Budget is for losers

Every personal finance guru suggest the best thing for your bank account is a budget, I think not. Let me explain why.

It takes, in my opinion, a lot of willpower and effort to adhere to the budget, it takes up mental real estate. Consult the budget each time something needs to buy, did we go over the budget for weekly grocery? Do we have budget for that nice jacket? Any money left in entertainment budget for us to go to the movies? Questions like these becomes constant nagging, perhaps drive you to less consumption or, I think, more likely to rocket you away from even pretending to care about the budget.

Build a habit of responsible spending instead of a budget. It will not be as easy to having a budget, but will result in a much healthier financial future, and reduce the stress and anxiety associated with strict budgets, and the best part is it can be done one step at a time.DSCF0198_1280

Knowing how much money coming in and fixed cost is important for what I am proposing, that is all the “budgeting” you will do.

What is responsible spending? It is a spending behaviour that will create the most amount of good for us and the people we care about in the long run. An extreme example would be spending money on illegal drugs would be very high on the detrimental scale while the same money spent on a MBA course would be very beneficial.

We can take a few steps to help us along.

First “Did I do my best to make sure this purchase is necessary?”, evaluate the necessity of an expenditure. For example paying electricity bill is high up on the necessary list. If you are not sure then it’s not essential. Once the bills, mortgages, maybe student loans has been paid most of our purchases are in the “want” category, and these bears a little bit more consideration.

Next “Did I do my best to make sure this is the best use of my money?”. This is a tough question because it is often hard to know what is the best decision. We make decisions based on the information we have, take time to research, explore as many options as we possibly could. We often spend time to find the best deal but rarely pause to figure out if this is what we should spend money on. For example buying a new TV, many hours spent reading about 4K, HDR, 120fps or curved. Little or no time thinking if the money would be better spent invested in retirement fund, save up for that vacation, or spent it on gas for road trips during the weekend, or perhaps the money could go to build a family library. You decide how best to use your money, sometimes we are so set in spending money a certain way we fail to see better alternatives. We have limited funds, explore all the options.

Then “Did I do my best to make sure this purchase will make a positive impact?”. That new car you’ve always wanted will surely make a positive impact in life right? Perhaps not, it will definitely increase monthly car payment, more expensive insurance, maybe more on gas, a huge cost in depreciation, not to mention jealous coworkers asking “You got a raise or something?”. What about that 4500 sqft house? Perhaps you can afford it but how much of a strain would that put on your finances? Other costs like home insurance, possible renovations, heating and cooling bills and property taxes could become unbearable in the long run. Think beyond just the purchase cost, many major expenditures come with many strings attached.

Lastly “Did I make the best decision for the long run?”. When we buy a house we consider all sorts of things, thinking about all decision in terms of longer time helps us avoid decisions that only generate short term or immediate gratification. Like buying a piece of clothing that will be worn once then stashed away never to see daylight again, not the best decision, but if we spend money on high quality clothing and with good care will last us many years and will make us feel great each time we wear it, it may end up saving us money by reducing future purchases. Being cheap usually doesn’t save money, it might end up costing more in the long run. Buy for what it is worth to you, not the number on the price tag.

Did I do my best to make sure the purchase is necessary? Did I do my best to make sure this is the best use of my money? Did I do my best to make sure this purchase will have a positive impact? Did I do my best to make the best decision for the long run? These questions are designed not only to help with spending habits but also to tell us a bit more about ourselves. If we don’t know ourselves how could we be expected to now how to best use our limited wealth.

These are just a few things I find useful and helpful in my life, try them out for yourself see if it helps you. Remember also we are not our own slaves and nothing good comes from forcing ourselves to do things we do not want. We strive for balance for spending habits just like everywhere else in life.

Nickle and Dime

I asked my coworker today, who makes decent wage, pays little mortgage and doesn’t have car payments how much money he’s saving he said almost none.

It’s not uncommon, despite making a good wage very few of us end up with a steadily increasing saving. Why is it so hard to save?DSC00213_1280

“I would rather make more money than save more money!”

You have probably thought about that many raises ago and yet still have not find the money to save despite making twice as much or more than when you started. It is hard to save because our spending keeps up with our earning.

The hardest part is keep spending low even while earning increases, that is the only way to save. Surely we need some material goods to reward ourselves for a job well done, that is no problem on it’s own but becomes one when we make a habit of it.

Eating out once in awhile is a fantastic way to spend time with family or friends, but eating out three or four days a week it comes a huge drain on the good old wallet. Each meal averages out to about $60, three times a week is $200 per week and $800 a month, $9600 a year, almost $10,000 a year just by eating out three times a week.

Entertain at home is such a great way to have a fantastic time with friends and family without breaking the bank. While it does take more time and effort, but for me it is better. Not only does it cost much less, in my experience we always have a better time because we are in complete control of the environment, no noisy customers, no music that is too loud for you to hear yourself talk, and no waiting for the waiters to ask “would you like another round?”

The other thing is pack lunches, it seems like a bit of a hassle, but if you ever make dinner just make some extra and you have a packed lunch. Or try meal prep, I personally don’t do it. My wife and I make food for lunch about twice week, once on Sunday and once on Wednesday. If you can pack lunch 4 days a week, that’s anywhere from $40 to $80 saved, that’s $2000 to $4000 a year.

I like to buy whatever is on sale at the grocery store and build my meals based on that. For some people it’s hard, I think you can buy whatever you want from the grocery store as long as there is no eating out, cutting out restaurant would save a lot more than saving a dollar or two at the grocery store. At my local supermarket they clear out the unsold prepared foods by the end of the day around 8pm, that is usually when I go to the supermarket, lucky me. Sometimes I find meals with rice, vegetable and chicken for $3, that is pretty hard to beat.

Buy second hand stuff. Not everything is good for buying second hand, don’t buy underwear, or toothbrushes second hand. However just about everything else you can buy second hand. I won’t mention cars for now because I think that is a huge topic all on it’s own.

Books are the best thing you can buy second hand, not only do you get a deal, you can feel good about recycling, and sometimes there might even be a nice note on the first page or a bookmark. Another thing I love to buy second hand is electronics such as cameras, monitors, TVs, or even lights. it won’t be the latest and greatest but the hefty discount is totally worth it. Home decor and furniture are great to buy from your local thrift store or craigslist/kijiji.

I’m not suggesting not to spend money, just a bit of attention and care before spending will result in a much more responsible buying behaviour, saving money and reduce financial woes.

Armed with these few tips you will sure to keep money in your bank account working for you and not working for someone else, you can also read about how to get your money working here: https://covertzebra.com/2018/02/17/116/

The Right to Write

I found this book on the shelf at my favorite lunchtime escape: value village. The title peaked my interest. “Right to write” it said on the yellow cover.

I’m not sure what made me want to read this book, but I like all the words in the title: right, I love my rights; write, I would love to write!

The idea of right to write is we all have the innate ability and desire to write, to express our thoughts and ideas. It doesn’t really matter if anyone else is going to read it, it’s about getting thoughts out of our heads, in the process we are able to examine, digest and re-evaluate these words being written.DSCF5370_1280

I liked to write, I also had the feeling I don’t know what I am doing. I wasn’t trained as a writer but I enjoy writing, expressing my ideas. I picked up the book in part hoping to have some of my own opinions validated and to learn from someone who has been in the trade for more than 30 years.

She provide tools at the end of each chapter for the reader can work on, like writing morning pages as she calls them, which I think is a fantastic idea I plan to implement into my daily schedule. If these tools are the only things I got out of the book I would be happy with my purchase, but the book has much more to offer. It’s written in a very casual and candid tone, feeling like chatting with a friend, the feeling I get from the book is the author wants readers to write with complete disregard for the outcome, the act of writing is the desired outcome.

We like people who are eloquent, same goes for writing, especially those write write well. I wish to write and maybe even write well, however the desire to write flawlessly sometimes hinders the act of writing, the feeling of “I’m not gonna write perfectly I might as well not start.” is also addressed quite nicely in the book, she suggest to write imperfectly, perfection is for later, but first, imperfection. It seems like such a simple thing, just like we don’t expect anyone to perform anything perfectly the first try, we shouldn’t expect first drafts to be perfect. This frees the mind up to write, instead of trying to consider how the writing is not perfect and how to fix it, write first, fix later.

I also like her approach of get started by writing about something mundane, the weather, what your surrounding looks like and that might lead to more interesting writings. Getting started is all the motivation you need, once started stopping becomes the hard part. It is something I have thought about myself but confirmation from an “expert” is always reassuring. Now I just write down whatever is on my mind, make sense or not doesn’t matter because I’m trying to get started or to record something in my mind for later use.

In the book she made another point I find very helpful. I always thought it requires large chunks of uninterrupted time to write, like taking a year off to work on a novel or more romantic version of that: locking oneself away in a cabin middle of nowhere. Julia wrote that this is not the case, she said to “steal” time to write. A lot of her own writing are done on stolen time, a few minutes here between chores, an hour there while baby sleeps. It may not seem like much but a few minutes here, an hour there adds up over time. I have benefited greatly from this, I had the same romantic idea of all writers must have vast uninterrupted time dedicated to writing, while this is true for some, but it seems for most, stolen time is the best and most practical way to lay down a few lines.

Whenever there is enthusiasm there is the chance for snobbery especially if there’s money to be made. People gets turned off by snobbery and think it’s not for them but for someone who is truly passionate snobbery is the worst enemy. Like pompous and condescending audiophiles or whiskey/wine sommeliers driving off people who want to participate because of a slightly twisted sense of superiority Julia, in the book, despises those writers who make it their mission to keep “normal” people away from writing.

Not everyone can be a great writer but everyone should write. Writing help us find out more about ourselves. It can also be an enjoyable activity, with your favorite beverage and some music it could be your zen and escape. We may never get a book published, but we all have the right to write.

The Right to Write: An Invitation and Initiation into the Writing Life
by Julia Cameron
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