PNC.com has these 10 recommendations in a post entitled, How To Stop Spending Money.
Create a budget.
Visualize what you're saving for.
Always shop with a list.
Nix the brand names.
Master meal prep.
Consider cash for in-store shopping.
Remove temptation.
Hit "pause."
Think reusable.
Keep at it!
There are probably millions of lists like this. Some are just as profound as this one. ;)
I intentionally used the phrase "spending control." It's impossible to stop spending money unless you're dead. But it's very possible to get a better grip on our spending if we want to.
Why This...Why Now?
In early March we sold our house of 25 years and moved. Clearly, it had been 25 years since we'd done it so we weren't exactly in game shape. Lots of things have changed since the late 90s. Our age tops the list. The economy is right up there, too. Our life circumstances, too. Back then we were a family of 4 with two high schoolers. Now we're an older couple with almost 20 years experience in being empty nesters.
Then there's the practical realities associated with our selling our house. We had a built-in refrigerator so there was no refrigerator to move. We included the washer and dryer with the sale of the house...so no laundry to move. That's great on the front end, but when you move you need a refrigerator and a laundry pair. So you have to buy them.
Then there's the impractical realities associated with selling our house and moving. We moved into an apartment just a few miles away from our old house. Refrigerator, washer and dryer included. Great! But we had an opportunity to really disrupt life so we took it. We bought a house miles away and we moved into that. Wait a minute, what? You heard me. We moved twice at the same time. About 90% of our stuff was moved to the house and the other 10% went to the apartment. All at the same time! My body is still paying the price.
Thus began the outpouring of cash. That's why this is currently top-of-mind. And that's why I'm discussing this now.
It's Always A Good Time
Is there ever a time in our lives when it wouldn't be profitable to re-examine our spending? No. It's always wise to be more thoughtful about where our money goes.
John Prine's classic song, Sam Stone, includes the line: There's a hole in Daddy's arm where all the money goes. Dad came home from the Vietnam war injured, physically and emotionally. Now he's a junkie and that's where all the money goes. Where does all your money go? Do you know?
Here's the lead sentence in a recent news story about the United States government spending - specifically, the debt our government enjoys elevating:
As talks over raising the U.S. government's $31.4 trillion debt ceiling intensify, Wall Street banks and asset managers have begun preparing for fallout from a potential default.
Do citizens take their cues from their national government? Or does the government reflect the habits of their citizens? It's a chicken or egg thing. I'm sure somebody smart has studied it. Here in America we love debt because we love spending. We hate saving. More than anything, we hate waiting.
The average American holds a debt balance of $96,371, according to 2021 Experian data, the latest data available.
Anti-capitalism folks blame it on consumerism driven capitalism. I blame it on lack of individual responsibility and low self-discipline. We're bombarded with advertising and marketing urging us to buy. Right now! We mostly listen. And do as we're encouraged because we want to. Nobody is forcing us. We're burying ourselves because we want what we want and we want it now.
Cash Flowing Life Means Living Within Your Means (every month)
Calculate your monthly income and discipline yourself to not spend any more than that. That's cash flowing life. It doesn't mean you must spend that amount, but it does mean you won't exceed it unless it's an exception - and you're prepared with a strategy to pay it off with no or minimal interest. For example, we had to buy a refrigerator, a washer and a dryer for our new house. Rather than write a check and cover the full amount out of savings, we opted to put it on a newly issued credit card from the store in order to take advantage of 6 months same as cash. Simply put, we're paying monthly payments (1/6th of the total) for six months and it isn't costing us anything. Meanwhile, our savings account continues to earn 3.75% (not much, but better than nothing).
If these appliances last 10 years, then it's easy to calculate their annual upfront cost per year. That makes spending money on something like a major home appliance very different than buying something that we might use for a brief period, then store it away never to look it again. The ROI on a new refrigerator is much higher than the ROI on a set of patio furniture. Or a new shirt.
During our move my 10 year old Apple computer died prompting me to buy a new one about a year before my plan. I'd been preparing to ready myself to buy a new Apple Macbook Pro, but I wasn't planning to do that until 2024. It was now March 2023, but I was now without a computer. My work - my life - depends on a working computer so I had no choice. So I pulled the trigger and again, since it was a major purchase (like those appliances), I bought it at Apple taking advantage of 12 months same as cash (that means 12 equal monthly payments with no interest as long as I pay off the entire balance before the one year anniversary of the purchase). If this new computer lasts as long as my previous computers, then I'll have it 8-10 years. Again, that's different math than buying a pair of shoes that may last 2-3 years. And I took advantage of using Apple's money instead of my own upfront.
Looking at these major purchases gave me pause anyway because I don't usually buy these things. It had been many years since I got any new appliances. It had been about 10 years since I got a new computer. These are exceptional purchases with long life spans (hopefully).
That's not where the troubles usually are found. It's mostly in those impulse buys of things that just don't matter. Buying unnecessary stuff because we like having new things - different things.
I began to examine my spending because moving is expensive. Much of it is part of the process. I wouldn't consider it extraordinary or wasteful.
Here's a list of a few things that were one-off type expenses associated with moving. These are in no particular order.
a. Moving expenses (truck rentals, help to load and unload trucks, packing material, specialty boxes) - once and done
b. Appliances
c. Blinds at new house (for just 2 rooms; blinds were already in the house elsewhere) / black out drapes for apartment
d. Staple supplies (this was necessary because we have an apartment and a house so we needed some things in two different places, hardly normal)
e. Landscaping at new house (it's a once and basically done ordeal because it's an Arizona yard, meaning mostly rock) this is not an inexpensive endeavor but like my computer and the appliances, it'll hopefully have a multi-year benefit
f. The Yellow Studio gear (I mostly owned everything I needed, but now I was going to have version 3.0, which quickly became 3.1 and I was also going to be working to get version 4.0 up and going) this included desks, chairs and other gear that based on my history would last for many years
g. Mid-longer Range Stuff (do you like that category label? :D) it includes things like ladders, leaf blowers, lawn chairs, storage tubs and things that will have a long life...but it also includes things like favorite shoes that go on sale so I buy 3 pair, favorite pants on sale so I buy 2 pair, and other things that will last at least 2-3 years or longer
h. Short Range Stuff includes food, household items like paper towels, detergent, toothpaste, razorblades and that kind of thing
i. Gifts - we mostly try to gift things that will last (for example, our most recent gifts to each other were these awesome "camping" rocking chairs that we can take to the kids' ball games or use wherever we want...we're currently using them inside our apartment 'cause they're that comfortable...and yes we got two crimson 'cause we're OU Sooner fans ;)
I began to examine this stuff - all of it - and realized that we're currently going through an extraordinary circumstance that's got upfront expenses. The danger is failure to realize that and falling into a habit of spend, spend, spend. Take the landscaping of the new house. It started out estimated at one price, which didn't last long. It climbed. And climbed some more. And kept climbing. Not because we were changing our mind and adding more stuff, but because estimated amounts of rock were inaccurate. We decided to add some bigger rock in one area where rain water run off is greater. That drove up the cost, but just slightly. The climbing costs weren't dramatic, but more like a dreadful creep.
Our biggest spending (by a wide margin) include:
Appliances
My computer
Landscaping
Household stuff like blinds, ladder, leaf blower, step ladder (the new house had ginormous ceilings and Rhonda still feels like a Smurf), bar stools, chairs (those gifts we got each other), Yellow Studio stuff (desks, chairs, video lights, Rodecaster Pro 2 (I'm using the original RCP 1 in one location), Rhonda needed some shelving installed at the new house (it looks pretty terrific and gave her so much more linear shelf space)
The only consumable items have been food, paper products (plates, paper towels, toilet paper), detergent and cleaning products. While those add up, they're a small fraction of those larger ticket items. And the majority of the big ticket items were financed using somebody else's money without costing us any interest. That includes some podcasting stuff that I got using 12 months same as cash or 6 months same as cash....
