In the past year, Mr. Frugal Rock and I have made some changes to our lifestyle that have greatly impacted our quality of life and decreased our spending. It wasn't a big conversation that prompted these changes, but we began considering and trying to be more intentional with how and where we spent our money (and our time). Looking back it probably first began with our decision a few years ago to purchase a smaller home, where we had to really look at the function, utility and beautiful-ness of each object or piece of furniture. Any person who is living in 1500 square feet or less can relate this problem. This led us to downscale from a dining room table the fit 10 to a small round table with home-made built in benches for cozy board games and exceptional amounts of storage in a small space*. It also reflected who we are and what we enjoy. I am not a hosting-a-big-dinner-party kind of person, but a quiet night with friends- totally my speed!
In the past year though, we have really looked at every aspect of our lives and tried to find ways to reduce. So where has this led? It led to a conscious decision to keep our heat low (even a few degrees can make a difference) and avoid additional electrical expenses- like putting up Christmas lights**. While some were big savings decisions, others were smaller lifestyle decisions that made less of an impact on our wallet. One of the major lifestyle changes was related to what we purchase. In the wake of an abundance of Black Friday purchases/Holiday shopping it can be all too easy to get sucked into the consumerism of the season. I myself am a sucker for emails from Amazon relating the AMAZING deals. But wait, you say, isn't it better to purchase something on SALE than on full price??
While that may be true- it becomes NEEDS versus WANTS. If there was something that you genuinely needed and it's on sale- here in the cold north, a winter coat comes to mind, I say go for it. However, for most of us there are already 2 winter coats in the closet and this latest purchase is the more 'stylish' in coat for this new season, than it falls pretty quickly into the WANT column. So why does that new gadget, item, piece of clothing have that allure for us? Advertising and marketing firms are working hard to try and sell you happiness- not a new coat, but the feeling that new coat will supposedly give to you. And most of us have felt that high after buying that perfect item. But how long does that last for? Here are three questions to ask yourself before you go online or brick' n' mortar shopping:
While a lot of this is in our heads, and we can get out and enjoy long walks and time outdoors even in our cold Wisconsin winters, it can feel more challenging. As a result, I purchased our family snowshoes this year to push ourselves to get outdoors and to allow us to still get to enjoy our hikes through nature. This purchase has a few benefits for us- it allows us to learn a new skill and embark on a new experience (snowshoeing), enables us to get outside for more of the year, and encourages healthy physical exercise. That feels like a win! Of course we didn't go out and buy the most expensive ones. We also tried rentals first (to make sure we actually liked it) and ultimately shopped around before getting a good online deal. This passed the test of helping us achieve something new- in a way that a new video console system, digital cameral, etc. wouldn't. While marketing experts want you to achieve 'happiness' even for a short-time for purchasing their product, maybe think about if this item will bring you 'joy' or a long-lasting sustaining feeling of accomplishment.
Another helpful way of looking at spending is to compare it to a normal monthly cost- for example the electric bill, mortgage payment, car or student loan payment. For example, $200 could be the equivalent of your student loan payment or 1/2 of a car payment. By stopping and reflecting that you could make an extra student loan payment or that it was nearly a car payment, it can help put the purchase in perspective.
Sometimes after putting the big purchases in perspective, folks still have a hard time realizing how those small purchases can add up. Even something like eating out once a week for lunch during the work week can add up quickly! As a former Cousins Subs junkie, I would relish the idea of going there for lunch despite the fact that this 'cheap' lunch was easily over $10 a pop. To really get a sense of what you are spending try recording each purchase you make a month- or for ease and sake of time, consider an app like MINT that you can link your accounts to, which will also easily break down your spending into categories, that you can choose or customize. If you are feeling really inspired, make a budget and MINT will email you weekly status reports on your spending and let you know how much you have spent in each budget area that month. As we learned from School House Rock: Knowledge is POWER.
*watch for a future post from Frugal Rock Finance with a tour of the Home of Frugal Rock