Tuesday, February 1, 2011

New year, new budget (part I)

The last two years I've done a shopping hiatus after January, inspired by Joslyn. The first year was revelatory. The second year was slightly less so, which I took as a good sign because I really do think I improved quite a bit. (If you missed it, you can see all my 2009 shopping hiatus posts here and the 2010 ones here)

The goal is always to think about my spending and to learn to spend more usefully and thoughtfully. What I've learned is that I prefer to spend money on experiences (yoga classes with D, happy hours with my girls, good meals out, premium cable*) rather than stuff. Unless it is really awesome stuff that I will cherish forever (notably, my CathrineHolm bowls that I have not had a second of regret over, despite the high price tag) or use like crazy.

catherineholm lotus bowls
{catherineholm lotus bowls}

Once I figured that out, it was a little easier to prioritize. I spend less on clothes than I used to (although I could still improve - my goal is to stop buying anything cheap, ever). And I feel less guilty about spending money on the experiences I love. I'm naturally a saver, so I can't focus too strictly on cutting back or I start to stress out big time and not want to spend any money at all. If you read quick financial tips, they tend to emphasize cutting your spending on frivolous items. Cut back on your eating out, paint your own nails, make your coffee at home, watch DVDs instead of going out to movies.

To some extent, I agree. You can save a lot of money by making your own coffee in the morning and if you're stopping for coffee just because you can't get your act together to make it, you might want to look into that. But, if you stop for coffee every morning because you love the ritual and you truly enjoy the luxury of having someone else make it for you, then prioritize it and make room in your budget. You'll just have to give up something else that you like less (cheap tee shirts that fall apart after you wash them, maybe?).

I don't buy coffee every morning, but I do buy myself flowers almost every week. Because I like it. So I make room for it. I also like going out to eat regularly, and I'm happy to pay for it. I like being with friends, and I don't mind buying ingredients for a really nice meal or paying for my drinks if we decide to go out. It would be cheaper to stay home and just eat beans all the time, of course. But these things improve my life, tangibly. I'm careful not to take them for granted, to remember that I'm lucky. I don't deserve these things, in the sense that I'm somehow entitled to them as a right (indulgences are not rights even if it seems like everyone else can afford them - I think we tend to forget that sometimes). But I deserve them in the sense that I work hard for them and I budget for them and I appreciate them.

I save money on things I don't care about as much. I always pack a lunch (or eat frozen meals) at work, because running out to buy lunch and eat it in a rush by myself doesn't make my life any better. I take the bus to work and D and I share a car (and all the expenses that go along with owning a car), which is a pain sometimes, but not that often.  I avoid wandering around in stores because I know I'll be tempted to make impulse purchases and I don't need extra stuff. I check books out from the library and only buy the ones I really love. I have a $10 cell phone and a prepaid plan that costs me less than $10 per month, because I don't like talking on a cell.

Here is the bottom line - your expendable money should be giving you joy, making your life richer. I can't have everything I want, but I can pick and choose the things I want the most and then make them happen.

Tomorrow (if you aren't all completely sick of personal finance already) - my new strategy for this year.


* I used to try to convince myself that we should cut our cable, but I've come to peace with it. We love cable, we look forward to all the new shows and we watch them together, so I'm classifying it as together time. Also, crafting without cable really sucks.

41 comments:

  1. so well said! i feel the exact same way - coffee and flowers are tiny things that improve my days dramatically. i also agree (almost always), experiences over things.

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  2. Love this post. I spent yesterday having msny of these thoughts. I'm not doing a shopping hiatus this year either, but I do need to repriortize for sure. Can't wait to read part two.

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  3. Please continue to talk about living well and personal finances. This was a great post!

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  4. i love this post and the timing is perfect as i've been thinking about how/if to approach a hiatus this year.

    i love this thought especially:

    "Here is the bottom line - your expendable money should be giving you joy, making your life richer. I can't have everything I want, but I can pick and choose the things I want the most and then make them happen."


    well said friend!

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  5. here, here. saving extra pennies to buy special things; refusing to buy things that are cheaply made (at high cost to the people who make them); valuing experiences over things. being ever thoughtful. looking forward to part II.

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  6. Thank you for sharing these thoughts; they are very encouraging. I am a recent college grad trying to figure out finances myself, so reading how others make stewardship choices with their money is wonderful!

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  7. Love this- thank you so much for sharing this with us. Really looking forward to your next post. Thanks!

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  8. i'm loving that you're posting about this... it's so important to take stock of your finances on a regular basis, and it sounds like re-evaluating every year helps you to make sure you're spending your money on the things that you'll really enjoy. continue sharing, i'm enjoying it!

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  9. This post is such a perfect timing as I've just started shopping hiatus all through February.

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  10. this is a great post.And with a big move on our horizon,and a new budget... this is something I'm going to keep coming back to and reminding myself about.

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  11. Well said, lady! I'm eager to hear your strategies for next year. I've been inspired by your shopping hiatuses and always though I should do one of my own. I'm impressed with the way that you own some of your financial choices and make room in your budget for the things that you love. I think it is something we all need to be doing.

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  12. You totally hit this one spot on. I'm also a natural saver and tend to get stressed when I'm too strict with my expenses. Thanks for this post, it made me think!

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  13. I love what you said about indulgences. It's so true, and it always helps to have a reminder to put things in perspective.

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  14. Great post, Rachel! I really like what you said about indulgences are not rights. I try really hard to remember that and to be grateful for what I can have now, since it might not always be the case. Balance is the key when it comes to budgets (as with most things, I think) and there's always a give and take.

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  15. I totally feel you on prioritizing experiences! One way I was able to cut back the last two years on going out is my group of girlfriends all got Disneyland passes, so we would go there on a Friday night or Sunday afternoon or whatever to hang out. An investment initially, but we far outran the cost with how many times we went. :) Of course, not everyone has that option! But everyone has their priorities and it's all about figuring out what's important to you. I've definitely stopped paying for cheap clothes. A few Target or Old Navy things here and there, but I've been workin' it at TJ Maxx and Nordstrom Rack for decent quality at a discount (plus online sales). Plus cutting up my credit card a year and a half ago has also forced me to prioritize and budget like never before!

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  16. Obviously this post is resonating with people. Myself included. My husband and I try to live what we call a "simple life" with our two kiddies. But we are careful to preserve the joy in living. Cutting back on things that don't really bring you happiness in order to make room for the things that do...a latte, ice cream at the local shop with the kids just because it is a hot day, nice watercolors instead of cheapies for art time. That being said, we try to choose day-to-day activities that bring us happiness and are free! Parks, playgrounds, the beach, free museum days. You can live quite a beautiful life, in a simple way, without feeling deprived. I think your post sums that up beautifully.

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  17. THANK YOU for this post! I am naturally a saver, too, and I always struggle to maintain balance in making sure I live my life, along with planning for future unknowns. It's refreshing to hear from other(s) who work on maintaining such a balance as well.

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  18. I can read about personal finance all day. It is so helpful to find out how other people do it. I really appreciate this post. You can post about personal finance everyday, lol!

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  19. this is a fantastic post. my dad {a very wise dude} also emphasizes that money spent on experiences {i.e. memories} trumps all else. thank you for the inspiration :)

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  20. i am so waiting on a day when cable can be customiziable (not a word) so i can have a smaller menu of shows that i love instead of the 4,000 sports shows on my plan.

    i can see why you love those bowls.

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  21. Love this post and your very wise words...things we buy should bring us joy.

    We have had to cut our spending by 75%, and what I have discovered is that paying attention to what you purchase and why you purchase it makes a huge difference. Compulsive buying is so bad, and ultimately, it just makes you feel horrible. I'm also trying to teach my little crumb the importance of 'things' and quality versus quantity.

    Btw, those bowls are divine!

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  22. What a great post. I need to go on a hiatus too. asap!
    This is very encouraging to me. Thanks for sharing!

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  23. This is a really great post about balanced and aware spending habits. This is the kind of thing more people should teach their children, and don't. Great work.

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  24. i totally agree with you! experiences is what makes our lives richer.
    and yes, the pun was intended ;)

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  25. I have to agree with everyone else in that this post was a fantastic read! With the new year many of us, myself included, want to take a look at our finances. Where I usually fail is sticking to it; many times the advice you read from the "pros" isn't necessarily fit for everyday-me.

    Purchasing only things I love and will cherish for years to come, or experiences that I realize I'd never regret spending extra money on, I say it's worth it, and I'll gladly stick to a can of soup for lunch!

    I'm looking forward to your next post on this, and your next...and your next!!

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  26. Great post - I am also doing a major savings and banking re-haul, so definitely looking forward to your next post...

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  27. Yes. yes yes yes yes. to everything you said here. I am also a once-a-week flowers girl, and it truly brightens my life...I'm thankful that I am able to carve out that $10 or $15 to do it.

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  28. Very thoughtful post. We have cut back this year also. No Starbucks since the week before Christmas (I got a Keurig the I love.) Also, shopping on Drugstore.com for the things we usually run into Target for...read buy more stuff. I am a new follower. :)

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  29. I agree with Emily. Please do continue to talk about personal finances and wealth! I'm reading the few blog posts you've mentioned. That should be my new year's resolution--going on a shopping hiatus (It took me forever to find a resolution. I thought about making sure I don't buy the same thing repeatedly because I have misplaced things, but this takes it to a whole new level! Now it's February 1st, I've finally found one!). Thanks for sharing this :)

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  30. This might be one of my favorite posts ever. It really struck a chord with me.

    Bring on more budget wisdom!

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  31. This makes me feel better about my ghettophone.

    Also, you are a smart cookie.

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  32. Another reader chiming in to say that more posts on this theme would be lovely! You have a really fresh look on budgeting and finance. So many of the techniques out there are about cutting out any and all unnecessary expenses, and while I think that really is ideal for those who are deep in debt, I think something more practical along these lines are perfect for those without any looming debt who still wish to budget wisely. My husband and I are currently paying off a few furniture and appliance purchases we made a few months back at the purchase of our new home. We will be paying them all off within the next couple of months (years before our "no interest" financing would expire) and have plans to start saving a large sum for a rainy day. We don't live beyond our means at the moment, but we certainly don't pay much attention to our expenses and budget either. I'd really like to sit down and actually look over receipts and be mindful of what we're spending and start a monthly budget to make meeting our saving goal even faster and easier. Thank you for all the insight on how to budget and still live well!

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  33. Great post! Very timely as I need to create a budget for myself this year, now more than ever. I'm with you, I'm shifting more towards experiences than things.

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  34. I agree - it is so much more meaningful to spend money on experiences than things.

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  35. You guys, I love reading your experiences - thanks for sharing!

    @ jeny - I avoid Target too! The accidental purchases are too out of control.

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  36. I'm trying to teach myself to spend money better...and your post is full of good motivation. You've articulated what I want to do so clearly! Thanks for sharing.

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  37. this is really well put. I have been trying to save money more and more these days.. but it is just so hard to tell myself no all the time. This prioritizing and room to enjoy life might just be the ticket!

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  38. Thank you so much for this post...It was truly perfect timing! For the past few months, I have only been spending money on experiences & not stuff. Recently I've been tempted more than usual. But, hearing it again from you has been great motivation to not go into Vroman's!

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  39. You so rock! Thank you so much for this post! It gives me such perspective! I sadly admit I am a black & white kind of girl, hardly are there ever gray areas for me. Which is why I like seeing your point of view! It opens my eyes. :)

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  40. I don't comment very often, but this post struck a cord with me. Beautifully said. This pretty much sums up how I feel about finances. (My fiance and I are also trying to plan a wedding, FYI, and that can really throw your budget for a loop, no matter how much you try and plan, so good luck! lol)But anyway, back to your post, I fully agree with just about everything you wrote. I too believe in justifiable "luxuries." Coffee that you don't make yourself, flowers every once in awhile, for no reason what so ever, pedicures, etc.

    My new thing is to update my wardrobe. I work at a bank, so I have to stick to a certain kind of clothing purchase anyway, which makes it easier when shopping, what with the whole work uniform and what not. As I buy new clothing items, I not only donate an old, less loved item, but I am also a lot more careful about what I purchase. Will I wear this for years to come? Will it go with several pieces that I already own? Is it good quality?

    Any way, I'm rambling, and I'm sure that there are several run-on sentences in this post. Basically, I just loved that some one else felt the same way that I do about finances, and that you shouldn't necessarily feel guilty about luxury purchases for yourself, as long as you budget for them, can really afford them, and you create good experiences for yourself with loved ones usually involved.

    p.s. I LOVED what Char said about à la carte cable options. I've always felt this way, and we cut our cable last year (only do the Hulu, Netflix thing for now) and don't plan on resubscribing to it until there is a cable option that does that.

    <3

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