Saving for a big purchase
I love the jeans I'm wearing. I actually wear them almost four days a week. Chances are that if you see me, I'm wearing these jeans. They're my only pair. When I bought them, I very gladly put down my $200 cash and left the store with a smile. The jeans I had before them cost the same, and I wore them until they got holes in them, and then I got those patched up, and then the patches got holes in them and the hem came out and I decided to move on.
A lot of personal finance advice I read says that $200 is entirely too much to spend on jeans, no matter their longevity. The problem here is that I love these jeans. I feel confident in them. It sounds weird to me, but having jeans that fit this well have become a value of mine. The jeans aren't the point though. Chances are, we all have something we buy that maybe costs more than it should, or at least more than it could, be it wine, fitness, clothing, makeup, electronics, or pure-bred cats. My goal is to spend on the things I care about, and ferociously save on the things I don't.
I practice the art of conscious spending.
Your Values Should Dictate Your Spending
We can't have it all. With my jeans, I spend on the pants and then save on the shoes I wear with them. My shoes aren't important to me. They probably should be, but try as I might to read studies about proper arch support, I can't get myself to make it a value. If I were to spend on the jeans, then spend on the shoes to go with them, then the belt to match, I frankly wouldn't have enough money for a shirt.
With travel, it'd be great to stay in a luxury hotel, eat at fancy restaurants and take cabs everywhere. But for most of us, that would make travel inaccessible. If I ever splurge on more comfortable accommodation, I'll make sure to walk everywhere and get cheap street food to eat at the park.
My point is this: Figure out your values. Spend on those, skimp on the others. For me, this meant charting my spending. By seeing where my money was going, I could more properly cut out what I didn't care about and funnel the funds into what I did, or more probably, into savings.
Here's an untrue example of where my $500 in discretionary spending went one month:
I look at this list and have three things come into mind first:
- I love Chairman Meow, and so his wild caught Alaskan cat food is non-negotiable.
- I do hear the people sing and tend to cry through all of Act I.
- I still can't believe how effective acupuncture is at reducing stiffness in my back.
Outside of those three, I realize I usually don't have a very good time when I go to concerts with my friends and these Levis come on way too high on my waist. To align more with my values, I should keep the cat food, Les Mis, and needles, and enjoy a night at home reading a library book (Victor Hugo!) in my amazing new jeans.
If the desire to buy a more expensive item is strong enough, I should be able to save for it. If my desire wanes from day to day, or I realize that I'd be happy with something cheaper, I don't buy the product.
I'm really looking forward to a trip I hope to take to Istanbul next year. If Istanbul didn't come up at least once a week in conversations for me, it would probably cease to be a savings goal. If I don't change behavior and put more money toward it, it isn't going to happen.
To change behavior, I set up smaller goals and advertise to myself. I have this picture on my desk now and gaze lovingly at it every time I transfer funds into my Istanbul savings account. The week before I make a transfer, I go to the library and get out a book (hopefully with lots of pictures) about the city and read away. Not only will I have more appreciation and knowledge of various landmarks once I get there, but it helps keep Istanbul exciting, fresh, and sexy for me, not that it needs much help.
A few months from now, if my monthly savings goal continues to be met, I'll buy the plane tickets and know some more awesome facts, like back when the city was part of the Ottoman Empire, Istanbul had 1400 public toilets all over town. Europe at the time had yet to build a single palace.
With some of my larger purchases, I make myself earn them in a less financial sense. I want to make sure something is a value of mine before I spend the money on it. Here's what I'm talking about:
- For a big trip, justify spending the money by having a tangible language goal. Tell yourself that after a year of weekly French classes, you'll finally allow yourself to spend the money on eating a baguette under the Eiffel Tower.
- Interested in taking barre classes? Commit to using the DVD two or three times a week for the next two months. If you can get that done, it's become a value and money can follow.
- Want that expensive new makeup? Use up everything in the bathroom first instead of adding to the pile of half-used containers.
- Looking forward to your favorite band coming to town? Learn the riff of your favorite song on guitar, especially if you've never played before.
Pick a goal that makes sense and stick to it. If the purchase isn't inspiring you to save and better yourself, then it probably isn't a value.
Frugality isn't always about finding the cheapest option, but rather bringing as much consciousness to your spending as possible. You can lose the guilt, increase the pleasure, and accomplish something new.
What's your more pricey item? How do you make sure your spending is a conscious effort on it?