Money Obedience

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!

Unless we’re independently wealthy, or somehow doing very well even in these hard times, we’re probably on a family budget. That is, we’re trying to control our spending well enough that it doesn’t overtake our income. That process is a struggle. Sometimes I struggle with having to budget at all. Maybe it never happens to you, but every now and then I get sick and tired of having to be careful with money, worn out with being wary of overspending, and battered from budgeting.

I had a big moment of that this week as I’m working on decorating my boys’ rooms. I’ve written here a few times about my desire to do this room redux on a shoestring. Well, this week I went off the deep end of that pool we know as IKEA. I dove in, thinking about all the possibilities of making the boys’ rooms colorful little zoos or princely palaces, and I think I lost myself, or at least my mind.

I am lucky. I’m one of those people who can use a credit card wisely. I bought almost everything I wanted, charged it all on the credit card, but I will take back most of that stuff within the coming week. I don’t know where hubby got his statistics from, but I think he once told me that the majority of people who bring items home from the store (without trying them on, for example) don’t bother to take those items back if they are not quite what they wanted (or, for example, if they don’t properly fit). Whooboy, if that was me, we’d be out a pretty penny this week! After I got things home, and started moving the furniture into the rooms, I realized pretty quickly that not everything was going to fit, or look the way I expected it to. Most of my plans were realistic, but failed at the execution stage.

I wouldn’t recommend it for everyone, but this was a really great exercise in blowing off some consumerist steam. Now that I have my frugal wits about me, and my receipts, I can remedy that situation pretty easily.

Am I the only one, or does the buying bug hit any of you? What do you do about it? And how readily do you bounce back once bitten?

Your family budget consists of your income and your expenses. To ease a budget crunch, you can either lower expenses, or raise your income. If your expenses stay the same and you earn more, you will be able to save that extra income. Likewise, if your income stays the same and you spend less, you will be able to save the income you did not spend. If you can combine both tactics, you will win twice. This is the ideal case. The reality looks quite different.

On Monday we wrote about trying to make more money to improve your family budget. Earning more is no doubt a big challenge. Even if you manage to earn more than you do right now, you will only keep part of your income since you will have to pay taxes on your additional income. So, if you want to improve your family’s cash flow by $1000 per month, you will have to earn a bit more than $1000 to cover the taxes.

Spending less is, to many, also a big challenge. Think about it. We may be stuck in bad habits that we cannot overcome that easily. Sure, we can improve ourselves now and then, but it is so easy to fall back into bad habits. Or, it could be that we are already at the absolute low point of our expenses and there is nothing else we can squeeze out of our budget.

If you compare the effort in spending a dollar less or earning a dollar more, you might decide that spending a dollar less is the way to go. The good news about spending less is that each dollar you spend less is improving your cash flow by just as many dollars. Taxes won’t come into play – because you’ve already paid the tax on that spent dollar – so it goes right into your pocket. Your efforts will hit your bottom line dollar for dollar. It is also easier for most people to spend less than it is to make more. Making more depends on many things outside of our immediate control (like whether our boss thinks highly enough of us to set us up for overtime or a raise, or whether we’re qualified for a promotion or a new job altogether). On the other hand, spending less depends only on us. These are just some of the reasons why we think that spending less is a better tactic to follow when you want to get your finances in good order.

Nevertheless, both making more and spending less are challenging goals for anybody. But the pay-off (especially to spending less through the long term) is worth overcoming any challenges you may encounter.