Since I run in the circles of frugal living and personal finance blogs, I’ve seen a theme over and over again that I just had to speak out against a teensy tiny bit. You see, the theme is this: Lifestyle Inflation is bad. If you get to the point where you pay off your debt and start buying nice things, you’re just as guilty as you were all those years you were racking up credit card debt.
Hopefully in everyone’s life, there eventually comes a time when you are no longer in debt and can make spending choices again on your discretionary income. The problem is that sometimes it’s hard to find a middle ground after quitting non-essential spending cold turkey for such a long time.
I’m here to tell you that there is a happy middle ground. You see, if you don’t ever have any lifestyle inflation, you’ll end up like my uncle who never bought a new bit of furniture in 50 years. He had this ancient pea green couch with a missing leg that was being held up with a couple of bricks. It was like that for 20 years, yet he had so much money in the bank that he never touched his savings. He lived completely off his SS check and rental income and was still able to skim a bit off the top of that too. Another miserly example is Jacq’s dad from Single Mom Rich Mom. Go read the story. The guy is wealthy by most people’s standards but hoards money like there’s no tomorrow. Although I admire their resourcefulness and simple lifestyle, there’s a point when you look at guys like that and wish you could convince them that it’s okay to buy a new pair of dickies once in a while and there’s only so many times you can glue the sole of your work boot back on before it becomes uncomfortable to wear. And that’s just my point. Having no lifestyle inflation is just as bad as going overboard because you tend to make due with things that really have a negative effect on the quality of your life. You buy the cheapest of everything even if it means being uncomfortable in it because it’s “good enough.”
Now, since us frugal types have a tendency to over save and be super paranoid about the next rainy day around the corner, I thought I’d lay out some ground rules that anyone can follow. As I write this, I realize that this article is really meant for the people out there who really are living way below their theoretical means…not the people who bought into their dream homes from the get go for the biggest loan they could take out.
Affordability Questions:
In this case, I’m already assuming you are out of credit card debt and have an emergency fund saved. Now, whenever there’s any kind of big purchase to be made, you can ask yourself these basic questions:
1. Do I have the cash to buy this item outright? If yes, move to question 2. If no and it’s not a house, then ask yourself if you have a big enough emergency fund and/or if you can save for a bit longer.
2. Do I have something else I need to be saving for that I’m not doing already? If no, go to question 3 (For example, are you saving 15% or more into retirement, are you saving for college, etc).
3. Will I get my money’s worth out of this item? How often will the item be used?
4. Will I be just as happy with a good quality used version of this item at a lower cost? (The answer for me is usually yes on everything but clothes and electronics).
5. Is it a good time to buy this item? If you’re frugal, you really will feel better about a purchase if you think it’s a good value. It’s much harder to stomach buying a house during a hot market or paying full price for something.
If you’re not sure on #3, then you can choose to delay the purchase for some designated amount of time. If you’re still thinking about it months later, then it is indeed something important to you. Lastly in many instances with material items, it is usually possible to resell those items if you’re not getting what you hoped for out of them, so buying decisions can also be reversed. Maybe all your money can’t be recouped but some can.
Babci Should Spend More Too
I definitely inherited the money hoarding tendencies from Babci. I remember about 15 years ago Babci was having back issues and I bought her a new mattress. She called me and started crying the next day because it was the first time she got a good nights sleep in ages. That horrible old mattress she had was the cheapest thing you could buy at the salvation army. It was terrible but I suppose to her, it was a big upgrade from the straw tick beds that she grew up in. Now it’s time again for a new mattress and she’s still fighting me that the old one is still perfectly good (just like she did last time). Babci..you use the mattress every freakin day..probably more than any other single item in your house. Stop fighting me about it already.
I’ve bought a lot of things this year that I have felt a little guilty about. I keep saying..I’m spending too much money, I’m out of control. But then, when I look at what I spent this year as a % of my income, it’s a drop in the bucket, plus we didn’t take a big vacation this year either. That’s when I realized it’s that little money hoarder in me fighting back. For example, I just bought a pair of Muck Arctic Sports. I told myself at the end of last winter that I won’t go another season with wet and frozen feet. All I had was hiking boots and they were useless in deep snow. I had gaiters that I wore with them, but they were also spent with patches on them and a safety pin holding one of them up. I now wish I also had the Mucks during the wet mushrooming season we had. What a soggy mess my feet were after every excursion mushrooming. After one of my sopping foot adventures I finally said to myself that I’m no better than my uncle. I’d rather have cold wet feet than spend $150 on boots I’ll probably use for 15 years or more (yes, that’s how old my other hiking boots are). And I was like..how the heck did I manage to survive all my life without snow boots (I mean I’m almost 40). What the heck is that all about? I’m nuts. PS..we did just get over a foot of snow this week and I was very happy to have those boots. As I analyze myself, the way it happened was I kept telling myself every year that I’d get them at the end of the season when they’re on clearance. I never did because I’d either put it off yet again or they were out of my size by the time they went on sale and on it went for literally decades.
I Need a Spending Budget
I’ve decided that I actually need some kind of spending budget on things like clothes, undergarments and housewares because otherwise I tend to wait way til the point when everywhere I look, I need stuff. Last winter I really needed some work clothes badly and everything in the stores was covered in ugly ruffles or old lady flower patterns. I bought a few things out of desperation and my husband ended up making pirate noises at me when I put one of the shirts on and told me I looked like his grandmother in another one. Now those shirts are at goodwill. Although I’m not particularly fond of shopping, I think I need to level load my spending in that department so that I’m not as desperate when I shop. Desperation usually means buying something/anything because you have to, which means you don’t “love” your purchases, which inevitably leads to buyer’s remorse and money wasted.
It seems like the only thing I don’t have a big issue spending money on is fixing up our homes. I guess when we bought fixer uppers, we knew that there would be some annual amount of money and time that needed to be spent in order to “pay as we go” vs buying something more expensive from the get go. In hindsight, this isn’t the cheapest way to go, but at least we get to customize the homes to our exact taste. I think the reason I don’t have an issue with it is because in a small way, the spending I’m doing in that department is building equity too, so it’s almost like saving.
So, do you have money hoarding tendencies? How do you justify purchases? Do you catch yourself making do on things that really should have been purchased long ago? What phase of spending are you in?
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