What? Where did you find this story? Lol. Change a few things and this is my story with a funny twist! Like you, we are now renting, but we no longer have to drive 120 miles per day to get to/from work (I'm now less than 3 minutes away; my husband is 12 min away from his); our daughters' Christian school is now only 15 min. away and she can finally participate in after school activities, sports, etc.; I don't have to worry about repairs; I don't have to save up for that twice a year property tax; I don't have to pay for a gym membership because my complex has a beautiful gym, pool and hot-tub; our apt. complex is gated and in a nice area, and I have more money to do the things that really matter, because I am no longer paying for space I don't use or need! Yep, once you get over the emotional part, the "reality check" allows for a soft and happy landing : )
i just looked to my left to see that new handbag....argh! i want to spend smart so i can splurge without guilt!
i have a related questions -- i live in an expensive suburb. what are general opinions on how much of your income you should spend on rent? unfortunately all the places by me are so expensive....
This is a great list of resources, Debbie. I hadn't heard of a lot of them. One other tool some people may find helpful is http://unbury.me/. It helps people see what will happen if they go after their low balance debts first (snowball) or their high interest rate debts first (avalanche).
Usually, going after your low balance debts first will give you the emotional win of paying off one of your debts ASAP, whereas going after your high interest rate debts first will get you completely out of debt the fastest and with the least amount of interest paid. But this calculator will show people the details of either method based on their situation.
There is so much emotion tied up in home ownership, you are exactly right. When I remarried at the age of 48, my husband was adamant that we purchase a home together immediately (we had both been through bankruptcies and given up homes as the result of divorces previously). Now we own a tiny brick ranch home which has gone down in value significantly in the last few years. I'm torn between thinking we should have continued to rent until we could save up for a larger house, or maybe just continued to rent indefinitely. For too many of us fiftyish people, our houses are the bulk of our estates. Since both of us are public employees, we haven't received any salary increase for nearly five years, but the mortgage doesn't get any smaller, the cost of living keeps going up and things keep needing to be repaired. Thank God properties haven't depreciated here as drastically as what was described in this article!
I think the "Tuesday afternoon/ Saturday night" advice is really smart. I constantly buy "going out" clothes that I never wear because they're too uncomfortable!
I cut my cable last summer. My wife and I thought it would be harder then said, but we're really enjoying it! It opens your mind up to other activities we can do together rather then sitting blankly into a screen.
I love this post. We need to hear more of this. I try to be practical in my spending. One thing I try to ask myself when I make purchases is "is it functional?" I'm all about smart spending but often times it's difficult since we live in a society that is so concerned with consuming stuff.
I think we could all be aspirational spenders for one thing or another. I bought this really cool cleaning gadget because it looked really cool, but I only used it 3 times. But I guess when you buy something you should definitely ask yourself if this is a day to day necessity, if not you may want to rethink your purchase. I think all of us can say that there are a couple things stored away in our closets that we never used.
great advice! I'm an impulsive buyer and these questions don't even come to mind when I'm thinking of making a purchase (big or small). I've started to notice how much I spend on going out, shopping, etc and I def fit into the "aspirational spending" category. Thanks for the tips, will have to definitely weigh out the benefits/cons next time I get that itch to spend!
This is great advice! I actually use it all the time, but then I already know I'm never going to look like a supermodel if I purchase so-and-so brand outfits. I'm a much bigger fan of finding what looks good for ME and then shopping around for bargains. I don't care about the label - I just want to look smashing. ;)
I often have battles with myself over aspirational spending. Currently one half of me is trying to talk the other half of me into an iPhone that I know I don't really need. So far the frugal side has won, but the battle isn't over yet!
Just moved into my first house! The article hits on many points that I'm thinking about right now... Do I buy that natural gas bbq or king bed? ARG! Do we get a new couch or just reupholster the existing one? Spend $500 on the front garden?
Love the cost/benefit checklist, I need to do that for sure!
My best investment was buying a house. True, the real estate market hasn't fared well financially, but few things have (I don't want to look at my stocks right now.) Owning a home has provided us with a steady place to live and a great place to raise our family, and our payments have gone towards our future.
The smartest investment I've ever made was to marry my husband! I will be loved and cared for my whole life. Plus he makes a good living. We bought a nice house and some good mutual funds, so I'd say I am a pretty lucky girl.
I've been guilty of aspirational spending throughout my whole life and maybe part of the American dream but that dream is becoming less attainable with the economic downturn. This article serves as a nice reality check b/c we're all guilty of it sometimes which can be ok but when times are tough then it can put you in a real bind like for millions right now (including me).
Also, related matter is that we Americans need to remember is to NOT live on credit. Credit and living beyond our means is what's got us into this Great Recession mess.
I have one spreadsheet that I use to track pretty much everything finance related. It's password protected, backed up in several spots, and on the cloud, so it will hopefully always be available barring some technological meltdown (in which case most of the data in there will probably be useless anyways, so there's that).
Just happened onto this older post via Wisebread. I suggest some of your readers make friends with people from other countries. My best friend is from Germany and my husband's parents are from Europe. And boy, has my mindset changed in the years (over a decade) that I have known them!
In Germany, I could find NO paper napkins. There were not gift bags because they would be horrified at delivering a gift in such a manner! Now, I am not saying anyone should adopt these methods - I just want to illustrate that both cultures look at "standards" very differently. Even with the smallest of details.
My husband and I no longer buy paper napkins. We bought nice cloth ones which I was regularly. While I do adopt this "European" idea, it does have a very American twist. I do NOT iron my napkins to make them perfect :) They are folded nicely in a drawer and are used for daily use. I have another set for special occasion which do get ironed periodically.
I like their smaller houses (less cleaning time) less isolation (no places for family members to hide away) and more time outside (nice table cloth on the cheap white table on the small balcony). Instead of meeting friends out at a restaurant, we have a wonderful ambiance on our deck with tablecloth and washable napkins. I love my "standard" of living that we have created by combining American attitudes and importing a few European touches. More time hanging out with friends, less time with the TV. I find the pace relaxing.
This has caused us to analyze what we really "need" in our lives to be happy. Got rid of cable, we live with just one car (used and no payments), and eat out less. I'm sure I'll find more places to cut next year. We're even considering a smaller home - but maybe have it on nice acreage.
I'm in the same boat, paid $175,000 and now valued at $34,500 by the county for taxes. Thirteen home on one street 1/3 of a mile long that have been forclosed on. With only 7 years left on a 15 year mortgage I'm going to pay off my debt. Many on my street bought with no money down and when their houses went under, just walked away. Many after trashing the house, the one my father bought for $100,000 showed that they worked on it before they left it a complete and udder mess. People thought they'd make easy money and just walk off. When they became underwater, they thrashed the place and said so long. Instead of giving everyone in America a home they should earn it. 30% in cash down plus insurance so if they walk away, they have something to lose instead of what could be termed rent payments.
When I got a new job in 2006, my husband and I were amazed that suddenly we were a six figure household without kids. Luckily, we looked at it as an opportunity to spend down our debt which accumulated while I was in school. Because in 2008, like many others, I was laid off form my wonderful job.
Now in 2011, I have been rehired in my former industry. Our previous mindset, spending down debt, was honed during my 3 year sabbatical (I went to grad school - which DID help in getting both my new job and my new salary).
Our mindset is the strategic frugality mentioned here. We do want a certain lifestyle. However, we found that we could downsize in many areas that we didn't really care about and pay attention to in order to upsize in the areas important to us.
We had cable because we grew up with TV. And realized we didn't watch it. Canceled our DirectTV, kept netflix. Utilize online programming. We are interested in reducing chemicals used in our household. We bought Norwex products (clean with water - silver infused cloth kills germs/bacteria) and got rid of Windex and other cleaning products. We get simple laundry powder and Ivory soap to make our own laundry detergent. We are freezing more farmers market produce to last for winter but spent on the freezer to keep the food. With our savings, we can now buy large quantity of meat directly from the farm - and save on meat costs at the grocery store.
Finances are like diets in my opinion. I can't stick to a lifestyle change just to lose weight just like I can't make a change just to save money. But if I make changes to do things I enjoy, I'm more likely to stick with it.
also works well with olive oil as makeup remover :)
What? Where did you find this story? Lol. Change a few things and this is my story with a funny twist! Like you, we are now renting, but we no longer have to drive 120 miles per day to get to/from work (I'm now less than 3 minutes away; my husband is 12 min away from his); our daughters' Christian school is now only 15 min. away and she can finally participate in after school activities, sports, etc.; I don't have to worry about repairs; I don't have to save up for that twice a year property tax; I don't have to pay for a gym membership because my complex has a beautiful gym, pool and hot-tub; our apt. complex is gated and in a nice area, and I have more money to do the things that really matter, because I am no longer paying for space I don't use or need! Yep, once you get over the emotional part, the "reality check" allows for a soft and happy landing : )
although there is people like that. why pay MORE than its face value? you could just go on itunes and buy a voucher for its face value.
i just looked to my left to see that new handbag....argh! i want to spend smart so i can splurge without guilt!
i have a related questions -- i live in an expensive suburb. what are general opinions on how much of your income you should spend on rent? unfortunately all the places by me are so expensive....
This is a great list of resources, Debbie. I hadn't heard of a lot of them. One other tool some people may find helpful is http://unbury.me/. It helps people see what will happen if they go after their low balance debts first (snowball) or their high interest rate debts first (avalanche).
Usually, going after your low balance debts first will give you the emotional win of paying off one of your debts ASAP, whereas going after your high interest rate debts first will get you completely out of debt the fastest and with the least amount of interest paid. But this calculator will show people the details of either method based on their situation.
There is so much emotion tied up in home ownership, you are exactly right. When I remarried at the age of 48, my husband was adamant that we purchase a home together immediately (we had both been through bankruptcies and given up homes as the result of divorces previously). Now we own a tiny brick ranch home which has gone down in value significantly in the last few years. I'm torn between thinking we should have continued to rent until we could save up for a larger house, or maybe just continued to rent indefinitely. For too many of us fiftyish people, our houses are the bulk of our estates. Since both of us are public employees, we haven't received any salary increase for nearly five years, but the mortgage doesn't get any smaller, the cost of living keeps going up and things keep needing to be repaired. Thank God properties haven't depreciated here as drastically as what was described in this article!
I think the "Tuesday afternoon/ Saturday night" advice is really smart. I constantly buy "going out" clothes that I never wear because they're too uncomfortable!
I cut my cable last summer. My wife and I thought it would be harder then said, but we're really enjoying it! It opens your mind up to other activities we can do together rather then sitting blankly into a screen.
I love this post. We need to hear more of this. I try to be practical in my spending. One thing I try to ask myself when I make purchases is "is it functional?" I'm all about smart spending but often times it's difficult since we live in a society that is so concerned with consuming stuff.
I think we could all be aspirational spenders for one thing or another. I bought this really cool cleaning gadget because it looked really cool, but I only used it 3 times. But I guess when you buy something you should definitely ask yourself if this is a day to day necessity, if not you may want to rethink your purchase. I think all of us can say that there are a couple things stored away in our closets that we never used.
I suppose buying clothes in anticipation of the weight you assume you're going to lose also counts as aspirational spending? :(
great advice! I'm an impulsive buyer and these questions don't even come to mind when I'm thinking of making a purchase (big or small). I've started to notice how much I spend on going out, shopping, etc and I def fit into the "aspirational spending" category. Thanks for the tips, will have to definitely weigh out the benefits/cons next time I get that itch to spend!
This is great advice! I actually use it all the time, but then I already know I'm never going to look like a supermodel if I purchase so-and-so brand outfits. I'm a much bigger fan of finding what looks good for ME and then shopping around for bargains. I don't care about the label - I just want to look smashing. ;)
I often have battles with myself over aspirational spending. Currently one half of me is trying to talk the other half of me into an iPhone that I know I don't really need. So far the frugal side has won, but the battle isn't over yet!
Just moved into my first house! The article hits on many points that I'm thinking about right now... Do I buy that natural gas bbq or king bed? ARG! Do we get a new couch or just reupholster the existing one? Spend $500 on the front garden?
Love the cost/benefit checklist, I need to do that for sure!
My best investment was buying a house. True, the real estate market hasn't fared well financially, but few things have (I don't want to look at my stocks right now.) Owning a home has provided us with a steady place to live and a great place to raise our family, and our payments have gone towards our future.
The smartest investment I've ever made was to marry my husband! I will be loved and cared for my whole life. Plus he makes a good living. We bought a nice house and some good mutual funds, so I'd say I am a pretty lucky girl.
I've been guilty of aspirational spending throughout my whole life and maybe part of the American dream but that dream is becoming less attainable with the economic downturn. This article serves as a nice reality check b/c we're all guilty of it sometimes which can be ok but when times are tough then it can put you in a real bind like for millions right now (including me).
Also, related matter is that we Americans need to remember is to NOT live on credit. Credit and living beyond our means is what's got us into this Great Recession mess.
I'm looking to cut my cable bill since I'm never home to watch TV anyway. At $110 a month, it sure isn't cheap.
I have one spreadsheet that I use to track pretty much everything finance related. It's password protected, backed up in several spots, and on the cloud, so it will hopefully always be available barring some technological meltdown (in which case most of the data in there will probably be useless anyways, so there's that).
Hi Vanessa,
You'd need to contact Ken directly about that, which you should be able to do through Flickr: http://www.flickr.com/photos/kensbrown/3796660184/
Best,
Meg
Yes! Good quality shoes are something I splurge on as well. I don't know how anybody comfortably walks around in cheap shoes!
Just happened onto this older post via Wisebread. I suggest some of your readers make friends with people from other countries. My best friend is from Germany and my husband's parents are from Europe. And boy, has my mindset changed in the years (over a decade) that I have known them!
In Germany, I could find NO paper napkins. There were not gift bags because they would be horrified at delivering a gift in such a manner! Now, I am not saying anyone should adopt these methods - I just want to illustrate that both cultures look at "standards" very differently. Even with the smallest of details.
My husband and I no longer buy paper napkins. We bought nice cloth ones which I was regularly. While I do adopt this "European" idea, it does have a very American twist. I do NOT iron my napkins to make them perfect :) They are folded nicely in a drawer and are used for daily use. I have another set for special occasion which do get ironed periodically.
I like their smaller houses (less cleaning time) less isolation (no places for family members to hide away) and more time outside (nice table cloth on the cheap white table on the small balcony). Instead of meeting friends out at a restaurant, we have a wonderful ambiance on our deck with tablecloth and washable napkins. I love my "standard" of living that we have created by combining American attitudes and importing a few European touches. More time hanging out with friends, less time with the TV. I find the pace relaxing.
This has caused us to analyze what we really "need" in our lives to be happy. Got rid of cable, we live with just one car (used and no payments), and eat out less. I'm sure I'll find more places to cut next year. We're even considering a smaller home - but maybe have it on nice acreage.
I'm in the same boat, paid $175,000 and now valued at $34,500 by the county for taxes. Thirteen home on one street 1/3 of a mile long that have been forclosed on. With only 7 years left on a 15 year mortgage I'm going to pay off my debt. Many on my street bought with no money down and when their houses went under, just walked away. Many after trashing the house, the one my father bought for $100,000 showed that they worked on it before they left it a complete and udder mess. People thought they'd make easy money and just walk off. When they became underwater, they thrashed the place and said so long. Instead of giving everyone in America a home they should earn it. 30% in cash down plus insurance so if they walk away, they have something to lose instead of what could be termed rent payments.
When I got a new job in 2006, my husband and I were amazed that suddenly we were a six figure household without kids. Luckily, we looked at it as an opportunity to spend down our debt which accumulated while I was in school. Because in 2008, like many others, I was laid off form my wonderful job.
Now in 2011, I have been rehired in my former industry. Our previous mindset, spending down debt, was honed during my 3 year sabbatical (I went to grad school - which DID help in getting both my new job and my new salary).
Our mindset is the strategic frugality mentioned here. We do want a certain lifestyle. However, we found that we could downsize in many areas that we didn't really care about and pay attention to in order to upsize in the areas important to us.
We had cable because we grew up with TV. And realized we didn't watch it. Canceled our DirectTV, kept netflix. Utilize online programming. We are interested in reducing chemicals used in our household. We bought Norwex products (clean with water - silver infused cloth kills germs/bacteria) and got rid of Windex and other cleaning products. We get simple laundry powder and Ivory soap to make our own laundry detergent. We are freezing more farmers market produce to last for winter but spent on the freezer to keep the food. With our savings, we can now buy large quantity of meat directly from the farm - and save on meat costs at the grocery store.
Finances are like diets in my opinion. I can't stick to a lifestyle change just to lose weight just like I can't make a change just to save money. But if I make changes to do things I enjoy, I'm more likely to stick with it.