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?

As the new school year is starting all over the US, let me talk about learning. When we go to school we learn all kinds of stuff. After we leave school we forget a lot of what we have learned especially if we don’t use the learned knowledge in our daily lives. (Sometimes I am frightened about the amount of stuff I have forgotten.) I don’t think it even matters what kind of teaching methods schools apply. We end up forgetting most of the stuff anyway.

A couple days ago I came across an article in Newsweek that argues that schools should incorporate yet another field of study: personal finance. I happen to think that it is a good idea to teach students how to handle money properly. School officials may gripe that they can’t make time for additional topics in the curriculum, but I’ve got the funny feeling that some stuff can be cut out to make room for such an important field of knowledge.

After all, if we want our economy to run well, shouldn’t we teach our citizens how to handle their own personal economies? The current economic crisis has to have root, at least partially, in a level of financial ignorance among the general population. Sure, there are some bad apples to blame, but there were also lots of people who seemed to make financial decisions that caused bad consequences they neither anticipated nor understood. Think about all of the crazy mortgage products some people signed up for! Fortunately I do not have first-hand experience with any of these products, but some of the people who do are still struggling to release themselves from a bad financial situation.

If we can somehow fix one of the problems of the economic crisis with education, why would we not do so? How difficult is it to teach a little bit about budgeting, for example? Most of the math behind budgeting is just simple adding and subtracting. Besides, if the math might be too hard for some students, teachers can show off one of the many free budget planners offered on some websites that do the math for the user.

In my mind the real bonus from teaching personal finance classes in schools is not that students learn about an important part of modern life, but that students learn something that they can actually use day in and day out. Chances are that they will not forget this body of knowledge if they use it all the time unlike a lot of the other stuff that is taught in school. That means that teaching personal finance will not be a waste of time in the long run, right?