowdsourcing the term? I’m too lazy to look it up.

The reason I’m asking is that I am tempted to ask for advice  from time to time.  I hesitate only because I wonder if I or anyone ever follows advice from their readers.  Oftentimes it seems like the person receives a lot of good advice but makes the opposite decision, or actually has their mind made up anyway.  I believe there’s science behind this, too, called “confirmation bias” (scholars, correct me if I’m wrong!). From my understanding, this means in general people simply pay more attention to views that confirm their own beliefs.  Example: If you think all Asians are good at math, you will notice if an Asian person wins a Nobel prize for mathematics.  If you have an Asian friend who is bad at math, you’ll assume that’s an exception to the rule.  I’m sure there are many more and better examples of this in the political arena, of which I stay far away from!

I still remember a debt-blogger who asked readers if she and her husband should join her family on a “once-in-a-lifetime” trip to Europe.  They did not have ailing relatives. Everyone else in her family was financially stable but did not have enough to subsidize her tickets/travel expenses.  They would probably have to spend on higher-end hotels than if they had gone on their own. I would say that the answers were sort of split.  Many people said “go for it” which in my mind is very easy to do when it’s not your money! A lot of people also advised her not to do it until you’re out of debt.  I felt that those who were against it made better arguments.  After all she had racked up debt due to lifestyle choices, not education loans or medical debt.  To me, they had spent to enjoy their early 20s and should pay for it before going into debt for another fun adventure.   This is tough for me to say because I love traveling and I also believe travel is worth the money; however, paying off a trip for years didn’t make sense even to me.  Of course you could say that she followed the advice since most people said to “go”; however it was pretty clear that she had made up her mind before even asking the question.

As for me, my question would have been about whether moving to another rental house that is out of our real budget range but closer to my work is worth the trade-off (the classic time vs. money).  I haven’t written about the move yet because I’m tired and a bit embarrassed by my/our bad financial decision-making skills.    If I had asked, I’m sure I would have gotten good advice and I’m pretty sure I wouldn’t have listened either.   Maybe someone would have suggested a compromise that would save time and also reduce the hit on our budget.   However,  we made the decision based on “wants”.  We wanted to save time, but also wanted a larger house with a yard.  We didn’t want to share walls.   In other words, I didn’t think that the best arguments in the world probably would have swayed me.  Of course two years down the line I might regret this move!  Once I’m recovered from moving, I may write more about it.

Have you ever asked readers for advice and actually read a comment or comments that truly affected your final decision? I’m especially interested if you changed your mind on BIG decisions, like a job choice, moving, finance etc…

Financial Independence And Co-Dependence

As I get close to the end of “Your Money or Your Life”, I alternate between feelings of inspiration and depression, for lack of a better adjective.  Chapter 8 of YMOYL focuses on the cross-over point, when you reach financial independence and reap the rewards.  There are many success stories which are inspiring. Some people quit their jobs to volunteer, spend time with family and friends, and/or travel.  Those are the kinds of stories that I expected to read.  However, many people take a sabbatical and then go back to work.  The point is that choosing to work is very different than having to work. 

At the same time, I get somewhat depressed, or deflated, when I think of taking that next step and the consequences.  The big “What ifs” pop in my head.  I’m ready to move on to the next phase of my life but I can’t imagine feeling so free mentally in regards to finances.  I am used to a steady paycheck with paid vacations;  I imagine that financial worries would seep into my muddled head.  We’ll see how this plays out….

Financial independence is harder to achieve when your spouse is not onboard.  My husband is just not interested in reading or discussing finances.  I have told him about my readings but I doubt he’ll ever read the book himself. 

Like it or not, our financial lives are intertwined.  I don’t believe in separate finances, other than some fun spend money, because it all comes out of the same pot in the end.  When we don’t jointly focus on our household spending now, we both end up spending more.  Luckily he has adjusted to my frugal tendencies over the years even though he thinks I’m a bit obsessed.  Our backgrounds are so different that it’s hard for him to imagine a life where you can’t fall back on your parents as a last resort.  Even when he worries about money, I feel that he believes things will work out.  I don’t think like that.  I imagine worse-case scenarios.

I guess I really need to pay attention to Chapter 9, which talks about managing your finances.  I also lined up another finance/lifestyle book for reinforcement and ideas. Next up: All The Money In The World.. I really hope that I can reach a place where I view money as a tool and not be so paranoid.

Have you crossed over to true financial independence? If so, what’s your story?

Are We Living On The Edge?

When we made the decision to have kids, we knew that it would be a huge financial undertaking.  We live in a high cost of living urban area where you generally need two incomes to survive.  I thought we were doing OK until a discussion on a blog got me thinking.  Then recently, a friend confided to me that her family was in a huge financial crisis. They are not spendthrifts and I’m pretty sure that her husband makes the same or slightly less than I do.  While we’re not stressing over finances (yet?), our incomes and expenses are similar enough to make me nervous. 

My friend and her husband went through a long period of under-employment just as they started a family.   Even if you don’t go for designer maternity clothes or a fancy nursery, having kids will stretch anyone’s budget.  They moved to another city to escape a high cost of living area but this move meant a greater distance from family and friends.   She also quit her job to stay home and is pretty adamant about not returning to work.  I am pretty sure that they started relying on credit cards to make ends meet.

Once the husband found a job, their situation stabilized.  However, they had zero savings, credit card debt and her student loan debt in addition to regular living expenses.  In situations like this, one major car repair or unexpected medical expense became a major set-back.

In contrast, we’ve generally made better choices and have been luckier than my friend in terms of finances.  Neither of us have student loans.  We did not start a family until we had substantial savings.  I continued working after having kids.  We can also rely on family for some much-needed help with childcare. 

I guess I’m worried because there are two ways of viewing our different financial outlooks.  Either the oilandgarlic household is doing OK because of a combination of smart choices and luck (no student loans, no periods of under-employment or unemployment, outbidded on overpriced homes during the real estate bubble) OR it’s all an illusion because kid-related expenses are only beginning to catch up to us.  In other words, my friend’s current situation is a crystal ball into our future.

Despite getting off to a better start, I worry about increasing childrearing costs, higher medical premiums and general cost of living increases in gas, clothing, and food.  Other new expenses are avoidable but are saving our sanity, like gardeners, cleaning help and a part-time nanny.  Very soon, I will have to crunch some numbers to see if our expenses are exceeding our incomes or if it’s more in my head.  I do know for sure that we can’t save much right now and I wonder if this is how it started for my friend until it snowballed into credit card debt and desperation.

Do you ever feel like you’re one mis-step away from disaster?  Do you live on one income, just in case?