This guest post is from one of my favorite online (and real life) friends, Cap from Stop Buying Crap.
For those that don’t know me (and that’s basically everyone), I am a cheap, cheap fellow. This may explain why I’m still single.
20% kidding aside, I really do try and watch the way I spend my money. Like many other personal finance bloggers, I don’t particularly set or follow a certain monthly budget. This doesn’t mean that there aren’t merits to setting a budget — after all, understanding your income and expenses can be a very powerful tool to control your finances — but it simply means that I have a fairly good understanding of how much money I make and how much money I ultimately spend. The fact is, there really isn’t a lot of budgeting to do when you simply don’t spend money beyond basic necessities.
Having said all that, I do have a spending vice: I am completely willing to spend money on experiences, mainly, traveling.
Once I’m on a vacation or a trip, all bets are off. Whether it’s an expensive dinner or pricey entertainment at tourist traps, I gladly open my wallet as long as my travel party and I will have a good time. Overpriced souvenirs that will soon collect dust? Five please.
Image from m_o_d_e
Of course, I do make attempts to put a limit to my spending spree when I’m traveling. Here are some of the strategies I take to limit my wallet busting habits:
- Save as much as possible prior to the trip. If I’m booking a flight, I’ll look through numerous travel search engines to find the right combination, layover and connections in order to save as much as possible without making the entire trip too uncomfortable (e.g., yes maybe I can save an additional $30 but if it adds 3 hours to the overall travel time, that’s probably not going to be worth it). These travel sites for cheap vacation deals may help in this endeavor.
- Bring a limited amount of cash with me. Some people have issues with spending money via credit cards, but in my case, if I have cash-on-hand, I tend to do a bad job keeping track of the money and will spend a dollar here and there easily without proper accounting. I can at least capture my expenses when I use my credit cards and can check them out via card statements. For more disciplined folks, tracking expenses via a budget may be more acceptable.
Having spending vices can be a real problem, especially if it’s a particular hobby you may enjoy doing and can easily get carried away with. Case in point: my brother-in-law collects expensive action figures and LEGO. He’ll often buy LEGO by the pound or in bulk (which in his defense, is quite the savings vs. buying them brand new), but I often wonder if he may accidentally cross the line of sensible hobby spending.
So how do you know if you have a spending vice and if you need to start fighting the urge to splurge? Here are some hints and clues. Watch out when:
- Your significant other rolls their eyes as you talk about your latest purchase or spending.
- You convince yourself that you’re saving money since you’ve figured out the best way to spend less money on that particular purchase (case in point above, “I buy LEGO by the bulk and not at brand new prices!”).
- You’re surprised by how much you’ve spent after-the-fact.
- You hear the all-too-knowing phrase: “You spend way too much money on ____ (specific and frequently mentioned item).”
Before you start thinking that this is a full-on rant about how you should completely do away with your “spending vice,” you should know that I’m actually still fairly comfortable with splurging while on vacation. After all, the experiences are well worth the money for me, and I’ve since found a healthy balance in the way I spend, save and use money while traveling.
When considering your spending vices, the important thing is to figure out if it’s simply something you tend to splurge a little bit on — or if it’s something that’s drastically affecting your financial health. In my personal opinion, splurging on experiences (and yes, material things that make you happy) is completely worthwhile and acceptable. After all, what’s the point of making money if you can’t enjoy life? But the minute you’re piling on debt or credit card bills just to enjoy your habits or hobbies, you’re surely heading down a slippery slope of trouble.
What’s your spending vice or what do you splurge on? How do you keep your spending on your favorite activities, hobbies, or collections in check?
Created 3/26/10; Updated 04/28/11
Copyright © 2011 The Digerati Life. All Rights Reserved.
{ 17 comments… read them below or add one }
Neatly explained, Cap. Makes me think twice on how I go about spending money… just like you, I don’t follow a monthly budget. However, I do make sure I have enough money to cover myself for 6 months at least. As of now I have a whole bunch of vices (let’s say wish list) and owning them might require efforts on my part.
Oh, well…. you’ve motivated me
My big vice this year is going to be MLB Extra Innings. My favorite team is out of market, and I have never been able to watch more than a few games per year. Hopefully I’ll be able to watch bits of at last 60-70 games, though.
My vice is coffee. I love the stuff and there is a coffee shop across the street from where I work. I try to limit it to a couple of times a week, but would love to go every day. I probably spend $50-$100 bucks a month on coffee when there is free pot of Folgers at work.
I try to be frugal with most everything else, but that is one vice I have allowed myself.
My dreadful spending vice is Starbucks Venti Hot Chocolate – most every day, year around. I cannot face my job without it, and believe me, I have tried….
Traveling is my vice as well… my guy and I have already spent 5 days in Honduras (which I learned to Scuba Dive for) and are busy planning our summer 3 weeks to Thailand… we go kinda stir crazy if we don’t make it out of the country at least once a year!
I have the same vacation vice. I am so good with my money day in and day out. However, once I get into “vacation mode” my frugal habits get thrown out the window.
I really love movies, so I spend most of my money on new dvds or special movie collections, or going to the cinema. Except for this, I am very frugal and thrifty.
Books.
It’s a good thing they’re cheap (compared to lots of other spending vices).
There are too many good books in this mixed-up world of ours.
Rob
Baseball is my spending vice.
I split Angel’s season tickets with my brothers and it’s not cheap, especially during playoffs. I also took a small vacation to Phoenix for Spring Training this year. It’s something we like to do together as a family. But, it certainly adds up as a budget killer.
Good advice. My spending vice is handbags, which I keep in check by telling myself “I really don’t need that new bag”. I don’t have a strict budget, I just test my will power.
Taxes. I spend way to much on them, get little in return. The harder I work to offset them, the bigger bite they take.
LOL I’m prone to anger too AND my vice is traveling AND I’m worse with cash on hand than a credit card. =)
Though I super super cheap the rest of the time (e.g. brown bag my lunch every day) to compensate for my frivolous trips around the world.
Don’t believe what Cap says… he’s really a huge sweetheart.
One of the most generous dudes around, anywhere. As for my spending “vice”? I’ll say anything for the home. I love to decorate and feel comfortable in my space. So I’m a sucker for Bed, Bath and Beyond!
My dreadful spending vice is shopping, most are for clothes, music and movies. I am good with managing other people’s budgets but still not good enough to manage my own budget. lol.
Good advice. My spending vice is handbags, which I keep in check by telling myself “I really don’t need that new bag”. I don’t have a strict budget, I just test my will power.
I agree with this post. Much like you Cap, I really only spend money on the basics. When there are things I want, I research them well and find a product I think could last me a lifetime, maybe even pass down. When I buy things, I try and get just the “tool” I need, and not get the tool with all the extra gadgets, it’s just more to break IMO. New beds with motors, heating, etc…I just want a good bed. I don’t want to have to hire a mechanic to fix it! Traveling, I free up a little. I will have one of the best darn breakfast, lunch, and dinners during my trip on separate days. Everyday day if it’s all-inclusive.:) If there’s a chance to do a once in a lifetime time type thing, I’m game.
Certain things seem to bring out the splurge in an otherwise frugal guy. Those certain things are travel, electronics and my clothes/shoes. For the most part we go for quality versus quantity. I may overspend for shoes, but I keep them for 20-30 years. BTW, the only debt I have is a small mortgage, so I am in control of my spending.