Of course, (sorry Mom!) I have had plenty of my own failures in home economics. I saved $45 over three months by drinking generic coffee, but spent $45 for a salad and martinis at the Cheesecake Factory Friday night. I save $30 a year by canning my own strawberry jam, but spend $420 a year on a gym membership that I no longer use.

While the article makes the point that we don’t always spend and save rationally, I also appreciated behavioral economist Dan Ariely’s definition of rational behavior: “But I have a more relaxed definition, which is that rational decisions are those you make and don’t regret later.” It’s far too easy to laugh at someone else’s economic decisions. What’s more important is how you evaluate and reflect on your own.

Sure, the $45 dinner wasn’t frugal, but I don’t regret one minute that I spent with my friend.  On the other hand, I do regret the gym membership and curse the fact that I’m still locked into a contract with them.  In some ways, a budget helps us minimize potential for regret.  I have $150 a month for fun, and part of that went to dinner this month.  However, now the fun money is gone, so I need to find frugal ways to entertain myself until December 1.  It really doesn’t matter what I spend that $150 a month on.  As long as I’m allocating the rest of my budget wisely, I can just feel happy that I can afford money for a little frivolity each month.

This week I’ve been settling into the idea that spending, in and of itself, is not bad. If it’s something you won’t regret, you should go for it! Hoarding money just for the sake of hoarding won’t help you live your best life either. Being frugal, for me, is turning out to be about trimming expenses on things I don’t value that much so that I have more money for the things I do value.  What seem like illogical, lopsided trade-offs can actually be quite logical.  I’ve become pretty frugal when it comes to groceries and household cleaners, but now we have a lot more money going to savings each month.  I’m content with my new frugality in the kitchen.  The key is not to reduce ALL my decisions to some kind of stereotype: “I’m the frugal gal, so I’ll wear this cheap watch until I die.” 

In fact, all those irrational calculations are really just the manifestations of interesting, complicated people.  We’re faced with so many ways to spend money and so many choices in life, that we’re bound to make some quirky ones.  If we all just always acted on the rational impulse, we might pass home economics.  But I don’t think we’d be nearly as compelling!

For the last week or so, I feel like my husband and I have been spending like mad.  To wit:

1. A new car
2. stepdaughter’s birthday presents and party
3. new shoes (me)
4. new shirts (2 for him, one for me)
5. cologne (him)
6. a new watch (me)
7. very expensive juice (him. . .how expensive could juice be?  you’d be surprised!)
8. groceries and wine
9. dinner out (me)
10. plane tickets for Christmas

What’s interesting is the justification for each item:

1. see recent post. . . we’ll drive it for 10-12 years
2. must do
3. old ones were REALLY shabby
4. very cute
5. ran out of old lotion.  . .this was a great boxed-set deal
6. early Christmas present
7. could help his back pain
8. necessities
9. wanted to catch up with friend
10. want to visit parents. . . kids have never flown

For each item, there’s a (mostly) rational explanation.  Even so, we could have gone without each and every purchase, expect for groceries.  On one hand, it’s all good because we can afford each purchase.  I haven’t gone over budget for the month; in fact, I’m on track to save a little bit this month.  Christmas and birthdays are regular expenses, so we’ll allow for that in the budget.  On the other hand, I feel like we have left the frugal zone completely.  Once we opened the door to spending, it’s become easier by the day to spend more.  Shopping certainly begets more shopping!

What’s troubling me these days is how should we wisely balance spending money and saving money.  When I was paying off my credit card debt, I was so focused on paying it off that I did so six months ahead of schedule.  However, in order to do that, every extra penny (often my “fun” money) went to my debt.  It was easy to sustain that “crash diet” mentality for a few months, but I know that we can’t realistically do so for years and years. 

I’m now trying to figure out why spending money that is budgeted for spending is bothering me.  Between my savings and retirement contribution, we’re saving  about 20% of our combined income, as recommended.  The car payment moves us from 25% to 20%, but we’re still saving far above the national average.  Even so, I’m uneasy about spending what is actually budgeted.  I think, in some ways, I have yet to trust that the budget will get us to our financial goals.  Since I sent in that last credit card payment, I haven’t relaxed my debt-reduction mentality.  Well, I have started spending again (see items 1-10!), but I now feel guilty about those purchases.

Another factor is my old two-budget mentality.  I spent so many years over-indulging and feeling guilty, that now guilt is an integral part of the shopping process.  Even if I can now afford what I’m buying, it’s hard to shake off the guilt.

I do think we need to sit down and plan a Christmas budget, especially since travel is a big part of it.  We also have yet to draw up a detailed budget for the things my husband buys.  I think once we do so, then I’ll feel more comfortable.  I’m also tossing around the idea of meeting with a financial planner.  I was able to  draw up a plan to wipe out my credit card debt pretty easily, but planning out the next twenty or thirty years’ of financial goals is turning out to be more daunting.  By meeting with a professional, I might be able to trust our plan more.  By trusting that the budget will really work, I can trust that it is OK to spend money when we need to.  Then, finally, I may be able to shake this budget guilt!

Anyone out there have advice on finding a good financial planner?

However, by the time we were done shopping, the thought of a long wait and a noisy restaurant didn’t seem all that appealing.  Thanks to my pantry project, I knew that I had all the fixings for a good stir-fry on hand.  It only took about twenty minutes to make; I know we would have waited at least that long for a table.  We had a relaxing dinner by candlelight, daydreaming about this year’s vacation.  And I was happy, knowing that we saved $60 or so by eating in!

Speaking of saving money in your food budget, if you haven’t seen The One Dollar Diet Project, be sure to check it out.  A couple decided to eat on only $1 a day each for thirty days to raise awareness about social justice.  The experiment is complete, so you can read through it in their archives.  Thanks to them and Kelly’s recipe for polenta at Almost Frugal Food, we now have one new, frugal dish to add to the repertoire.  

Other Good Reads:

PaidTwice has finally achieved coolness.  She’s right; I’ve noticed more savers and coupon clippers around these days as well.

Mrs. Micah warns about posting picture of your keys online (like all those folks do in the “What’s in My Bag” Flickr series).

Simple Mom advises shopping now for the holidays.  My mom agrees. . . she finished Christmas shopping Thursday!

We Like Money was able to save up some fun money and had fun spending it!  I so agree that you need to have wiggle room for a bit of fun while paying off debt!

Happy reading and enjoy your Sunday!

I buy a new car!

Eep!

Yesterday, my post about how blogging can help you improve your finances ran on Being Frugal.  Re-reading the post reminded me how much I do depend on the blog to keep me on the straight-and-narrow financial path.  I haven’t been blogging as regularly as I should, and I know that part of it was my fear of sharing my new purchase with readers.  Zipping out and financing a brand-new, 2009 Honda Civic doesn’t really align with the whole Ms. Sensible-Who-Paid-Off-Her-Debt persona that I’ve been cultivating over the last few months.

So, before you all rush to unsubscribe and delete me from your blogrolls, let me explain a little.  I’ve never bought a new car in my life; I’ve always bought my mom’s old cars.  When I lived in DC, I even went for a couple of years without a car.  I’ve never been much of a car person, and I got all nostalgic for Interurban trams on a recent trip to a local museum.  I’ve been driving my trusty 2000 Chevy Malibu since I moved to Ohio, even though my parents and my husband all wanted me to buy a new car.

OK, so, non-car-loving credentials established.  Now, why, in the midst of a giant fiscal crisis, did I go into debt for a car?

Well, I knew we could afford to buy a car in the next year or so, and my husband and I know we we’ll drive the car for 10-12 years.  When a dear family member’s car died, I knew that I could help him out by selling him mine.  So, last weekend, I uttered those famous last words, “we could just go test drive.”  And the rest is history.

Financially, on the plus side, we used savings to put down 1/4 of the price.  (You’ll notice my emergency fund pie chart had a big setback!).  Ideally, I would have liked to have more money in the bank when we bought the car, but I feel like a family emergency qualifies for raiding the funds.  And, because of these tough financial times, we were able to get a great deal, and we qualified for 1.9% financing for three years. 

I have to say, after years of dodgy credit, that it felt wonderful knowing my credit score has rebounded.  We decided to put the car and the loan in my name.  Since I paid off those credit cards, I qualified for the best rate.  Last time, when I bought my mom’s Malibu, I didn’t even qualify for a loan on my own!  I had to have my parents co-sign.  If you’re struggling to pay off debt, know that once you do, your score will change pretty quickly.

It was also pretty darn fun driving the car off the lot, awash in that new-car smell.  I soaked it up because I won’t be doing this again for at least a decade!  All in all, it might not have been a perfect decision, but I feel really good about it.  Yes, we have payments, but they’re on good terms.  As my husband reminded me, you can’t just hoard money mindlessly.  That’s as bad as spending mindlessly.  While the purchase happened pretty quickly, I’m happy that we did it.

Regular readers, I’ll be back tomorrow with a semi-frugal confession!  Stay tuned. 

• 3-4 medium eggplants, peeled and sliced into thick rounds
• 1/4 cup of olive oil
• 1/4 cup of walnuts (or other nuts), toasted if you like
• 1 tsp garlic
• a little lemon juice, salt, pepper, and 3-4 tbs fresh herbs (I used Thai basil and parsley)
• 1 can of salmon, rinsed
• fresh spinach
• flat bread or pita bread

Preheat the broiler and peel and slice the eggplant.  Once sliced, set the rounds out on a foil-lined baking sheet.  Brush each side generously with oil.  Roast on one side for 10 minutes or so, flip and roast for 5-6 minutes more until nicely browned.

While the eggplant is roasting, combine the garlic and nuts in a food processor until finely chopped.  Add the eggplant and pulse until the mixture reaches a creamy consistency.  Finish with a splash of lemon juice, about 1/2 tsp of salt, pepper, and herbs.  I heated the salmon in the microwave for about a minute.

Spread one half of the bread with the dip, squish in 1/4 of the salmon, and add a big stack of spinach.  Enjoy!  I wanted to serve these with sweet potato chips, but ran out of time.  Next time, I think it will be a great combo!

The dip and salmon combine for a really lovely flavor and a nice “veggie burger” texture.  You should also have leftover dip for crackers or chips; I like to serve it warm.  I was never much of an eggplant fan, but this is one of my new favorite things.  Hope you like it!

Yesterday, the skirt called it quits.  It’s been unusually warm here in Ohio.  I got a call to do one more round of canvassing before the presidential election and decided it was too warm for jeans.  So, out came the trusty skirt, which I paired with an election t-shirt and my “I voted” sticker.  I happily set out to knock on doors one more time before the polls closed at 7:30. 

After walking door to door in one half of the neighborhood, I decided to drive across Main Street (yes, our town really has a Main Street) to finish the other half of my assignment.  As I sat down in the car, I heard a ripping noise but dismissed it as I was busy tuning in the radio to see if exit polls had been released yet.  I waited for a very large train to pass by, drove to the other side of town, and parked in front of the elementary school.  I double-checked my clipboard for the next address and hopped out of the car.  Suddenly, it felt far too breezy!

My poor skirt had a huge tear in the back.  Thank goodness school had let out or some little kiddies may have caught sight of much more than they would have wanted to see.  I literally had to hike my skirt up to hide the tear and hobble back to my car after smiling sheepishly at a passing car or two.

Fortunately, I’d been assigned my own neighborhood this time, so I was just blocks from my house.  I zipped home, changed into jeans, and finished knocking on doors.  The denim on my darling skirt had literally worn out.  My husband suggested I now use the skirt as an apron, which is actually a pretty good idea.

So, I fondly bid farewell to the end of the denim-skirt era but happily welcome a new president!  ;)

Today was bill-paying day for me

When I logged into my online banking this morning, I knew that I would face some charges on my credit card.  I used it while traveling and during the last week of October.  I’ll pay off the full balance when I get reimbursed for the trip.  This morning, I wanted to sort out all the charges I need to pay for with my money so that all that sits on the card is reimbursable.

With a little trepidation, I clicked on the details for my credit card.  For years, literally, I was always shocked by that pesky statement.  No mater how responsible I had been, the balance ALWAYS was higher than I thought it should be.  Today, the balance actually looked lower than I had feared.  As I wrote down each charge, I was happy to note that I had accounted for it in my budget.  I sent $309 off to cover my charges and still was able to “snowflake” another $344 to my emergency fund.  Whew!

It is so nice to feel like I finally have my spending under control.  After my little shopping spree last week, I’m actually contemplating how much money I can save this month.  I don’t feel the need to buy anything today.  Now, that’s a good feeling!

Driving to work, I realized once again how “unreal” using a credit card used to be to me.  The main problem was that I treated the account limit as an extra stream of income.  I used to plunk down that card for all kinds of little treats: coffee, books, shoes, craft supplies, dinners out.  I always thought I “needed” whatever I was buying.  Each time, I think, “well, I’ll pay for this. . .when my loan comes” or “when I get my first paycheck” or “when I get my tax refund” or “when I get paid next month.”  Whatever the individual reason, the central theme was: “I’ll pay for this. . .later.”

The only problem with that little line of thinking is that “later” doesn’t always turn out as you plan.  You might not get as much money as you thought you would or it might take longer to arrive.  Even worse, when I didn’t account for every purchase in my budget, I’d re-spend what ever money I thought was coming in.  If I was supposed to get $100, I’d think “I’ll buy this jacket and pay for it with that $100.”  Then, a few days later, I’d forget about the jacked and think “I’ll finance this trip to Borders with that $100.”  Then, when friends invited me out to dinner the next week, I’d think “oh yeah, I’ve got that $100 coming.”  Pretty soon, I’d spent $300 and STILL didn’t have that $100 in the bank.

This time, when I was using the credit card, I accounted for it in my budget. . .the real money.  There were no unexpected charges on the card, and I didn’t spend extra thinking, “I’ll get that trip money” or “I’ve got extra coming for my stipend.”  Instead, that extra money went to the emergency fund.

It’s been a huge shift in thinking for me, and I’m happy that I haven’t slid back into my old ways.  The more mindful I’ve become about spending, the easier it’s getting to save.  Our emergency fund is now at $3284, over halfway to my goal.  It’s a good thing because I noticed that my front brakes are squeaking.  :(

I may have to tap into the emergency fund this month, but it’s nice that it’s there.  Rather than overspending and then having to charge car repairs on top of that, I can walk into the auto shop knowing I’ve got a cushion to pay for repairs.  It’s so different to have a “I’ll save for this now” mindset rather than a “I’ll pay for this later” brain!

How about you?  How has your attitude toward spending and saving changed?

In DC last week, I finally able to squeeze in a little fall shopping.  As I mentioned before, fall shopping used to be a consuming process, but this year I condensed it into one short weekend.  Once you have a decent wardrobe in place, you really shouldn’t need more than a weekend to shop.  I especially love shopping when I travel.  You have more time and can enjoy new stores.  Also, if you wait until you travel, you’ll come home with souveniers that fill a real need.  Finally, you can mention your travels when you receive compliments.  I happily spent $265 for the season, a serious reduction from my constant-shopping days.  Here’s how I did it:

First of all, think carefully about what you have and what you need.  I’ve got a simple three-piece black suit from Banana Republic, several more pairs of slacks, a couple of cute skirts, and several dresses.  For work, I can mix these items with a few button-down shirts, silky shirts, good quality t-shirts, and sweaters.  For shoes, black ballet flats and black boots, and brown boots cover most of my needs.  I also have t-shirts, jeans, and cordory pants for the weekend.  So, I felt good about my suit, shoes, and bottoms for this season.  Mainly, I wanted a new jacket, a black cashmere sweater, and a cream silk shirt.  I also have fallen completely in love with the current scarf trend.  I have several, but wouldn’t mind one more.

Prioritize your checklist.  I knew that I really wanted one boxy, 1960’s style jacket.  I could mix it with pants and skirts without it looking like a ladies-who-lunch suit.  They’re everywhere this season, so I have a feeling they will still be sylish for a few years.  While I wanted a cashmere sweater, I knew that I couldn’t really afford both, so I was willing to wait on the sweater.  I’ve got two that are in pretty good shape.

Try shoppnig for in a single color family.  If you’re just shopping for a weekend, try aiming for one new color.  If you buy several pieces that work together, you’ll get more mileage.  Odds are that they will also fit in with what you have at home.  I tried on a deep plum turtleneck at Benneton that I just loved.  I ended up getting a jacket at Zara in the same shade, plus a patterned silk top that matched.  Then, at Urban Outfitters, I found a silk scarf that picked up on the plum theme.  Now, I can mix and match these items with several of my skirts, with black slacks, or with jeans.  The shade is very “now,” so it perks up my whole wardrobe.  Since I bought everything on one big spree, I could make sure that I was buying things that accented one another.

Once you have basic pieces in place, fall shopping really can be about picking up a few good items.  I firmly believe in the buying only pieces that will last several years.   The price difference isn’t that much anymore, especially if you buy on sale.  I got the jacket at Zara for $59, marked down from $89.  I only spent $19 more than I would have spent at Target for a jacket and got a much better quality wool and a silk lining.  The jacked should last, and, most importantly, I love how I feel wearing it!  As we all know, frugal does not equal cheap!

How have you managed fall shopping this year?

This is the last week in October, and I’m happy to report that I saved $45 out of my $420 monthly grocery budget.  Now, that isn’t quite as good as it sounds because my husband made a couple of quick trips to the store and one trip to the market this month.  However, on the bright side, we spent a lot more at the market, stocking up on tomatoes to can and squashes to get us through the winter.  Our market in town is now closed for the season.  A nearby farm will be open through December, but I don’t plan to buy as much from them, thanks to all the squash we bought this month!  All in all, I’m hoping to save even more next month since we won’t be stockpiling as much. 

And how are my supplies holding up?  The good news is that I think I bought too much!  I just opened my 25-pound sack of flour and still have plenty of whole-wheat flour and rice and beans.  The only thing that I may run out of before December will be coffee.  I also now have all those lovely jars of tomatoes sitting on the shelves.  Those will be great for soups, stews, and chili this winter.

The biggest plus of my new system is the time that I save at the grocery store.  I used to spend an hour or two a week clipping coupons and at least an hour a week at the store.  Now, I only clip for things I’ll buy at CVS, so I’ve cut that way down.  I never spend more than thirty minutes in the store.  It is so much nicer to go in for a handful of things than to have to drag a big cart up and down each aisle loading up on food.

I also love the flexibility that I now have when it comes to planning meals.  As long as I rotate my “nights” of soup, salad, pasta, etc, I can make all number of things with what we have on hand.  Last night was a soup night, and I had the choice of making a squash soup, potato soup, or a vegetable soup.  I ended up making a potato and turnip soup and a fresh batch of cornbread.  It was so yummy and only took thirty minutes!

If you’re looking for ways to save at the store and hate clipping coupons, buying in bulk and making things from scratch may be a great idea.  I’m definitely saving more money than I was before, partly because I avoid items that are “too good a deal to pass up.”  When clipping coupons, I’d always buy a few things just because they were such good bargains.  I’d always tell myself that we might use the items.  Now, I avoid those entirely and only buy what we actually eat.