Spend-Thrifty

So about a year ago at work we were forced to set up our "goals" for the year. It seemed like an impossible task to me. Goals? Unless it's used in the context of a hockey or soccer game the word "goal" makes me shudder just a bit. Nevertheless, goals can be an important tool to accomplish things in our life. Plus, I really love making lists so a goal list should be right up my alley. The problem with the list is that when I sit down to write it, my mind goes blank. So I came up with an alternate system.

I have tweaked the standard goal list just a bit and have instead created a visual representation of "Crap I'd like to Accomplish." I have a cork board set up above my desk and I've pinned various items to it: a list of all my student loan debts, a list of things I'm thankful for, information on the dream trip that I am planning, and pictures of my family, among other things. This board serves a lot of purposes- most importantly it is a constant reminder of all the great things in my life. But it is also a reminder of things I'd love to accomplish, like paying off my student loans.

So, anytime I am online randomly placing items in my Amazon shopping cart I can't help but look at the board and ask myself, do I really need more crap or would I rather put this money toward something on my board? The answer is almost always, no I don't need this crap. It's a great check on myself and my priorities.

What about you? Do you make a goal lists? What do you think of my "Crap I'd Like to Accomplish" board?

I am a big fan of honesty so I am beginning this post with a disclaimer. I like to spend money. Yes, I realize that might seem to contradict some things in this blog but so be it. I love the smell and feel of new books. Yes libraries are fantastic, but some books just look so fabulous on my bookshelves. I like to treat myself to new clothes. I often find myself buying furniture or other furnishings for my apartment.

I am hoping to change some of these frivolous spending habits over the next year. I've already started a bit, as mentioned in previous posts, but to help me even more I have been trying to follow the mantra in the title to this post.

Want it. Need it. Have to have it.

Every time I pick up an item in a store or add an object to my virtual shopping cart I ask myself the following question: Do I want it, need it, or have to have it?

Every tangible item in our life falls into one of those categories. The new television I bought recently was something that I wanted. My new snow boots were something that I needed. My cell phone is something that I have to have. The same item could fall into a different category depending on the person. Some people could easily live without a cell phone. Since I don't have a home phone and my parents are resistant to e-mail, a cellphone is a necessity. It's the only way I can keep in touch with my family.

So, I propose that before we buy anything we should ask ourselves do we want it, need it, or have to have it. If we decide that yes, it is something we have to have, then it is a good purchase. We should not feel any guilt buying these items (assuming we buy only what we must have).

If an item falls into the next category, something that we need but not urgently, then we should resist an impulse purchase. This happens most often when we are in a store (or browsing on Amazon) and we see an item that we actually do need. For instance, snow boots. Living in Chicago, I need a good pair of snow boots for the winter. Rather than buy the first pair of snow boots I see, I should try multiple stores and look for the best deal. There is no shame in waiting for an item we need to go on sale. When we buy a "need" item at a good price, rather than on impulse, we have made a good purchase. Again, no guilt!

The third category is where most people, including myself, run into trouble. Want. It's a simple word, but can cause a whole lotta problems. Want can lead to debt, addiction, and a hollow feeling inside. Satisfying want is nearly impossible, but it IS manageable. Most easily by learning to be thankful for the things we already have. But want usually still clings on for dear life. So this is how I intend to manage my want.

I am using a reward system of sorts. Each month I will keep a list of things that I "want".  This can be anything from a book to a concert ticket. No matter how big or how small I will write the item on the list. The only condition is that it has to be something I want and could reasonably get. Sure it would be nice to have a private jet but that is more of a dream than a "want".

At the end of each month I will go over the list again. I'm willing to bet that most of the items will get crossed off after I've had time to think about it. I will look at whatever is on the list and add up the cost of those items. I haven't actually done this yet so I'm not sure how high that number will be but the plan is to allow myself a percentage of that total to spend on something on my want list. Here is an example: If my want list for January totals $1,000, I will allow myself to purchase something (or some things) from my list that cost up to 5% of the total. In my example that would mean $50. If your want list total is higher, you can lower your percentage.

The idea behind this being that I will still allow myself to satisfy some of my want, but because I am limiting my spending I will most likely only buy those things that I really, really want. After the month is over, the want list continues. Any items from the previous month stay on the list, thereby increasing my "want" total each month. And each month I will get a slightly higher allowance for my reward. In the end, I will still be saving a lot of money because I will only be purchasing a small percentage of the things that I want and would normally just buy without much thought.

So that's the plan. After a couple of months I will report back on how this system is going but I think it's very doable. Another interesting thing will be to see what the total will be for my want list in December, and to see how much money I will save by using this reward system.

If you decide to try this, let me know how it goes. It might need some tweaking along the way.

If you are anything like me, lunch is your favorite time of every workday. I spend my morning looking forward to it. Every now and then, I decide I will start making my lunch for work everyday. I usually last about three days before I resort to paying $10 for a sandwich somewhere. Yes, I am talking about you, Beach Club at Jimmy John's. So this year, I've set up a reward system for myself as motivation to stick with this brilliant plan.

At the beginning of the week, I start with $50 in cash. This money can only be spent only on lunch. If I get lazy and buy my lunch somewhere, the money is gone. But, if I take my own lunch, at the end of the week this cash goes into my piggy bank. Each day of the work week is worth $10 (Chicago prices). That means that if at the end of the week I have taken my lunch everyday I will have $50 to put in my bank. In my case, this is literally a little bank in the shape of a safe that sits on my desk. You could put yours in an actual bank if you'd like but I enjoy seeing the cash pile up before my eyes. After one month, I will have $200 if I make my lunch everyday.

Confession time: So far in January I have taken my lunch everyday except for two days. That's pretty good I think.

Now, the plan is to reward myself with the money I am saving. So my plan is to use this money for spending money on my dream trip. A rough estimate tells me that I will have about $1000 before my trip. I will use $500 of it for spending money and put the other $500 in the bank.

Let's be honest, it isn't hard to slap together a sandwich. It's only slightly easier (and much costlier) to pay someone to do it for us. Plus you never know what you are really getting if you aren't making it yourself. The key is motivation. So figure out what will motivate you, and put the money towards it. A trip, a new television, paying off debt- whatever works! There is no wrong reason to save money.

Looking back on 2010, there are a lot of things I could have done differently. Starting 2011, I find myself almost exactly where I was a year ago, monetarily. So I've decided to create this website as a way of keeping myself honest about my goals and follow-through.

So, here are some of my goals:
1. Lower my debt. I have a little credit card debt and whole lot of student loan debt. Damn you law school!
2. Boost my savings account. Yes, ideally I would already have six months of savings in case of emergency. But reality doesn't quite work that way. So my goal is to boost my current savings. I would like to have 10,000 dollars in my ING savings account by the end of the year.
3. Create another source of income. I have my full-time job, and I bill a significant amount of extra hours. But it would be nice to have an additional revenue stream, possibly online. Maybe even this website. I haven't decided for sure yet, but I'm continuing to think about it.
4. Take my dream trip without guilt. I am planning a trip to Greece and Italy with some friends for early summer and I would like to pay for the whole trip well ahead of time plus have a cushion for expenses. Taking the trip is going to be great but doing so with no monetary concerns will make it even more enjoyable.

These are the goals I have so far, financially anyway. As more of them come to me I will add new posts.

So the purpose of this website is two-fold: to help me achieve my goals, but also to help you achieve yours. I will provide you with specific things I am doing to save and make money, and maybe you can share some of your ideas and successes too.

As a kickoff to my new website, my first post will be brief. Livingsocial has an excellent deal today, a $20 Amazon.com giftcard for only $10. If you are like me and order something from Amazon at least once per week, this deal really can't be passed up.

I have more thoughts about these types of websites. Sometimes I think they cost you much more than they save you, but this deal seems to be worthwhile. Needless to say, I've already purchased one for myself!