priorities

Justification or the Truth?

June 3, 2013 By Jennifer Derrick 3 Comments

I went out to lunch with a sometime friend/mostly acquaintance (it’s a complicated relationship) the other day and she spent the better part of the meal checking her cell phone, texting, and LOL’ing to Facebook posts. At one point she looked up and said, “Aren’t you going to check your messages?” (I think she was feeling bad that I wasn’t obsessed with my phone, too, and, that I actually wanted to have a conversation with a live person, instead. Perhaps she realized she was being rude and wanted me to join in her rude behavior so she wouldn’t seem quite so obnoxious.)

“No,” I said. “Besides, I only have a ‘dumb’ phone. It doesn’t text or anything. I can check my voicemail when I get home.”

“Oh. Why don’t you have a smartphone?” she asked.

“Because I don’t need one. I’m not into social media, I don’t get that many calls, and all I need is something for emergencies or the rare long distance call that I can’t use my home phone to make. I don’t need one, so I don’t see the sense in laying out the money for it. I just keep a cheap prepaid phone.”

She made a derisive snorting noise.

“What’s that for?” I asked.

“Please. You’re just trying to justify why you don’t have one. If you can’t afford it, it’s okay to say so. I won’t think less of you.”

At first I laughed, and then I got kind of mad. My first thought was that it was funny that she automatically leapt to the, “You can’t afford it,” conclusion. This from the person who I know can’t “afford” her phone, her car, or most of her clothes. She lets the credit cards “afford” those things for her. The irony there was funny.

But then I got mad that she actually thought that I would be worried about what she thought of me for not having a smart phone. Honestly, if someone thinks less of me because I don’t have something, for whatever reason, that’s not someone I’m going to hang around with for long. Finally, I zeroed in on the “justification” part of her comment. And I got even angrier.

“I’m not justifying anything,” I told her. “It’s a simple truth. I don’t need it, so I won’t pay for it.”

“Sure, sure,” she said, waving her hand. “Whatever. That’s your story. You’d be happier if you had one.”

I could have defended myself further but as I was about to open my mouth, I realized that I didn’t need to defend myself. Nothing I said was going to change her mind that somehow I was secretly dying to have a smart phone, but that I couldn’t afford it so I was saving face by creating this “story” about not needing it. And as for happiness, please. If a cell phone could make me happy I’d buy one, but I’m smart enough to know that happiness is never going to be found in a cell phone, no matter how swanky it might be. If anything, spending money on something that I don’t need is going to make me unhappy, not happy. The rudeness and blind assumptions here were hers, not mine, so I wasn’t going to waste my breath defending anything. If anything, I deserved an apology.

I’ve seen this happen before. You tell someone you don’t want a kitchen redo because you’re happy with your appliances and your laminate counters and they say, “Sure. If you could afford it, you’d do it.” Or if you say you’re happy driving your old car, living in your small house, wearing your old clothes, carrying a store brand handbag, or taking camping vacations instead of cruises, some people say, “That’s just your way of justifying the fact that you don’t have the money to buy a new/better thing. You’re not really happy, just poor.”

This is often their way of feeling better about their own wasteful choices. Deriding your common sense makes them feel better about their own unhappiness due to choices made “because everyone else has one.” Spending the money didn’t buy them happiness, so it never dawns on them that you could be perfectly happy having not spent the money.

In some cases it may be a justification. Someone may really covet those things but needs to save face so it’s less embarrassing to say, “I don’t want it,” rather than, “I can’t afford it”. In my case, and in the case of most people who live below their means, though, it’s a simple truth. “I don’t need it or want it,” is not a justification. We know what we need to live comfortably, if not lavishly, and we know what makes us happy. We know that happiness isn’t found in objects and we’re far happier living a much smaller life than many of our peers. We prefer financial security over piles of stuff bought because other people told us we should.

When you assume that someone is “justifying” why they don’t have something, stop and think for a minute. Chances are they aren’t lying to you about why they don’t own such and such. Chances are that they simply don’t want it. That doesn’t make them strange, or dangerous, or “unfortunate” in any way. It just means that their priorities are different from yours, or that they had the sense to say, “No,” when everyone else was saying, “Shut up and take my money!” The next time someone says, “I don’t have that because I don’t need it,” listen to them instead of dismissing them or pitying them. If you pay attention to their reasoning, you might learn a little something about financial security and wise spending.

(Photo courtesy of Jason Taellious)

Your To Do List May Be Longer Than You Think

May 22, 2013 By Jennifer Derrick 4 Comments

I read a lot of books and articles on things like brain science, psychology, productivity, and memory. One thing that tends to come up often as I read is that the brain sees any incomplete task or goal as part of your to-do list. Even if you aren’t consciously thinking of it, anything that you have left undone lingers in the subconscious and will periodically torment you until it’s finished.

This applies to everything in your environment including unpaid bills, an unfinished presentation for work, unread books, a Tivo full of unwatched shows, or hobbies that you started but never did anything with. You may not have these things on your immediate to-do list (in fact, they may not have been important to you for months or years), but your brain does. As far as your brain is concerned, these things all represent projects or goals that you started and have yet to finish. As such, your brain keeps them stored in your subconscious and periodically “pokes” you with reminders (usually, it seems, in the form of guilt or stress) that you have all these undone things to do.

It’s up to your conscious mind to assign priority to these things, which is why the things that are most immediate (finish that presentation for work, call the plumber, pick up the kids, shop for dinner, etc.) are the ones that get written down on an actual to do list. Those things get accomplished first. But your unconscious brain is still keeping track of those other things it thinks you have to do. Whether you realize it or not, they’re causing you stress.

You’ve probably experienced this. Ever walk by that shelf of books you bought but haven’t yet read and felt guilty or thought, “Man, I’ve really got to get on that?” Or looked at your DVD collection and thought, “I spent the money for that video, I feel bad I haven’t watched it yet.” Or walked past that stack of bills you’ve been meaning to pay or bank statements you’ve been meaning to review and felt your stress level ratchet up just a bit? None of those things may have been on your conscious to-do list for the day, but your brain thinks they are (or should be).

This little phenomenon has implications for our financial lives. Many of us have a lot of stuff in hour house that we bought but have yet to use. We have books we haven’t read, games we haven’t played, hobby supplies for hobbies that never got off the ground, china we’ve never used, and movies we haven’t watched. Not only is all of this stuff taking up space, it’s likely causing us stress because our brains are constantly thinking, “Gotta use that, gotta play with that, really shouldn’t have bought that, what was I thinking,” and it eventually turns to a different message that says, “Gotta find the time to get rid of all of that, it’s taking up too much space, I’m an idiot for having spent the money on that,” until eventually you give in and either use it or get rid of it. But during all those months and years that go by in between, you’re experiencing a very subtle form of stress that eats away at you.

This makes the case for buying far less stuff. The less you own, the less you leave unused, and the less your brain adds to the to-do list. It also makes the case for taking care of your finances and not procrastinating. Even if something doesn’t seem urgently important to you (like getting a will made, for example), your brain thinks differently. It knows it needs to get done so you will be bothered about it until you do it.

If you’re already surrounded by unused stuff, untouched hobbies, or undone tasks, make it a point to deal with them. Either use or donate/toss the stuff. Make a move to actively participate in the hobby, or disregard it once and for all. Deal with your paperwork, or make a conscious decision that certain things don’t have to be done at all. The part of your to-do list over which you exert conscious control every day is tiny compared to the to-do list that your subconscious is harboring. Make it easier on your brain and free yourself from some stress by buying less, procrastinating less, and using what you already own to its fullest.

(Photo courtesy of robstephaustralia)

TV Panic: Day 23 & 24

January 27, 2013 By Jeffrey Strain 3 Comments

With the end of the current house sitting job, I have three days before the next one begins. Since I’ve managed to not have to pay anything for lodging so far this month, I figured that I should try to make that the case for the entire month. The plan was to go to visit my sister (just to rub in how well I am doing on the minimum wage challenge thus far a little), but that was quickly changed when I got a message from my mom telling me that her TV wasn’t working.

I stopped watching TV awhile ago and anyone can as stop watching TV well if they want. The key phrase there being that they need to want to stop. I think that people would be a lot better off in most cases if they simply trashed their TV and found other ways to entertain themselves, but I also know that there are some people out there that absolutely love their TV. My mom is one of those people.

I spend a good portion of the morning trying to fix the TV to no avail. When it became apparent that I didn’t think I could fix it, I asked her how long she was willing to live without a TV. She looked at me like I was sentencing her to solitary confinement. (Sidenote: a good way to determine if something is a priority is to start listing the other things that you pay for that you would be willing to give up for whatever it is you are discussing. If you know that you would give up most everything else, you can be fairly certain it’s a priority in your life. This is how I know TV is a priority to my mom). We needed to get a TV and fairly quickly.

The problem, of course, is when things need to be done in a hurry, it’s difficult to get a good price. There isn’t time to look for deals going on or to look into used options. I explained that if we could wait a week, we could get a much better deal, but that also wasn’t an option. So I started to look online and for what deals were available at close-by stores. I was about to go out and make a purchase when I had one final idea come to me.

The problem was that we couldn’t get the TV to turn on. The remote didn’t work. I changed the batteries, it still didn’t work. I tried the on/off switch on the TV and nothing happened. I tried a bunch of other buttons, but they didn’t work either. The thing was that I knew the TV was getting power because the red light indicating that it was turned off could be seen. I wondered if I simply unplugged the TV it might reset (much like turning off a computer when it freezes). I did and thankfully, it worked. The TV now seems to be working fine.

While I did spend almost the entire day fooling around with the TV and then looking for the best price for a quick purchase, in the end I ended up saving my mom a couple hundred dollars. I wish I would have thought of that solution sooner, but it was better late than never. We’ll see if the TV has any more problems, but it seems to be working fine at the moment…

After the entire TV ordeal, I decided that I would go for a hike on the 24th. I headed to Big Basin which is one of my favorite places to hike fairly close to where my mom lives. It’s a wonderful area with large redwood trees and a nice waterfall hike:

In the afternoon, I did head to the coffee shop as I needed to meet with a person who is building an iPhone app for one of our sites. I ended up using my coffee card to pay for the drink (I still have enough on it to do a few more times) although I do need to begin thinking about the alternatives to save money when the card runs out. An interesting thought was that if the main purpose of going is to meet with someone about the blogs (as was the case here), then I could deduct the cost as a business expense and still spend time working there even after the meeting was over. I’m not sure how often that opportunity would come up, but it is another creative way to keep my spending lower that i might be able to leverage.

For the two days I had a total of $1.50 in spending for postcards for the girls. I will need to go to the post office to buy stamps for the increase in postage for postcards so I can use the rest of the stamps I still have. The car miles were all deductible since it was a state park and part of the national parks blog I write. I feel pretty confident that I will end the month of January in a really good financial position (knock on wood) unless there is a major repair that needs to be done with the clicking clutch on the car.

Yesterday’s & Today’s Spending

Food: $0.00
Car: $0.00
Housing: $0.00
Travel: $0.00
Misc: $1.50

Total: $1.50

Total Spending

Food: $18.52
Car: $0.00
Housing: $0.00
Travel: $0.00
Misc: $19.00

Total: $37.52

Next article: Day 25 & 26: Car Repair Failure & Golden Gate Bridge

(Photo courtesy of tvanhoosear)

First Difficult Choice: Day 3

January 3, 2013 By Jeffrey Strain 7 Comments

Well, I knew this day was bound to happen. I just wish that it would have been a little later into the year. Having it come so quickly into the new year only confirms that I will likely have to make a lot of these choices in the months to come. I had to make the first difficult choice to opt out of something that I would have normally done in a heartbeat. Such are the decisions which need to be made when participating in a minimum wage challenge.

I was invited by a friend to go skiing for a weekend at the end of this month with the best part being that he already had a place and I could hitch a ride with him so there would be no housing or transportation costs involved. The problem was that although this sounded like an inexpensive way to have some fun, actually running the numbers showed something very different. While free lodging and transportation would make this seem like a deal, in truth the weekend would likely cost me several hundred dollars.

I would need to buy lift tickets which would be well over $100 for 2 days even with a discount. Then there would be the cost of rental gear (I don’t currently own my own equipment). There would be food costs since I would be splitting these costs with friends, but I would have little control over what was purchased (and the cost of it). Then there would be the inevitable night out drinking which would be difficult to decline. Although I would really like to go (and would have if offered this opportunity in 2012), with a minimum cost of $300+, I had to politely decline.

I had to keep reminding myself that “living well” doesn’t mean that I get to do everything I want to do. It means making a rational choice within a limited budget when opportunities are presented, and making a financial decision based on priorities. Although I love skiing, for the amount of money it would cost (even with having a cabin and transportation to the area covered) I could do a lot of other travel and use that money to get more enjoyment over a longer period of time. Under my current financial restrictions, it was a sacrifice that made sense even though I know it would have been a lot of fun. That all being said, I haven’t completely given up on the idea of going skiing this winter. I’ll have to put my creative juices to work and see if I can work out some way to get on the slopes for a price that makes sense within my current budget.

I didn’t have as much time as I did yesterday to travel, but I still wanted to take advantage of the opportunity of being in Arizona with free use of a car, so I took a shorter trip like I had done on January 1. I decided to head for a place I had never been before — Tuzigoot national monument:

Again, I was able to pack a lunch and snacks to avoid spending money on food, and my national parks pass meant I didn’t need to pay the $5 entrance fee. It could have been a no spend day, but I purchased 3 postcards again to send to my nieces and my best friend’s daughter for $1.20.

Even with having to pass on the skiing, these first three days have gone better than I could have ever expected. I’ve been able to get out and explore every day thus far for virtually no cost. I was worried that I would be tempted to stop and buy things when traveling to the national parks, but I have thus far been able to restrain myself from doing so. I’ve packed smart with enough food and snacks so that I haven’t made any impulse purchases. I’m sure I will be tested on this at some point, but for now the system seems to be working well and I’ve spent very little money.

Today’s Spending

Food: $0.00
Car: $0.00
Housing: $0.00
Travel: $0.00
Misc: $1.20

Total Spending

Food: $0.00
Car: $0.00
Housing: $0.00
Travel: $0.00
Misc: $2.40

Next article: Day Four: The Importance of Living Well

(Top photo courtesy of *pascal*)

Personal Finance Is Personal — And That Makes It Hard Work

February 16, 2009 By Jennifer Derrick 3 Comments

I get tickled when people tell me that they read a certain book or listened to a certain guru and followed the plan to the letter, but still have financial trouble or they can’t meet their goals. They seem stymied as to why the plan didn’t work. I often ask them if the plan was tailored to their specific situation, beliefs, needs, and goals. They always say, “Well, no, it was just the plan in the book. But it must be good because the author (or guru) claims to have helped a million people.”

What they don’t yet understand is that it’s called “personal finance” for a reason. Personal finance is personal. Yes, there are some generalizations that apply to most people such as putting away a set amount each payday into an account for emergencies. This is good advice for almost anyone, unless your crystal ball tells you that you will never have an emergency. But a lot of personal finance advice is relevant only to the extent that it applies to your unique situation. The advice to cut out lattes only works if you’re already drinking them. If you’re not drinking lattes, you’ll have to find some other way to save money.

When you set out to improve and manage your finances you have to remember that they are your finances and no one else’s. You can learn from the advice of others, but when it comes time to do the work you have to take into account your unique circumstances in order to succeed. So what personal items do you have to account for?

Your income: Some plans assume a certain level of income. If you fall below or above that mark you may have to adjust the plan to compensate.

Your ability to generate more income: Some plans suggest you get a part time job to bring in more income. This may not be possible if you spend your nights caring for an aging parent or disabled spouse. In such a case you’ll have to find a way to generate income from home, or find other ways to reduce spending.

Your religious beliefs: If you believe in tithing and aren’t willing to give it up, you’ll have to find a way to work it into the plan.

Your social beliefs: If you believe strongly that your money shouldn’t go to certain companies or causes, you may need to adjust your investment and spending strategies. Similarly, if you are adamant about donating to specific causes, you will have to reduce spending in other areas in order to make that possible.

What you like to do and what you want to own: Maybe you want to blow all your money on travel or video games. Maybe you want to eat out every night or own a Ferrari. That’s fine. It’s your money and what you want to do with it is up to you. As long as you aren’t relying on others to carry you and you aren’t shirking your other financial obligations, it’s up to you how you spend your money. Plans that tell you to give up eating out or some other thing that you love will just make you mad. You have to modify the plan to support your personal desires.

Your long term goals: Do you want to have a big retirement fund so you can buy a $300,000 motor home and see the country? Pay for all your kids’ college educations? Go back to school yourself? Amass enough wealth so you can give to all your favorite causes? Leave a huge inheritance? What you want your money to do long term will determine how you allocate it. Everyone’s goals are different and a plan that preaches nothing but retirement funding when you want to pay for your motor home won’t help you.

Your short term goals: Do you want to get out of debt? Buy a new car? Save for a down payment on a house? Renovate your existing home? Get ready for a child? Everyone wants to do different things, and in different orders and ways. How you want to meet your short term goals will determine how you work your financial plan.

Your priorities: Maybe you want to both renovate your house and buy a new car. You will likely have to decide which should come first and then work toward the higher priority first. Most generic financial plans don’t take into account your personal priorities.

Your level of commitment and your weaknesses: If you are fired up to deal with your finances, great. If you’re a bit reluctant, you’ll need a plan that either inspires you or makes allowances for your reluctance. If you have areas where you are weak, you’d better strengthen them or create a plan that works in spite of your weaknesses.

Your changing life: Whatever plan you create today will probably not work in five years. And that new plan will probably be useless five years after that. Your circumstances, health, income, family size, and desires are always changing. What was important today may not be important tomorrow. And there will be things beyond your control, such as inflation, recessions, job losses, and even boom times that will impact your financial plans. A generic plan cannot possibly account for all of the changes you will go through.

That’s not to say that all financial plans are useless. The financial plans you find in books or on TV segments can be helpful. You can take pieces from several plans and cobble them together to make something that works for you. And you can learn a lot by looking a different plans and seeing how the author’s approach finance. Extra information is rarely a bad thing. But when it comes to following something word for word, you’re likely to run into trouble when your unique, real life gets in the way.

Of course, creating a plan that works for you takes a lot of effort, and that’s why people turn to books and ready-made plans first. As with weight loss, it would be so much easier if you could just pick up a plan, follow it to a tee and then the miracle happens and your finances are fixed. It’s much harder to inventory your life, to be honest with yourself, to admit where you’ve gone wrong, and to account for all of the things you want, hope for, and need. And then adjust that plan constantly to keep up with the changes in your life. But creating your own plan is the only way to win. You have to make a plan that is personal for you.

And while you’re working your plan, you have to learn how to tune out all the people who are telling you that you’re doing it wrong. They may not agree with or understand your choices. They will tell you that donating all of your extra money to an animal shelter is a waste and that you should be saving for a home. But that is their priority, not yours. They are working their own plan (or they have no plan and are simply parroting something they heard elsewhere). As long as you have a plan that works for you and are sticking to it, you’re doing it right. You’re keeping your finances personal.