Frivolous Purchases

Trent at The Simple Dollar has a great post today about how he talks himself out of frivolous purchases. I am always inspired by the different things he is able to do since I haven't been able to put tactics in place to improve my self control. I admit that I often set myself up for frivolous purchases. This past December has been a huge spending month for my husband and I. Some of the purchases were sorely needed (e.g. some sweaters for me to replace the ones that I wore out over the summer). Others were more frivolous purchases that I will use, but that I don't need (e.g. the new suit I bought).

I am planning on doing a tally on how much my husband and I spend on clothes for me in the month of December. Since I don't track our finances that closely, I won't know how that compares with other months, but I'm thinking the amount spent in the month of December is probably similar to the amount spent the rest of the year.

I need to work better at resisting the $2 chocolate chip cookies at Mrs. Fields while I'm out shopping. I need to think, "Do I want a house, or do I want this cookie?" And when I do resist these items, I need to save them elsewhere so the savings don't get frittered away on other items.

I Didn't Mean to Stop Blogging

. . .it just sort of happened. Once you get out of a habit, it's a lot harder to get back on track.

Recently I've been struggling a lot with how my husband and I spend our money. There are so many things that we want to do, that we can afford to do. But each of these little things that we do gets in the way of my larger goal of early retirement (it should be noted that my husband does not share the same goal of early retirement and is afraid that I'll bug him all day at work if I retire early).

One of the main issues is that our goals are so murky and undefined. Yes, we're saving a lot of money (we make almost the same amount of money and we save the equivalent of one after tax salary) and the money goes to retirement, emergency fund, and our down payment fund. However, we've never calculated how much we would need for me to retire early (and become the primary caretaker of our future kids). We've only done rough calculations on a home purchase (we know the max we could pay for a house and the max we want to pay for a house).

For 2008, I hope to get more defined goals, especially around how I'm going to progress towards early retirement (for me, early retirement means that I will be able to work at something I love, not just something I like, with the flexibility to quit whenever I want).

C and I are off for a vacation for this upcoming weekend, but expect to see more posts in early January, including a post where I define some goals and talk about how I did on my goals from 2007.

Carnival Time

The latest Carnival of Personal Finance is up at
MrCreditCard.

My Favorite Post is from My Wealth Builder who managed to retire in his forties. Congrats!

Busy Weeks & Job Review

These past few weeks have been incredibly busy with many 12+ hour work weeks. I've been seriously thinking about when it's going to be time to look for a new job. Right now laziness about updating my resume are keeping me from moving forward on that. I also want to try and stay in my job as long as possible since there is still a lot of upward income potential. I estimate that I will be making six figures within two years if I stay at my current position. Of course, I could be making six figures once I switch jobs as well. But once I switch jobs I don't think I'll be in a career with as much salary growth potential. Seeing as I'm quite interested in our financial well being, I'm not sure if I'm willing to transition into a lower growth position just yet.

As a consultant, each new client is like getting a new job. I'm eagerly anticipating what my next project will bring.

Salary

Madame X at My Open Wallet has an interesting post entitled "Okay, I'm Asking" where she posted her approximate salary and asks readers to do the same.

I told my husband about the post and he immediately thought that there was probably a selection bias of those who decided to respond. We determined that those who are doing better are probably the ones who posted.

She's gotten a lot of responses and it's interesting to see a more personal view of how people around the world make a living. I could go to salary.com and get the similar information, but then it would be missing the personal aspect of it.

My Timeshare Presentation Experience

I saw this posted by Dawn from at Frugal for Life about whether timeshare presentations are a waste of time. I went to the link and tried to listen, but it wasn't available.

Anyway, this reminded me of the recent timeshare presentation my husband and I went to. We were in a resort town for 2 days. We had just gotten to town and we were on our way to lunch. Someone stopped us outside of this old Western looking movie museum. I don't really know how to describe the place - it photos up from old Westerns. Later I realized that it was run by the timeshare place. Anyway, this guy (let's call him Joe) there convinced us to come in and get a map.

Then Joe shared his timeshare pitch with us. He was only a representative to get us in the door. My husband was reluctant to go to the presentation, but I was sold on the free helicopter ride. I had never been on a helicopter before and it seemed like a good way to see the sights. My husband and I decided to go to the 90 minute presentation. We had to give the Joe $20 to hold our spot.

After lunch, we went to the resort. Our $20 was promptly returned to us. We were told that we could get there anytime before they closed, but the Joe put us down at 3:30. We arrived about 15 minutes earlier, but we didn't get to start our tour until our assigned time.

We were assigned a sale representative (let's call him Gary). Gary was a great representative for the company. I can easily see how someone could be swayed to purchase a timeshare. I don't remember all the nuances of the presentation since it was a few months ago. A few things stick out in my mind.

Gary kept on talking about the "points" we would receive by owning the time share and he referred to it as monopoly money. I thought this was an important psychological trick to make it seem like you weren't really spending money.

Another thing Gary did was he took our annual vacation spending (which was quite low) and convinced us that we wanted to spend more money annually. I can understand that. But then he used that base to calculate how much we would be spending on our vacations for the next twenty years and talked about how much we would be saving by getting the timeshare. But he never really talked about the cost of airfare, which would not be negated by "owning" a timeshare.

My husband and I declined. Then it was time to get our gift. This is where our negative experience happened. We received a "voucher" for the ride. Joe told us that someone would help us book the ride and that we could do it whenever we wanted to. These were both false statements. We ended up calling the helicopter place, but they would not take us out on a ride without another paying customer. And we were unable to book a ride for later that night (which we had wanted to do) and we couldn't even book it for the next day (which was the day we were leaving). Instead we got $100.

Becoming the Bread Winner

Madame X and Meg posted great commentary about the affect of disparate salaries in dating relationships article in the NY Times here and here. This caused me to think about the earning history of my husband and me.

In my relationship with my husband, we have flip flopped several times in who was the bread winner. When we first began dating, we were both students. I was impressed by his economic resources with his part-time research job and his upcoming (& lucrative) summer internship. Soon thereafter I graduated and began working in my first "real" job. That allowed me to be the breadwinner for about 3 years. In that time we got married. My husband then became the breadwinner again once he began working full-time.

Due to our career paths, we had a feeling that I would surpass my husband's income. He works for a non-profit. I work in a fairly lucrative industry. He gets really good benefits. I get sub-par benefits. Recently with my raise, I surpassed my husband's income.

Before this happened, I thought about how it would change the dynamics of our relationship. My husband is similar to the author of this post. He would rather spend the extra money to get more of his time while I am always looking for ways to save money. I wondered if my husband would be more willing to listen to my money saving schemes. I wondered if he would feel uncomfortable or threatened. Money is a form of power and I wondered if it would have an effect on how we relate to each other.

Well, aside from some light hearted teasing, the income change has not affected our relationship. My husband is not likely to spend of any more of his time machinating with me on how to increase our net worth through savings. Nor does he seem to feel insecure about my earnings. However, now when he tells me not to waste money on things like doing surveys or cutting coupons, I can tell him that I am focusing on both the offense and defense part of our net worth strategy