19 August 2013

Spending Money

Source: tumblr

Apart from the object related shift of values post, I have never really written about my approach to money and budgeting. I am not planning to go accountant on you, but I have noted quite a few things on spending money and satisfaction that I'd like to share with you.

As I started questioning the consumerist society, advertisments (Japan has a lot more advertising everywhere than France and it was a shock), but also my self esteem and purchase habits, the way I spent my money started to change. Here are a few elements I learnt over these past six years. I am not sure that all of the below applies to everybody, but I thought it might be worth sharing.

Spending Habits Awareness

In Japan, the weirdest thing happened to me. In nine months, everything changed about my spending habits. I started spending money on brands I didn't even know before like high end make-up or clothing brands, I purchased things I never bought in France, like cute mobile phone straps, designer bags... And when I came back in France, my  "acceptable price range" for everything  had changed dramatically. Just to give you an example, my eyeliner, that I paid 10€ before leaving, changed to a 35€ one from Lancôme and I didn't even notice the shift.

Some of these changes might be explained by my becoming adult and trading up for better quality clothing and beauty products. But to be honest, most of these changes were linked to an unconscious influence of both advertising and the spending habits of my Japanese classmates.

When I came back to France and realized how much money I spent in Japan every month, and on what type of material items, I started realizing how little control we really have on these things if we don't pay attention, and that we need to make ourselves aware of what we spend our money on and why.

Ever since, I hold a precise record of my spending habits - with weekly updates on past purchases and monthly budgeting of the next. Of course, this helps maintaining my balance between income and spendings, but also keeping aware of how I spend my money, and if I am being influenced by marketing or my surroundings.

Possessions vs Experiences

As I recorded my purchases - and as I paid for shipping all my material purchases back to France - I realized I spent a lot of time, money and energy on material collections of DVDs, video games, books and other things I used to collect. I started to wonder if too many material possessions weren't a burden, and if I shouldn't consider cool experiences instead, like fancy restaurants, week-ends away, classes and theatre shows...

I already wrote a full post on experiences vs stuff if you'd like to read the reasons why I now prioritize non-material purchases with my budget. This was a serious shift in spending habits over these past few years. I don't have a lot of money, but I can now allow myself to buy things I would never think I could afford, like violin lessons for example.

For Myself vs For Others

I watched a great TED talk the other day, subversively named "How to Buy Happiness". In there, Michael Norton explains, backed by scientific studies, that it makes us happier to spend money on other people rather than ourselves.

Obviously, our salary is made for food, accomodation, personal purchases and hobbies etc. so I'm not saying you should spend all your money on somebody else. But I realized it made me happy to buy presents for my family and friends, to give for a cause I believe in.

So now, I make a ritual out of it: I wrap the gifts carefully before giving them, when I see something that makes me think of someone, I buy it for them even if it isn't their birthday or anything, I always think of a (preferably useful) trinket to bring back from my travels, I give a few coins to people or causes on the street from time to time, and I regularly treat close ones with a drink or a meal in a restaurant. And Michael Norton is right, it does make me happy.

Material Purchases: Priorities and Growth

Back to material purchases for myself, how do I spend my money now? I'm afraid the previous paragraphs may sound like I'm a perfect money spender, which is completely untrue. I still spend a lot of money on material items, and I still make purchase mistakes. The first action I decided to take is to accept my weaknesses and stop beating myself up about them.

The upside of keeping records of my purchases is that I can be aware of these weaknesses and try to learn from them. But above all, I learnt which material purchases made me happy.

In the end, I think the best way to handle material purchases is to prioritize in regards of how you will use them, not what they are. For example, if you are a fashion lover and get joy from outfit picking in the morning and sharing finds with friends, then it makes sense to put sartorial purchases on top of your list. If you like spending a lot of time at home, invite a lot of people over or practice a lot of activities from home, it makes sense to add furniture/decoration on top of your list. If you have a particular passion (a sport, a cultural activity...), it makes sense to be at the top of your priorities.

The problem arises when small meaningless purchases add up and become a huge part of your budget although they are not a priority, which is often the case. Does it make any sense?

I hope this little summary was of some use to you. This was more of an overview of my current trail of thoughts on money and happiness, but if you'd like me to dig deeper on some of the aspects mentioned above please let me know! What about you? Have you ever questioned the way you spent money, made priorities in your budget?

20 comments:

  1. Agreed agreed agreed! Especially after my own post on my own mistakes regarding budgeting. I barely survived in DC towards the end of my time there.

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    1. Ah I see what you mean here. When you live in a new environment for a while it can disrupt the spending habits indeed :)

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  2. This is a wonderful reminder that half the battle is being more mindful of spending.

    I have the same problem as you -- coming from a small town in the States, the advertising in Moscow is invasive and hard to ignore.

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    1. Yes, I think many people spend their money mindlessly and end up falling into classic traps. I didn't know Moscow was full of advertisments!

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  3. I love your blog so much. I initially came across you while looking for minimalist closet ideas/blogs/etc, and have been so happy to read about all the other things you post. I'm still in the beginning of my journey to buy less, own less and you really push my thinking. I guess this is all to say "thanks!" for being an inspiration :)

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    1. Thank you very much for the kind word! It is always rewarding to hear people find value in what I write. Good luck in your simplification journey :)

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  4. My "small, meaningless" purchase is almost always in the form of food and drinks - I had to set limits of how many flat whites I buy a week when I realised I spent about $100 a month on coffee, which s $1,200 a year. I could go on a holiday on that money, or put it away in some kind of endowment.

    I agree writing down what you buy is a great exercise - as i list down the items i can see which ones give me a small glow of pride and satisfaction, and which one makes me feel guilty and sheepish. instinctively you know which items deserve a spot and which ones are nice things i could go without.



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    1. The cheapest ones are usually the worst because you don't even think about it. When I arrived in Paris, I went to Starbucks a lot and realized I spent almost 100€ a month on coffee! Now I'm more scarce about these Starbucks visits :)

      It is true that a regular listing and review of purchases is a good way to set priorities for the future. I tend to regret when I buy too many beauty products for example, but I never feel guilty about a night out in a good restaurant for example.

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  5. Thanks for making me think of this topic that i have problems coming face to face with..

    Since i moved to Paris i have gone from being extremely frugal and cautious of buying in Euros, to now "accepting" it and buying with abandon (well Not *quite* but it seems like it) and purchasing things that i normally wouldn't have spent before (the eyeliner example is exactly me!)

    Now i am trying to find my balance.. i recently visited the US and also shopped a lot and felt terribly guilty, but when i converted my purchases from dollars to euros, realized that i would've snatched up everything in Paris without a second glance.

    i like your comment about putting your money where your interests are.. i think playing with identity and fashion is important to me. its important to my maturation, my career, its a creative outlet for me, its a sport and a passion.. I follow several minimalist blogs because my style is very tomboy and minimalist,not the quantity (why did i get a paris apartment with a huge walk in closet???!)

    i like being challenged to think about things.. thanks again

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    1. Ah, shopping in a different currency does cut off from the regular values and price ranges, doesn't it? But after a while we tend to adjust to the new currency as well. Plus, when the lifestyle changes, spending habits do as well. I think the important is to keep priorities in mind - I am sure you have a lot to play with in Paris when it comes to fashion :)

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  6. A topic that is always on my mind! Thanks for addressing it so clearly. I try to think about whether a purchase of an item for $xxx will really give me $xxx of enjoyment, or would I rather have the cash in hand/in a savings account for something different. It's hard to gauge ahead of time! Even trying to learn from previous experiences, I'm often confounded how one purchase can make me so happy, and one can make me instantly regret it, even if they are both similar items. Sigh.

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    1. Ah I see what you mean here. I also use past experiences to be cautious about future possible mistakes, but sometimes it is hard to point out what went wrong and why. I find that when you think carefully about a purchase and really give yourself to time to consider it, you tend to regret it less, even if it doesn't turn out exactly as planned, because at least you know you did your best! If it makes any sense...

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  7. I've changed a lot like you, and I thing my best move was to change my makeup and care routine for my face and hair. I have only a few products, but I love them all, and most of them are cheap and organic. I still get the feel of self pampering but without feeling like i flush money out with the water...

    Like you I blog about my purchases, and it helps a lot. I have a list of things I can buy for my wardrobe, so it doesn't get out of hand. I have halved my purchases for wardrobe and beauty in 2013 compared to 2012, it's amazing.

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    1. Congrats! It does help a lot to record purchases, because it makes us mindful about our spending habits. It is true too, that changing everyday habits like beauty routine has an influence on spending habits as well. After my shopping fast I changed my week-end habits a lot, and it showed on my bank account!

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  8. Fashion purchases are my weakness. And I can do really good, but then once I let myself start again I CAN NOT BE CONTAINED!!!

    Now that I've calmed down it's nice to put the money towards things that I always put off like skin care and various mundane services (cobbler, dry cleaning, etc...). And I have so much clothes, truly I need find less costly outlets of self-expression. As someone with this nagging feeling of living on borrowed time, I should be storing more money away.

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    1. If you like fashion I'm sure you have found out ways to make yourself satisfied with you purchases without spending too much money, no? If you tend to go on a spree when you decide to buy something, maybe that's a pattern you can use, and decide to put off purchases to make them all at once for the season or something. I know I have the same tendency: if I buy nothing, I'm fine for a while, but if I go to a store and get one thing, I tend to want to "use the opportunity" to be in town to buy many more. Now it's a part of my habits - when I go shopping I know I have several things on my list :)

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  9. Great post Kali, and it seems that we once again have been thinking alike! I've been drafting a post on money, spending and budgeting for a while now, but I just haven't managed to buckle up and finish it :)

    It is so true how fast your habits can change. I keep thinking back to when I was a student (or when I was working in a call center) and how much less money I had to get by each month. Of course, back then I couldn't afford to actually SAVE any money, which I do now, but oh boy have my spending habits changed as well. The most humorous example I can think of is where I used to buy the cheapest toilet paper I now buy a much expensive brand - because it has puppies printed on it. I mean, WHAT?! What IS that? Okay, I really do need to write that blog post.

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    1. Haha I was thinking the exact same thing last time I made my supermarket shopping list. I buy some fancy scented toilet paper, high end wooden floors cleaner etc. now, but when I was a student I always reached for the cheapest ones. I guess it is both due to a change in habits when you become adult, and an increase in salary. I am sure one just gets used to how much they earn, and naturally tend to spend more. That's why the money I set aside every month is programmed as automatic transfers, otherwise I'd probably spend it too. Looking forwrd to reading your own money post :)

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  10. such a thought-provoking and thoughtful post! i know exactly what you mean about the incremental "little purchases". i think one of the 'personal accomplishments' i'm most proud of is learning how to shop and budget the last 5-6 years. it's a long term process, and i think a lot of it comes from growing into your lifestyle and understanding who you are, and what you're passionate about.

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    1. Yes you are right, I guess it somes down to knowing yourself well, your priorities, habits, passions... You are very lucky to have found a system that works for you, congratulations! I am getting there myself, I know my priorities and taste, but I am paying taxes for the first year in 2013 and I need to learn to adjust to that (in France we pay revenue taxes only once a year so we need to save money for that)

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