Jay wrote with a question that I think most of us have had to face at one time or another: What do you do when you feel like you’re slipping into bad financial habits? Here’s his story:
I have no real debt besides some student loans on which the monthly payments and interest are negligible and well under control. My credit card gets paid in full every month. I’m building an emergency fund. I recently got a decently paying full-time job. I live as frugally as I’m comfortable with — I pack my lunches for work, eat home except for twice a month (or when I’m out of town on business), and keep entertainment expenses reasonable. I manage to put away 30% of my take home pay into a high-yield online savings account and dump as much as possible in to the emergency fund every now and then. So why do I need advice?
I want to start a small side-business, and need to make just a couple of high-cost equipment purchases (about $700 worth). At the same time, my long-term girlfriend and I have just separated, so my living expenses are about to increase:
- I’m going to need to buy some furniture.
- The cost of groceries is going to increase.
- Vet bills will no longer be split.
- And so on.
What’s the best way to not fall back into the non-frugal rut, to still maintain a strong outlook on personal finance? Should I hold off on equipment for the side-business until I get a stronger handle on what’s going to happen financially? Is it better to live farther away from my job and pay less rent, but have a longer commute (and therefore pay more for gas)? I’ve been making good financial decisions, but even as I look at apartments online, I find myself thinking, “Well that’s a bit more than I wanted to spend, but I could do it.”
This feels like the first step to losing control. How would you approach something like this?
This situation gets at the core of personal finance — money is more about mind than it is about math. Jay understands the math, and he’s had the mental discipline for some time, but he can sense his strength beginning to crumble. What can he do to maintain his resolve?
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There is no easy answer. You’re doing all the right things during a very tough time.
You may want to get a roommate temporarily to bring in extra income. Remember what you’ve done that works and just keep doing it.
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I slipped several times and yes, it can get expensive. You just wonder why did you do that? In moments like this the best way is to delay that expense. I found myself several times trying to checkout items from ebay or amazon, then when the time comes for credit card details, I stop. I tell myself let me do this later. That helps curb the urge for awhile.
I also am looking for a better place to live, and when the time comes to make a decision I ask myself several questions, as if I am talking to someone. I live just 5 minutes to work, but I know I can get a bigger place for the same price, but I need to drive to work. I tell myself it is expensive to drive, and do I really need all that space. Thus I try to find another place within the 10 minutes radius to where I work. Just looking at apartments and houses satisfies the urge of looking around, and no matter where, I ask myself if this is really good for me and my finance.
Advising myself as how I would advice others in my situation truly talked me out of several pitfalls I would have made. I sometimes still do them, there is no 100 percent foolproof, but you can curb it to an extend.
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I’m not sure that anyone can mentally afford to be 100% disciplined 100% of the time. Shit happens, or some great (but expensive) opportunity comes. Don’t be afraid to be flexible. Give yourself a little time to breathe and assess your new circumstances, then get back on the same frugal track that got you here.
Also, I would advise taking the more expensive apartment over the more expensive commute any day. It’s not just gas money that makes a commute expensive, and the money isn’t the only thing you should take into account. A long commute would eat up my soul along with my wallet.
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it’s better to live closer to work if the money you will save in gas/car maintenance/car payments/car insurance will be greater than the increase in the cost of a closer apartment.
plus you may save the pain of a long commute (unless you like the longer drive, which some do)
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It sounds like he may be emotionally vulnerable from the break-up. IMO, he should hold off on any new endeavors such as a side business until he’s healed from the end of his relationship. As far as the apartment, I would get a short-term lease on a place he really likes and is close to work, even if it’s a little pricier.
In short: the grief period after a relationship ends is not the time to lock into any big decisions. Take care of yourself now and worry about wealth-building later.
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I will only provide my own advice, as to the question about getting equipment for the side-business.
First off the question of starting the side-business will have to be thought trough once more. The break up can lead to changes in how you spend your time, your mood and the level of energy you have to run the side-business. So generally starting a business in an emotional turbulent time might not be the best idea. On the other hand once a break up is done with and if there are no kids involved then there is probably more time to invest in the side-business.
The question of spending $700 on equipment can then be separated from your day to day expenses. Think of yourself as a manager for a new start-up (your side-business) with only yourself as an employee. Would you as a manager of the start business start off by borrowing $700 (from yourself) to invest in equipment? Is that a good business decision?
Also it might be a good thing to run the whole side-business as a business, setting up a separate budget and separating it from your normal budget. That way it is easy to see if the time and money invested in the side-business is profitable or not.
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Whether it’s a small “side-business” or a large business, you must have a lot of capital before you start. Sure, seven hundred dollars might be what you need for equipment, but what about monthly expenses? Merchandise? Liabilities might increase with upkeep, you have to account for depreciation if you’re purchasing equipment, etc. I would stick to the savings plan that you were at before, or at least as close as possible. Starting up a business takes a lot of money, no matter what you’re doing.
AS for the commute, calculate how much money will be depreciated for the miles that you put on your car. Typically it’s something around $.10/mile+$/mile in gas. If you calculate that it will cost more to go to work and back with that, then I would move closer. But, that’s just how I would look at it.
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Do the math on the commuting expense. Based your car’s gas mileage and current gas prices, figure out how much per month the closer location will save on gas. (Add in a fudge factor for more frequent car maintenance and increased wear-and-tear.) Then, just keep in mind that additional cost when comparing prices. (It could be that living closer would still cost more, but that the savings in car expenses make the increase smaller and therefore worthwhile.)
I also agree to just defer the side business for a few months while you get back on your feet. As far as furniture, if you’re really worried see what you can scrounge up on Craigslist. Or start by just buying the bare essentials (a couch and a bed), and figure out later what you really miss or “need”.
Also, its a buyers’ housing market. If you can afford to buy a house or a condo, and would plan to live there for a long time, now’s the time to do it since you need to move anyway.
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To borrow from Keynesian economics: when times are good, set your money aside. When times are bad, that’s why you set your money aside in the first place.
I would personally scale back my investment first, and if you have enough in savings, scale that back too. No sense in just scraping by while a great deal of money aside.
Continue to make frugal choices, even if the outcome isn’t as great as it was before.
And I’m not sure that I would start a side business in lean times. Although your capital needs are pretty small, if it’s going to significantly reduce your savings, you might want to hold off.
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I second Tordr’s suggestions on the side business. Do it right, set aside income for taxes. Assuming there is demand for your business, how long will it take to make $700 back? Talk to an accountant because the expenses are tax deductable. Do this right or don’t do it at all.
In regards to expenses and saving, a roomate is the best option fiscally. Mentally maybe not. I wish the reader good luck, its OK to take a few risks when your head is screwed on tight.
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For myself, creating a spreadsheet with my goals and the cost of those goals truly helped. When I feel myself slipping, I go back to my spreadsheet, and suddenly remember why I’m working two jobs, why I’m going back to school, why I really don’t need those new boots.
Getting it all down on paper helped crystallize what I’m really doing and why I’m doing it, which might help Jay. Especially since he’s had a recent change in his living situation, he may want to create a brand new budget—-including savings for his prospective side business.
Some people can keep this all in their heads and refer to it that way; I need to see it in black and white—getting it on paper motivates and inspires me—along with reading blogs like this one!!
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Transitions can be hard. The good thing is that you’re starting from a very strong position. 30% savings rate? — nice!
If you decide not to take on a new roommate, rent the smallest, cheapest, acceptable place you can as close to work as you’re willing to live. I don’t necessarily believe that renting is throwing money away compared to owning, but why pay more than you have to? By moving close to work, you’ll be less the victim of $4/gal gas. If public transit is an option, consider that when choosing your apt., too. More transportation choices are good.
Also, as for furniture and side business equipment — How much can you buy used and/or refurbished to reduce the $700 costs plus the cost of furniture? (You’re on your own with the higher vet bills — those are tough!)
Groceries don’t have to be more expensive, especially if you invest in a small freezer. Many leftovers freeze beautifully.
Be creative and thoughtful about extra spending, and you’ll be fine. The fact that you’re already worried about it before diving in suggests that you’ll do better than most.
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This may not be sound financial advise but here it goes. First get a new girlfriend ( I know, I know,good girlfriends are hard to get)But if you can possibly find one that doesn’t quit when the going gets tough that would take care of some of your problems.
I’m assuming she left you right? If not call her up and admitting that your an overbearing jerk and you would like to try again with a new attitude. Tell her there was a popping sound involving the location of your head and you believe the problem is fixed.
Now I don’t want to take up anymore room with my ramblings so I’ll leave room for others to give you some meatier advise. I’m justa saying!
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I simply surround myself, nay, I SATURATE myself w/ incredibly good influences every single day. This creates a shield to block bad habits. The more you read about good personal finance and good personal development (which are two sides of the same coin), the stronger and more protective your shield will become. GRS is the best site you can possibly read on the internet for personal finance … but don’t stop there! Read the books that J.D. recommends, read the books that Trent at the Simple Dollar recommends, read the books that Leo at Zen Habits recommends. Eventually, you can’t help but to react to situations that confront you with the collective wisdom of your shield.
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Before making large purchases, we wait a week. Often we find that we don’t actually need/want those things, and it was just an impulse of the moment…
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Keep your focus on all the things you have done correct – saving 30% of your income in a high yeild savings, packing lunches, eating out only twice per month, etc. Also, with a recent break up, which is quite emotional, that may make you want to spend money – I know when I am down I tend to want to spend to make myself “feel better.”
In reality, spending may make us feel better for the day, but it never solves any issues – in fact it can create more issues and thus a rut. So avoid spending needlessly.
When you get the urge to spend money on things you do not need – make yourself wait at least 1 to 2 days and during that time ask yourself – “do I really need this thing?” Those things have worked for me.
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Actually you don’t need a fortune to start a small business. Just don’t go into debt for it and the income will repay the investment.
Also the small business from your home will let you deduct a sizable amount from your taxes. Any expenses and losses are deducted from your job income.
If you set aside a room for the business, all associated costs…rent utilities, telephone, auto, landscaping (if you have to mow yourself) are directly deducted from you tax liability on the Schedule C Self Employment you will be filling out even if you don’t make a profit for years.
Also,that $700 will be directly expensed on Schedule C so it will only cost you 75% of your investment as will the office furniture if you need it.
These expenses are deductible up to the percentage of the the total cost. e.g. The office is 20% of the space of the apt so 20% apt expenses are deductible. Same with car expenses.
You do not have to be making a profit to have this deduction, you just have to be serious about having the business.
If your place is big enough, you could take a roommate and set aside half of the living room as your office and the same still applies.
Also, go to good will for your furniture for the rental places sell their depreciated stuff super cheap.
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This comment will not be popular at GRS but frugality for frugality’s sake is not always healthy. From a financial perspective, the ultimate goal should be increasing NET WORTH. With questions of your potential earnings and success of your new business aside, a $700 “investment” in equipment does not reduce your NET WORTH: It would simply be an exchange of one asset (cash) for another asset (equipment). Your assets stayed the same and your debt did not change.
Now, assuming your business idea works, you will have created a new cash flow with the $700 investment…
Good luck…
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First, celebrate your triumphs. Sometimes we forget to pat ourselves in the back. Being proud of what you have been able to accomplish financially can help you in your decision making.
Secondly, I would not recommend taking the apartment or house that is further from your job. For 8 months I commuted to work with a round trip total of 110 miles. This was one of the most miserable times I had. The toll that it will take on mind and body is just not worth the savings you will get from living further away.
I like everyone’s advice as to how to handle a high priced item. My favorite one is the the 48 hour rule. Before making a decision, wait 48 hours and see how you feel about it afterwards.
I wish him the best of luck.
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Let me throw in another point in favor of the short commute. For me, things that take time often literally cost me money, not in the “time=money” sense.
If I’ve got less time (because I’m driving an hour a day), I’m less likely to pack a lunch, or clip coupons, etc. I find myself making worse financial choices in the name of convenience.
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Re: Apartment vs commute – The simple way to answer this is to ask what do you value more – money or time? If the commute is cheaper and you don’t care about your time, then fine, go with that. Most people, however, are better off spending a bit more on rent and saving that commute time for time spent living their life. In the end, a lot of people wind up overspending because they are trying to fill their lives with stuff to make up for the fact that they have a 3 hour commute that makes their lives less…If they lived closer to work and could actually do more for their time, they would spend less.
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Just wanted to include the ecological point of view.. It’s definitely better to live closer to work and not have to spend so much gas on a daily basis. Giving up your car (or even keeping it as a part-time vehicle) will save you a surprising amount of money. Public transportation is often cheaper and you can use the time for something effective (like reading, sketching a business plan).
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You should buy the business equipment instead of furniture.
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I agree with Anne about the probability of your seeming and feeling vulnerable right now. With that said, I’m sorry for the loss of your relationship and please do grieve it, but don’t lose sight of your goals. You may slip, but just weather it and don’t make too many major decisions right now.
And definitely don’t consider a longer commute — the time and or money saved is not worth your life and the possible impending stress. Engage some friends and some other things to keep yourself busy until you work all of this out.
Twannette
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I completely agree with Get A Grip Girl. Finances often remind me of dieting: both are all about discipline. Diet experts often tell us to go out for a walk or do anything that would delay succumbing to a food craving, b/c then it often goes away. The same goes for unnecessary expenses such as recreational online shopping: wait for a while, do something else, and often the need to buy that item will go away.
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I agree with all the tips mentioned above. Having gone through the same experience three years ago (vet bills included), the following things also help me:
*Bump up your workouts or take up a new sport – a lot of out of control shopping sprees were simply emotional outlets. You’ll feel better emotionally and physically.
*Buy your furniture and kitchen items at thrift stores, discount stores (like Target) and Craigslist. Friends also gave me a number of things they no longer wanted, like a G3 Mac, a fancy woven rug, and an carved Indonesian table. My place looks better now than it did before the breakup. (I could probably devote a whole blog on decorating your apartment on a tight budget).
*Get rid of your car. This is radical and only applies to people who live conveniently along transit lines. I moved to a place along a bus line to work, then got rid of my car and took up biking – it totally changed my life. I saved about $300-400 a month on gas, insurance, etc. and it also limited my consumer spending. I also lost weight and improved my health (see tip #1). It’s good for the environment too.
*One can always spend less on groceries. GRS’s Food section has awesome tips for lowering your grocery bill. It takes time to adjust buying just for one, but when I did, I really only needed to buy 1/3 of what I usually bought before.
*In terms of your business, I’d try to find one friend with a similar career plan or mindset. I have coffee with one such friend regularly and we bounce ideas off one another and keep each other inspired and on track.
My biggest expense have been vet bills (my cat got really sick). I don’t have any tips for that – I’m not quite sure if pet insurance is worth the expense. Hope that helps!
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Don’t sign any leases yet. Let the dust settle.
Make a budget and track all of your expenses. Then trim the fat.
Consider a smaller apt closer to work or get a roommate. This limits the financially and mentally exhausting commute and frees up time to develop a business plan for your new business.
Look at freecycle etc for items to furnish a small apt.
Cut vet expenses with discount vaccination clinics at the pet stores.
Continue with lunches from home and limit eating out. Invest in a basic cookbook, clip coupons and be smart about grocery shopping.
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You’re doing the right things. All I can say is buy used furniture to get you by. Estate sales are a great place to get good quality furniture cheap. If your business idea is sound and you’ll be able to make the $700 back quickly, then by all means go buy it, but wait until you can pay cash for it.
My wife had to spend about $800 on equipment for her business last year. We put it off and put it off, but it took about a month to make the money back once she bought it.
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Other than this being a difficult time emotionally due to a breakup, I don’t understand why this is an economic crisis or a situation where one would “fall back” or “lose control.” It sounds like you’ve been saving tons of money, so a $700 purchase shouldn’t be a big deal. And the extra expenses you mentioned don’t have to amount to much if you are careful. New furniture can cost thousands, or it can cost barely anything if you use freecycle, craigslist, goodwill, etc. There are other ways to take the same approach with additional expenses you mentioned.
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I’m going to play devil’s advocate and say live a little, for goodness sake. You sound depressed. And young. Spending money doesn’t make you feel better, but there’s a huge gap between frivolous and a 30% savings rate. Congratulations on having such resolve, and I’m sorry that you and your girlfriend broke up, but get out a pencil, do the numbers, and see what you can afford without going into debt. You’re asking vague questions that need firm math, and only you have your books in front of you. And PUT SOME MONEY ASIDE for dating, because you should get out. Make sure you have an emergency reserve. Make sure you’re contributing some money to a ROTH IRA or 401K (divert some money from your savings, if you aren’t doing this). But go out with a friend and have a beer, sign up for some online dating service, and have a little (reasonably priced) fun.
Sorry JD, I can’t advocate grim finances all the time!
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I was recently in this situation, though not to the same extreme, where I had an extra $500 unavoidable expense and then seemed as though I was slipping as well.
My solution was to start saving more.
The instant I got paid that money was moved to my ING Direct account, and was no longer in my chequings. This left me with a specific amount of money that I was able to spend, and I had to budget accordingly. I never take money out of my savings account except when I’ve planned to (my upcoming move to Australia, for example), and so once that money is in there, it’s “gone”.
By saving slightly more than I normally did, it forced me to continue being frugal as I knew that I didn’t have the money to keep spending. Once I was out of money, I was out of money and I knew it.
A couple of weeks later, the phase passed and I no longer had the spending urges. Life went back on as normal. If that initial $500 expense hadn’t happened, I likely would not have gotten into that spending spree, which is exactly what you seem to be going through but on a larger scale.
You’re going to want to keep saving 30% if possible. Remove that entirely from your paycheque, and make your decisions with 70% of your paycheque as your budget.
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I am going to give you a right-brained answer to a left-brained question. First of all, we have no control over what goes on in our lives.The roof leaks, the car breaks down, loved ones leave. We can “what if” ourselves until we are blue in the face.It does’nt change anything. This is not to say that we don’t prepare for rainy days or seek advice from wise people. But ultimately the answers you seek are ones only you can answer. Put away the graphs, calculators and stats and look within yourself first.Do what is right for you. If the answer within is starting a business or going to Tibet, everything will fall into place.
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I would start saving for both emergencies and the equipment you need out of that 30% of your paycheck (you may have to drop this back to 20-25% if your expenses are increasing). Whatever you do, resist the urge to pile the business expenseses and the furniture purchases on a credit card.
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Grimsaburger said: “Also, I would advise taking the more expensive apartment over the more expensive commute any day. It’s not just gas money that makes a commute expensive, and the money isn’t the only thing you should take into account. A long commute would eat up my soul along with my wallet.”
Just to voice an opposing opinion, I would say that I prefer a bit longer commute. It gives me time to unwind and free my mind from the office-grind. Of course, it depends on the details, as with anything. For 3 years, I commuted 60 miles each way, but a large portion of that (about 20 miles) was on a fast-moving (no traffic jams) section of highway along the Pacific coast. All I had to do was set the cruise control, stay to the right and pay minimal attention to the traffic. It was very relaxing and even after the worst days at work, I no longer felt like kicking the dog by the time I got home (just kidding about kicking the dog, don’t flame me for that remark!) If I had to deal with stop lights every block for miles, or sit in snarled traffic jams, I’d feel differently, but I generally average better than 50mph on my commutes.
The point is, you’re going to pay one way or the other – either a short commute with more expensive housing, or vice-versa. You have to decide which is more important to you. This isn’t purely a dollar-based decision.
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Re: the living situation, I would recommend spending a bit more and living closer in, especially being newly single. I find it much easier to meet new people through getting involved, volunteering, being social, etc. living closer into town rather than way out in the ‘burbs or ‘boonies. I also spend a bit more to have a comfortable place in a nice neighborhood where I can walk for exercise and stress relief.
I think budgeting and debt repayment work best when you can adjust a little–with a plan. Perhaps for two months you don’t set aside the 30% in savings, but re-direct that money to fund setting up house in your new place. And be smart about that–resale shops, thrift stores, auctions, craigslist–can be good places to find furniture, if you’re discerning about it.
As for the side business and equipment–don’t know enough about it to say. Although
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what no one likes my advice from my first comment. Must be at least one of you paying attention.
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His situation doesn’t sound all that bad, it just sounds like he had a comfortable and predictable deal and now he will be going through some adjustments.
First he may have to delay some things, like starting the business. Then he may want to stock another month’s living expenses into his emergency fund since his situation has changed quite a bit. It may also be a time to go from saving 30% into an account to saving 15% or 20% (which is still great btw).
He’s just bummed because the status quo has changed on him.
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Were you committed to buying this equipment before the break-up? If so, I would not let the break-up derail you, although I would reassess the budget based on your new situation. On the other hand, if the decision to start a new entrepreneurial endeavor was prompted in part by the break-up (i.e. an emotion decision because you feel out of control and this will help you feel more in control) then I would hold off for a while. You were in a serious enough relationship to share vet expenses, so I think this break-up is probably a big deal and you need a little time to recover before making big decisions. That probably includes moving – I would consider the suggestion to get a temporary roommate – just make sure you have a written agreement about how much they will pay and give you the right to kick them out when you want the space back to yourself. Sorry you are going through a tough time – hang in there. It sound as though you got custody, so that’s something to be grateful for.
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I know that I feel more vulnerable to needless expenditures when I am feeling low about something, myself, so I can relate. The question that leads to, however, is how do we define “needless?” A side business that can add revenue to the equation makes sense, at least at some point. Some of the other things, like higher housing costs and vet bills will be part of the equation after any breakup, although if one is not married then health insurance will stay the same. All in all, I agree with the people who suggest putting off any major financial decisions for a little while, and also remembering to get out there and live a little to get that mojo back!
Jerry
http://www.leads4insurance.com
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I have to warn against the long commute. My commute is about 10 minutes, I have a lot of coworkers who commute over an hour. They are miserable. There is actually some research to back that up:
“Harvard psychologist Daniel Gilbert explains (video) that the human mind is great at adapting to things that won’t change: we convince ourselves we will be fine, and then it becomes basically true that we will be. But if things change all the time, we cannot use that adaptive part of our brain. In this way, having a bad commute is worse than losing a limb.”
see: http://blog.penelopetrunk.com/2007/12/20/how-to-decide-if-your-commute-is-too-long/
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Years ago, a counselor gave me the BEST advice for the lean times. I was raising two children alone, no support system, in a state that was gripped by a recession that lasted ten years. I was lucky to get project work in my related field on 30 day contracts. From month to month, it was a struggle.
It got me a bit depressed. I felt so POOR. Here’s what I was taught:
There is a difference between being poor and being out of money. In tough times, you are out of money. Poor is a state of mind.
To help me she had me make a LIST OF TEN and keep it in my wallet. Ten items, none more than about $10 each, ten bucks that I could squeeze out of the household budget from time to time. My list included things like this:
*a new CD
*a movie ticket
*a new book
*a lipstick
*a sketchbook
*admission to the museum
*a fancy sandwich to go
*breakfast out
* a pair of jazzy little socks
She also had me plan to make one $200 purchase once a year of something I would really love. Then save for it each month, $17 in cash in a jar at home, where I could see it tucked into my sock drawer. With this I could buy a new easel or a set of good speakers or seat covers for my car and so forth. It was a great psychological tool at that time.
My “treat” need was fulfilled and I was able to cope better with the starkness of my situation with these little rewards. Just having that List Of Ten stashed in my wallet, just knowing that if I wanted to, I could go out and treat myself to some indulgence like this every now and again, was enough. I rarely need to do more than pull it out and savor the possibilities.
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Just a side note
@ajmartin, regarding “If you set aside a room for the business, all associated costs…rent utilities, telephone, auto, landscaping (if you have to mow yourself) are directly deducted from you tax liability on the Schedule C Self Employment you will be filling out even if you don’t make a profit for years.”
For a home based business I’d be careful deducting losses for multiple years. THe IRS has a test for profit motive that looks for profitability in 3 of 5 years. If you do not have profits in 3 of 5 years it could trigger an audit and you’d have to prove you’re not just deducting expenses from a hobby.
refs:
http://smallbusiness.yahoo.com/r-article-a-2574-m-4-sc-27-hobby_business_tax_rules-i
http://www.ahbbo.com/hobbybusiness.html
-Jim
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I recommend sitting down, relax, and take an inventory of where you are both financially and emotionally. You have just gone through a major crisis with the separation of a long time girlfriend. You may even need to hold off making any major financial decision for short period of time.
Celebrate the victory of where you are and where you have come from. It is important to not be so focused that you do not have fun.
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So I’m going against the majority here but these are my thoughts.
1. Totally go for it with the business if you’ve already thought it out. Your going to have a lot of free time on your hands and a new business is a great way to be constructive with your time instead of watching tv and missing her.
2. Live close in. You are going to have to start budgeting for dating and the best way to trim that down is being in close contact with free city events.
3. Have a roommate. Your already used to making compromises for someone else so this should be a pretty easy adjustment. And your roommate will probably have a little furniture themselves.
Life is going to be more expensive for a while but eventually you’ll find ways to cut it back. And this is why you save so much when you can, so when you can’t, it’s not a big deal.
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I’ve lived far away from my employer and did it WAY too long. I changed jobs and moved and now only live about 15 minutes from my job, compared to 40. I am SO much happier and I think you’ll see the benefits both milage and gas-wise with your car. It’s amazing how much I save in gas now.
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I agree with Finally Frugal, that the way to prevent from slipping is to have financial goals. The goals remained the same presumably, if they didn’t then you need to readjust your goals. All the other suggestions are variables that lead up to your goals. Sort of like focusing on the symptoms rather than the problem.
You’ve hinted at the problem, and that is you don’t have a handle on your new financial situation. Get a handle on it, adjust or redefine your goals, and go from there. Everything else then is just number crunching on your part.
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I haven’t read all the reply posts (just a few), but I definitely have compassion and understanding for this guy. Yes, things are more expensive alone. You will learn how to make choices, that’s all. Some choices will be easier than others (like food instead of movies).
You will figure out solutions to the furniture thing (look in thrift stores, consignment shops, Pennysaver ads, ask friends, estate sales, etc). I have a friend who bought a gorgeous whole living room set for $200 from a Pennysaver ad. You may go with less ‘fashionable’ furniture for a while (the basics first). You may even forgo purchasing big screen TV to just watch DVDs on your computer for a while.
As for your commute, I don’t know where you live, so I don’t know if you think “a long commute” is 15 minutes, 30 minutes or 90 minutes. Here in the DC area, a commute can be 2 hours each way (!) if it rains at rush hour. This is a personal decision, and yet you might find better housing prices ‘just outside’ the hot living area, if you find a quality back-way drive into your work zone. OR, you may find a cheap fixer-upper that you don’t mind trading sweat-equity for the lower initial fee.
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If you feel that living closer and avoiding a long commute will save you enough mental anguish to keep you sane, I would spend the extra money.
I would also hold off on the new equipment for some time until I felt more financially ready. However, I think it’s important to set a date to reassess in a few months so you don’t put it off indefinitely.
As for new furniture expenses, May/June will be the perfect time to pick up some cheap stuff when all the college students are forced out of their homes. Dumpster dive on move-out day (Seriously, we got rid of whole couches, perfect lamps, vacuums, etc.), or sort through the craigslist postings. Whatever you do, don’t buy new (except maybe an IKEA mattress – never sleep on an old mattress. You never know who’s got bed bugs).
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You have loads of good advice already, so I’ll just add a few strange things.
Here’s what I’d do:
Spend a month or two recovering from the break-up. Think about what changes I made for my ex. Which ones would I like to keep, because they made me a better person, and which would I like to undo, because I was just doing it to be polite.
With very little furniture, I liked to throw “art show” parties when I was between roommates. I’d invite all my friends to bring over things they’d made, and we displayed them on the walls and countertops and floors (lots of space now!). (I defined “art” broadly, and got to see hand-made clothing and furniture, rope tied in various knots, pictures of Halloween costumes, and of course paintings and photography.) Or have a dance or indoor picnic or something else that needs all that space!
Taking care of yourself like this can help keep you from losing your grip on things that are important to you like your finances.
Then I’d probably look for a roommate, either for my place or their place.
For motivation, I would tell myself that I won’t let my ex ruin my finances. This makes it more like a challenge, a dare, even though it’s basically imaginary because the other person isn’t there and isn’t actually trying to make you ruin your finances.
If the two of you were saving for something in particular, and now it all seems so irrelevant, now’s the time to start thinking of new goals. Brainstorm and include crazy ones.
My more general and thus less wacky advice is to do what you need to do to take care of yourself right now, remembering that there are many ways to pamper yourself, and they don’t all cost money. (Playing with your pet, taking long walks, singing along with your music, wearing whatever you feel like on the weekends, cooking the kinds of food she hates, taking long hot showers or baths, re-reading old favorite books/comics, having games parties or pot-lucks, etc.)
And depending on your business and your personality, buying that equipment and jumping into it may be just the kind of distracting activity you need.
You really can put off buying furniture for a while even if you have to use a sleeping bag or figure out how to watch rented DVDs on your monitor. And people may lend you things. When your friends see you hurting, they want to help even though they know they can’t, so letting someone lend you their patio furniture for your dining room could be just the thing to make them feel useful.
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Hi Jay,
As several people mentioned above, thrift stores are a good place for furniture. When we purchased our house a couple of years ago, we went to Goodwill and Salvation Army and other thrift stores and picked up a lot of good used furniture for about $400 (including the cost of the u-haul rental which was $120 – we didn’t know anyone in the area from whom we could borrow a van or truck).
There are some really good buys in thrift stores; real wood furniture such as cabinets, chests of drawers, bureaus, shelves, desks, end tables, coffee tables, chairs, etc. often for under $10 a piece. We brought it all home, gave the surfaces a light sanding and repainted it all to look new. And everything matches.
If you do go to thrift stores, I highly recommend buying real wood items. Those are easier to fix up (it’s hard to sand down laminate), sturdier and will last you longer. Don’t be turned off by something solidly built just because it looks a little shabby on the surface. Minor cosmetic blemishes are easily removed by sanding and painting.
As for the business, I don’t know what type of business it is, but you’ll want to consider how it would do with the economy in its current state. Would your business provide a service that is a necessity or a luxury? My sister and I have a small pet clothing and costuming business, and because our products are a luxury item, sales have slowed down a lot because our customers are now concerned with more basic things like paying for food and gas. So if your business will be providing a “luxury” service (anything that is not necessary but would be “nice to have”) I’d think about that before diving in and spending the money on the equipment.
Best wishes.
Penelope
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