There are a handful of books that have made an enormous impact on the way I approach money and spending. The first, Your Money or Your Life by Joe Dominguez and Vicki Robin, made the memorable connection between purchasing and the life energy needed to sustain each purchase. In other words, it's not a $30,000 auto, it's six months, or 3,120 hours of your life energy to purchase it, and then another $5,000, or 260 hours of your life energy to maintain it when you consider the annual cost of gas, tires, maintenance and insurance. OK, so my maintenance assumptions may be slightly off, but I trust you still get the point.
The second was The Millionaire Next Door by Thomas Stanley and William Danko. Take aways from this book? Stop thinking of your home as a gynormous checking account! Pay it off and stay put, such as the majority of homeowners in Europe appear to do. Paying off a home is one of the most important "getting your ducks in order" steps to take pre-retirement. Not to mention the fabulous peace of mind it affords. Priceless!
And stop trying to keep up with the Joneses. As we all now know, the Joneses are broke!
My most recent little financial find was The Ultimate Cheapskate by Jeff Yeager. Aside from being hysterical, Jeff suggests that much of our spending is due to sheer boredom. Hmmm, so my little habit of going out to a bagel shop for breakfast when I had six perfectly good bagels chillin' in my freezer was because I was bored? Darned if he might not have a point! Jeff challenges his readers to go a full week without spending, other than gas and essential bills, offering that the average American household has enough food on hand to last a month, and enough unused or underutilized entertainment possibilites to last a year.
I took his challenge, and learned some rather surprising things about myself over the course of the week. As disciplined as I thought I was, I had urge after urge to go out and spend for no reason other than boredom. Here's a brief synopsis of how the week went-
- Saturday morning. Post six mile run I wanted to go out to breakfast "as usual." Because this wasn't an option, I instead made blueberry pancakes with a small amount of blueberries that were a day or so from becoming overripe, squeezed a small glass of O.J. from two oranges I found in the fruit bin, and scrambled a couple of eggs. Result? Fun! Delicious! Satisfying!
- Sunday afternoon. Resisted urge to go out to a $10 per person movie with my husband and instead put on bathing suits and walked across the street to the association pool and jacuzzi that we pay $120 monthly in HOA fees for. Result? Relaxing! Fun! A little decadent!
- Monday - Friday lunch. Came home and ate leftovers, saving about $40 in lunch spend. A sandwich out vs. a sandwich at home tastes pretty much the same. Result? Same satisfaction level as going out. Who knew?!
- Friday night. Made dinner at home instead of picking up take out or ordering in a pizza. Defrosted some chicken to BQ, made brown rice (always in my pantry), and microwaved a bag of frozen peas. I also took a look at my baking supplies and found enough items to make homemade brownies. Result? Hello Domestic Goddess!