Loose with spending versus tight fisted

amother

Blonde

Sun, Mar 25 2018, 12:21 am

Bnei Berak 10 wrote:

An alternative is to take pre-cooled drinks in a plastic bag and those cooling/freezing elements I/o a cooling bag.
I agree that you get rich by increasing income. But with increased income you usually increase your expenses too. The trick is to increase income and to cut expenses.
30 USD a week is maybe not a lot for you - however 30 USD X 52 weeks=1560 USD yearly.

30 US is a lot of money to me. I do try to take cold drinks when I go out, but it's usually not enough for the day. Eventually new cold water bottles will need to be bought, if we dont want to lug a cooler.

I dont throw money out on whatever, but I don't see that those who are crazy scrimpers get rich from it. I know the math, but it's just my gut feeling.

amother

Cerise

Sun, Mar 25 2018, 12:35 am

I don't think anyone becomes rich, but it is quite possible for someone to be making it instead of falling deeper into debt due to these "small" expenditures.

Reminds me of one of my favorite jokes:

"Grandpa, how did you become so rich?"

"Well, son, I grew up in the time of the Great Depression. I didn't have a job, and all I had in my pocket was one nickel, just five cents. So I went to the market to see what I could do. I saw an apple saleswoman, and she had apples for five cents. I bought an apple, and spent the whole day shining it up. At the end of the day, I was able to sell that apple for ten cents.

"The next day I bought two apples, and shined them the whole day. I ended up with a profit of ten cents.

"By the end of a few weeks I had amassed a small fortune of $2.35.

"Then, my great-uncle Irving died and left me 2 million dollars."

Teomima

Sun, Mar 25 2018, 2:05 am

I don't think it impacts MY long-term wealth, but it does have an effect on my children and their economic (and health, based on the examples you gave) future.

If my kids see me bringing packed lunches to outings, just like I saw my mom prepare packed lunches, they're more likely to bring packed lunches when they have their own families. If they see me budgeting my shopping trips, avoiding the impulse purchase, they're now likely to be the same way. Balance is key here, if I deny them too much, they're more likely to splurge themselves when they get older. But if I make it clear that certain things are a treat, like occasionally buying a drink from a vending machine, they respect the value of special occasions while still learning to be, overall, thrifty (or health conscious...I think these things often go hand in hand).

Bnei Berak 10

Sun, Mar 25 2018, 2:58 am

Teomima wrote:

Totally agree with you.
Also remember, those occational treats are wonderful once they are occational and stay occational. Once they become frequent they aren't being treats anymore but a regular habit, and as we all know, habits are not easy to break.
And if you grew up with certain habits of frequent treats, once you, for some reason, have to break them, well it's usually HARD.

amother

Pewter

Sun, Mar 25 2018, 4:30 am

OP, I love this topic!!!!

I generally don't impulse shop and always pack my own drinks, we freeze and everyone has in their backpacks.
I've done long amusement park days, 12 hour range with just food in backpacks and a cover in a locker.
I've done on Pesach, where no option to buy soda anyway.
I do occasionally allow drinks while out, kids know it's a treat. I will give options, soda at vending machine or sleepers on the way home etc.

I think small impulse and occasional coffees or sodas while out are ok, bt in general, I'd rather save long term.

My opinion is on take out too, only for a rare occasion when there's no way to cook and no frozen pizza or someone to put up pasta or eggs or make a sandwich.
I believe it's about attitude and finding a healthy balance.

I'm not wealthy but because of budgeting managed to buy a house that went up in value, along with continuous money mindfulness, I don't fear the future like I did. We both work koi kodesh and our salaries would not be enough to really save if we didn't budget and be very money aware.

But, with all that, I will when Feel the need spend a few dollars on something. ( by a few, it can be from $1-$10) every so often and since I know I can spend,I don't need it so often.

lavenderchimes

Sun, Mar 25 2018, 4:38 am

tichellady wrote:

I’m not sure but not everyone’s goal is long term wealth. Some people just feel like feeling like they can be on vacation mode and splurge sometimes. Other people find it more stressful to splurge and don’t enjoy it.

My husband loves buying cold drinks on vacation. It doesn’t do anything for me, but if it makes him happy it’s certainly worth the extra few dollars.

Agreed. I try to be very frugal and shop sales and buy at thrift stores and bring my coffee with... but sometimes, it adds so much joy to buy a $2 glass bottle of soda or a candy bar. I usually avoud inpulse purchases. But there's value to spontaneity, within readon!

People have different mindsets -- that's what makes the workd so great:)

imasoftov

Sun, Mar 25 2018, 5:13 am

"Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." -- Charles Dickens

I can't tell you if the cumulative effect of all those small purchases is going to flip you between the first and second part of this without more details. Don't need to know your whole budget, just annual income, and expenditures with and without the sodas and candy bars. But once you have all that information ready you can tell by yourself.

amother

Firebrick

Sun, Mar 25 2018, 5:17 am

I think that most people who buy the occasional splurge don't buy it only on occasion- it becomes the norm to spend on "wants" vs putting thought into each financial decision. That said, most of those whom you would consider tight fisted splurge on occasion. It's just a well thought out splurge, even if it's spontaneous.

Iymnok

Sun, Mar 25 2018, 6:34 am

And I pack two half gallon juice bottles of half frozen water. No money spent on drinks.
Results? A well hydrated family with less emergency bathroom breaks.
The trip is the treat.

It’s a worthwhile mindset. A treat for Dh and me is a couple squares of good chocolate together after the kids are asleep.

Yes, we could afford more, we just dont want to.

amother

Firebrick

Sun, Mar 25 2018, 8:48 am

amother wrote:

I forgot to finish my thought. I do believe that overall, keeping a tight budget definitely contributes to wealth. Living below your means allows you invest, which is where many people who won't otherwise end up with a windfall of cash can really make it big. There are those who spend most of their monthly income freely, and they have a small amount to put away in savings. And there are those who spend well below their monthly income, no matter what that is, and they have the opportunity to save enough for serious investments that continue to build wealth.

Bnei Berak 10

Sun, Mar 25 2018, 9:49 am

GreenEyes26 wrote:

Ah yes, another episode of the Imamother classic, “I can live more frugally than you!”

Tune in in about 8 pages when we start fighting about whether cleaning help/yeshiva tuition/day camp is a necessity.

I don't see it as a competition. But to be budget conscious is a must for many families today. To try to stretch that dollar which will allow the most of it. It's a state of mind IMO.
A colleague of mine brought plenty of sweets and chametz to work that she hefkered. You would not believe, even lollipops kosher for pesach since her DH had bought it (20 pcs) and other things. Apparently she didn't want it in the house. Not very expensive stuff but still. It all adds up! Only those lollipops cost 7.90 NIS and there were other items too. Kind of waste of money.
Kids in my building got it (with parents permission)

Not only that, she said she had order in her closets and found brand new kids clothes with tags on that DH had stuffed in. Apparently didn't tell her or they forgot all abt it. Now clothes are too small on her girls. Kind of sad.

amother

Blonde

Sun, Mar 25 2018, 9:59 am

Bnei Berak 10 wrote:

The clothes are one thing. But 7.90 nis lollipops? I really dont think those stressing over those shekels are diverting them to big investments. Usually they are just trying to stay out of debt, which is of course extremely commendable.

Bnei Berak 10

Sun, Mar 25 2018, 11:34 am

amother wrote:

True. But as I wrote there were other items too, not only lollipops. If I had not taken them and redistributed it would all go to the garbage.
I personally don't like throwing money in the garbage, regardless if it's 1 NIS or 10 or more.

amother

Bronze

Sun, Mar 25 2018, 4:30 pm

This thread for some reason reminded me of the one where the woman buys her child something EVERY TIME they go anywhere. She grew up with her parents saying no all the time, and so now, she always always buys things. (With the disclaimer, but it’s just a few dollars and makes him/ her happy”) I was so surprised. Having Grown up with plenty, we still didn’t get something whenever we went out. It made me think though, is the behavior we’re modeling going to cause our children to make silly choices as adults, or will it cause them to emulate them? So as much as I value budgeting and all, and I steer clear of impulse purchases, I will occasionally buy my children a little treat, usually something useful.

LittleDucky

Sun, Mar 25 2018, 9:57 pm

Interesting topic...something I often wonder about. I tend to be on the more frugal side (I bring drinks, snacks etc when we go on a long trip) but within reason. If we run out or it is within reason we will buy. We do get treats- but not every time we are out of the house. I don't want my kids to feel deprived (like what that poster said about buying something every time they go out- way too extreme!!). I am so against the whole idea that for every little activity kids need a snack. Shabbos morning shul groups- kids come with snack bags. They ate breakfast at home and will get snack there! (And if they did not eat breakfast, bissli and lollipops are not a substitute!) Kids bring extra snacks because they get to school 15 minutes early.

I do hold to the idea that not spending that extra money (unless budgeted in) will help someone's financial security. Firstly- it adds up quickly. $10 extra a week is $520 a year. But we know it will be more than that- chol hamoed means trips so that means more $$. Think about how many bills that could pay and prevent credit card debt (and interest!). Then think about if you can put it in savings to prevent going into debt for those unpredictable costs. Or even investing it!
Then I would also think about someone who budgets in for these extras and is careful to not spend more than that would do the same for the rest of their life. And make sure to budget for savings and investments.

Bnei Berak 10

Mon, Mar 26 2018, 9:32 am

amother wrote:

Every time? shock

I don't think the child appreciates it and it is a bad habit. What about the day when this child finds himself in a situation when there might not be any treat dollars anymore? Then what? A habit from childhood which will be extremely hard to break.

saw50st8

Mon, Mar 26 2018, 9:54 am

I think people spend money on things they value. Some people value being able to buy small, frivolous purchases more than large, sensible purchases. Or use their money for daily things rather than saving up.

For example, I would spend every last dime I have traveling (I don't because I'm also a responsible human being). Other people don't even understand why I would want to do that when I could buy a fancy purse. Or insert whatever you would like to splurge on.

nicole81

Mon, Mar 26 2018, 1:48 pm

amother wrote:

I wish I knew more about this. I actually have the ability to be putting money away but I have no idea where to start. Where would you suggest I get more info?

I don't want to ignore your response but I really don't have an answer. BH I have an easy system set up for pension and annuities through work, so I don't really know much about setting up retirement accounts outside of the system we have. I see that someone did offer advice, but maybe start a spin-off about this for more info? Because I do think a lot of people could benefit from such information.