What is a "true" frugal blogger?

I wrote a rather-too-glib post yesterday about spending. I was called on it by an anonymous commenter. I think (s)he had some good points that brought me up short. On the other hand, I also think some of the charges were not entirely accurate.


For example, the iPod Touch we're planning on getting will be entirely through rewards program points, just like Tim's PSP. We won't be paying a dime out of pocket. So I consider that pretty frugal.


There is also the issue of video game purchases. Tim got some birthday money from his mom, which he spent on video games. The rest of the games he gets by trading in old ones.


But junk food? Clothing? Yeah, those are my own screw-ups. I eat too much junk food. I try to only buy with coupons, and I've cut way, way back on how much we get. Still, it accounts for more of our grocery bill than I would like.


And clothing: I got three new shirts that cost $60 after tax. It was a complete indulgence. It wasn't one I felt terribly justified in (though it certainly comes across that way in the post). It would be easy to rationalize it away. For instance, the only clothes I have gotten in the better part of two years were when old ones no longer fit. So this particular expense doesn't come up often. But, the fact is that we're in debt; we're working to get out. So that money could have been used in a much more strategic way.


The main point of the anonymous comment, though, seemed to be that the things I talk about -- iPod Touch, junk food, Cheesecake Factory (where we each get a slice of cake on Tim's birthday) -- did not resonate with "true" frugal bloggers.


Ouch.


I make a couple of missteps during the holiday season, and I'm not a true frugal blogger? I suppose everyone is entitled to his own opinion; but I'd be curious to know exactly what the parameters are for that position.


I proclaimed in one of my first posts that I was not the Martha Stewart of frugality. I can't be. Anyone who has ever wrestled with severe depression can attest to just how hard basic tasks are. (Seriously, why can't I make a call that will take two minutes? I don't know. Some days, it's simply an insurmountable goal.) You add in severe fatigue, and you find your options are more than a little circumscribed.


Perhaps some people believe that I'm using my health conditions to rationalize being less frugal. It's not true, but it's hard to prove a negative. Really, I can try to explain until I'm blue in the face, but it doesn't do much good. People who don't understand depression or chronic fatigue simply can't understand how much it impacts your life. So, to them, I'm malingering.


Whatever you believe or understand, the fact is that there are few people in this world with the exact same situation as you. And so it's easy to believe that a couple of details make all the difference. Of course, sometimes it's true. But a lot of the time it's just wishful thinking. Grass is always greener, etc.


I'm guilty of this line of thinking, too. There have been plenty of times in the past that I've become judgmental. You read enough blogs, enough posts, enough "how I got here" profiles, and it's bound to happen. You get frustrated by all of the benefits that other people have.


Most PF bloggers make a fairly decent living. Many of them are in two-income households -- or have voluntarily become one-income situations. Meanwhile, Tim and I have only once ever hit $40,000 a year combined. A lot of people make that much (or almost that much) with just one salary.


Or how about those couples who got tens of thousands of dollars in debt by buying to their hearts' content? Must be nice. Our debt was earned mainly because our basic expenses exceeded our income. Health conditions are expensive.


Tim also brought $20,000 of defaulted student loans into the relationship. After a year, we had to pay $7,000 for oral surgery and dentures. In and among that, there have been plenty of medical bills. At least $5,000 a year -- though much, much more when we got his oral surgery.


In other words, the grass looks a lot greener on the other side of our fence. Even with all our problems and limitations, we've paid down more than $30,000 in three and a half years. Imagine what we could have done with two full-time salaries!


So, yeah, I get frustrated. And judgmental. I have even been known to get into snobby moods where I dismiss other people as having it easy. I get annoyed by how many more corners I have to cut just to get anything like the results enjoyed by people in more traditional situations.


Then (eventually) I snap out of it. Because this line of thinking isn't fair. People with more money get themselves into more obligations. Tim and I don't have a mortgage or car payments. Until recently, we had free use of a car, without any costs, thanks to a very generous parent. That's quite the little leg-up we had. (Now, we are paying for insurance, car repairs and gas, which has definitely affected our budget.)


And I really shouldn't go casting stones. I'm frugal -- but not to the same degree that my mom is. And she's not as die-hard as people who separate their two-ply toilet paper. Meanwhile, neither of us have a garden to grow food in. So, despite being ardently frugal, we can both be shown up by others.


My point? Everyone has different benchmarks for acceptable frugality. I, for example, have no problem with spending $40-50 for a birthday or anniversary meal. Or the occasional pair of cool t-shirts for $18. (Which is, of course, not the same thing as $60 on clothing.) On the other hand, I also make sure we take advantage of freebies, discounts etc. I milk all of the free birthday offerings I can find.


Most avidly frugal folks cook a lot, often from scratch. It's cheap and it can be far healthier than convenience foods and pre-made fare. But I will probably never cook as much as I would like to. I just don't have the energy or wherewithal to deal with it. Tim's stomach doesn't help matters. It's very finicky. If he tries to eat something he doesn't like, he stomach sends it back from whence it came. So he can't just eat that last bowl of leftovers.


Our solution, then, was to keep a few different convenience foods around. Maybe he can have some canned stew and feel better. Or a hot dog. Or some frozen pizza. So long as we don't end up going to the grocery store (which adds up quickly) or ordering out (which adds up even faster), we've saved a good chunk of money. So, we've found an option that's cheaper than the alternatives. But few people would look at it and proclaim it to be frugal.


Really frugal people go to the store to hit key sales. They do sales, coupons, rebates and Register Rewards. So far, I'm only up to coupons. I do the occasional Register Rewards, but my energy problems mean I'm never sure I can use them before they expire. Meanwhile, rebates are just somehow beyond me. I never get around to mailing them off, no matter how good my intentions are. Eventually, I'll get there. It took me awhile to work up to using coupons; now they're second nature. But, for now, people might decide I'm not trying hard enough in those areas.


Then there are the times that I do something dumb, like fall in love with (and buy) some shirts for $60. There is really no excuse for it. I actually tend to stay out of department stores because of the problem of temptation. This time, though, I didn't. And I paid for it -- quite literally.


I am in the process of trying to find a balance between constantly living for the future -- when the debts are paid off -- and enjoying myself a little in the present. Often, I fall too far onto one side or the other. It's yet another work in progress, and this last shopping spree was a not-so-gentle reminder that I'm not even close to finding the solution.


So, yeah, I'm not a paragon of frugality. But I think I do okay, especially considering my limitations. I certainly think I do better than a lot of people, assuming that counts for anything.


I talk on here about free and/or cheap entertainment. There are the movie passes from My Coke Rewards. I have discussed various rewards and cash-back programs, which allow for big purchases (especially electronics) for free. And I mystery shop to get free dinners or other entertainment. Sometimes, I even make a couple of bucks off the endeavor.


For now, that has to be enough for me. That's not to say, though, that it's enough for other people. We each have our own version of frugality, a standard that seems, to us, right and fair. It's not something you can easily get someone to change. And given my recent talk of spending, I'm not really in a position to argue anything anyway.


I guess I just bristle at the term "true frugal blogger" because I happen to think too much of frugality is a case-by-case basis.


If that's not true, then where do we draw the line? What is the objective basis we use to delineate frugal from non-frugal? How much do you have to save? How much debt must you pay down each month? How much leeway can you give yourself for entertainment or indulgences before you are booted from the club?


And while you consider those questions, remember that I -- who am not a true frugal blogger -- got our debt down by $1,200 (38% of our income) this month. Actually, we paid $1,800 (57% of our income); but $600 of that covered new charges like car repairs and a vet visit for Sandy.


Now, if I can just go back to avoiding department stores, we may be set after all.

How much have we really learned?

The Nation Retail Federation released the numbers from Black Friday weekend. And people are not optimistic. Apparently, the American consumer just isn't consuming the way he used to.


More people came out this year -- 195 million, compared to last year's 172 million -- but people spent less. And this fills retailers with additional worry that sales won't be up to even their lowered expectations.


The precipitous drop in spending? A whopping $29.16. (Last year it was $372.47, this year $343.31.)


I hate to nitpick about details, but I'd like to make a quick point here:

• Average spending amount is down 8 percent per person
• Number of people spending is up 13.4%
• That means the retailers made more money than last year

That said, if I were a retailer, I would be worried -- just not for the same reasons. People are concerned that shoppers spent less, whereas I'd be worried that more people bothered going out on Black Friday. To me, that means more people are looking for good deals, hoping to spend less (and get shopping done earlier) this holiday season.


This all sounds like such a hopeful thing. People are spending less (okay, only $30 less, on average, but it's something right?) and trying to cash in on available savings. Maybe they've finally had the epiphany. Maybe they finally get it.


So does this mean that Americans are finally learning to keep to a budget when it comes to holiday shopping? In short, no.


What this means is that, even as jobs continue to vanish, even as average families await any sign of the economic upswing, American shoppers will go out (or online) and spend almost $350. Over a four-day period.


Okay, so the $343 is an average. This means that some people spent less. I, for example, spent a whopping $51 on Friday and have yet to get anything else. But an average also means that plenty of people spent more. Some probably spent much, much more.


It's important to note that a lot of people took advantage of discounts on large appliances. That does help explain some of the spending. On the other hand,almost one-third of the 5,000 people surveyed had bought toys. So it's pretty clear that not all sales were ranges or washer/dryers.


Oh, and let's not forget that prices have dropped since last year on many items. Xbox 360 and PS3 consoles both decreased by $100, to make themselves more appealing. And Wal-Mart was selling Nintendo DS systems for $70 less than retail. In other words, people could have been just as rampantly consumerist as last year, but simply had a smaller total.


The really great news, though? Roughtly 40 percent of those surveyed said they were 10 percent -- or less -- done with their holiday shopping. That's hundreds of dollars more spending!


So, assuming this survey is representative (and it's supposed to be, with a 1.4 percent margin of error) then Americans are spending about as blindly as they have in the past. To be more precise, this survey tells us that about 72 percent of Americans have done less than half of their gift buying. After spending, on average, almost $350 in the last five days.


All of this is disheartening enough, but you know what's more? It's going to get worse.


I know it is because, every single year, people swear up and down that they're going to rein in their spending. This year, they say, they're going to keep the number of presents smaller. And they don't.


They go over budget, they take advantage of too many sales, or they just get that last-minute panic most of us have -- that we haven't bought enough for those we care about -- and run out to stock up on some more goodies.


So what have we actually learned? I say not much, if anything at all.


More people went to trouble of waking up early this year for the door buster specials. Perhaps that means some have learned that their time isn't necessarily more valuable than saving a few bucks. Then again, if they end up s

The most dangerous time of the year

We're not even all that close to Thanksgiving yet, but I'm already worried about Christmas. This culture makes me sad sometimes.


That said, I have reasons to be thinking about this stuff.


My mom needs plenty of time, since she tends to cash in rewards points for gifts. Those can take 2-4 weeks on average, so the earlier the better. Tim, on the other hand, has decided to get all his shopping done early. As in, he's almost done. We just have to find something for his dad.


I suppose I should be grateful that he didn't wait until the last minute to do this stuff. But he "finished" shopping for me the day I finally sat down and made a list of things I would like. I even used Kaboodle so that I could email a copy to him and my mom, to give them some ideas.


I was aggravated, since I had repeatedly told him the past couple of days not to buy everything, because I was going to be making up a list soon. (In his defense, my "soon" is never something you want to rely on.)


I think the overall problem here is that, to make the list, I had to let the monster out of the box. The monster, in this case, being a nasty case of the Wants.


Most of the time, the Wants are completely happy in this box in the back of my mind. They stay out of my way, by and large, while I'm trying to be frugal. Every so often, though, the Wants break out. Instead of walking by, I stop and look at things I know I can't afford. I'll take a good, long look. I'll remind myself I can't afford it, but I'll still imagine how happy I'd be to have it.


It's about this time that I realize what's happening and shoo the Wants back to their domain. This is usually best accomplished by looking at the price tag. They seem particularly afraid of big numbers and will go scurrying back from whence they came.


Once the Wants are firmly hidden away, I can snap out of my trance and realize that the purchase isn't worth it. There's the inevitable guilt that you bought something rather than throwing your money at debt. And let's not forget how fleeting purchase-induced happiness can be. It's a rush, sure, but it leaves just as quickly as it came on.


Of course, I'm not claiming to be perfect. Sometimes the Wants overrun my good sense. Or they make an argument that sounds logical enough that I agree -- mainly because I want to be talked into it. But, for the most part, I'm pretty good at reining in those impulses.


All that is great, right up until my birthday and Christmas. Those times, I have trouble because I have to undo all my hard work. I am supposed to take time to dwell on what it is I would like, rather than trying to be happy with what I have. (Yes, I know some of you will take this opportunity to point out I could ask for charitable donations in my name rather than things. I'm afraid I'm not that selfless. I like getting presents. Shallow, but there it is.)


So, inevitably, when someone asks what I want, I come up blank. When you spend all year trying to avoid temptation, it's hard to change that in an instant. Frugality is mainly about making only necessary purchases. Whenever possible, you find it secondhand or you try to make do without it. And you definitely don't dwell on what you don't have. At least, not on a regular basis.


With all that on our plate, how do we answer the question of what we want? Really, the main way is to let the Wants out of the box. All those things you've been training yourself to not think about? Let it all come rushing out in one big tidal wave of materialism.


It's hard to do. You're, rather suddenly, switching your brain in reverse -- never advisable for any machine. But you will also then see just how many things you actually do want. It can be hard on the ego, if you were starting to think that you were above materialism. I know I was a little dismayed by how many things I wanted to put on my list.


Most importantly, though, you've had to let your Wants run wild. That's not something you can easily undo. And the more things they see, the stronger they get. So I end up with a good list for people to crib from; but I also end up more susceptible to spending impulses.


I made up the list yesterday and emailed it off. No big deal, other than way too long spent at the computer. Today, though... Today was not good.


I had to be at the mall for a mystery shop. Malls are not good destinations if you just switched your brain onto "consumerism" mode. I had to make a purchase and a return for the shop. But there was a few points where I almost convinced myself to buy a few items and only return one.


Then, Tim and I had to kill time before making the return. So, of course, we end up strolling around and poking our heads into shops. I'm proud to say that I left the mall without a single item, once I had made the required return, but it took just about everything I had in me.


I wanted to go on a shopping spree every time I saw a new store. I wanted to march in and start trying stuff on. Two things stopped me: A small amount of budgeting sanity that remained and, mostly, not having enough energy to bother wriggling in and out of clothes.


At one point, I even ended up looking around in a jewelry store. I've taught myself not to go in those anymore. I don't wear jewelry often enough and, most importantly, I get sad when I have to leave all the pretty sparkly stuff behind. But there I was, looking through the cases.


I even asked about the prices on a couple of items. I have no idea why. Even if they had been $30 -- and they weren't -- we're really not in a position to spend money unnecessarily. I guess I just wanted to entertain the fantasy that I might buy them. But that always just makes it worse.


The thing is, I know it's only going to get worse as the season progresses. All the sales and the ads for the sales... On the TV, on the radio, in the newspaper, in store windows, on banners or sandwich boards. It's relentless. No matter where you go in this society, you end up saturated with consumerism. And that stuff doesn't wash off easily.


And it's not just personal greed that will doom you. Trying to buy for others, it's easy to get swept away. You want to buy more gifts, nicer gifts. Nothing is ever enough.


So what do we do? I wish I had some sage advice for you here. I'm sure lots of frugal articles are out there with all sorts of peppy advice:

1. Avoid malls. "If you don't see it, you can't want it."
2. Focus. "If you have to go to a store, go only there and then only to the department you need. The more you look around, the more you'll leave with."
   
3. Write it down. "Make a list of presents for each person. Do not deviate from that list. Do not buy extra gifts. Remind yourself that what you have listed is plenty."
   
4. Tie up those purse strings. "Have your budget laid out, and know what things cost -- and what you want to pay for them. Do not allow yourself to go over budget for 'just one little thing' because that little trickle can easily become a roaring river."
   

That all sounds great, honestly. Unless, of course, you're human.

1. Avoid malls? If you have to buy any presents at all, you'll probably need to go to a mall. You might be able to do it online; but there are plenty of ads there, too. And the stores' websites are only a click away.
   
2. Focus? I don't care if you put blinders on, you will still see something that catches your eye. Stores set up displays specifically for that purpose. If your poor attention span, doesn't get you, smart marketing ploys probably will.
3. Write it down? Has anyone ever created a perfect gift list from the comfort of home? I know I haven't. Some people are completely impossible to shop for in the abstract. You just have to wander around until you see something that calls to you. And what if the store is out of the items you wanted to buy? Now you're stuck at a mall with no agenda! How will you survive?!
4. Purse strings? This one might be possible, assuming you pay only in cash. It's hard to go over your budget if there are no more bills to use. Even so, you have stores working against you. You'll probably find some little item on your way to the register that is just sooo great for Aunt Jane. And you already got her a gift, but this is just perfect and you have to get it. And it's only a couple of dollars, so it's no big deal. Unless you left your credit cards at home, you'll probably get it.

The thing about being a pessimist: You're always prepared for the worst, and you get to be pleasantly surprised if you turn out to be wrong.


That said, there are still no obvious solutions to help deal with the holiday excess. I guess you could watch A Christmas Carol and other lesson-laden movies every night to remind yourself about the true meaning of Christmas. Personally, I don't think I could handle it.


My mom is a big fan of adopting a kid or family for the holidays. You find out their needs and supply some presents. It's a good reminder that some people are just overjoyed to be getting a warm coat or a single toy.


That's probably a lot better for your karma than my method. This year, I'm choosing to look at our credit card balances every time I get the urge to get someone "just one more little thing." I can't say it'll work 100%, but, as I said, the Wants seem afraid of big numbers.


What do you do to calm down your consumerism during the holidays?

Spending: Frustration and irrational guilt

Photo by J.W. Dill

I have a chance to buy some items for one of my hobbies. At about one-third of the normal price. These are things I already wanted to get -- and will, inevitably. It's just a matter of when. Also, there's the fact that Tim now gets $30 a month for his own mad money.


So why do I feel guilty at the thought of spending the money?


Well, there are a few reasons. First of all, I'm already frustrated about our slow progress on debt. In addition, we're now looking at a move to Arizona, which will bring with it moving expenses plus the need for a down payment on a car. Taking away another $30 a month won't make a huge difference to either effort. But it's the principle of the thing.


There's also the feeling that we've got enough "stuff." I would like, in the long run, to pare down our belongings. While these acquisitions will be small and I already have storage space for them, once again it's the principle of the thing. Acquiring more things seems to run counter to that new resolution.


So all this is bouncing around in my head. What lingers, though, is frustration. Why can't things just be easier? Why can't we just have at least one of us earn something approaching a normal salary? Why can't I grant myself the same liberties I give to Tim? (In case you're wondering, the answers are: No one said life would be easy/easy isn't interesting; because we both have health problems, and I need to accept it and stop wishing for things to run counter to reality; because I have a ridiculously overactive guilt complex.)


I know plenty of PF bloggers grant themselves some mad money -- even while paying down debt. I've always said that you have to budget for at least some small things. Otherwise, you'll go mad with deprivation and will probably overspend to appease your resentment.


So why can't I take my own advice? I'm sure part of it is my Type-A personality. We expect perfection from ourselves, even as we cut other people slack. Part of it is also this desire for our debt reduction to hurry up already. It's hard to do anything that takes away from that overall goal. Even though you could argue that it's more dangerous for me not to have any discretionary spending.


I am betting that a lot of people in the middle of debt reduction have this internal struggle. It's just heightened by our limited funds. (Though, if I may be somewhat gender biased for a moment, I am willing to bet that more women than men have this problem. It seems to me that, especially in matters of money, men simply don't have as much guilt about spending.)


In the end, I think I will spend, even though it will be a struggle. It will be good for me. Perhaps one of the few times that a PF blogger has said that spending on a "want" could be a good growth experience.


But I've been working for a long time on being nicer to myself. I spent so many years demanding a perfection from myself that I could never achieve. I spent several years putting myself down rather than admitting that things were a factor of my disability. Saying things like, "I'm too lazy to do X" rather than, "I'm too tired." That habit took forever to break.


So my new method is to picture a friend in the same situation. What would I tell her? I'd tell her that $30 a month was well worth her sanity in the long run. I'd tell her that she was being ridiculous for feeling guilty at all. After all, it's good to be concerned about spending, but not to the point of obsession or deprivation.


Even through the guilt (and frustration over the guilt) I know this is the right move for me. So I guess I hope that more women unnecessarily ridden by guilt will learn to be nicer to themselves and to share their own triumphs over these emotions.

Are register rewards worth it?

Photo by Evelynishere

Or do you just end up spending more?


Staples, Walgreens, and now even grocery stores are using "savings" programs that are mainly designed to make you a repeat customer. Even if it's somewhat forcibly.


The stores offer savings in the form of credit against future purchases. So while you think you're saving in the present, you're really saving in the future. Or, looked at another way, you're simply enjoying the benefits in the future from money you already spent in the past -- all while thinking you're getting a good deal. It's a tad dizzying, really.


Let me give an example: Walgreen's recently advertised Kashi cereal as 3 boxes for $7. You bought 3 boxes, paid $10 and got a $3 Register Reward slip. You can use that slip on your next purchase at the store.


So, in fact, you're not saving money on the cereal. You're saving money on future purchases. There's a pretty big distinction.


One of the main problems here is that Register Rewards (and programs like them) expire. So, like rebates, there's a good chance that people won't use them. The company gets product sold, makes about the normal profit and customers come away feeling like they got a great deal. How could companies not love this process?!


Second, there's the old double-accounting trick. At least, that's what I call it. I'm very susceptible to it. I attribute that to the following: My brain is continuously distracted by random thoughts, lists of errands and any nearby shiny objects. Once you add the fog that rolls in with my readily accessible fatigue, you've got a former calculus student working up a sweat trying to do basic math some days.


So, when I use these programs, it's pretty common for the ole' gray matter to account twice for savings that occur only once. Such as: "Golly, it's so cool that I just got 3 boxes of Kashi for $7" -- even though I just paid $10 -- and then later, "Hey, while we're here, I'm going to get this candy because it's practically free. I have a $3 off coupon!"


See what just happened there? (If so, you're often one step ahead of me.) The discount got used in two different ways. So, in my mind, I saved $6. In fact, the "discount" only works if I buy something I'd buy anyway.


And, as I said before, you could question whether I would save any money at all, really. I'd pay $10 for 3 boxes of Kashi. Then, I would come back to Walgreen's and spend my $3 in Register Rewards. Since your item has to at least be equal to the RR slip, I'd end up paying 27 cents in sales tax.


So, I shelled out a minimum of $10.27, got a $3 certificate, and am being told I got it for $7. Anyone else see a logistical problem here?


If you plan ahead, you can avoid some of the confusion inherent in such complex transactions. For example, I bought three boxes, received my RR slip and gave it to Tim. While his three boxes were being rung up, I went back and got the last three left on the shelf. When I came back, he handed me his RR slip.


So, we paid $10, $7 and $7. In all, we got 9 boxes for $24. That's $2.67 a box -- or 34 cents more than advertised. Oh, and now we have a leftover RR to use for our next drug store need. Definitely not the worst deal in the world. It's a heck of a lot cheaper than the usual $4+ grocery store price and even cheaper than the large boxes at Sam's Club. Even if we let the RR lapse.


Since all of my prescriptions are at Walgreen's, this isn't a big deal. But if you're not a regular shopper there, the store just guaranteed that you'll make a return visit. (If you don't, it doesn't have to give you the discount, so it's win-win.)


And most people don't just get the one item at the drug store. There are a few hard-core shoppers who can manage it. But for most, these Register Rewards act like loss-leaders. They lure you into the store for one cheap item; then you come out, dazed, with an arm full of stuff and a significantly lighter wallet.


It's insidious.


***


Albertsons has been doing something similar around once a month. If you buy $25 worth of certain products, you get $5 off. You have to look closely (or, at least, I did) to notice that it's in the form of a $5 credit toward your purchase the next week. Good only for that week.


Tim and I had to work carefully to be sure that we a) used it before it expired and b) bought only essentials with it, lest we fall prey to the notion that it was "free" money. These days, I only participate in those deals if I actually need $25 worth of the products. I rarely do.


***


For a long time, Staples/Office Depot/Office Max let you return empty printer cartridges. Each cartridge netted you a $3 discount on a purchase. Maximum of three a day.


This was a great way to get a discount on ink. Or get shipping supplies if you ran a small business. My mom actually collected cartridges at the University of Washington, where they were simply being thrown away, and would use the discounts to buy and donate school supplies: backpacks, binders, pens, pencils, and more for families who couldn't afford those items.


Then the stores wised up. Now, you can turn in as many as 25 a day (at least, at Office Depot) but the discount comes later. Once a quarter, to be exact. And the credit is valid only for a couple of weeks. If you miss that window, too bad.


This means that people will be rushed and panicked, especially if they wait until the last minute. They won't want to "lose" the credit, so they'll buy things they probably didn't really need. This easily leads to excessive spending, which means a profit for the company.


Really, though, the company wins in two ways:

1. People think small with small amounts. But as the amount grows, so does their imagination. So, if they get a $3 -- or even a $9 -- discount, they'll probably spend it carefully. But, over the course of three months, those discounts accumulate. When they get up above $10 or so, people start to think bigger. If they get it up over the $20 or $30 mark, they're likely to see it as a way to get a discount on a big ticket item. So what they once would have used to get things free, now becomes a means to afford expensive purchases. Nice little deal for the company.
   
2. People have to come back in. In order to use the credit, which most of us begin to think of as our due, we have to go back. Or on to the website. Either way, the store gets us back in -- and in a mood to consume, no less!
   

Of course, the stores lose out on people like my mom, who simply stocks up on paper and ink and rarely goes over her credit amount. Perhaps soon enough they'll change it to something that necessitates purchase? As in, "Get $40 off (a purchase of $75 or more)."


I certainly hope not. But I think it's important for all consumers to remember that companies create rewards programs to get customers in the door. In other words, no rewards program is completely selfless -- all have ulterior motives. These programs are created to get you in the store, spending. It's a careful balance for the companies: Good enough rewards to keep customers happy, without losing too many profits.


In other words, remember that companies create (and tweak) these programs to always be in their best interest. So long as you remember that, you stand a better chance of actually getting a deal.


Good questions to ask are:

• Would I normally buy/use these products?
• Will I actually use the products (or reward)?
  
• Is it in my financial interest to use the reward?

If the answer to any of the above is "no," taking advantage of the offer will more than likely lead to you, wandering aisles of a store, trying to find things to buy. Things you don't need. All so you can take full advantage of a deal that isn't really that great a deal.
If you simply remember that even the best rewards programs are part of a capitalist business, you will have, I think, a better chance of getting real value from these programs.

When is an upgrade worth it?

Temptation comes in many forms. For Tim and I, it takes the guise of the TV channel G4.


This channel, which used to be known as Tech TV, is offering a free preview during March. Whenever there's a preview, we eat it up. Initially, Tim was the enthusiastic one. But he quickly turned me on to some of G4's offerings, and I was hooked too.


I took an immediate liking to "Attack of the Show" which makes me laugh. It also nicely sums up all of the hot YouTube clips so I don't feel quite so left out.


Tim loves X-Play which gives him even more information/reviews on games. (He has a subscription to a gaming magazine, but the show gives real time clips from the game and also often features cheat codes etc.)


Then there are shows like "Ninja Warrior" which I am now completely addicted to, and I couldn't tell you why. It's a ridiculous show, essentially showing various Japanese people attempting insanely difficult obstacle courses.


How difficult? Each competition starts with 100 people. The most I've ever seen advance is 11. Usually it's 2-4. Some people fall off on the first part of the course. Others almost make it to the end. But pretty much everyone who fails ends up falling about 4 feet into the muddy water below.


That's pretty much the entire show. The announcers (it's subtitled) are quite funny with their color commentary. Otherwise, it's just people trying (and mainly failing) to make it through the course. So why does it suck me in? I suppose the real allure is that, like many popular reality-based shows, it shows people failing -- and failing spectacularly. I mean, if it's just a little slip it's barely worth watching. But if you get to see someone tumbling end over end into the water, well that's entertainment!


I really never thought this kind of thing would get to me. But it's a morbid fascination. And I'm not the only one who's so enthralled. My mom, who doesn't even own a TV, watched a bit of it at my insistence. (Mainly because of the weird look she gave me when I was trying explain the show's appeal.) I thought she'd call time after a couple of people tried their best. She sat through the whole show, and even made the sympathetic noises -- "Aaaah, no!" as someone splashes down, "Oooo, almost!" as someone is 2 seconds shy of finishing the course.


So clearly, this show is a powerful substance.


So why do I rave about G4? Well because it's one package up from our current one on Dish. That's a $12 difference.


Logically, $12 a month doesn't sound like that much more. But it's $144 a year for the extra entertainment. I'm sorely tempted. But I'm just not sure.


Tim, of course, would be all for it. He doesn't just love G4. The package would also include his other-favorite channel: Animal Planet. In addition, some of the other channels in this preview are giving him access to some animated, comic-book-based shows that he loves: The Incredible Hulk, X-Men, etc.


And so my debate begins:


Pro: The extra $12 a month, would bring us hours upon hours of extra entertainment.

Con: We already watch a ton of TV. I'm not sure more is a good thing.



Pro: Tim gets antsy/bored easily, and more shows would mean less desire to go out.

Con: His Magic game on the computer provides many hours of entertainment and we already paid for that. (One-time $20 fee, paid 2.5 years ago.)



Pro: With Animal Planet on, I'd at least be watching vaguely edifying TV.

Con: I'd also be watching a lot of G4 silliness, and a whole lot more animated shows with Tim.



Pro: It's $12. You spend that when you and Tim each get a value meal!

Con: At least then we get out of the house.



Pro: You can't beat the cost per hour for entertainment. Even if we only watched the G4 shows we like, every day, the cost would be 30 cents an hour. More likely, we'd be looking at 10 cents or less an hour.

Con: However you break the cost down, it's still an extra $12 a month. And you're in debt. And may be losing half your income soon, unless Tim's unemployment benefits get extended.




It's that last one that I can't get around. I think, at least until we find out more about Tim's benefits, we probably shouldn't go adding to the budget. Even just $12 a month.


So we can't add to the budget. At least, that's what I'm guessing most people's answer will be. That it would be irresponsible, short-sighted, etc. (In other words, I'd be American consumer 1999-2007.)


As a result, I'll try to find it in the budget. I have to call the phone company and get some information on specific fees -- what they are and why I'm being charged them. And whether I can just NOT have a long distance plan. Last month, we used 6 long distance minutes for 55 cents. With fees, it was $9. So in other words, we paid $1.50 a minute.


If this were you, and you found out the benefits did get extended, would you upgrade?

Through the looking glass: A look at perceived frugality

Originally, I had titled this post “The cost of imperfection” and I asked, “How much does it cost us to be fallible?”

The idea, of course, being that no one is perfect and so we incur late fees on movies, or overdraft our bank accounts, or forget to cancel trial memberships before our credit cards are charged.

But I realized something: These costs aren’t from our failure to be perfect. They arise from our inability to accept that we’re not perfect. We all want to believe that we’re capable of more, especially my fellow Type-A personalities out there. We want to believe that if we try a little harder, we’ll manage to overcome our so-called flaws.

Because we persist in these beliefs, we fail to plan properly. We want to believe we’ll do the most frugal thing, no matter the consequences, whether that’s always cook or keep constant guard against overdrafts. We have “perceived frugality” rather than a realistic view of how we will act. When we have a bad day, we may not be able to talk ourselves out of ordering some pizza. When things are rough at work, we may fail to check in regularly with our bank balances to avoid overdrafts.

In other words, we end up paying for our self-image.

Essentially, we are charging ourselves a premium. Each time we fail to live up to our own hoped-for standards, we’re paying (sometimes dearly!) for the privilege of not facing reality.

I’m not trying to pretend that it’s easy to own up to our limitations. If it were, far fewer Americans would be in debt. They would look at their spending, compare it to their income, and make the appropriate changes.

But that would entail coming clean. It would mean admitting an unpalatable truth about themselves: that they’re chronic over-spenders.

A much better alternative – for the ego, anyway – is to simply justify the spending. They work hard, so they deserve nice things. They don’t spend any more than most of their peers. They’re due for a raise soon. They’ll find a way to pay for it later.

In the case of spending, most of you have probably already faced this and come out victorious. So maybe you think you’re all caught up on self-awareness. But that one battle is hardly the whole war.

Women, ask yourselves whether you still buy (or hang on to) clothing that is too tight. You know the ones: Just a tiny bit too snug – just this side of wearable. And you get it/keep it because you know that any time now, you will lose the extra weight, allowing you to wear it comfortably. It’s a common rationale.

But it’s just another way for us to avoid accepting ourselves as we are. Whether the topic is weight or finance or something else entirely, we all seem to put a lot of time and energy into convincing ourselves we’re equally capable in all areas.

We want to be the people who always return movies and library books on time. We want to be the kind of person who hits all the sales, never overpaying for the sake of convenience. We want to be the kind of person who never gets overwhelmed by life, and thereby lets our finances (or cleaning or cooking) suffer.

Why do we do this? Why do we consistently choose the path that leads (time and again) to frustration, perennial disappointment and, in some cases, self-loathing?

Well, first of all, no one really wants to be the person who can’t do something. It’s not exactly a sought-after position. But there’s more to it. I’ve begun to notice that people talk about things they can’t do with an almost apologetic tone.

Would you do this for some other fact about yourself – say being fond of oranges or preferring flats to high heels? Of course not… at least, I hope! So why do apologize for being bad at couponing or at finding the best sales online?

Because this society applauds achievement, and is suspicious or hostile toward failure. The very essence of our nation’s dream – pulling one’s self up from humble origins to riches – shows this. The implication is that if you don’t achieve the highest highs, clearly you’re not worth noticing, that only winners are worth caring about.

We’re inundated by stories of success. Articles about Olympic athletes’ lives never seem to mention that they have little social life because of the strict practice schedule, or that those 12-year-old gymnasts probably can’t remember what ice cream tastes like.

Any spotlighted article or show you see with a celebrity tends to focus only on what they do well. Note is taken if they decorated their houses single-handedly. But no mention is made of the wardrobe consultant who’s the only thing between that star and one of those “Worst Dressed” pages.

In-depth interviews with CEOs and other high-powered businessmen will never fail to list all their past achievements and accolades. But when have you ever heard mention of the personal assistants without whom these executives would be lost?

I could go through plenty more examples, but I think you get the point: No one is good at everything. And I doubt you’d expect any of your friends to be. Why, then, hold yourself up to that standard?

We’ve already heard a couple theories: No one wants to be the guy who can’t do something, and society applauds exceptional people. But there is a third reason. It’s one of those that sounds ludicrous to anyone who didn’t grow up believing it. Still, it’s a powerful motivator: If you’re not perfect, no one will love you.

I told you it sounds crazy. Hearing it spoken – or seeing it written – even I have a hard time crediting it as a driving factor. But everything in me tenses when I have to ask for help. Because instinctually I “know” that if you need something – especially help – people will treat you like a leper. You have to be everything for everyone at any time – except when it comes to taking care of yourself.

I personally believe it’s one of the main reasons so many people can’t accept themselves as anything less than perfect. But, of course, perfection is unattainable. So, we’re left in an exhausting and endless cycle of exacting standards, disappointment and despair. It’s a drain on time and energy – and, let’s not forget, money.

For years, I played along. When I was bad at a particular thing – due dates, for example – I would regularly scold myself, feel appropriate amounts of shame, and then set myself right back up for more failure. I bought into the idea of perceived frugality. Because I knew that I should act frugally, I believed that I would.

How many fines and late payment fees did I end up with, I wonder, because I simply couldn’t accept I was bad at something as simple as a due date? (Especially as the daughter of journalists, deadlines were supposed to be a specialty of mine.)

How many charges got on my credit card because I swore, swore, that this time, I was going to remember to cancel before the trial membership elapsed? (My success rate is somewhere around 50-75 percent on that.)

How much money could I have saved over the years if I had just altered my approach to coupons – not just tacking them up on the fridge where they inevitably were forgotten on grocery store trips?

How much might I have saved on delivery throughout the years if I had simply accepted that I didn’t like to cook? If, instead of insisting I would do the frugal thing, I had just stocked up on quick, easy dinners that took little to no real preparation?

I’m sure there’s more, but I haven’t got the heart to recount them all. What I do know is that I don’t want to keep adding to them. So I have to just accept that most of the difficulties I have are probably not going to change.

As Modern Tightwad points out, you have to take yourself into account when you plan your life or your budget.

So let’s say you’re absolutely incapable of passing by a “sale” sign in a store window. You can assume that you’re just too weak, and that these flaws should be battled at every turn. It’s certainly one way to go. Though you’ll probably keep backsliding – and spend plenty of money when you do.

Or you could just plan ahead. You can plan with family or friends to try and avoid malls whenever possible. And when you have to go in, take a friend to keep you in line.

I guess the major question here is this: What if we stopped thinking in terms of short-comings and flaws? What if they were just facts? You could say, “I tend to overdraft. I also write with my left hand.”

Certainly, being left-handed won’t cost you $28-32 a shot. So perhaps those two facts will never be completely equal. But when we buy into the idea that there are good and bad traits and skills, we lose sight of the real battle.

If you’re convinced that you shouldn’t be overdraft-prone, you’ll spend your whole time fighting some very basic behavior. Like switching from using your right hand to your left, you can make a big change. But it will always be a struggle against your basic nature.

If, on the other hand, you stop fighting a basic tendency and instead examine the situation, you’re more likely to find a solution. Perhaps you need to leave more money in the bank each payday. Or maybe you need to stop using your debit card, and move to an all-cash system.

But you’ll never figure it out if you’re busy fighting your own tendencies. Instead, you can work to avoid situations in which these tendencies have troublesome consequences.

Yes, some people may see it as accepting failure. I prefer to see it as embracing our humanity.

How do your emotions affect your spending?

After graduating high school, my cousin came up to Anchorage for college. She had almost nothing in her bank account, despite the fact that she had worked nearly full-time for the last two to three years.


Her excuse? When she felt bad, she would go shopping.


As a result, she started college with an empty bank account and a full closet.


While she did later become frugal, my cousin's problem was pretty obvious, even to her. She thought bad feelings could be solved with stuff. She let her emotions rule her spending.


But don't we all do this, to some extent?


Have you ever had your defenses lowered by stress -- been zapped of any and all will to pinch some pennies? Or, perhaps, the reverse is true and you hold on too tightly to your money.


A few months ago, another relative took me out for a bite to eat and our talk turned to my blog and money overall. She confided that her online savings account was up to well over $10,000. At that time, a few banks were offering 4-5% return on promotional CDs, so we discussed the possibility of a CD ladder.


This led to a talk about how she should do something like that. But part of her panics at the thought of taking money out of savings. Logically, she knows that, even in a crisis, she could get by until the CDs began maturing. To feel safe, though, she needs money to be plentiful -- and instantly accessible.


She acknowledged this duality and said it was partially due to being over 50, yet not having nearly enough saved for retirement. Money has always been important for her to feel secure, but the prospect of poverty in later years -- when she couldn't work -- really terrified her.


That's when I asked if she had maxed out her IRA contributions for '08 yet. She hadn't. I pointed out that, since she has a Roth, this was the best of both worlds: Her funds would be accessible, but her profits would grow tax-free over the next 10+ years.


She shook her head, incredulous that such an obvious idea had escaped her. But I didn't find it surprising at all. When it comes to money, she doesn't think so much as feel.


It's a pretty common human trait. In fact, I would bet that just about everyone has some illogical, knee-jerk reaction to money. It's ingrained in us.


When I'm exhausted, sick or experiencing deeper depression, I tend to spend more. It's not just the fact that frugality often takes effort. It's also that, when I don't feel well, I want comforting things: a certain food from a favorite restaurant, pricey junk food, or simply a good time out with my husband.


Part of me seems to believe that things can make me happy. While it's true that a favorite dish or a night on the town can be a good time, neither solves the inherent problems I'm trying to address: illness, exhaustion or depression.


On the other hand, when I'm well I tend to flinch at spending any money. Whether it's popcorn at the movies (which we get into free) or some nice cheese that will make Tim happy, I feel like every cent should be going to our debt.


From my current point of view, the ultimate security lies in being debt-free. So, I can already foresee trouble when, in the future, it comes time to invest. My first order of business will always be to fund retirement. But beyond that? Ordinary investments are going to be a debacle. I am highly risk averse and extremely prone to worry. CDs are at least safe, but sometimes I wonder if it's worth locking up that money for such relatively small amounts. (I know, I know. There's no pleasing me.)


In the meantime, while we still have debt, my frustration tends to be about our slow progress. Just the other day, Tim had to talk me down from a fit of misery. I had to leave enough in the bank for his insurance premium and for our rent, which left me enough to pay some basic expenses and nothing more. It was the second week in a row that our credit card debt was untouched.


I felt like an utter failure. Clearly, I wasn't pulling hard enough on the financial reins. It wasn't that we had to keep out a combined $1200 to pay for rent and insurance. Nope, it was a deep-seated flaw in me. I hadn't said "no" often enough, to my and Tim's "wants." It couldn't possibly be that living on $3100 is precarious, even for two healthy people. It must be my fault.


Tim was able to convince me I was being too hard on myself. He pointed out how far we've come. How he would still owe on student loans if not for me. How he never could have afforded his oral surgery and dentures if not for my financial know-how. How this was a tough period and next week we'd be able to pay down some debt.


I do so hate it when he uses logical arguments to defeat a perfectly good blind, emotional reaction.


Because once you're out of the situation, the whole thing seems pretty bewildering. Why did I automatically blame myself when I know I'm doing my absolute best? Why do I always let those feelings take such a strong hold?


But while you're in the emotions' chokehold, it all makes perfect sense. As far as you're concerned, you're being perfectly logical. Or, perhaps you know you're overreacting, but can't do anything to stop it. Either way, you get swept up in the moment -- and the rationale, whether it's rational or not.


So look at all your financial plans: the budgets, the list of debts, the thought of spending (both necessary and frivolous). See how you react to each of these. Think back to moments when you slipped out of frugality mode -- or when you slid to the complete "penny pinching miser" end of the frugal spectrum. Think about the catalysts. Figure out what's behind those emotions.


We can try to be logical about money, using budgets and savings plans and plenty of frugal hacks. But until we understand 1) that we react to certain stimuli in an irrational manner and 2) why we react that way, we will never be truly financially wise.


Because I define financial wisdom as the ability to lead a full life. One that isn't consumed by debt, but neither is it consumed by some primal, grasping fear at the prospect of parting with even a single cent.



How do your emotions affect spending? What techniques do you use to minimize their impact? Have emotions ever affected your spending in a positive way?

What does 'budget' mean to you?

Free From Broke posted recently with "Excuse Busters for Not Having a Budget." FFB then asked what other excuses we could think of. Being my opinionated lil' self, I chimed right in.


I explained our current situation and said it was simply not possible to budget for the problems that crop up between the two of us and our health conditions.


I said that the closest we got to an actual budget was:

• My disability check to cover our rent
• Making sure there was $500 in checking on the first Friday of each month, for Tim's insurance.
• Each week, keeping $220 in the bank -- $20 for our IRA, $65 for therapists kind enough to work on a sliding scale, the rest for groceries and other incidentals -- and throwing the rest at the credit card debt.

In fact, I ended up emailing with FFB to discuss this a little further. I explained just how many unexpected expenses come up, making it very very difficult for any real concept of budget.


Then again, I added, I suppose it depended on your definition of "budget."


FFB agreed with me. He wrote back:

I still see a budget as valuable so you can more accurately track your expenses ans spending. A budget doesn't have to be concrete, it can float. Unexpected expenses always come up and if you have a good budget then you can re-work it to free up money for the new expenses. Or at least know how you are going to pay for it.

By these sketchy outlines, Tim and I do have a budget. As expenses come up, we divert some money from credit card payments. Other times, we put it on a credit card (which we make sure to pay in full each month, to avoid interest) and then pay that down before any other credit card. Either way, our system does fall under FFB's description of why a budget is useful.


So do we have a budget?


My opinion is no. I think we have a frugal lifestyle.


We try to keep grocery costs down. But I don't have the energy to record all receipts from groceries. And when I am on Quicken, I use my time to be sure we're not going to bounce -- not to go through and find transactions from any of the four stores we might have visited.


We make sure there's enough money in the bank for the EFT from Tim's insurance. But that comes about only through careful planning of money allocation 10 or so days beforehand.


We don't buy many things on a whim. But we also don't rationalize that it's "not in the budget." We ask ourselves (or each other, depending on the situation) if we really need it. Especially in light of our current financial situation. Usually the answer is no.


And while I try to limit the amount spent on dining out (or ordering in), it's hit and miss. My goal is about once a week, or a total of $30. Some weeks, we do great and have no trouble providing food for ourselves. Other weeks, we're both feeling completely rundown -- whether from chronic fatigue/depression (me) or eczema/painful MRSA infection (Tim). Those weeks, we'll probably do very little cooking. I'll eat PBJs, Tim will scrounge for food. But at least twice, we'll give up and order a pizza.


About the only things we truly budget for are:

• Checks to therapists
• IRA contribution
• $10 each per week to do with as we please

On the whole, I'd have to say that, if our plan is a budget, it's a pretty terrible one that only sometimes gets followed.


Of course, perhaps I'm putting the cart before the horse. Just because we don't follow a budget, that doesn't mean we don't have one. Perhaps I'm being too strict in my definition of "budget."


To me, a budget is a plan that, while fluid, is something that you can generally stick to. It's something that has goal numbers for each sector: groceries, utilities, fun, dining out, etc. It has to be somewhat changeable, since life is hard to plan for.


But can you really have a budget if you don't have the energy to track each penny? Can you really have a budget if it only works about half of the time?


I'll put it to you readers: What is your definition of a 'budget'? How does yours work? How often do you not meet the goals you set out?

Romance, spending & the economic crisis: Some Vday-induced thoughts

Blah, blah, "love"


Blah, blah, "cherish"


Blah, blah, "chocolate"


Hey, wait! Chocolate? Now you've got my attention!


Actually, last night, I talked myself out of buying some chocolate because it seemed ridiculous to pay $3 a bag now when, in two days, I could get it at least 50% off.


So while I bide my time waiting for chocolate prices to plunge -- if only the stock market's prices were as reliable as grocery stock prices -- here are a few things to consider:


To quote my blogging buddy Brunette on a Budget,

"According to the Washington Post, the National Retail Federation's spending survey found that Americans plan to put up a total of $15 billion in the name of Cupid this year, or $103 per person. Granted, that's $20 less than last year, but it's still a far cry from macaroni-necklace territory, the paper says."

To me, this is once again proof that either Americans are even more short-sighted than we have ever given them credit for, or the average American is still doing a lot better than most media would have us believe.


Yes, it's much lower than retailers were hoping for. We were in a boom, now we're moving toward the "bust" end of the cycle. Businesses are experiencing the pain of financial contraction. In good times, businesses expand and hire a lot of people. In bad times, they have to pare back down to essentials. That means layoffs.


I'm not trying to be crass or flippant. Of course these layoffs have huge ripple effects across the economy. Of course people's lives are changed by this, rarely in a good way.


But I've always thought of economics as a cycle. As the old adage, "What goes up must come down." In terms of the human existence, the effect is far more nuanced and important. But the simple fact that something has tragic consequences rarely keeps it from happening.


And given all this potential tragedy, all this nervousness about job security and our shared economic future, what does it say about us that we are still willing to fork out $15 billion for a single day? (I try not to think about the total for more popular holidays like Christmas and Hannukah.)


Well, it either says either:

• We are the kind of patriotic saps -- er, Americans -- that are spending to keep the economy afloat, just as our politicians, economists and investment bloggers vehemently implore us to do
• For all our new-found frugality and housing-bubble-induced wisdom, we're still mainly a myopic, instant-gratification oriented group of people who will never truly learn to put our future security above a nice dinner and some overpriced flowers.
  

Honestly, I'm not sure which interpretation is worse.


And on that cheery thought I am off to eat some breakfast and prepare for our unValentine's Day. The boys have decided to see Friday the 13th. (My mom replied that gory movies aptly mirror a lot of romance: Someone delights in ripping someone else's heart out. I guess you see where I get my romantic sensibilities from.) After that, it's some greasy fast food and then home to have a few drinks and probably watch Christopher Titus's special "Love is Evil" along, perhaps, with some cheesy movies that we can heckle.


FYI, before you chide me for spending after that tirade, the movie will be seen with free passes thanks to Mom's MyCokeRewards account. The fast food will be out of pocket, but, hey, it's a holiday, folks!


And what better way to spend a holiday than at the carnival(s)? So here are a few blog carnivals that have been good enough to include me in their ranks. Read up while you wait for your discounted chocolate!


The Carnival of Investing Strategies

The Carnival of Debt Reduction

The Festival of Frugality

The Personal Finance News Blog Carnival

The Carnival of Everything Money

Do you know the difference between want and need?

Okay, well obviously the best way to be frugal is to not spend money.


Sound too simple? Of course it is. You have to spend money eventually. A human has needs... But how many of your purchases are actually needs?


Humans have three basic, obvious needs:

1. Housing: Most of us aren't willing to be homeless or live in our cars.
2. Clothes: Other than certain communities, nudity is verboten in public.
3. Food: It's kind of important, and there just aren't many dumpster divers

Beyond these, how much do you actually need?


This is a real question, not a criticism. I certainly have a lot of luxuries that I don't strictly need.


But people have a disturbing tendency I've noticed lately to call things "needs" that just aren't, well, necessary.


Why do we do this?


I'm sure part of it is cultural habit. America is a country that prides itself on a certain amount of ostentation. "Keeping up with the Joneses" is a cliche for a reason. The average person wants to have the biggest and best toys -- or at least the same ones that other guy has.


This has lead to a distortion in distinguishing between real need and simply wanting something. Remember when you were a kid and you needed something? I mean needed it. And what happened? Usually, your parents told you no. You were sure you'd wither and die from deprivation. But, since you're reading these words, clearly you were able to tough it out.


Most of us can easily recall the pain of wanting something so desperately that it felt absolutely necessary. But it seems like, collectively, we have started to forget that there is a distinction between the two.

Why?

Maybe it's entitlement

We want it, so we should have it. We work hard and pay taxes and darn it we "deserve" something nice.

Maybe it's luck

There are obvious exceptions, but on the whole, people in this country have so much. Perhaps we've lost the ability to distinguish because we so rarely have to face real need.



Maybe it's advertising

It could be that we're just believing the hype of the ads we're inundated by. I can't count how many commercials tell people that, even if they have bad credit, they "deserve" a car. It's alluring to let go of critical thinking skills and just accept what the marketers tell us: We're worth luxuries, we should treat ourselves to anything we want.

Personally I suspect it's simpler than that:

My generation and its immediate predecessor (Gen X) don't want to be adults.


Today, it's socially acceptable to still play video games and read comics and all the other ways we extend adolescence beyond all previous limits. And the inability to take on blame or responsibility for our decisions -- especially for our spending -- is just a symptom of this reluctance to grow up.


Unfortunately, we're one of the first generations that has had such bald and extensive access to credit. So we don't have to be able to afford the things we want.


Whatever the reason, it's important to know the difference between "want" and "need." If you can't do this, frugality is always going to be hard for you.



So start with an exercise:

Every time you go to buy something, ask yourself if you need it. Try to brainstorm at least two ways you could get around buying it. (This includes borrowing items or just avoiding the actions that make it necessary.)


For example, if you want to get some fast food, ask yourself if you can wait until you get home and heat up some leftovers or microwave a frozen entree.


A $60 video game? Do you know people who would lend you the game when they're done with it? Can you trade in enough old games to get it free? Can you try a free subscription of a games-subscription service?



Still having trouble?

Here's the absolute best way to determine if something is really a need: Visualize your debt amounts. Now ask yourself if the item is worth staying in debt for.

Yes, you have leftovers in the fridge but you've had them for three nights now and fries sound really wonderful; yes, you could wait for the game, but every single guy in the office is bragging about his stats and it's driving you crazy enough to plunk down the cash.

But will it be worth staying in debt for another month? Another year?

It doesn't matter what your proposed purchase actually costs. The smaller purchases are probably the most dangerous, because they seem so trivial in the short-term. But do the math: If you get a $7 meal twice a week, you're spending over $700 a year.

You'll quickly find out that you rarely "need" anything so badly that you'll consciously stay in debt.

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