Posted on September 1, 2016
Buying your way to happiness or saving your way to freedom
The best thing about working downtown is all the action. There are museums, great greenspace to enjoy, it’s a great place to people watch, and it’s convenient to run errands during my lunch hour. Conversely, it’s one of the worst places to work because you are constantly inundated with the sights and smells of amazing food stalls, cute retail stores and original crafts. In fact, just to get to work I have to walk through a high-end mall that’s full of all the fancy things that money can buy, like this gem that caught my eye the other day.
We live in a world where even our accessories are tired
The price tag? $200. TWO HUNDRED DOLLARS. For a purse. For the costs of this purse I could go away for a weekend and recharge with friends. The irony was killing me, so I knew I had to post about it.
Spend to save!
Then this facebook ad caught my eye this morning:
Is this a trick question?
This bank technique is to encourage people to spend so that they earn more rewards. Or, I could not spend the $4 on a fancy coffee, and instead keep the money invested, & tote around my .50¢ coffee in a travel mug. You’d earn even more by saving, I am willing to bet.
I am busted and I leak a little but if you hold me upright I still work
(I know, I know, I should buy a functional travel mug. If it makes you feel better, I am putting one on my Christmas list.)
The coffee equation is pretty divisive, I know, and it’s also an overused analogy but that is because it is a good one. I have friends who insist that they don’t give two flips about penny pinching and would much rather not have to think about their spending and instead enjoy all the fancy coffees and artisanal lunches their money can buy. They like to post articles about how not buying lattes is oppressive and sucks the joy out of life. That’s cool, I am not here to harsh anyone’s mellow but for me spending $1000 a year on coffee when I can spend $130 for fancy coffee I make myself at home is ludicrous. It may be splitting hairs to some but if I stick that $870 into an index fund making 7% a year, after 10 years of bringing my coffee I will have $12572. Add in that fact that most lunches around here are $10 and I can make a lunch for $3 or less, that will save me 26,351.06 over 10 years. Bringing coffee and my lunch over 10 years will save me $38392.
THIRTY-EIGHT THOUSAND DOLLARSI could essentially take a year off of work by just not buying food at work. Amazing.
Never say never
All this isn’t to say that I never buy things I like, or never eat out, or never pay for entertainment. I do all these things. The difference is, I try and do them consciously and not constantly.
Since it is summer, my workplace is full of students gaining valuable work experience & making money for the first time this school year. The two who sit next to me often buy both breakfasts and lunches at one of the fast food places nearby. Buying a $10 sub every day doesn’t appeal to me in the slightest, however, I have no problem heading to one of my favourite restaurants and paying $50+ for a decent meal. I don’t do it often, and I do try and watch what I spend (I am looking at you, delicious cocktails!) but when I do go out, I make sure to spend consciously to maximize my enjoyment. To me, a $10 sub that can be replaced with a $3 meal is not as valuable as going out every couple of months and enjoying a $50 experience. I’d like to say “maybe these kids get value out of eating out every day, so good on them if they enjoy it and can afford it” but I have noticed as we get closer to the summer the realization that the paychecks are going to stop has settled in. Now they are bringing in their own coffee, sugar, and cream and most of the time, I see them eating their brown bag lunches.
I’m like, “Yo – that’s fifty dollars for a T-shirt.” Limited edition, let’s do some simple addition, fifty dollars for a T-shirt – that’s just some ignorant…
Nothing epitomizes the punk ethos like $265 t-shirts “crafted of black brushed Japanese cotton-cashmere.” If Henry Rollins were dead, he’d be rollin’ in his grave.
All this to say, the above is just an exercise and the real world isn’t as simple (I don’t actually work 52 weeks a year) and investments aren’t guaranteed. Still, I find it helpful to periodically do these calculations to remind myself that small decisions made every day get big results. Since we buy good food and we cook things I enjoy, it’s not a hardship to bring my lunch every day because it is always delicious.
But this post isn’t about judging people on what they choose to do so much as outline that in 10 years I want to have enough money saved to retire comfortably. Part of that process depends on me making good choices every day. So it’s not so much the idea that I am going to nickel and dime myself to death, instead I am making deliberate choices to choose one equally as good alternative over the more expensive choice. If I make just three good choices a day, I am well on my way to reaching my goal.
It certainly is, ridiculously-expensive-purse. It certainly is.