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 Post subject: Boorpoy's struggle to not buy awesome things
PostPosted: Wed Jun 04, 2008 2:35 am 

Joined: Tue Jun 03, 2008 8:30 pm
Posts: 158
Hi, I'm Boorpoy.

I currently have no debt, have an emergency fund, and I'm renting. I live in in an area where the houses cost about 500k-700k on average.

I am currently attempting to live on a third of my take home pay, which happens to be very easy since I live like a college student and I have a "grown-up" salary. I also put 15% of my gross pay into retirement investments with a combination of 401k and Roth IRA.

That means I have a chunk of money leftover to do whatever I want, roughly 50% of my take home pay. The problem is, I'm investing about 11% of it for something in the future (downpayment for house?) and I'm saving 89% of it for "Large Purchases". It's always saddening to track my net worth because I hardly make any traction, so much of my savings are spent on stuff, albeit awesome stuff.

I don't regret buying the awesome things, but I should probably invest a greater proportion of my discretionary money.

My goals are:

1) Save up 2000 more and buy a PS3 and a car with my savings. UPDATE: PS3 bought, car on hold
2) Ramp up investment to 75% of discretionary spending. UPDATE: Budget wasn't that realistic, modified.

I'm not setting deadlines because there are so many unexpected expenses in my life, especially now that I'm moving soon and we need a new couch.


Last edited by boorpoy on Wed Aug 06, 2008 3:43 pm, edited 2 times in total.

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 Post subject: Re: Boorpoy's struggle to not buy awsome things
PostPosted: Wed Jun 04, 2008 5:28 am 
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Posts: 793
boorpoy wrote:
I'm not setting deadlines because there are so many unexpected expenses in my life, especially now that I'm moving soon and we need a new couch.


Rather then not set a deadline at all, I'd recommend you set two deadlines. A "best case" deadline, and a "worst case" deadline. You're certainly correct about the unexpected expenses in life, however we should also consider the unexpected income as well. If something major happens you can always adjust your deadlines, but it does give you a goal to shoot for. I once heard "A goal is just a dream with a deadline" so providing some sort of flexible time frame may produce better results then no time frame at all. Consider the time line a personal challenge, not a "must do or else".


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PostPosted: Thu Jun 05, 2008 10:52 am 
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Joined: Thu Apr 05, 2007 5:20 am
Posts: 515
Location: Birmingham, AL
The ability to be content with what you have, rather than buying new things, is a key to building wealth.

Most 'awesome things' you are buying are worth nothing in 3-5 years (PS2 for example). I'd rather save a dollar today so that in the future I can buy as many Playstations as I want.

_________________
No Debt Plan


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PostPosted: Thu Jun 05, 2008 11:55 am 

Joined: Tue Jun 03, 2008 8:30 pm
Posts: 158
Well, yes but by then I won't care as much about a Playstation 3. Besides, the Playstation 2 has been selling extremely strong (stronger than the PS3 currently) 8 years later. Playstations have very long tails. I can always be content with what I have, and I am, but if we were always content with what we had we would never buy things or replacements for things we didn't already own.

The awesome things I buy last for many many years and provide lots of enjoyment, that's why I don't regret them.

As for goals, I'll set the 2k goal for 2 months (end of July) and converting to investment heavy savings for August.


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PostPosted: Thu Jun 05, 2008 4:29 pm 

Joined: Fri Feb 15, 2008 4:11 pm
Posts: 71
You may want to check out my journal, it sounds like we are in very similar situations.

http://www.getrichslowly.org/forum/viewtopic.php?t=1571


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PostPosted: Fri Jun 06, 2008 1:53 am 

Joined: Tue Jun 03, 2008 8:30 pm
Posts: 158
Very cool, thanks for sharing your info. I always wonder how I stack up to other people my age.

You have some very low monthly expenses there, my monthly budget looks like this:

Code:
Income
3400

Fixed Expenses
550 Rent
30 Internet
32 Phone
---------------
612

Expenses
150 Groceries
30 Gas
---------------
180

Lifestyle
  50 Coffee
  28 Movies
200 Eating out
---------------
278

Expense Breakdown
=================
550 Rent
  92 Internet/Phone/Gas
350 Food
  78 Entertainment
100 Miscellaneous (Household stuff, miscellaneous luxury things)
----
900 Essentials
270 Luxury
----
1170 = 34% Net


The reason my eating out budget is so high is because I travel a lot for work. I'm going to try lowering it a bit by eating at cheaper places and bringing a bagel with me from home to take care of breakfast. You mentioned people who have their paychecks already spent before they get them, I actually fit that description since my paychecks go to pay off my credit card in full and the rest goes to savings/investments.


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PostPosted: Fri Jun 06, 2008 10:00 am 

Joined: Fri Feb 15, 2008 4:11 pm
Posts: 71
I eat out quite a bit too, simply because I work long hours and don't generally take the time to pack a lunch.

I also work with a lot of people who go out to lunch daily, so really, it's a good way to get away from the office and network with co-workers as well. Generally, lunch is around 5-8 bucks, sometimes more. Sometimes life gets so busy that it's very worth it.


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PostPosted: Sat Jun 14, 2008 3:29 pm 

Joined: Tue Jun 03, 2008 8:30 pm
Posts: 158
Mid June update:

Unexpected expenses: Since we are moving in a few months, we bought the washer/dryer off the current residents of our new place. That's 150 for both, not a bad deal. Then we also need a microwave since our new place doesn't have one, we were able to get the nicest microwave we've ever had for $20 on craigslist.

PS3 bought, I got the Metal Gear Solid 4 bundle.

Paycheck goes toward paying off my credit card bill, so no savings for the rest of the month.

In July I will most likely meet my $2000 savings goal to pay my PS3 balance on my credit card (I always pay off my balance at the end of every month), which means $1500 goes toward my car fund ($9500 total). But how could I do that if I only save 1500 a month? Well, I also have some reimbursements from this month that will be coming to me in the next few weeks ($564), I will be getting $250 from my credit card cash back program, and $600 from the stimulus. Break it down:

Code:
July
=====

  250 Cash back
  600 Stimulus
3400 Net pay
----
4250 Net income

-1170 Monthly expenses
- 500 Roth IRA
-----
2580 Discretionary money

-1080 Investment via Zecco
-1500 Large purchases savings, meets my goal of $2000


I should be able to switch over to heavy investment mode in August.


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PostPosted: Thu Jun 26, 2008 8:58 pm 

Joined: Tue Jun 03, 2008 8:30 pm
Posts: 158
Apparently I miscalculated my savings... lets do it with more real numbers this time:

Code:
July
=====
  564 Reimbursment
  600 Stimulus
4000 Net pay
----
5165 Net income

-1800 CC bill (June + first 11 days of July)
- 550 Rent
- 500 Roth IRA
-----
2315 Discretionary money

-2315 Large purchases savings


A few things changed. I bought an extra controller for my PS3 so my girlfriend could play with me ($60), I bought a Nintendo DS game that I've been waiting for for years ($50), and I bought a downloadable game for my PS3 ($10). I guess you could call all these things, awesome things... which are exactly what I am struggling not to buy!

But... they are awesome, and I do not regret buying them. Is that a problem?

I've also stopped calculating my July expenses with July expenses, since I pay those in August (CC). Instead, I just count my CC bill and Rent as expenses for a month. With all this money going towards my large purchases fund, I'll meet my 10k goal and start heavily investing the rest of my discretionary money in August.


Last edited by boorpoy on Fri Jun 27, 2008 2:25 am, edited 2 times in total.

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PostPosted: Thu Jun 26, 2008 11:35 pm 

Joined: Wed Jun 06, 2007 2:09 am
Posts: 466
Do this:

1) Look around for those "awesome" things everywhere (craigslist, amazon, ebay, pricegrabber.com, sams club) before buying retail.

2) Try to hold of purchases as long as possible. You are paying for purchasing excitement. kmull is right, most of the items that are retail won't be worth much in a couple of years. I can buy all the Command and Conquer games now for $50 but I have spent nearly $500 on them over the past ten years. I am not saying you should always hold off on all purchases but you should generally hold off on a lot of them especially digitalized entertainment items.

3) Play the crap out of what you own. Now that you own that DS game, play it too death!!! Also, instead of watching TV (more stuff you don't need) or checking out internet ads, play as much PS3 with your GF as possible. Make a rule that you will beat a game at least once or watch a movie twice before buying another one.

4) Check out old entertainment! I love old games and just don't have the time to invest 40 hours just to "learn" how to play a new game. Old games, movies, and music costs much less than new stuff.


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PostPosted: Fri Jun 27, 2008 12:16 am 

Joined: Tue Jun 03, 2008 8:30 pm
Posts: 158
sdogg1m wrote:
Do this:

1) Look around for those "awesome" things everywhere (craigslist, amazon, ebay, pricegrabber.com, sams club) before buying retail.

2) Try to hold of purchases as long as possible. You are paying for purchasing excitement. kmull is right, most of the items that are retail won't be worth much in a couple of years. I can buy all the Command and Conquer games now for $50 but I have spent nearly $500 on them over the past ten years. I am not saying you should always hold off on all purchases but you should generally hold off on a lot of them especially digitalized entertainment items.

3) Play the crap out of what you own. Now that you own that DS game, play it too death!!! Also, instead of watching TV (more stuff you don't need) or checking out internet ads, play as much PS3 with your GF as possible. Make a rule that you will beat a game at least once or watch a movie twice before buying another one.

4) Check out old entertainment! I love old games and just don't have the time to invest 40 hours just to "learn" how to play a new game. Old games, movies, and music costs much less than new stuff.


I would consider myself a very savvy shopper, I definitely research and get the best price. I do hold off on buying things, much longer than the "1 day per $100" rule. I don't have a problem with buying used, however I generally have a rule against buying big ticket electronics used. The same goes with new games. If a game is very popular, it will not show up used for a low price on craigslist or ebay, usually only 5-10 dollars cheaper and quite a few months later. I've been waiting for this particular DS game for about 3 years now, ever since I lost the prequel.

I definitely do play the crap out of everything I own, I don't have to worry about that. I have 420+ hours on Orange Box, the last computer game (set) I purchased. The DS game I bought (Final Fantasy Tactics A2) promises 200+ hours of gameplay. And I play the PS3 with my gf everyday to de-stress her and get some entertaining activity together that tests our communication and teamwork... and we don't have cable/satellite, so our TV watching is 1 hour max watching the Daily Show and Colbert Report on Hulu.


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PostPosted: Fri Jun 27, 2008 12:22 am 

Joined: Wed Jun 06, 2007 2:09 am
Posts: 466
How old are you?

By the way, you didn't respond to my "buying older games and media."

Also, never buy a CD or DVD new. I am sorry but you are flat out WASTING your money. I have never bought a used game, DVD, or CD that did not work: never!!! I guess I just don't get as excited about new media anymore.

I even waited two weeks before going to see Iron Man. I didn't want to spend the money because recent movies have had horrible content. Iron Man helped to redeem my view of hollywood a bit.

What do you do for a living?


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PostPosted: Fri Jun 27, 2008 1:04 am 

Joined: Tue Jun 03, 2008 8:30 pm
Posts: 158
I'm about 24.

All the DVDs I own are gifts, I use Netflix. There really aren't too many movies in the past 5 years that are worth seeing twice, imo. If I do go see a movie, I see it matinee or with 7.50 anytime discount tickets that I can buy through Borders Rewards... Iron Man was the last movie I saw in the theaters.

I used to buy lots of CDs because I like to support the artists. These days I've cut back, but I definitely buy used whenever I can.

When it comes to games I'm highly anticipating, I often find that it isn't worth it to wait until they show up in the used market since they are not marked down enough. Since the games I buy have very high resale value, they're usually only about 5-10 dollars less. For example, the next few games I'm highly anticipating are Fallout 3, Spore, and Final Fantasy XIII. All of these are AAA titles that will sell at about 10 dollars less at most about 6 months after they come out. They're like Toyotas, except they depreciate even less.

I work on making things delightful to use for a living.


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PostPosted: Fri Jun 27, 2008 10:12 am 

Joined: Wed Jun 06, 2007 2:09 am
Posts: 466
You may want to check out this website:

http://www.swapadvd.com/index.php

You post the DVDs you no longer have use for and send them to people who request them. You will build credits this way and then you can request different (even new DVDs) and people will send them to you. I picked up Smallville season 6, etc.

The only cost is media shipping (roughly $2-3) which is cheap!

Eventually, they will have a section to swap video games. You will be able to post your old ones that you have beat and request ones you want.


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PostPosted: Fri Jun 27, 2008 12:16 pm 

Joined: Tue Apr 01, 2008 2:35 pm
Posts: 140
boorpoy wrote:
I used to buy lots of CDs because I like to support the artists. These days I've cut back, but I definitely buy used whenever I can.


One great thing these days is how many artists are allowing customers to pay what they want... a great example is Girl Talk... he finished the album a couple of weeks ago and it's downloadable as a pay what you want structure. If you pay $5 you also get the entire album as one giant track (if you are familiar w/ him, it's how his music SHOULD be experienceds). And if you pay $10, you get an actual copy in September (when it comes out in stores!)

Do you live in a relatively bustling city? I very rarely buy CDs (if I don't download them/get them from friends I borrow them from the library) but I try to see lots of live music (most bands cost between $8-20 to see). In my opinion, that is how to make sure (w/ music) that you're spending $$ on experiences and not things. You'll always remember a fantastic live show! I spent $250 on going to Sasquatch (a big music festival in the NW) this spring and I still remember every wonderful minute...


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