Thoughts on Spending Money

C and I have always been pretty good with our money. We’re not the best and I actually even stopped doing our budgeting by using the Force method since I realized that I could get a higher interest rate in our ING Checking account (referral link) with a balance over $50K. A lot of our savings are as liquid as can be since we’re looking to purchase a house soon. I’ve been busy (read: lazy) over the past few months in tracking how we’re doing.

One thing I did see: my company 401K says that it’s up 10% for the past 30 days and only done 30% for the past 12 months. That’s what the website provided analytics stated, but I’m not sure if that’s looking at the actual investments or just the balance. I hope that’s the actual investments since I’ve been contributing a lot to it over the past year.

So back to the point I was trying to get to: I think we are spending more in this economy than we were before. It might be lifestyle inflation, as we’re increasing our incomes. But I think it’s really because of the great deals that are out there. Travel is our major splurge. I’m a big believe in conscious spending (link). We normally pack our lunches and don’t spend a lot going out, compared to our demographic group (young twenties/thirties couple living in an exciting city). Once I get on a traveling project, I’m traveling every week and it’s easy to take a weekend trip somewhere rather than go back home. C takes probably 5-10 business trips a year. So we try to combine a lot of our business trips into weekend vacations. In 2009 alone, we’ve already taken 4 trips that have been somewhat subsidized by one of our companies.

What’s the point of this? When you life a modest lifestyle compared to your income, you can take advantage of deals when everyone else is hunkered down, trying to avoid all discretionary spending.

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Geez I Need a Budget . . .

Recently C and I have been spending a lot of money.

We spent quite a bit on our 4 week vacation. It was a once in a lifetime trip that we wanted to take before we have kids (thinking about having kids in a few years).

Then we just bought a new bed from Costco. This was sorely needed since we had been sleeping on a bed purchased from craigslist 2 years ago for only $25. In this case, I really do think we got what we paid for. The bed totally sagged in the middle if we put it on a metal bedframe, so we had to leave it on the floor in order to not wake up every night with back pain. We only woke up occasionally with back pain, but it was becoming more frequent, so time to pull the trigger. Incidentally we had received a wedding gift of cash with the stipulation that the money was for a new bed, so you can consider this an expense that we had money allocated for.

We just had some semi unexpected auto repairs. Unexpected since you never know what your car is going to break down, but only "semi" since the car is 12 years old.

Now C is making noises about getting a new computer. Granted, right now we don't have any working computers that we own. Both C and I have work laptops, that we also use for personal needs. I agree we need a computer, but on top of all of our other recent expenditures, it seems like a lot! This will be especially critical if I want to seriously explore my career options.

Of course, we are against going into debt to purchase travel/consumer goods, so that's not an issue. I'm just worried that we're not saving enough for our house down payment.

I think I'm going to ask for Quicken for Christmas!

My Husband Was Upset That I Bargained at a Retail Store

Background
C has a fairly expensive watch ($300) that he needed repaired. The battery had gone out and the strap needed to be replaced. The watch was one of the few nice gifts I had given to C. I got it for him during our first or second year of dating. We have now been together for about 6 years - 3 years of dating and 3 years of marriage.

The watch hadn't been operational for about a year and a half since the strap broke. It was very hard to find a replacement strap. We ended up buying a replacement strap about 4 months ago when we were on vacation in NYC when we went to the retail store of the watch manufacturer. The store in NYC was the only retail store the watch manufacturer has anywhere. Unfortunately since we were on vacation, we didn't get a chance to actually get the strap replaced at the store since the watch was a home. The replacement strap was pretty pricey. We can't remember exactly how much it cost. I think it was about $50 while C thinks it was about $100. I'm not sure when the battery broke.

Bargaining at the Store
Last night we went to this fancy watch store since we know that they do repairs. We had went there before to see if they could repair C's watch, but they would need to order the strap which we didn't want them to do. We ask the serviceman how much it costs to replace the strap and get the battery replaced. The battery was $21.70 and the installation of the band was $15, so the total was going to be about $37.

Both my husband and I were hesitating, so I asked the watch serviceman if he could do it for $30 total. He first said that he didn't set the prices, then I frowned. He then said that he would go and check. While the serviceman was gone C told me that he didn't like bargaining for services that he would rather pay the extra $7 since he thinks people don't do as good of a job with a service when you don't pay as much. I completely disagreed since I thought it was pretty clear cut what he was going to do. Well the serviceman came back and told us that he could do it for $30!

It probably took an extra 2 minutes to save $7. Upon examining his returned watch, there was a minor scratch on the face that C didn't remember seeing. C thinks that the serviceman might have scratched the watch. I told C that I thought it was probably already there. Since we hadn't examined the watch before bringing it in, we couldn't be sure. I just don't think someone at a fancy watch store would purposely or accidentally scratch a watch. Since most of the watches in the store are $1000+, I know that those guys have a lot of experience dealing with nice watches.

I have realized the C and I have very different ideas when it comes to spending money. I always knew that we had different philosophies, but I couldn't believe that he disagreed with bargaining in this case. I think he is just uncomfortable with asking people to give him special treatment, whereas I am a big believer in asking for what you want. We agreed to disagree in this case, but I will definitely try bargaining in the future.

My Husband Doesn't See How Inflation is Affecting Our Finances

In our marriage, I am the primary manager of our finances. We each manage our own retirement accounts. I want us to review this together to see if we have the right combined asset allocation, but we haven't gotten around to it. I am kind of a lazy money manager. I manage our day to day finances. Most of our spending is via credit card, which is paid off every month. I also manage our savings accounts for our emergency fund and house payment fund.

Since I manage most of these things independently, my husband doesn't see how inflation is affecting us. I admit that it hasn't affected us that much since we live way below our means. But the increased cost of gas and food has affected our ability to save as much money as I would like for our house down payment. In fact, I think our down payment savings are fairly stagnant for the year, despite the fact that my husband and I both got pretty decent raises from last year. A big part of that is probably due to our upcoming vacation! Once we get back from vacation, expense tracking is going to start for at least another month!

How Much is Your Commute Costing You?

Mine costs me almost $10/day.

If you have a good idea of the mileage your car gets, you can get a good idea of how much your commute is costing you. I like to determine my mileage by tracking my mileage and the number of gallons of gas I get. I keep a little notebook in my car where I record the fill up date, the total number of miles drive, the total number of gallons, the cost per gallon, and the total cost. Then if you divide the total miles by the total gallons, you get the MPG for your last tank of fuel. Of course this only works if you fill up your tank.

Right now I'm on a client that's about 23 miles away from my home. The MPG I've been getting is around 22-24 MPG. That means each drive out there is a gallon of gas. Each day is two gallons of gas. My car is supposed to get midgrade gas, which cost me $4.61/gallon last time I filled up.

Basically my daily commute is $4.61*2 = $9.22. I hate spending money when I feel like I don't have to. I think commuting that far is kind of a waste, but when you're a consultant, you don't always get that much choice on where your client is.

Lunch Challenge

Krystal has created a great lunch challenge and invited her readers to participate. The goal is to not spend money on work days on food (lunch, snacks, drinks) from now until March 31. I wish I could participate, but there are too many variable in my life that make participating in this challenge particularly difficult. Here they are:

1. I'm going to be visiting one of my favorite cities, NYC, for one week this month. I will be working, but I will not be getting reimbursed for my meals. It's going to be a semi-vacation, and one of my favorite things in NYC is the food, so I don't want to give that up.
2. I normally get a meal allowance, so technically I get reimbursed for almost all of my weekday meals (I just get a meal allowance, so I do my best to spend the least amount of money possible)
3. I'm going to be working from home for about half the month, so that seems a little like cheating. In my opinion, it's much easier to not eat out when you're at home.
4. It's pretty extreme to bring lunch from home when you get a meal allowance and have no frige at your hotel. I could bring lunch and store it at the fridge at work, but then I would be hogging space in the communal fridge.

Instead I'm doing my own modified lunch challenge. My goal is to only buy lunch once during my normal work weeks (e.g. weeks when I'm not in NYC and not working only at home). I don't want to get too specific, but suffice it to say, I think this is pretty challenging when facing obstacle #4 listed above. When I'm in NY, I'll probably buy lunch 2-3 times. When I'm at home, I don't expect to ever buy lunch out.

If I were working locally, I would have it as a goal to bring my lunch 9 days out of 10, meaning only one lunch out every other week. I just think doing the lunch challenge while traveling is a bit too much for me.