Tag Archives: Emotion

Deep Snow and Thoughts

So it’s been a blizzard here in the last few days, so there is lots of snow and blowing snow.  I dug my driveway once already but I’m not even sure if I can drive my car to work this morning because the roads are so deep.  I wonder if my kid will have a snow day? Well regardless all this snow kept us in the house all day Sunday so I did some thinking.

I won’t lie to you having a six figure income helps with your ability to save easily.  I’ve been there now for the last few months because of the second job and yep it’s damn easy to save.  Yet what really makes the saving so huge in my case isn’t just the income, I would say a bigger part of it is being frugal.

You see I make six figures, but I’m still spending less than $35,000 a year.  The fact I haven’t raised my spending with my salary has made a huge difference in where I am today.  I’ve never felt the need to spend everything I make.  I know a higher income isn’t a license to spend more.  Yes I can if I want, but why bother?  Am I not just as happy as I was before making this money? Yes.  Am I still buying those things I REALLY want? Yes.

So what’s the other part of spending so little when you make so much.  It’s going to sound cheesing, but: I know myself.  I’ve spent a lot of time over the years getting to know myself.  How I think? Why I think that way and what my emotional response is to many things? So this offers me many valuable saving options.  Like the fact I know I’ve never becoming a VP of anything anywhere.  I have no interest in the job.  I’ve seen the demands they place on those in senior positions and often the salary to go with and in my mind it’s a poor trade.  So I don’t feel the need to wear a suit to work each day or suck up to those in high places.  I just focus instead on doing my job and answer questions truthfully.

So ironically that has actually helped my career in spots (I tend to just give senior management what they want and treat them like everyone else) and saved me a small fortune of money that I don’t spend to keep up appearances.  I’m happy and generally so have most of my bosses once they realize my quirks.

So that’s my deep snow induced thinking.  Now where’s my shovel?

My Spending Vices (And What I Do About Them)

I started writing this post while somewhat hungover after a night out in Toronto with friends from University that included a bar that had 343 different kinds of beer on it’s menu.  This was an expensive night (with that many different flavours, I felt it was my duty to try to get through as many as I could) that I don’t regret (other then the tiredness and sore head in the morning) and got me thinking about other things that I buy or spend money on that I know are a waste of money and are counterproductive to my end goal of retirement at 45, but I do anyway because of various justifications.  Over the years, I have also learned how to limit the amount of money I spend on these activities in order to at least have some semblance of budgeting with my vices, which are as follows:

Video Games: This “hobby” is probably my most expensive habit.  I own an XBox 360, Wii and Playstation 3, which means in total, I have approximately $1,000 worth of hardware that all play essentially the same games (in my defense though, the PS3 was a wedding present).  Trent at the Simple Dollar gave tips on how to reduce the cost of video games by buying only games that have long-time playability, reducing your cost per hour to a minimum.  I don’t have an attention span long enough to continually play a game for months and months and after I have beat it, I rarely feel the need to return to it to play it again.  Up until a few years ago, this meant that I would be trading in games for 25% of what I bought them for to get new games, something that is not entirely desirable.  Now, I spend $17 per month and rent games over the internet through zip.ca.  I pick the games I want to play and the company mails them to me as I mail them back.  This allows me to play several more games then I normally would for a flat fee, thus limiting the expensive ownership cost of the games.  The only downside of the service is that I never know what game I’m going to get, which is kind of interesting sometimes.

Golf: I love to golf.  If I had a choice, I would spend most of my summer wandering around courses in the area.  This is a very expensive hobby as well, with equipment and usage costs, a person could spend significant amounts of money over a season.  I have limited my costs in couple of ways:

  1. I golf in the evenings, utilizing “twilight” deals offered by most public courses in the area.  For most courses, it works out to 25-50% just by starting the round later.
  2. I limit golf equipment spending.  I limit club purchases to at most one per year.  Golf balls can also be expensive, but you can find deals online on used balls.  In my experience, a $0.20 golf ball will go just as far in the bush, or just as deep in a pond as one you’ve spent $1-$3 on.  Last year I bought 10 dozen used balls for $30 + $10 shipping.  These should last me several years and work just fine.
  3. I budget year-round for this hobby.  I could fix the playing cost by purchasing a membership, but in general unless you play 50+ rounds at the same course during the day, it doesn’t work out to be cheaper then paying on a per-round basis.

Gambling: This vice actually costs me the least amount of money per year, and actually allows me to make a little bit of profit on a per year basis [If I pick the right teams, which I didn’t do yesterday when I went 1 out of 4 in the first round of the NFL playoffs 🙁  ].  I found a gaming site that accepts bets as low as $1 per game and use this, reducing my risk, while still allowing a wager on the game, which is really all I want.  Profitability is uncertain, but if bets are researched (similar to stocks), I think that a skilled person could make decent long-term profit through betting.

Beer: I’ve been led to believe that most people also enjoy beer (unless I’ve been watching too many football games), which can get expensive to drink in Canada where alcohol and tobacco are taxed significantly.  This year, I am going to start brewing my own beer, mainly because I enjoy making most things from scratch, but also because I believe if I learn to do it well, it could lead to some cost savings down the road, after purchasing the equipment.  Right now, I just drink cheaper beer, after finding a few brands that I enjoy (I’m not sure if it’s available elsewhere in the country, but I would highly recommend Brava Light). It would be healthier to give up beer altogether, but it is something that I enjoy occasionally, and it’s just tasty :).

How about you, what are your vices?  How do you fit them into your financial plan?

Book Review: The Secret Language of Money

For a book that in some respects was not even a personal finance book I found The Secret Language of Money by David Krueger with John David Mann a fascinating read.  Yes, first off you will find no discussion of tax savings or where to invest, but rather a series of deeper questions: why if the math so easy do I have trouble paying off my debts?  If I’ve got all this money, why am I not happy?  Why do I buy dumb things when I regret them afterwords?

Effectively the book explores the crossroads of psychology and personal finance and this is what made it an interesting read for me.  It provided a window into why we do some incredibly stupid things with our money and also the book explores a key point: spending is emotional. Money is never just money: it’s your hopes, fears, wishes and comforts all wrapped up in a thin bill or coin.

The book actually taught me several new things that I’ve always known, but never known why.  For example, I’ve been a big fan of sleep on it before making a big decision.  I never really understood why it worked until this book.  In a nut shell when you are tired or highly emotional basically your brain starts to by pass the parts of the brain that do logic so you are basically making decisions mostly on emotion and instinct which is fine when a person is deciding to run away or fight, but sucks when you are deciding on selling a stock or not.

The book is structured about the concept of your money story.  Your money story is what you tell yourself about money.  It may show you why you buy new things, why you don’t’ save more or why you just can’t seem to make a go of your own business.  In the end via a series of exercises we are shown what are money story is and better yet, how to change it if you want to.

This is where the book pulled out a fact that blew me away.  Apparently your brain can’t tell the difference between you actually doing something and visualizing doing something.  In either case it will develop new pathways in your head if you practice enough either in real life or in your head.  So you can basically if you visualize succeeding at a goal long enough your brain will literally change to support that goal happening.  You can reprogram yourself if you want to.  You have no excuse for “I’m not a saver or I can’t do that”  you can be or do anything that you want.

Overall I highly suggest reading this book as you are likely going to learn a few items about yourself and hopefully make you a bit more understanding with some of you own money behaviours.  After all the math is easy, it’s the why we do things that is hard.