Years ago, back when I read women’s magazines on a regular basis, Cosmopolitan ran a recurring sidebar called something like, Eat This… Or All That. In it, the editors would present two lunch options. One was always something quick and easy, such as two slices of pepperoni pizza and a can of Coke. The other was an elaborate meal – something like an 8oz strip steak, side salad, shrimp cocktail, chocolate square and wine spritzer.
Both meals had the same number of calories, and so the choice was supposed to be pretty simple. In fact, there was no choice. Pick the one that has more food, dummy. Who wants this one thing, when you can have all these things?
I was a teenager at the time and I still found the whole idea absurd. For one thing, the piece always neglected to address convenience, access and cost – three of the biggest factors in healthy eating. It also assumed that all calories are created equal, which we all know is untrue. Finally, neither option appeared to be a balanced meal – even by late 90s standards.
Twenty years ago, most women probably saw that sidebar and scoffed at that $20 steak and moved on. But if the same piece ran today, it would go down quite differently. Women would work ourselves into a frenzy on Twitter and demand Cosmo do better. “Eat this!” we’d tweet and tweet until our outrage trended and The View did a segment about it. I, for one, appreciate having an open forum on which to gut check the media.
But that was then and this is now. Today I can’t even find an old example of the sidebar online, which makes me think that Cosmo and I agree on at least one thing. That’s progress.
I never liked the concept of This… or All That – at least not when applied to eating. Very few people in America need to be encouraged to make their meals bigger. Even nutrient rich foods should not be heaped on a plate like it’s an all-you-can-eat buffet. It can be confusing, I know, which is why people with influence shouldn’t do it.
However, I do like this idea when it’s applied to finances. A few years ago, my financial planner trotted out a modified version like a show pony.
“I tell women all the time,” she said. “You can buy that new handbag now… or you can invest the money and use it to pay your monthly mortgage years from now.”
It’s a classic This… or All That – except that we were talking about dollars instead of calories. And I had to wait twenty years to reap the reward. That and I was actually more in the market for a 40-liter all-weather hiking backpack. Oh and I don’t dream of mortgages.
But still, I got it. Let’s aim high. I’ll take all that. Give me all that.
I’ve never been a huge fan of strict budgets, but lately I’ve been forced to keep one. My financial situation has changed in a pretty significant way. When I transferred from New York to Munich, my salary went down, my taxes went up and I no longer received a 401k match. When I crunched all the numbers, I was taking home about half of what I used to earn.
When I admit this to people, they narrow their eyes and ask why I made the move under such poor terms. Where did my negotiation skills go? What, exactly, was in it for me? Oh, right… That. Alllll that.
Perhaps more annoyingly, with time and space galore, I started shopping more – buying clothes, knickknacks and incidentals that I never would have purchased if I was still lugging a single suitcase around the world. It didn’t seem to be a big deal until I looked at my bank account at the end of the first month and saw very little left over.
What happened? How did I spend more money than usual, but not even go to Cambodia or Egypt? Better question: How exactly am I going to afford to go to Cairo in the future if I can barely manage to break even in Munich? I was irritated with myself. I bought this, this and this – but it didn’t add up to all that.
I decided that if I wanted to keep up my old lifestyle, I’d have to make some choices about where and how to spend my money. I’d have to decide what I’d rather have: a new winter coat, or a weekend in Madrid, complete with a visit to the Prado and daily happy hour drinks on a terrace? A fancy meal in Helsinki or a day-trip to Salzburg, with views of the Alps and beers at a 600-year old brewery run by monks? A cute two-room apartment in Munich all to myself or a real travel budget?
It almost always boiled down to the same question: Do I want this one, single thing, or do I want this long string of experiences?
These, by the way, are great choices to have – and I feel lucky to have the means to make them. For many people, I know that budgeting means choosing between bills and groceries, health insurance or tuition. When I talk about a spending plan with categories dedicated to things like “fitness” and “blog advertisements”, I roll my eyes at myself. I realize just how frivolous much of my spending is. I know the difference between a need and a want.
Still, I think a great many of my readers will agree that there are usually a few “wants” in their budget. Most of the time, I think there’s a way to make room for more. Sometime we fail to realise that a “need” is really just a dressed up “want.”
For me, it wasn’t about crunching the numbers to put a little bit more in every bucket, so much as reprioritizing my total spending. But before I could do that, I needed to see exactly where all my money was going. For three months, I wrote down every purchase I made and categorized it as best I could: groceries, restaurants, entertainment, public transportation, travel, savings, etc. I know that there are apps and programs that do this sort of thing automatically, but they don’t work for me. I like the accountability of saving receipts and writing it all down at the end of the day. I want to add the numbers up myself and see exactly how I’m doing.
This turned out to be an interesting exercise. As someone who never had much of a problem hitting savings goals or paying bills in the past, I never much bothered to look where the rest of my money was going. So, in many cases, I was shocked by what I found: I routinely spent more per month on beauty and self-care than I did on groceries. I spent hardly anything on restaurants, but sank ridiculous amounts of money into bars. In the month that I moved into my new apartment in Munich, I spent nearly $500 on things I “needed” – drawer organizers, a set of kitchen knives, cleaning supplies, a hair dryer, etc. – a figure that could cover my cell phone bill for a year.
It all seemed so preposterous. I (still) make good money, sure. But I was doing a good job of wasting it.
Before I figured out where I could reduce my budget, I decided to outright eliminate certain things.
My house budget was the first thing to get the axe. When I arrived in Munich, I wanted to make an effort to make the place feel like home. I’ve since decided that’s impossible since it’s a short-term rental full of furniture that I hate. The world simply cannot produce a duvet cover or scented candle that will change that. Instead, I’ve decided to think about this apartment as nothing more than an Airbnb that I need to clean myself. Henceforth, my home will not be getting any more spontaneous gifts of kitchen towels or decorative baskets. My budget for home décor and other incidentals is now $0. If the choice is a French press or a ferry ticket to Estonia, I’ll take the latter.
Looking at my housing budget more broadly, my rent seemed ridiculous. I knew the cost was high when I signed the lease back in January, but it wasn’t until I looked at it within the context of my other spending that I realised just how expensive it really is. This is especially painful since I don’t even spend that much time in Munich. I decided to downgrade my apartment and rent a room instead. When my lease is up in August, I’m moving. While I won’t have as much privacy, I’ll be able to live in nicer neighborhood and a prettier place. Even better, I’ll be saving about $1300 per month. I plan to add two-thirds to my monthly savings goal to make up for my 401k match and put the rest towards “big trip” plans.
Talk about this or all that.
Beauty was the next category to get a look. My hair has always been a money pit and the past year has been especially rough as I tried to recover from the great Canadian chemical cut. But, it’s mostly under control now. I found a stylist I like in Helsinki, I’ve given up on finding a miracle product to fix my hair and I now own a nice collection of hats. I decided to reduce my budget by half, which allows me to maintain my current hair and beauty regiment, but not experiment with anything new. Basically, this means I’m not allowed to walk into a Sephora. It’s another easy choice. I’ll take a flight to Rome over a handful of lipsticks any day.
Clothing, too, got the axe. While I still need to replace items from time to time, I decided not to build a real wardrobe. I’ve been traveling for two years with only a few outfits, so this isn’t that hard. Surely, I don’t “need” much more. I’ve allowed myself $100/month to replace things like t-shirts and sandals, with some “flex” built in for bigger purchases, like winter boots or new jeans. Another easy choice. I’ll take three nights in Amsterdam over a new handbag any day.
And then there was the rest: groceries, transportation, restaurants and bars, entertainment. These were harder places to make deep cuts. Either I really do “need” these things, or I would have to give up any semblance of a social life. I decided to try to reduce them all by 10% – not by avoiding purchases so much as choosing cheaper options. I downgraded our coffee, wine and some meal options in Helsinki. When I went out, I tried to avoid restaurants and stick to a two-drink limit. It takes some effort but it’s worth it.
The result of all of the above? I shaved about $700 off my monthly expenses. I put an extra $350 in my savings account each month and dedicated the rest to a monthly trip of my choosing. Beginning in August, I’ll be able to reallocate that additional $1300 – which means that I’ll have reorganized my expenses to find about $2000/month to put towards things I really need or really enjoy.
To celebrate, I booked a three-day trip to Slovenia. I’ll be staying in Ljubljana and hoping for good weather to take a day trip to Lake Bled and the surrounding mountains. In my book, that’s way better than a new moisturizer and some gourmet coffee.
But, again, I don’t want to be so Cosmo about it. I know that not everyone can get to Slovenia by bus for $36. I’m not trying to imply that with the right penny-pinching we can all get everything we want. I know that not everyone has the option of reducing their housing budget by 70%. It’s just not the simple.
But there’s a part of me that thinks that it’s also not that hard. There are things you need and things you want. But a lot of times the lines are blurred. You need a place to live, but you want a two-room apartment in the middle of a busy city. You need a car to get to work, but you want a luxury SUV. A lot of people, like me, can probably stand to downgrade on the big things… and get even bigger things in return.
For me, it was easier to spot those things once I put them down on paper for a few months. Seeing not only where I spent the money but also what those purchases brought me was a good way to figure out where to make changes.
That won’t work for everyone, but it’s worth considering. It costs $0 to try.
So many people have asked me over the years how I pay for my travels. Up until now, the answer I usually gave was, “With money.”
As I adjust to my new job and home, it’s a little more nuanced now.
“With discipline,” is how I’d say it today. All that discipline.
Mindfullness & Money…great read! -Josh
:) Me & You when we try to do hip hop quotes: https://media.giphy.com/media/l0MYO3rFwZcvUnvO0/giphy.gif
Yeah… you know what else I can’t pull off, inserting a GIF. I tried three times… you’ll just have to use your imagination.
Thanks for reading!!
Love this! As a CPA, I volunteer to give financial literacy seminars- and so much of it echoes what you’ve covered. People want to have everything and then can’t understand when they can’t afford it all.
My boyfriend and I try to prioritize in the same way- instead of buying a brand new couch for our apartment (for many thousands of dollars)- we bought a used one for $100, and spent the difference on our flights to Japan.
I get it… I really do. It seems like our money should go further than it does. No matter how much you have, it never seems to be enough. Glad to hear I’m not alone!
I like the couch compromise. I also would rather have a trip to Japan than a brand new sofa. That said, I know it’s going to be a challenge for me when Johann and I move into an apartment together. It’s been so long since I’ve had a real home with my own things and I know I’m going to want to go nuts with furniture and art and everything else. I mean, look at me. I spent $500 moving in here… and it’s not even my place… and I didn’t buy furniture! Maybe I’ll sign up for one of your classes when we’re at that point. I’ll need a reminder that a couch is not all that…
Holy cow, this was an awesome read and so inspiring. The Mr and I have been making a lot of adjustments as well: growing our own food, making our own cleaning products and it’s saving us a ton of money in the long run so that we can have the lifestyle we long for. Thanks for this!
That’s impressive! I’m not going to attempt growing my own food any time soon, but that’s awesome that you do. I actually didn’t cut my grocery budget that much… I consider healthy eating its own investment. But I did make an effort to buy in-season produce, which makes a big difference especially in Helsinki. I’m learning to enjoy winter citrus as much as summertime berries, which is a different kind of payoff that I can appreciate.
Saving is kind of addicting, isn’t it? When you see it work, you just find more and more ways to do it. For me, it’s kind of like going to the gym. Anyway, thanks for reading and good luck!