Money Obedience

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Last week I visited Indianapolis and I liked it very much. The city has a nice feel to it and beautiful architecture, both old and new. If you ever make it to Indy, do stop at the public library and go inside. This is one of the best libraries I have ever seen. Not only does it seem to have a very extensive stock of books, the building itself is beautiful inside and outside.

On the flight back home I was fumbling through the magazines in the pouch in front of my seat on the airplane. After I was done with the Su-Doku I picked up the magazine/catalogue called “Sky Mall” and leafed through it. I’m sure you can imagine that I had little desire to buy a lot of the things in there. In fact, rather than making a purchase, the items offered there inspired me to write this blog post.

I find some of these offerings quite amusing. There was a remote controlled tarantula for $29.95, video recording sunglasses for $199.95, and a PupStep Plus for $39.99. I wonder who buys things like that, but I don’t really have to look that far. Sometimes I have fallen into the trap of “needing” to own such a useless thing.

The most useless thing I ever bought was a “dancing flower.” I picked it up in Japan where you can find all kinds of novelty gadgets that serve no purpose at all. (I bought some of the most beautiful toothbrushes there, too.) This dancing flower was moving its stem to the rhythm of music prompted by a sound sensor. The mechanical concept is rather simple, but hey, it was a cool thing to look at. Or so I thought. That novelty lasted for all of two weeks if my rose-colored memory serves me correctly. I still own this flower, but it has not been used in years, and a battery may have exploded inside the casing, but for some reason I still have to hold on to it. It has moved with me five times for crying out loud!

Anyway, when I bought this toy it did not break the bank. It was fairly cheap. But other items I saw in this Sky Mall were a lot more expensive. These items do not serve any real purpose, either, but they may cause some people financial problems, especially if they keep spending money on such things.

That is why it is a good idea to have some sort of budget set up. Using a free budget planner helps you keep your spending in control. If you prepare your budget way in advance of making purchases, and you don’t allow for such frivolous purchases in your budget, you are more likely to avoid making them at all. After all that work at setting up and sticking to a budget, you would not want to betray yourself like that. Worse, think of how you will feel at the end of the month when you compare your actual expenses with your budget and are again reminded of that regrettable purchase. I know I would not want to catch myself like that. That is one of the reasons why the Sky Mall did not tempt me into buying anything. Another reason is my memory of the dancing flower. I think I have learned my lesson.

The other day a big box arrived at our house. My wife knew what was in the box since she ordered it, but I did not know what was in that shipment. Lo and behold the lady of the house had ordered a huge bag of flour, the kind you only see in bakeries or pizza places. I think this was a bag of 50 pounds of gluten-free flour. Let me say right off the bat, gluten free flour is a lot more expensive than regular flour and a lot harder to find. We need this flour since we have a couple people in our household who do not function well when they eat gluten, but who still want to enjoy the pleasures of bread and baked goods. Unfortunately gluten-free baked goods bought in a store are both expensive and not that tasty. That is why the lady of the house has taken up yet another role or job. She has become the resident gluten-free baker. After some experimenting she does a swell job whipping up tasty pancakes, cookies, sandwich breads, and challah. (Well, some things can be whipped up faster than others.)

Anyway, back to the big bag of flour. As it turns out the price of this gluten-free flour mix was relatively low: $2.60 per pound including shipping (because it was on sale). This was a bargain way too good to pass up. We are fortunate enough that we have enough storage space to keep so much flour cool and dry so that we can use it up over time as wifey bakes away.

Now, how do we accommodate for such an unusual expense? We don’t really have a budget line that would allow for such an expense in our monthly budget. But we don’t care about that since we have some unusual and irregular expenses throughout the year. (For example, we pay our various insurance premiums only once a year.) This flour purchase just happens to be one that also falls into an unusual category, i.e. “groceries.” Needless to say we will exceed our budget for groceries this month, but it will even out over time. And that is the most important thing to us: not to exceed our budget over time. We would not want to pass up such an offer just to stick to a rigid monthly budget. The bigger picture is much more important.

Come to think of it, I have another idea what to do with this large expense. Our little boys used the large shipping box from the flour delivery and made themselves a “house” out of it. They colored all over it with markers, and the house has already given them many hours of entertainment. So, maybe I should split up the expense between two budget items: “groceries” and “toys”! I’m pretty sure we might get back on budget then!

Money is part of life, but it is really not the most essential part of life, is it? Let me make the point by talking about financial emergencies and preparing for emergencies, a favorite topic among personal finance bloggers.

It is a favorite topic because it is so very important. Life is full of unforeseen events. If you are somewhat prepared for surprises, you will probably weather almost any storm in pretty good shape. I don’t want to get into the details of how much money you should set aside for financial surprises and emergencies, since that would be a topic for at least one other post. Instead, I want to state that it is not that difficult to set aside some money for financial emergencies. All you need to do is put a little money into a savings account every month and before you know it, you will have a sizeable sum of money socked away for emergencies. Easy, right? – Well, some of us have difficulties doing that. Not that I would blame anybody who does not have an emergency fund, since life’s expenses and desires can indeed get in the way. Still, the idea of putting money away for emergencies is pretty simple and it can be put into practice fairly easily, too, right?

We cannot say the same about other emergencies and surprises in life. What about illness? What about the terminal illness of a loved one? There is nothing we can do to prepare for personal emergencies like these. Even when we are prepared for the death of a loved one (for example, in the case when doctors may have told us a few months prior), we are still not prepared. There is nothing that prepares us for the finality of death. No emergency pile of happiness will make up for the sadness we feel in life sometimes. And this kind of sadness hardly ever centers around or involves money, does it?

So, considering the real emergencies and surprises in life, doesn’t it look so much easier to prepare for financial surprises and emergencies? Somehow we can almost always get a handle on our money situation. So, if you’re lucky enough to have food, clothing, and shelter pretty much set, then why not focus on setting up an emergency fund? Why leave yourself open to financial surprises and emergencies? Life deals us plenty of surprises and emergencies for which we cannot prepare adequately no matter how much advanced notice we get. Let’s make sure that we at least somewhat control those easy-enough-to-deal-with financial surprises and emergencies.