I’ve received a lot of interesting out-of-the-ordinary questions from GRS readers recently. Two weeks ago, for instance, Rita asked about the moral implications of spending. This week, Crystal wants to know: What if she is materialistic? Is that wrong? If so, how can she change?
Here’s what she has to say:
I’ve read your blog for a while now, and it always inspires me, but I stop just short of embracing the frugal lifestyle. Why? Because I’ve tried it and discovered that I am, in fact, very materialistic.
For instance, I have tons of clothes, shoes, and bags — and I use them all. I have over 30 purses, and I change them out every day. I have a separate work and leisure wardrobe, and I very much enjoy getting dressed in the morning. I also love laying out my clothes for the next day, choosing between outfits, and so on.
I also love eating out. It makes me happy. I love the variety, and because I dread cooking, I’m not very good at it. So food from home isn’t as tasty and wonderful as dining out. Plus, were I to buy all these ingredients they’d go bad before I came back to use them. When I dine out, I love the people watching. I love having food brought to me. I love not cleaning up.
I love being the person who gives the gift that the recipient is looking forward to receiving.
And I’m a bibliophile, to be sure. I love new hardbound historical novels. I believe rows and rows of books are beautiful. I love to just look at them. I’ve thought of selling my books, but I’m too attached.
You get the picture. I love Stuff, and it makes me happy. I’m not in real debt (no student loans, no car payment, only $3,000 total of credit-card debt with a total monthly payment of $110, towards which which I pay $200) but I also don’t save anything. I have a mindset that store-bought is much better than home-made (like laundry detergents and the likes).
Am I a lost cause? How can I re-frame my mind when fashion/celebrity/shopping is my passion?
First of all, I think it’s great that Crystal is completely open about her love for food, fashion, and fun. She’s being honest about how she spends her money, so I don’t think there’s any point in criticizing her for the choices. Instead, let’s focus on two things:
- How can Crystal fit her love for Stuff into a reasonable budget?
- How can Crystal learn to love frugality while retaining a passion for the “good things” in life?
You can probably guess my response to the first question. I believe that smart spending is about making choices. Frugality isn’t about pinching pennies on everything; it’s about cutting costs on the things that don’t matter to you so that you can spend on the things that do matter.
In my case, that means spending less on clothes, cutting cable television, and growing some of my own food. These cost-cutting moves allow me to afford season tickets to the local pro soccer team, buy comic books, attend an expensive gym, and travel the world. There’s much more to this, of course, but the main lesson is that I practice conscious spending. I actively choose to spend on some things and not on others.
Crystal can do this too. If fashion, food, and books are important to her, she can spend on those — within reason. There’s no rule that says she can’t. But it’s in her best interest to be smart about this.
Crystal should:
- Find ways to buy books and clothes for less. Some of the best-dressed people I know buy their clothes at thrift stores our outlet stores. A used book can be just as satisfying as a new book (and sometimes more so).
- Cut back hard on the things that are unimportant. While nice clothes and restaurant meals are important to Crystal, there are probably other things in her life that aren’t. Maybe she can get by in a small apartment. Or maybe she doesn’t mind riding the bus. She can have some of the things she really wants if she’s willing to make sacrifices on other things that matter less to her.
- Avoid going into debt to indulge her passions. It’s fine to spend money you can afford to pursue your hobbies. But it’s dangerous when you start spending more than you earn. Crystal has only $3,000 in credit-card debt at the moment. That’s not a lot, but it could grow into a bigger problem if she tries to have it all.
I also think that Crystal should begin to foster some frugal habits even as she allows herself to be materialistic. When she shops, she should be smart about it. She should wait for sales. If she finds something she likes in a department store, she should check eBay to see if she can buy it for less. She should begin using the library to borrow one or two books a month. When she dines out, she should look for ways to cut costs: use coupons, forego drinks, choose cheaper restaurants, and so on.
There are ways to practice frugality even while indulging in a materialistic life. When Kris and I bought furniture for my Man Room (which had remained empty for the first five years we lived in this house), we bought nice stuff. But we waited for a big sale and we used a coupon. In the end, we paid something like half price for some very expensive furniture.
It is possible to be frugal and materialistic at the same time.
Or is it? What do you think? How do you balance having the things you want with saving for the future? Can a person be both frugal and materialistic at the same time? Is Crystal a lost cause? How can she learn to love frugality without giving up the good things in life?
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Definitely put saving first.
If you have 3K of credit card debt that you can’t or won’t pay off each month, that actually is quite a lot. No savings is dangerous. There are a lot of things I love and want, but can’t have because we can’t afford them. For example, I’d like a house in the SF Bay area, even though my job is in a different state. That would make me happy. But I don’t have a spare million dollars. The fact that I really want it is irrelevant. I have to take care of my needs for both me now and future me before I can consider luxuries.
Get rid of your high interest debt. Put 15% (or more if you need catch-up) away for retirement. Get a fat emergency fund of at least 6 months expenses (12 months or more if you anticipate having trouble finding future work). Then spend money on whatever the heck you want.
If you don’t want to be unable to afford even catfood should you lose your job or need to retire, then making a few sacrifices now will allow you to continue enjoying the good life in the future.
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I feel like Nicole’s post is spot on. The eye sore to me is that Crystal states she only has $3k in credit card debt, key word being only. At her current rate of payment, it will take her over two years to pay it off. Anything that big shouldn’t be dismissed as little debt.
There are people who are happier with material possessions, but it seems to me like Crystal might be trying to cover up some hidden financial frustration with more spending. She’s had negative cash flow in the past, and there’s a good chance she still does, and is trying to justify her reasons for not being frugal.
I think this is one of those things where the person thinks he or she is happy with material possessions. But without ever experiencing life with positive cash flow, emergency savings, and without the shackles of debt, it’s hard to truly measure his or her happiness.
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I’d have to agree as well. there’s an easy way to balance frugality and fun. It’s also not a bad idea to put together some savings. $3,000 in debt may not seem like a lot now when there is a steady stream of income, but any thing can happen to break that stream, and then three thousand dollars with no savings just becomes a burden.
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$3,000 credit card debt is not a big deal. The big problem here is she is making $200 payments. It sounds like at the rate she is spending, the credit card debt will keep growing bigger!
If Crystal loves spending money so much she should MAKE MORE MONEY! She already said she can not do frugal so that’s out. Focus on making more money so she can have positive cash flow.
Of course, I think making more money is a lot harder than spending less.
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Actually, her situation wouldn’t necessarily improve if she makes more money because she would simply spend it. With her mindset, she would view a higher income as an opportunity to buy more things and eat out more frequently.
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Actually, her situation might improve if she were to lose her income now and hit what is still a relatively small financial crisis.
That would likely teach her some better habits while she’s still young and before that $3000 debt becomes a $10,000 debt or worse.
The worst thing that could happen to her is that she goes on like this until she’s out of her twenties and can’t change, and then some really big crisis puts her back permanently. (It’s pretty obvious she’s in her twenties.)
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“until she’s out of her twenties and can’t change”
Once you hit 30, you’re stuck?
My biggest financial changes for far have all been in my 30s. (I’m currently 35, so 20s and 30s are really the only decades I can speak to.)
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Agreed. The concepts of materialism and saving are not mutually exclusive. All you have to do is budget. Sure, it’s not as fun, but like Nicole (and others) say, you have to take care of yourself before you can spoil yourself. Recessions, employment, inflation all operate on cycles – you have to prepare to deal with what a future bad job market might bring you. Those dinners out, nice clothes, and walls of books might wind up being the only source of potential income you have if you lose your job or get hurt and can’t work. Having to sell some goodies later might be more depressing than forgoing some to save now.
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I am very materialistic, too. I love the full moon rising in the evening over the city, the peas in my little garden, the sight of a summer tanager in its crimson plumage, and the soft touch of the spring wind. I love selecting foliage and flowers and trying out different combinations of them in one of my favorite vases. I adore good food that I cook myself, and hardly any restaurant, no matter how pricey, can match the ingredients and light touch of my own cooking; I always feel like the stuff that other people exclaim over when dining out is way too salty, and that seems to be what they think is so tasty.
I think it’s fine to be materialistic, but materialism doesn’t have to mean spending a lot of money. I love being on earth as much as anybody; fortunately enjoying one’s existence doesn’t require a lot of consumer purchases.
Hope I don’t have to bail Crystal out in retirement, that’s all.
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+1 for Nicole’s post.
JD, you were too soft on Crystal.
She’s living completely for today and needs to think about the future. She might want to buy a house someday or have kids or go through a stretch of unemployment without pulling her hair out.
I suggest she read some pf books – that might help her understand how her actions today might negatively impact her future.
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Exactly, the piece you are missing in the response is the temporal element.
PF is all about changing the now reward into a larger future reward. Period.
If you want the reward to be purses, go ahead. Crystal just needs to know that without saving money, she is spending more now then she will be able to in the future. Let’s simplify the problem. The goal if personal finance is to maximize the reward for your money. Therefore, credit is the worst solution, and savings are the best solution. There obviously is a balance, because if you end up with more money to spend then you have time to spend it, you have also missed the maximum reward return (unless you get reward knowing you are supporting your heirs).
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It might also be a matter of how old she is.
I spent a lot on food, clothes and travel in my 20s. In my 30s I saved and bought a home. At the moment that’s my real focus, but in my 40s and 50s I’ll probably ramp up the retirement savings (I pay into a retirement fund now, but not much).
If she’s reading Get Rich Slowly she’s probably reached an age where she wants to change things. It she can work on a spending plan that fits in with her love of stuff, eliminates the credit card debt and builds up a small emergency fund, then that’s a real achievement.
Of course, if she’s 62 years old, then she has a real problem!
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+1 Nicole.
I think there is nothing wrong with being materialistic and enjoying Stuff. Its great!
The only question is.. Can you sustain this life on enjoying stuff, without debt, until you are old for the rest of your life?
If your answer is Yes, please tell me your secret!
For a lot of us, the answer is no. Sadly I don’t envision myself working until I am 80, but I would like to live until then and if possible enjoy the same things and values that I do. For that, I have to be frugal in the now.
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Another who totally agrees with Nicole! If someone’s being responsible by planning for the future and saving for a rainy day, then I say spend away if you want to.
But if you’ve got no savings and $3000 of credit card debt (which seems like a lot to me!), then some expenses need to be cut, at least temporarily.
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I like JD’s advice.
I think another part is the see it, love it, buy it mentality. Frugal means thinking about your purchase and buying what you want within limits. I’m getting the impression there is a lot of going out for the sake of going out, then spending money on lunch/shopping/dinner multiple times a week. It might help slow the bleeding if she shops with more of an eye towards something she needs specifically, e.g. a specific color outfit for work, rather than the impression I’m getting of “isn’t that a great outfit, I have to have it”. Thrift shops may help, provided it doesn’t become “oh, I can buy five dresses instead of just one.” kind of thing. Finally, she could figure out a number of something she’s got and is good with, say 45 purses, and she can’t buy a new one until she’s donated, trashed, or sold an old one. This way she can add new, but only if she’s really going to use it rather than hoard it.
With respect to the books, I prefer to read something, then buy if I really want to add it to the collection. So the library is big with me and may be a benefit that might work in her case. Ours has rentals of movies, books on tape, etc. so its covered a lot of entertainment bases. If that isn’t viable, there are web options like paperback swap she could look at.
In the end though, she will have to make a decision on some things. If you lose your job tomorrow, will your books, purses, and clothes put food in your mouth (if you can’t part with them now could you then, and if you could then, why not now)? Will those restaurants honor your patronage with free meals? Will your credit card company be happy to bump up your limit until you get a new job? $100 a month and in a year you have a $1200 emergency fund. Stop with the card, $300 a month and out of debt in a year. Then you can add anothe $100 to the emergency fund and freely spend $200 a month without going into debt.
Best of luck.
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I’m the same way with books
Most of the novels on my shelves are the “comfort books” I’ve read over and over again. They’ve been well loved, and well shared!
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I hate to be a stickler for definitions, but I don’t think this is on point for the definition of “materialism” or being “materialistic”.
From Dictionary.com
ma·te·ri·al·ism
[muh-teer-ee-uh-liz-uhm] Show IPA
–noun
1.
preoccupation with or emphasis on material objects, comforts, and considerations, with a disinterest in or rejection of spiritual, intellectual, or cultural values.
The sacrifice or rejection of spiritual values didn’t come into play in her comments or question (although that issue may very well exist in her case). I see this still as a matter of not being frugal or worse yet, not being fiscally responsible. She has credit card debt used to finance her love for material things and comforts. Semantics aside, that appears to be the crux of the matter.
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What word would you suggest as a substitute?
Language is not stagnant, it evolves. I agree that dictionary.com’s definition is one definition of the word, and is still defined that way in philosophy.
However, you can’t ignore that oxforddictionaries.com, thefreedictionary.com, and wikipedia, and urbandictionary.com (non-credible reference, I know, but that one exists goes to further my point on the evolution of language).
Wikipedia uses a qualifier, economic: (From Wikipedia)
“This article addresses materialism in the economic sense of the word. For information on the philosophical and scientific meanings, see materialism.
Materialism refers to how a person or group chooses to spend their resources, particularly money and time. Literally, a materialist is a person for whom collecting material goods is an important priority. In common use, the word more specifically refers to a person who primarily pursues wealth, possessions and luxury. ”
I think the use of the word is correct. It’s become one of those words that whose meaning has changed over time. Old english uses words like “awful” meaning “full of awe”; it used to be more akin to “awesome”, however the word has the opposite meaning today. There are examples like this all over the place.
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I agree with Nicole! You can be materialistic but not on a credit card. Crystal should be debt free, 1 year of savings, then she can be materialistic as her budget allows, LOL. It should be easy because she has lots of clothes already. Go on a 6 month no clothes buying spree and save!
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Yeah, folks like Crystal are David Bach’s intended audience. Smart women finish rich is probably right up her alley. (Unless she loses a job… then she’ll have to go gazelle intense rice and beans with Dave Ramsey.)
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I like nice things too but I always remember that they won’t put food on my table should I lose my job tomorrow. That’s why I save, so I will at least be covered during the rainy days.
Buying n owning nice things are not wrong. Most of us work hard to have/do what we like. Not having debt can help her to have nicer things (if that’s what she likes). So get rid of that cc debt and start some savings.
In this kind of economic climate, nothing is secure. Like #2 commentor said, if she loses her job, are her nice things going to help her? She might be able to sell them and get some money for it but it won’t be forever.
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I admire the writer’s honesty about her current situation. I think the real challenge to her spending habits is that it assumes the same level of earning (or greater) in order to maintain her lifestyle. What will she do if she has an emergency or loses her source of income?
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This is a tough one to comment on because I am pretty darn frugal. I can’t tell you the last time I bought new clothes or shoes! However, I wasn’t always frugal. I used to buy whatever I wanted whenever I wanted it. What caused me to change my lifestyle was a change in income. The first thing to go was cable. Once I realized I didn’t miss cable, I started on other things, such as brand name clothes and food. I didn’t miss the brand name STUFF and cut things like going to the salon and going out several times a week. I learned to cook for myself out of necessity. After all of the stuff was out of my way, I figured out what was important to me: Travel. I now have money automatically deducted and put into my travel fund (as well as an emergency fund).
Crystal will not change her spending habits until she wants to or has to. Right now it sounds like she is content with how she spends her money. It’s hard to change the mind of someone who is content with the way things are.
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When someone says “shopping is my passion”, the only thing you can do is be glad you don’t share a joint account.
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That made me laugh out loud. I agree.
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LOL.
Hopefully she’s single.
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For the sake of some poor guy I hope she stays single. Probably won’t even want to work wheN she gets married. Lol
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At least she’s being honest. How about if you revealed yourself, I’m sure you’d get criticized for your little things. Everyone has something they need to work on.
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Yeah, plus the days are long gone when many men had good enough jobs to support a non-working spouse. Two-income households are the norm; hardly anyone can expect a permanent, high-paying job of the kind that used to exist for the majority of men.
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I think I am going to be the odd man out here, but I can understand where Crystal is coming from.
The point of living is not to accumulate as much money as we can. The point is to be as HAPPY as you can.
Why is it a good thing for most people to practice frugality? I think it’s for two reasons:
1. To be able to get the things/experiences that matter to you by giving up the ones that don’t
2. To avoid “unhappiness” later in life – debt, bankruptcy, not having the money to deal with emergencies, etc.
I think the point of the whole thing is to optimize your life for happiness, if you get what I mean.
And I think that’s exactly what Crystal is doing here, so I don’t see anything wrong. As long as she keeps her debt under control, and spends less than she earns, what’s wrong with being in love with clothes, dining out, and the other things she mentioned? We don’t really know what she earns, do we?
And if she does need to spend almost all her money (or take on debt) to support all this, then I would advise her to find ways to make more money, not stop doing things that fill her life with joy.
Just look at the words she uses to describe her spending habits. It’s CLEAR she REALLY loves the stuff she mentioned.
Crystal, I am with you. If required, find ways to work more hours, or earn more dollars per hour of work, but don’t listen to these people asking you to reduce the happiness in your life.
Rohit Sinha
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I think the concern here is that Crystal doesn’t have a safety net — which could lead to a LOT of unhappiness.
Admittedly, I tend to err on the frugal side, but having a retirement plan, a budget and an emergency fund has given me the confidence to find balance. As J.D. and others have said, it’s all about choices — and they should be informed ones.
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Well, yes, but if she finds ways to make more money than she does now, then problem solved, right?
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Not if she still can’t pay off a 3K revolving debt! How much she makes is immaterial if she always spends more than she earns. And it means a greater shock to the system if her income drops. http://nicoleandmaggie.wordpress.com/2011/02/07/i-know-were-preaching-to-the-choir-but/
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I am assuming her spending won’t go up as her income does! I agree with you (Nicole) that what she spends should be less than what she earns.
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I don’t agree that earning more money is the answer. I think we’ve all seen examples on GRS of how almost anyone can live below their means no matter what their income. Saving doesn’t suddenly become a habit when your income increases.
If Crystal wants to get a second job and put all of that money into savings, more power to her
(Assuming all those extra hours don’t detract from her health and happiness) However, I think a smarter solution would be to work with what she’s got now, then save more as she earns more.
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Well, she doesn’t HAVE to take up a second job to increase her income. She could get a new job that pays more, she could ask for a raise, she could sell some of her old stuff, and so on. If she runs a business, she could increase her prices, or tie up with other non-competing businesses to cross promote each other, etc. There are so many ways to increase your income that don’t have to take a toll on your health or happiness.
And as for being smart, I think increasing your income is the smarter choice. There is only so much you can do to reduce your spending – there is a limit to how much you can save each month, depending on your income. But if you can increase your income, that will let you save a lot more, eliminate your debt faster, and let you enjoy your life more, overall.
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@Rohit — I’m not disagreeing with the fact more money means more luxuries and more money to save. I’m just saying that Crystal shouldn’t wait until she earns more to actually start saving and pay off the debt. The trick is to establish the habit now. Waiting for a future goal is often just an excuse to avoid taking action. People who aren’t careful with their cash on a small income don’t become smart with money just because their wages increase.
We’re not talking about someone who can barely pay the bills or keep food on the table. Living with a few less material goods and eating at home more often would free up some cash right now without having a huge impact on her happiness. She can still work towards earning more money, and then increase her spending and saving accordingly.
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Just to clarify, I am not against any of the common sense principals that JD teaches.
We think of cutting back on our spending by default, but when spending on things makes us happy, why not think about earning more money instead?
All the other principles JD teaches us still apply. I am just advocating making increase-your-income the first choice instead of reduce-your-spending.
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Sure, making more money would help anyone in any situation. However, she has 0 savings, 0 retirement and $3K worth of debt. She needs to play catch up until she at least reverses to $0 Debt, $3K savings. Then she can spend every dollar of every paycheck if she really wants to and doesnt mind betting on SS for retirement.
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Absolutely. But in order to catch up, she could either reduce her spending, or increase her income. All I am saying is, increasing her income is a better choice than reducing her spending.
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The vast majority of people will find it easier to cut back on spending than to create more income. Most people simply don’t have the guts and/or skill to freelance or demand a raise.
Additionally, increasing income is a great solution assuming that the additional income isn’t simply spent on Stuff.
In either case, Crystal needs to get her spending under control.
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I think part of the answer here is that, for example, when Crystal talks about eating out she mentions many of the same things that most of us enjoy about eating out. But that doesn’t mean that eating out needs to happen every day – in fact, when I’ve been on business trips and forced to eat out regularly, I’ve found it diminishes my enjoyment of each meal.
Here’s a couple suggestions:
- Get enough lunch-type ingredients to make lunches at home and bring them to work. Saving $5-10 on lunch can add up – and I don’t know about others, but when I go out for lunch during the workweek I’m not usually relaxed anyway. Save the money for dinners!
- Learn how to cook 2-3 things you like to eat. Have ingredients on hand (shelf/dried/frozen stuff often will work if needed, so it won’t go bad). Cook at least twice a week. This will save some money and make going out feel more special.
I think it’s definitely possible to be frugal and spend money on the things you truly enjoy. I also think it’s good to make sure you get the most enjoyment possible out of those things though… and one way to do that is to make sure that the thing you enjoy is more “special” than “default.”
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Another option might be to box up half your meal everytime you go out to eat. Have the leftovers for your next meal. Voila, two meals for the price of one.
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As far as eating out, if one of her issues is that she just doesn’t like cooking, she could also probably save a decent amount of money by eating out at less fancy places.
Some of it is just a matter of self-control. We all have things we like or love, but we don’t all insist on having these things all the time.
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“Doesn’t like cooking” — The way she describes eating out, it sounds more like good old-fashioned LAZY.
I mean, she says she “dreads” cooking?
Like what part — the absolute horror of having to put the dry spaghetti in the boiling water, and then pour a decent store-bought sauce over it? OH, the AGONY!!!!
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Wow I think that’s incredibly harsh, Crystal wrote what she is thinking and she might not have ever learned to cook or been taught. For people like that cooking is very difficult and can be more trouble than its worth.
I think she needs to get an emergency fund and start working on getting rid of her CC debt, but I agree with the idea of using her last meal as lunch, or making and bringing lunch to work to enjoy going to dinner more.
Betsy just because you know how to cook (even simple things) doesn’t mean that everyone does or can. You seem to be genuinely angry about this post.
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@Kms68kms Just because someone never learned to do something, doesn’t mean they can’t or shouldn’t. My mom learned to cook as a teenager, but she learned more techniques and recipes from friends and family as an adult.
A lot of the time people say “I can’t” or “I’m no good at” because they lack skill and confidence. (This is the former teacher in me speaking.) Some people make cooking an art form, but I’d argue that learning to cook basic, healthy meals is a skill everyone should have. Now is a good time to learn when she can experiment and there isn’t a family budget at stake.
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Yeah. Because boiling water and reading instructions is just so incredibly difficult and harsh. Who are you to guess at how I learned to cook, anyway? Maybe I read the back of the spaghetti box.
Crystal fesses up to being a materialistic, lazy, shallow fool with money. *That’s* what’s going to make her life harsh!
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There ARE no decent store sauces. Spaghetti and jarred sauce — revolting.
Sorry, I feel for Krystal on this one. This is my weakness too. I HATE to cook — hate it. Doesn’t mean I don’t know how. Doesn’t mean I haven’t made my share of meals.
Doesn’t change the fact that I hate it, hate shopping for it, planning it, doing it, cleaning up after it. Being disappointed more often than not in the results.
Plus resenting the time and effort involved in the cooking and cleaning. Time I could use another way, perhaps earning money.
A part of why I stay single is to avoid having to cook for other people.
I eat out far more than I should — it’s to the point where I dislike that too because it’s gotten too pricey.
So I bounce back and forth — eat out more than I should, eat at home more than I like. It’s difficult. I waste money too, trying to cook in bulk (cook once, eat multiple times) and then disliking it or just hating the leftovers. Having food go bad before I use it.
PITA.
I’ve investigated whether a personal chef service would save me money over the long run. Not convinced yet.
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I don’t think you’re a lost cause, but if you don’t consider $3000 of credit card debt to be “real debt”, you are headed for trouble.
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I’d say it depends on your income. $3,000 in debt sounds like a huge amount if you’re making say, less than $30K a year. If you’re making over $100K a year, not so much. No idea what Crystal’s income is, however.
Also depends on things like the interest you’re paying on it.
The key part is savings. If she has “only” $3,000 in credit card debt yet isn’t able to put something toward savings, that could be a problem.
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Disagree. If she can’t pay it off right now, it’s too much, regardless of her income.
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Maybe this is just an age thing – so part of it is novelty? (After awhile, you really can’t collect any more clothes or purses without getting rid of something.) I went through the same thing pre-kids (without the debt), still have a lot of clothes, still have a lot of purses and jewelry, used to be a bibliophile until I realized I was collecting to *have* more than to read, used to love eating out every day and still love it occasionally… Once you get older, the hassle of moving the books, getting rid of the clothes, mucking around with the purses and shoes, losing the weight from eating out too much… gets old.
The people I know that make this kind of thing work focus on earning more and saving at least 20% right off the top and just happily spend the rest.
The people I know that are this way but it’s not working for them have had a history of 20+ years of paying interest on credit cards and zero savings. And some are locked into jobs they don’t like, but don’t have the flexibility to do anything about it.
I’d just try one no-spend week or month just for fun to test your creativity and see what insights come out of that. Or count your life vs thing/experience ratio like in YMoYL – how many hours did you have to work to buy X? Was that worth it? Sometimes it is, sometimes not. Then look at it on an annual basis – is it worth working a whole month every year to eat out every day? Maybe it is, maybe not.
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I agree with this post. If she pays off the credit card debt, has an emergency fund, and saves for retirement, I don’t think she should have guilt about enjoying spending her money on whatever she wants and enjoys. If she does the above she can still shop, eat out, etc, but she will have to prioritize (shop the same but eat out less or vice versa, be creative etc).
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Exactly! Once she’s got 15% going to retirement, 3 months expenses into a savings fund (with 5-10% being put in monthly), and no credit card (or other) debt then she is free to use her money to make herself happy. Even if she’s buying Stuff instead of experiences.
Another suggestion while she takes time to get stable: get a second job as a personal shopper! More income to pay debts but she can still be around clothes and help others find nice things with her experience.
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I thought the same thing about becoming a personal shopper! It could be a way to make her hobby/passion work for her.
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Oh, I don’t know about that personal shopper idea. I recall the book “Shopaholic” and it wasn’t pretty to read about what can happen if you put a compulsive shopper into a retail job.
Not that she is compulsive – heck, I’m sure I’d have a hard time resisting deals, especially if I worked at a Coach factory outlet…
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Nothing wrong with Crystal appreciating clothes and eating out. It’s interesting that she asks the question here, like she wants to know what she’s missing but hasn’t figured out what would be worth sacrificing her current comforts.
Lack of savings and credit card debt seems to indicate she’s kind of running on empty but just doesn’t realize it yet or what to do about it.
She likes to take care of herself by dressing nicely, so the next logical step is to take care of herself by building a saving account. Financial independence is sexy too!
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Agreed. If there was no concern that her choices included some risk, I don’t think she’d pose them to JD.
The 3k in CC debt has already been mentioned by many. No information about retirement or emergency savings is also concerning.
I know we shouldn’t project our thoughts about happiness on others, but 30 purses seems extravagant by anyone’s standards – particularly if you are in $3,000 debt.
One can love their material things, but can still have too many of them.
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Dear Reader, you *need* to have an emergency fund. You shouldn’t be carrying credit card debt.
It would be worth your while to create a schedule to build up a 3 mos emergency fund and pay off the debt within, say, a year.
To figure out where to cut, determine how much you spend on each category of materialism for a month and how much time you have to work to pay for all that. What isn’t worth it? Can you cut back to dining out 3x a week instead of daily? Can you buy one new piece of clothing a month instead of 3?
Stay out of the stores. Go for a bike ride with friends or something that keeps you from oggling retail goods.
For your fashion fix, check out the website http://psimadethis.com/ , which is all about a fashionista’s projects making her own trendy clothes & accessories.
The question of whether materialism is bad has other dimensions… depletion of natural resources, harm to people working in sweatshops, etc. Consider those.
Good luck!
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I admire the writer’s honesty, too, and I think there’s nothing wrong with going to restaurants, buying new clothes, and the other things she says she enjoys. I like pretty much all the things she listed — I love eating out, I love new clothes and expensive bags, I like giving (and getting) nice gifts, etc., but I do think she needs to focus on eliminating her credit card debt and building up her savings, too.
I would second the suggestion of another commenter that she call a 6-month moratorium on buying new clothes and use that money towards her cc debt. Once the card is paid off, I would then put the money that used to go towards the cc payments into a retirement fund and/or a high yield savings account.
I would also suggest that she figure out which meal of the day she hates cooking the most (for me, it’s dinner — I have no problem cooking an egg in the morning or making a salad for lunch at home, but I HATE cooking dinner…), and try to cook all meals except the meal she hates preparing most at home (or pack it for work). She can also put the money she saves from not buying lunch/breakfast each day towards savings. She might also consider cooking at home (every meal) a certain number of days a week and go out the other days — like… eat at home 4 days a week, eat dinner out 3 days a week.
I also have had the problem of spending a lot in the supermarket on ingredients for meals that I never actually got around to cooking. I’ve learned to save money by NOT being overly ambitious about cooking (an activity I don’t like) and buying a bunch of ingredients I will not end up using. Instead, I now only buy food i know with absolute certainty that I will use — eggs, lettuce, tomatoes, milk, etc.
Finally, I would also suggest that she figure out precisely how often she goes shopping for new clothes — once a month, once every two weeks, etc. — and then cut that in half, so instead of buying a new blouse every month or every week, she would buy a new blouse every 2 months, etc. This might also help save some money. In between, I’d stay away from the mall and store web sites so I don’t feel tempted to buy anything.
Anyway, basically, I think she can make some relatively minor tweaks to her current lifestyle and easily free up money to pay off her credit card debt, create an emergency savings fund and a retirement fund. She might also find that once she makes those tweaks, cultivating a more frugal mindset will come naturally without feeling compelled to shop at thrift stores, eat microwave ramen noodles and knit everyone’s Christmas gifts (nothing wrong with these things, if that’s what you’re into, but no one should feel forced into liking those things).
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I don’t know if I’d call myself materialistic, but we do own every single thing we’d like to have, except for an ocean front property, which we do rent from time to time. Turns out we don’t want to own that oceanfront home enough to give up all the other things we’d have to sacrifice to get there – central air, latest tech gadgets, newer cars, eating out once in a while, etc.
However, there were a lot of years of really frugal living to get us to this point. First we rewarded ourselves with the A/C, then the gadgets, then the eating out.
I think Crystal needs to get rid of that cc debt and build up an e-fund and then she can go back to enjoying her life. A year of major sacrifice would probably put her on solid footing. Alternatively, she could do two years of a moderately reduced lifestyle. There’s nothing wrong with what she wants, it’s just wrong for her to live that lifestyle right now with 3k in cc debt and no savings.
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One quickie idea. With eating out and cooking, just try to keep your house stocked with essentials like fruits, vegetables, nuts, plain yogurt, maybe some bean dips, etc. When you plan to eat out try to have some of your no-preparation easy snacks. If you can have a bunch of cut vegetables or a quick, easy salad (surely you can put some balsamic vinegar with some olive oil and a bit of salt and pepper) before you hit the restaurant you can end up saving half of the bill. If you’re eating breakfast have a quick couple pieces of fruit and a glass of milk, or maybe a smoothie with some yogurt.
The same applies for every meal out; think about what you can bring from home that will cover part of the meal and then only pay for the part of the meal that you really enjoy (most likely a main dish at supper, etc.).
On the other hand, you could go the other way and do what one bachelor does in the book for Apartment Therapy and get rid of everything cooking/kitchen related and just be resigned to the fact that you don’t cook. If you make the right range of income it can be justified on a time as money mentality and you’ll save on having to own and maintain a stove, a large fridge and a freezer, a dishwasher, etc.
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Coming from someone who also loves shopping for clothing (home goods are also another weakness)I can sympathize with you. Although I have always been pretty mindful of my money I used to swing from one extreme to the other on my spending. I would spend a lot for a month or so then panic and react by spending no money at all for a while. I was always either feeling guilty for spending too much or I was disappointed I couldn’t/shouldn’t buy something I really wanted.
What really worked for me was budgeting first just in an excel spreadsheet and now using Mint. I set some savings goals and put in the rest of my recurring expenses and then whatever is leftover can be used for food/shopping. I have my food and shopping budgets set to roll over each month so anything I don’t spend becomes extra for the next month, but anything I overspend takes away from next month’s allowance which is how I work in large purchases (like a new laptop). This allows me to always know if I can truly “afford” something, not just if I have the money in my bank account to cover it. Although I make more room for the things I really want by saving on other things (cooking my own food, finding nice used furniture off of craigslist).
I do agree about getting rid of that credit card debt asap. I still have a student loan, but the salary increase from my new job went directly towards extra payments on that rather than increasing the fun budget.
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I was in Crystal`s shoes several years ago and loved EVERY minute of it. Then reality hit, and I started thinking about wanting to buy a house later or, you know, RETIRING. Ì still have beautiful clothes, shoes, and purses, because I learned where to shop to save money. But my most prized possessions are definitely my fabulous savings account, and monthly credit card statements at $0.
My friends all marvel at my ability to save so much money, but when I consider the alternative: wallowing about a dim financial future, while clutching a Balenciaga handbag, and showing off my Bulgari sunglasses in a restaurant, the choice seems rather obvious…Nothing looks or tastes as good as money in the bank, to me.
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Because in the van by the river there’s no room to keep all that clothing!
Get motivated:
http://www.youtube.com/watch?v=3nhgfjrKi0o
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Bingo!!
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I can relate to Crystal on the clothing thing, with the exception that I actually *hate* shopping, although I love being well-dressed. To stay frugal, I keep a small wardrobe of pieces I can mix and match sufficiently to make about 1-2 weeks worth of unique outfits. I don’t need to be able to go a month or more without wearing the same outfit twice. This also means that I wear things frequently and by the time the trend is over, the piece is also worn out (at least by my standards!) and ready for replacement with something more current.
I think the same principle applies for other things too – she doesn’t have to give it up, but it might be a good idea just to have *less*.
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I like JD’s take. It’s not about pinching pennies in all aspects of life, but it’s about making adjustments in some areas in order to put that saving toward things that you truly enjoy.
Personally, I can relate to Crystal when it comes to enjoying eating out and clothes (just not the bags and shoes part!). There are lots of ways to afford these pursuits while still paying the bills on time in their entirety and putting away for savings.
There are things like restaurant.com, groupon, and other sites where really good restaurants offer exceptional deals and will cut the food bills dramatically without having to forgo the experience entirely.
JD’s point about outlet stores is right on, especially when some of them offer even deeper savings by signing up to for their e-mail subscriptions. I know one woman who even has a thing where she invites friends to come or and raid her closet, selling whatever they want to buy and using that money to buy her new stuff. May be something to look into there.
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Definitely like the idea of satisfying the ‘wants’ in a more fiscally responsible manner (i.e. groupon and online discounts, etc.). I highly doubt that Crystal will be inviting friends over to buy her leftovers, though; they would see right through that ruse.
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But how is that a “ruse”?
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I’m surprised no one has mentioned the obvious – to change your mindset about materialism – reduce your exposure to the material side of life (advertising, magazines, celebrity blogs, TV) and immerse yourself and find pleasure in the spiritual side of life. Whatever this means to her – meditation, mindfulness, gardening, yoga, helping others in need (volunteering at a soup kitchen or other organization), etc. Changing your mindset in a vacuum is hard – you have to replace your current thoughts and habits with new thoughts and habits.
3000 dollars in debt is “real debt”. Pretending it isn’t serious could really get her into trouble down the line. If you get comfortable with having debt, it becomes easier to slide down the slope from – Oh, it’s only $1000 in debt, oh, it’s only $3000, it’s only $5000 and suddenly oh crap, it’s $15,000. Credit card rules are getting so much stricter lately – she could be late on one bill (not even her credit card bill but some other bill) and her $3,000 debt could balloon overnight with a huge interest rate hike. And suddenly $200/month would take much longer to pay off the bill.
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I completely agree! Getting rid of cable helped a great deal with that for me. Living like a celebrity is probably better left to the celebrities, anyway. It`s fine to treat yourself once in a while, but the temptation isn`t so great to splurge when it isn`t constantly in your face…
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Just a slight correction:
In the US, universal default (increasing APR because of late payments on a different account) has been banned. This was in the Credit Card Act of 2009.
Source: http://www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/
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I think knowing yourself, as Crystal does, is half the battle. Some things are worth spending on – I am super frugal except my apartment. It is a nice place in a pricey location, but it lets me be carless and I can walk to 3 farmer’s markets in the summer. So – that being said, Crystal, could you get by with a service like http://www.bagborroworsteal.com ? Like netflix for purses. That gives you some variety and ‘new stuff’ feel, without the $$ and clutter. I swear I have seen the same for shoes and jewelry. Anyway, that could help you get through a 6-month no spending spree without feeling totally deprived.
Could you sell some old clothes or purses? If you are a super shopper and like quality, there may be some real money tucked away in your closet. Maybe do a good spring purge and see how much you can raise.
I agree with the above commenters, take a 6-month breather on the shopping, and save/invest/etc, and see if you feeling better about finances feels as good as new stuff. Good luck!
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The answer is yes, yes she is a lost cause. Spending habits aside, nobody on earth needs that much shit and it’s a waste of materials anyway. 30 purses? Good god.
This lady is just one example of everything that is wrong with Western civilization. How is it even possible to have a “passion” for celebrity? I don’t mean to sound like a troll here but ugh…
If you’re going to use a credit card at all, at least put all that debt toward something more meaningful. Life experiences are so much more important in the long run than having a bunch of crap to leave behind when you die.
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I think this is the most direct answer to the question “Is Materialism wrong?”
I agree with you in the aspect that experiences are rewarding, and I wouldn’t want 30 purses, but it’s not because I see something inherently “wrong” with it. This seems to be more a question of values, and (un?)fortunately, everyone values different things.
If you value travel, events, and experiences, then of course you would put your money and efforts in that direction.
But what about people who stress when unexpected events happen, and therefore do not travel? What about people who have no desire to move out of their hometown, and thus have a strong sense of community and family? Is there something inherently wrong with them?
I have to say there’s nothing wrong to me about her spending aside from the fact that she’s in debt. Yes, she should get rid of the credit card debt as fast as possible. Yes, she should save an emergency fund. Yes, she should be putting income toward retirement. And yes, those things may temporarily put a crimp in her style.
As stated above, it’s about doing things which bring happiness, and if her values and perception of happiness don’t coincide with yours, it doesn’t make them any less real.
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Completely agree with you on this one. 30 purses? That’s bordering on hoarding.
The OP says that these things bring her happiness, but I don’t buy it. They bring temporary highs akin to a meth injection.
Study after study has shown that more posessions do not increase happiness. More experiences do. Put the purse down and go for a hike with some friends.
Honestly instead of going out to eat I think the OP should be going to shopaholics anonymous.
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I own 11 purses, 1 packback, probably 6-9 totes and 3 laptop bags. I love bags and have a real thing for them. I have about 10 makeup bags (Clinique bonuses) and I don’t even wear makeup everyday (I recently took some to work for friends but I use them for other things than makeup). I have an equal number of shoes. And tshirts. I have over 500 books. I love to eat out. I really empathize with Crystal.
I am not a hoarder and I doubt she is either. It’s fine that in your life you’ve made different choices, it’s not okay to use those choices to try to make her feel bad about hers.
Difference between Crystal and I? I don’t have credit card debt and I have savings. A long time ago I realized that while I love these things, I love financial security more. I love financial independence more. So, while I still indulge in my acquisitiveness, I temper it with my sense of duty to myself. It’s not flashy or fun, but it’s just something I feel MUST be done. I want to be that old lady who kicks the bucket, still financially sound and cursed roundly by whomever has to clear out all my stuff.
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Uhhh… how self-righteous and judgmental…
I don’t think the writer is a lost cause at all. So she likes nice things? How does that make her a financial lost cause? She likes purses and she uses them regularly. Good for her. She’ll enjoy her purses and you can enjoy whatever it is you like to spend money on. You have your “meaningful” and she has hers. I wonder how she would feel about the luxuries/hobbies you spend on…
For the record, I agree with you that spending money on experiences, like travel, IS ultimately more fulfilling and meaningful than spending on clothes, purses, etc. but I don’t feel it’s my place (or anyone else’s) to judge how people spend their money or the things they like.
Her focus shouldn’t be to change her personality or tastes (to suit yours), but to make adjustments to her lifestyle that will enable her to pay off her debt and save money AND still enjoy her life on her own terms (not yours). It’s very possible and I hope she takes steps to do this.
She is in no way a lost cause.
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Seriously. Most of the other comments have been pretty reasonable and respectable–this one strikes me as a HUGE overreaction.
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A couple of points to play the devil’s advocate:
Life experiences are great, but you leave your memories behind when you die too, so the only difference is that someone has to sort through your stuff. However, many of my favorite items are things that belonged to my grandparents or great grandparents.
Memory is faulty and fades quickly. It’s easy to take a trip, have a great time, and then quickly forget about it. I took a month long trip through four countries in Europe and it wasn’t this great life enhancing experience, it was just this thing I did a couple of years ago that seriously drained my bank account. Stuff that I really like, on the other hand, is around my apartment and makes me happy on a daily basis.
I think life experiences need to be viewed in the same way stuff is. They can be awesome and life enhancing, but they can also be just as much of a waste of money. Smart spending is the key no matter what you’re spending it on.
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Totally agree!
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I understand Crystal’s point. While I’m not much of a clothes shopping/purse girl, I LOVE eating out. I follow a few rules, though, that try to keep the spending in check (bonus: they keep me from getting very fat!):
- Only eat half (or less) of what I order. This way, I can take the rest home and get one or, if it’s a big portion, two additional meals out of it. This can work with something as cheap as Chipotle (one of their burritos often can serve as lunch and dinner).
- Only order water. Soda is often incredibly expensive at restaurants and not necessarily worth the extra bucks.
- Split dessert/appetizers/more. If you are someone who loves dessert (I am), only get it if you find someone to split it with you.
- Take advantage of happy hour prices. A lot of the best restaurants (at least in DC) have happy hour specials from 5-7. It’s a great way to try their food and drinks without breaking the bank.
- Only pay with cash. For some reason, this makes me spend less. I’m one of those people who can get into “credit cards are magic money” habits when I don’t watch it.
Crystal: I also love going out to eat, and feel no guilt about doing so, hope these tips are helpful!
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I can’t add a whole lot here, others have said it quite well…
No matter the dollar figure, if it takes you more than a year (or heck, six months) to pay off, it’s real debt. Although $3k is small to me, it’s clearly not to Chrystal.
What Chrystal needs to do is, ahem, budget. Figure out what her life goals are, and allocate money at a high level. Then, she figures out what she has left over to spend on “wants.”
There’s absolutely nothing wrong with appreciating or wanting nice things, but there is something wrong when you buy things you can’t afford.
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When I think about shopping I always go back to Beyonce’s classic, Independent Woman. It is catchy with excellent lyrics. The point being, she’s not singing “I charged it” or “I make monthly payments on it” (a little wordy) but “I BOUGHT IT”. Crystal, bring out your inner Beyonce and drop that debt! It IS sexy and fun. You deserve a big congrats for having no student or car loans already!!
A few things I do to keep my life frugal and fun:
**Mystery shop. There are legitimate consulting companies out there that pay you to do upscale things and then review the sales associate. Just look around and don’t pay any company to get shop offers.
**Buy clothes online. I get a lot of high label clothes online for cheap. If you love shopping, you can easily spend hours assessing the fit, sizing, etc. based on the measurements they provide and reading the reviews. Only buy from companies with good return policies. Another tip is to buy something online that has a store in your area. Typically the online price is cheaper, then if it doesn’t fit, you can return it to the physical location (save on return shipping).
**Skip lunch out. Don’t go out to eat with coworkers daily. It costs too much and is not memorable. Save lunches out for special occassions. Use time on your own to read all those historical novels you buy.
**Out for dinner – get drinks OR dessert. Salad OR soup. Order entrees that will give you leftovers another night, not the priciest thing with the smallest serving size.
As everyone says, being frugal is all about making choices. Good luck!
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It doesn’t say in her letter, but she does sound… young, in her 20s or so, and unattached perhaps. Let’s just say that your perspective can change dramatically with a husband and kids in the picture. I, too, “love” great clothes, shoes, bags, jewelry, going out to eat, and actually charged my way into a Chapter 13 bankruptcy doing just that. My bad. Not comparing myself to Crystal at all, she obviously has a lot more self-control. I’m just saying that if she’s young and has this relatively under control, taking on additional responsibilities of a spouse and kids over time have a way of shifting priorities naturally. But she should really be doing what I learned to do, to think of every purchase in terms of number of hours worked for that item, post taxes, and as an opportunity lost to invest (in her 20s? how much would that translate to in her 60s or 70s? might make her think long and hard about losing the power of compound interest for a fancy meal or another dress). And there’s no excuse for not having an emergency fund, really none. Take it from me, one who’s learned the really, really hard way.
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Yes, I don’t know whether she is young, but a young person is what I was picturing the whole time I read her post. It’s very easy to have that attitude when retirement seems light-years away and you have no children/significant others to be responsible for. I’m guessing given a few years she will change her attitude without even trying. I saw many friends of mine go through the same thing – one of my close friends who couldn’t have cared less whether she was saving at 25, is now making her first Roth IRA deposit at 31.
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I agree with some of the previous comments.
“Crystal has only $3,000 in credit-card debt at the moment.”
Only? And no savings? I’m actually surprised that JD wrote that sentence.
Crystal doesn’t seem willing to give anything up to be debt free or have savings.
Does she need 30 handbags? Would 25 not do? Is 31 going to make her happier?
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There’s nothing wrong with enjoying stuff if that’s your pleasure, but only if your spending habits align with your means. Crystal is supporting her lifestyle through deficit spending, as many people here will point out.
Taking aside the credit card debt, which is significant given her inability to pay more than $200/month, she has no emergency fund and no retirement savings, presumably. In my view, these are hidden forms of deficit spending since they will result in future costs – and likely more credit card debt – that will impair her lifestyle at some later date.
As Jacq said, it may be an age thing, so perhaps it’s only a matter of time before she realizes that savings for emergencies and retirement are priorities above accumulating stuff. If she’s young, it’s also possible that she has parents to rely upon should she get in financial trouble.
The problem is, the longer she maintains a lifestyle in which she spends more than she can afford, the more at risk she is putting her ability to live the way she wants to live. There are two ways to solve this problem – spend less or earn more.
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I would challenge anyone who is saying that they love to spend on eating out, coffee, clothes etc to tally up what that will cost over the next 30 years. Then, figure our if you invested (even a portion)that amount- how much would you have?
It’s easy to say “Oh this is important because I like it and can afford it” when we’re young, but when we look back and we’re not so young, that $100 per month would look really good in retirement, mortgage payment and the like.
I also worry about the “no savings” listed in the post. I think this lady should read Gail vaz Oxlade’s posts (and/or blog) and consider that maybe she’s actually a Gail “Princess”?
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Sue – I love eating out. This in itself isn’t financially irresponsible. It’s about a balance and finding a financial strategy that fits well for you. Everyone has different priorities and it’s not as simple as “you should have saved that money instead”. Personally, I would rather spend $100 eating out than an extra $100 on rent. I’m sure everyone here could nitpick others’ budgets and find things that they think are frivolous and should have been invested, but we should be careful not to judge others’ budgets, especially on such a general scale as “if you spend money on eating out, coffee, clothes, etc. you are not saving adequately for retirement”.
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Im going to second Katie. Theres nothing inherently wrong with enjoying clothes, or eating out. Life is to be lived. I agree that she should have an emergency fund, retirement savings and no debt. but after that, why the heck not? Is eating out or buying clothing inherently “bad spending”?”
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Well, I enjoy eating out and fine clothes and original art on my walls. Yes I could pour that money into investments, but when one is already maxing out their retirement, has an emergency, is adding to that fund, has no debt except the mortgage (and is making extra principal payments) then I think its okay to spend some money along the way.
I’m not going to wait until retirement to start spending.
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This story reminds me of what I see in my own household. Differences of what is enough. I cringe at the amount of products my family uses and the amount of water used for showers, the laundry piles, the heft of our weekly garbage, the stuff scattered around the house. I see it and express my discomfort with excess, but I’ve found I am alone in my view. I share with them how much our utilities cost and our regular bills, but it’s not something they grasp yet at 14 and 11 (my wife tells me I’m obsessed with bills). They are instead tuned in to what their friends are wearing and what hair products are ‘the best’ and what car is the coolest (NOT our 11 yr old Honda), the latest cell phone, i-pod, etc. I only hope they figure it out once they have to pay for their lifestyle choices. Enough…Crystal needs to add Your Money or Your Life to her book collection.
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Dave –
Maybe your family doesn’t share your views because it all just sounds like nagging and griping? That’s the way it comes across here…
If you really want change, you need to be the leader (follow your own advice, take charge of areas you can) and have a clear vision of what you DO WANT, not just what you DON’T WANT. Let others in your family know what you would like them to do… not just what annoys you.
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In this modern society, kids have wants that become ‘needs’ the instant that their circle of friends acquire the gadgets/clothes/trip to France!
It’s hard to be the only one to fight the good fight (I, too, am tired of being the ‘heavy’); but ultimately, these choices will determine the success or failure of our children…our next generation.
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I was raised by very frugal parents. They modeled good behavior and are very comfortable in their retirement.
Unfortunately I bought into my generation’s thinking that debt was the way to live. I didn’t worry about shutting off the lights until I had to pay the bill. I wish I would have been more open with my daughter about exactly what it cost to support our lifestyle. We went through a really rough patch when she was 15 and were forced to restructure. But it wasn’t until she was a parent that she finally figured it out. I knew my parents were frugal but I didn’t know how much they saved for retirement. I would also have liked to know how they budgeted. If I could have shared their tips with my daughter it would have helped.
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I like the reader’s honesty. I agree with other commenters that the only problem is that she has no savings and credit card debt, meaning she is spending more than she makes. This is a slippery slope. But the reader sounds young, so I get it – it’s nice to make money, be independant and be able to buy what you like.
I think that once this reader’s priorities change (as she gets older and starts living beyond the moment) that she will cut back on her spending and start saving for larger ticket items like a house or a great vacation.
This problem seems linked to age more than lifelong habits.
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I agree–it’s a phase, and life priorities change.
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From reading Crystal’s question, it’s obvious she enjoys the process of spending money. If she has the job to support this lifestyle, housing to store all of the items, that’s nothing different than what most people would consider a successful American lifestyle.
I think they made a bumpersticker about this. Unfortunately I didn’t buy it, but I think it reads something like: We’re 7% of the world population and consume 93% of the world’s resources…
I think this lifestyle requires a job you love (or a trust fund/inheritance/other windfall). And a big house. And not moving. (Or, if you do move, hire movers to do all the packing, moving and unpacking. There’s nothing more eye-opening than handling every posession so it can be packed)
I have some suggestions for re-framing attitudes about buying. These are various random experiences I’ve had
1) visit the local dump – see how much stuff people buy and dispose of. And have you ever wondered… where does it all go?
2) Volunteer at a local women’s shelter. People who use their services (often kids) are abruptly rooted from their life without their belongings
3) Figure out your hourly rate, after taxes. Now, think of the object you want to buy and decide is it worth an hour of your life’s energy to purchase it.
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Once you’ve got a hefty emergency fund, and you’re saving for retirement, and you’re debt free…what are you saving for beyond that?
I don’t like the Scrooge McDuck school of personal finance that it’s somehow virtuous to sit on a huge pile of gold coins and swim around in it rather than spend it.
The Millionaire Next Door had some passage where they chastised an old lady for wanting to send her grandkids to a private school. She asks them something like “What the hell else am I supposed to do with my money?” and I have to agree with her.
Something that bothered me about The Wealthy Barber was the nebulous 10% put aside for “savings”. This was in addition to debt repayment and retirement savings and the emergency fund. I never understood what that 10% was being put aside for? When could you spend it, ever? It’s not for retirement or emergencies or debt…is it a new car/vacation fund that is perpetual? It never explains anything about when you can spend this 10% saved. I guess it goes in the Scrooge McDuck vault.
Crystal’s materialism isn’t a problem in itself, it’s that she has consumer debt rolling forward each month and no savings. I wonder if she’s saving for retirement?
If she can stay out of debt, build up an emergency fund and save for retirement, there’s nothing wrong with her 30 handbags.
I myself have several vices (a lot of books is one of them) but I re-read them over and over and love storing and displaying them. They give me great pleasure. And I love clothes shopping (an addiction to high end denim 7 For All Mankind and Scotch and Soda shirts from Amsterdam). These vices cost money, and are just as virtuous a spending choice for me as my vacations in my mind.
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Once you’ve got a hefty emergency fund, and you’re saving for retirement, and you’re debt free…what are you saving for beyond that?
This sums up my most recent personal finance attitude! We are debt free, we have savings, two IRAs and a 401(k)….and it’s hard to feel motivated to keep saving beyond that point. If I already have 20k in the bank, how motivation do I have to keep saving? I would totally rather go on a fun trip or buy something for my husband!
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Adam,
While I understand what you are saying, that “additional” 10% IS important! It is for things like a vacation, a car, etc. In order to “stay out of debt”, you have to be able to pay for the item in full immediately. Even if you can pay your CC off in 3 months, you still carried debt for your thing – vacation, car, whatever. So yeah, you should be debt free, put 15% toward retirement (Assuming you start before 35, it goes up) AND you should put 10% toward other wants. After that, it’s up to you – personally, I’d rather be able to afford to go shopping for new clothes AND take a trip to Italy AND fix my house – so I save more than 10%.
So consider that 10% the ability to enjoy life without concern of how to pay for it. The money shouldn’t be in a giant vault that you swim in, but you might need to save for a little while to meet your goal of a trip or for a lot while to meet your goal of a new car every 6 years.
Hope that helps you feel better about why it’s recommended!
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Thanks for responding Megan. I just never read in that book when it was okay to spend that 10%. It didn’t seem to say “dip into your savings for that new car or dream vacation” at any point. It (to me) made it sound like if you want those things you should save up for them separate of the 10% you’re always putting aside.
So I guess that 10% is a “want fund” once you’ve got your emergency fund?
It’s all moot to me, I’m saving for a house downpayment and in Toronto anything I want is over $500,000 (even an 850 square foot condo) so my “want” savings will never be enough.
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I had once read that 10% described as “attitude money” (Charles Givens). If you have extra money you can afford to have an attitude!
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The extra money we’re putting aside these days is for a perpetual new car/vacation fund. I agree just stockpiling money should not be an end in and of itself.
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Ok, my answer may be controversial.
I used to be very materialistic. Every weekend I was at the mall buying new clothes I couldn’t really afford and didn’t need. I also thought a few thousand dollars of cc debt was no big deal. I mean, I was looking really cute – so what was the problem?
A change of my habits came for a few reasons:
1. I returned to grad school and lived on student loans. I had no money for weekly shopping sprees. Although I did still shop more than I should have. One time I actually bought a purse with textbook money!
2. I met my soon to be husband, who is naturally pretty frugal. I have adopted his habits and now rarely shop at all. In fact, I can’t stand the mall anymore.
Through changing my consumption habits I have slowly realized that shopping was a way of avoiding life. If I was sad, I could go buy a cute shirt! If I was lonely, I could go buy a cute skirt! If I was angry…a new lipstick could lighten my mood. If I didn’t have social plans it didn’t matter…I could always go to the mall.
I think a lot of people don’t realize how dependent they are on the little highs that materialism brings, and honestly don’t know how they will find joy without it…
I think that if the reader changes her habits, she may realize some of the simple joys in life and not need the high from a new purse to be happy…
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I think it takes finding something you value more than what you have – you didn’t just wake up and think “I should leave consumerism behind”, you decided to go to grad school and the change followed.
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Crystal might do well to be frugal in areas that other people “spend money to save money” on – if she’s going to eat out and not cook, an apartment with a very small kitchen might save a lot of money.
And unlike those of us who shop thrift stores, her “stuff” might actually be worth some money – for someone with expensive and stylish tastes, a round of weeding out the less-loved things can be pretty lucrative.
I’m with everyone else on the paid-off credit card and emergency fund – one car accident or illness can be enough to upset the applecart without that – but Crystal might a person who would actually enjoy a second job as a shopper at a department store (my most-fashionable friend’s old second job) or in a boutique or something.
Nobody should dig themselves into debt for stuff, but clearly some people do better on the “earn more” side than the “spend less” side.
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Spending money on what you value (wants) is fine, assuming you have a solid foundation – savings, no debt, etc. – which Crystal clearly does not. Bottom line is she’s only thinking about now, not down the road. What if she lost her job and couldn’t find another one for months? How valuable are 30 handbags and a closet of clothes then?
I think she needs to find a balance between the two – enjoy yourself now but couple that with some planning for the future. I’m somewhat speaking from experience here – it’s no fun to look back 8 years after you started working (like I did) and wonder where all your income went. It feels much better to have no credit card debt and a 5 figure emergency fund.
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One, “only $3000” is relative lets be honest. While almost anyone will tell you that 3K is a decent amount of money if you make a 150K its much more “only” 3k vs. someone making 30K. I will admit I think it’s 3K to much to owe anyone so I would first focus on paying that off.
A few other thoughts…
I like most here use to live a very different lifestyle. I never had massive credit card debt but it was climbing towards the end of my credit use. I however have a passion for anything with wheels & a motor plus a passion for time pieces (watches). Now we use to have more car payments than there are members of our household. It wasn’t smart, we couldn’t afford it. At the end of every month we were lucky if we had 50 bucks left. It is a rat race that you can’t ever win unless you change your mindset.
Did I have to give up those things to become financially fit. NO I did have to pause some of them for a time. Absolutely….
To use the quote I have seen here many times before “you can do/have anything you want, but you can’t do/have everything you want”. Make your choices smart, your errors small and be happy with your choices. I had a great chance to email with a very well to do gentleman before who told me “Most people are penny wise and pound foolish, I just did the opposite” He watched the large things and didn’t worry about the small stuff.
-Lunches out are typically cheaper than dinners, plus most of the time you’re not drinking at lunch. Its also a nice break in the work day.
-Shop designer trunk / private label sales, when the designers are changing lines (easier in larger cities but doable anywhere) there are typically insane deals. But buy with the mindset that it is still full priced. Don’t buy more buy what you would have at full price.
-Look at joining the designer rental programs where you can rent the newest bags, dresses, jewelry for those items you wont use over and over. Kinda like a zipcar for high end stuff.
Start small and work into the larger changes if stopping all the shopping/eating out is to much. Cut your spending by 15% the first month. Put that right on the CC bill. The second month 30% less and put that on the card. You didn’t specify any numbers so we don’t know how much that 3K represents of your spending is that like one month or 6 months worth of stuff/food? But I would try to reduce my stuff spending by at least 50% for the short term. If you can deal with doing it all at once great, if not step up to it. Then focus half that on retirement and half at e-fund monies.
My wife and I did the Dave Ramsey’s rice and beans method to really attack the debts which worked great for us but isn’t for everyone I understand. But the fact that you’re asking means you are at least contemplating change.
Good luck.
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I have learned to limit stuff without depriving. I have one bookcase, if I get a new book, I need to get rid of an old one to make room. Same with DVDs and video games. We just sold our CD collection after ripping our music onto our computer. We did that through the company I work for http://www.abundatrade.com that pays cash for used books, CDs, DVDs and video games. We also cut cable, but still watch what we want with over -the-air TV, the Roku box and Netflix, saving $70 a month.
We eat out twice a week and bring lunches to work. We enjoy meals at home and use coupons and sales for the food we buy. Nothing fancy menu wise. We share in the cooking and cleaning and we mix it up by having fancier meals in our dining room, more casual on our coffee table or eating alfresco on our patio table. Like J.D. we bought the “nice stuff” furniture and enjoy it.
We do not feel deprived, but instead happy to know our debt is almost gone and we budget for the things we do want to spend on and still have money to save for travel, emergencies and retirement.
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One piece of advice – I agree with (and love!) the comment that being financially secure and independent is sexy. But any time Crystal goes shopping from now on, when she wants to buy anything, she should ask herself: Is it fabulous? Will it make my life better? It’s amazing how much “stuff” we buy because it’s cute or on sale or maybe sort of interesting, but not fabulous. And then it piles up and doesn’t make our lives better. Save your money for the really fabulous things, and spend more of it paying off debt.
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I don’t mind admitting I’m kind of materialistic too (you only get one shot at life, may as well enjoy it) nothing extreme, but I am aware that I could cut back on some things.
To be honest, and this might not be a very popular attitude, but being materialistic drives me more professionally. If I lived a more austere lifestyle I might have got complacent with just a regular 8-5 cube job instead of working until 2 AM some nights trying to build my business. To each their own.
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The GRS reaction to carrying a balance on a credit card always amuses me. Hammer, meet nail.
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I don’t get it…?
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None of this is novel. The vast majority of Americans enjoy material items, don’t like cleaning up, would like to eat out all the time, etc. The point is to reach a level of maturity about it. Happiness can’t only be thought of and measured in the short-term. Sure, purses and clothing make you happy now. But, you also need to be happy when you are 60, 70, 80 years old. You won’t be happy if you’re too poor to even afford rent or healthcare, let alone closets packed with clothing. And you need to be happy even if an emergency comes. If you find yourself short on income due to a job loss or health emergency, you’re going to be even more unhappy than needed if you don’t have enough reserves to cover your costs and if you and all of your clothing get tossed on the street. So, consider the long-term, save enough to be happy in emergencies, and save enough to be happy in retirement.
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Well I agree with what’s been said and I agree that it’s about how you put it, to yourself.
“I love nice clothes and purses and new books” is not an adult answer.
“I love nice, new things and I also want to have a home to keep them in, so I’m going to make better choices about what new things I buy and tuck away some money and pay off my debt”
is grown up talk.
I like nice new things too. I often buy them, I don’t travel constantly but when I do it’s usually somewhat indulgent. I love to eat out, and not at a low cost restaurant. And that’s on the agenda some days. I like to shop, sometimes I do. But more importantly, sometimes I go to the library, cook and eat at home, make do with what’s on hand because I also want to maintain the security of knowing my bills are paid and I’m not racking up debt.
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as my dad always said when I was a youngun, “It’s okay to have nice things. It’s also okay to buy those nice things at Goodwill.”
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This is the type of posting that makes me want to drive someone to the library and have them take out Your Money or Your Life.
If Crystal knows her real hourly wage and decides that this stuff is worth the life energy she expended to get it, then I say more power to her.
I think this is an issue of being aware of what these things cost her not in terms of money but in time, effort and energy. Then determining whether or not she got sufficient fulfillment from those things to compensate her for that time, effort and energy.
Like Crystal I find eating out to be worth it. Unlike her, I don’t find most “stuff” to be worth it. Everybody needs a framework to make the call for themselves.
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There are two sides to a budget: income and expenses. If she’s already prioritized her spending and is still in debt, Crystal should focus on making more money: at least enough to carry her lifestyle month-to-month and pay off her credit card debt. This might involve spending some time and money on training classes, asking for a raise, earning a huge sales commission, or switching jobs. If she doesn’t already, she should start reading iwillteachyoutoberich which often focuses on increasing income rather than cutting costs.
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Bingo!
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Ok, I think that I should butt in too! Thrift Stores do not mean Goodwill, necessarily, you can find secondhand stores in some nicer neighborhoods where they sell barely worn or unworn brand-name clothes. Also try discount sites like ideeli.com and ruelala.com and so on, but do not let them pressure you to buy!
Second, aim to have at least 2 months’ expenses in emergency money and start to save for retirement. And, if I were you, I would increase what I am paying down on that credit card! (I would look to pay $1000 a month, but this obviously depends on what you are bringing in.)
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I have gotten some incredible, unique, quality clothes from ideeli! I love it! Unfortunately I have delete their e-mails before I open them so I’m not tempted to shop when I’m not planning to haha
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This! When I go thrifting, I drive 20 minutes out of my way to an incredibly upscale neighborhood. Last time, I scored two pairs of jeans new with tags on. Retail price would have been $300. I paid… $16!!!
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How does one get invited to Rue La La? It looks like a cute site!
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Crystal,
There is nothing wrong with being materialistic, however the problem lies in not having a savings account you can rely on for emergencies.
You have a consumer debt of 3,000.00 get rid of the debt and shop within your means after you have fulfilled the obligation to yourself to save.
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“There is nothing wrong with being materialistic”
This has got to be one of the most completely and utterly wrong statements I have ever read.
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