Tag Archives: Shopping

I Am the 1%

Don’t worry; this isn’t a political article. 

I recently discovered a thought-provoking website called the Global Rich List.  This website allows you to enter your income to see where it falls in relation to others globally.  As it turns out, if you are an American earning at least $47,500 per year, you are among the top 1% of the world’s earners.  

There is a link at the bottom of the site explaining how the calculations are made.  The data is derived from the World Bank Development Research Group, so I believe the information to be reasonably accurate.

The site’s creators state that their goal is to help people recognize that they are richer than they think and to feel more wealthy.  In turn, they hope that people will contribute more to charitable causes once they gain perspective about their place among the world’s earners. 

I love it.  One point that the Global Rich List site drives home with subtlety is that those of us who are “rich” but feeling poor are likely living beyond our means.  Yes, the United States has a much, much higher cost of living than most parts of the world.  We also have many more product choices and shopping opportunities that tempt us to spend.  If we can avoid being sucked into the consumer lifestyle, it is very possible to build wealth on a salary that is considered modest by American standards (and rich by the world’s standards).  We will even have some money left over to help those who are less fortunate.

How lucky I am to have been born in a prosperous country and to parents who had the resources to provide me with a healthy and stable childhood and educational opportunities.  Sometimes it’s so easy to forget how good I have it.

Viva la frugal!

P.S.  The currency default on the homepage for the Global Rich List is the British Pound, so be sure to change it to U.S. Dollars (unless of course, you’re British).

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Why Do You Work?

I saw this car today and had to snap a photo.  Do you see the license plate? 

 

CYIWORK = See Why I Work

It’s a pretty amusing vanity tag. 

Myself, I work because I like food and air conditioning.  Why do you work?

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The iPad: Meh…

Obviously, it’s been a looooong time since I last posted here.  There’s no real reason why I stopped writing on HotFrugal…  Life just kinda happened and I got busy with a new house, new job, new involvement with several local organizations, etc.  Things have calmed down a bit, and I really miss writing, so I’m going to start up again.  I’ll just go ahead and dive right in…

 

Used with permission from Debbie Ridpath Ohi at Inkygirl.com

For a long time, I have been absolutely green with iPad envy.  Two of my coworkers have iPads with fancy keyboard cases, and they (my coworkers) always make me jealous by showing off all the fun things they can do.  Even my mother has an iPad, and she’s not exactly someone I would consider to be an early adopter of new technologies.

So, a few months ago, I started an iPad savings account in true HotFrugal fashion.  I have an online checking account with ING Direct, and I also have several targeted savings accounts with ING.  My emergency fund is kept totally separate with another online bank.  I love ING because it literally takes about 30 seconds to open a new savings account, and you can have dozens of accounts at any one time.  With a few clicks, I had a savings account named “iPad” with the goal to save $800 for the mid-range model and the keyboard case.

But then a funny thing happened… Over the past five months since I opened the account, I’ve only put $40 in it.  Whenever I have extra money to save, I never seem to want to put it in the iPad account.  Instead, I find myself wanting to put the money toward my general savings fund or toward one of my other “just for fun” funds.  Today, it finally occurred to me that maybe I don’t really want an iPad all that badly, or rather, there are other things that I want more. 

There’s a good lesson in this experience that I hope I will remember in the future.  If I had just gone ahead and bought an iPad without deliberately saving for it, I never would have realized that I didn’t even want it that much in the first place.  Fortunately, ING makes it easy to change the nicknames for savings accounts, so the iPad account is now called “Roth IRA Starter Fund.” 

Viva la frugal!

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An Obligatory Tax Season Post

I am the Queen of Procrastination, so it’s quite surprising that I have already completed and filed my taxes.  This is the first year I’ve ever finished my taxes before the very late hours of April 14th (seriously!).  But I know a lot of folks probably aren’t done with theirs yet, so I wanted to share a great article from one of my favorite personal finance blogs, Get Rich Slowly.

The article is called “The Truth About Tax Deductions” and it’s a guest post submitted by a CPA.  The author, Greg Braun, does a great job of explaining how our drive to finagle every possible tax deduction can actually be counterproductive.  Braun sums it up nicely by stating, “The problem is that saving on taxes usually amounts to spending cash, or worse, signing up for debt.”

Even if you’ve already filed your taxes, the article is worth a read for next year.  It really makes you think about tax management and spending in a new way.

And just in case you’re wondering… I’m getting a tax refund of just under $1000 combined from my federal and state returns.  If anyone else told me they were getting a tax refund, I would encourage them to save or invest the money.  But I’m going to be a bit of a hypocrite and not follow my own advice.  I have an empty bedroom in my house that I would really like to turn into a fully functioning home office, so I’m going to use my refund to buy a desk, bookcase, filing cabinet, and wall shelves.

Should I be saving the money instead?  Yeah, there’s really no way to deny that my emergency savings fund is pretty meager at the moment.  But I’m desperate for a quiet, dedicated workspace in my home.  I know I will be more productive (and hopefully my HotFrugal posts will be much more frequent!) if I can sit down with my laptop somewhere other than on the couch in front of the TV.

I guess I should mention that I also tend to be the Queen of Rationalization, though usually it’s in the area of dessert.  (Most people don’t understand that chocolate is a vegetable because it comes from a bean, so I have to explain that to them.)  Anyway, it’s pretty difficult to live a HotFrugal lifestyle if you rationalize and make excuses for your spending.  I’m going to go ahead and buy my office furniture, but I’m going to do it fully acknowledging that it is probably not the best financial move I could make.

C’est la vie.

(Hopefully the next post will end with the usual “viva la frugal!”)

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Filed under Personal Finance, Shopping, Taxes

Kickin’ Worry to the Curb

When I began living frugally and writing this blog, I really had only one goal: to live comfortably and never worry about money.  Anything more specific than that – building an emergency fund, paying off my HELOC, saving for retirement, etc. – was really just a tactic to achieve the overall goal of financial freedom and comfort. 

I thought that I would achieve this goal sometime in the very distant future.  I imagined that there would be some tangible measure or trigger that would let me know that I could finally stop worrying about money.  Maybe it would be paying off a mortgage and owning a home outright, or maybe it would be reaching a $1 million balance in my retirement accounts.  Whatever “it” was, I mentally prepared myself to wait a good 20+ years before I felt confident enough to say, “I no longer worry about money.”

In actuality, it took only 12 months to reach that point.

Now, don’t get me wrong… I certainly did not achieve any exceptional financial milestones in that time.  I didn’t generate an impressive investment portfolio, and I didn’t pay off my mortgage.  But after 12 months, I did have a focused goal, discipline, and enough progress to feel confident and excited about my financial future.  As it turns out, that’s all I really needed to stop worrying about money.

It’s probably important to clarify what I mean when I speak of worrying about money.  To me, worry is what I feel when I’m scared or insecure.  I worried about money when I asked myself these types of questions:  Am I going to be able to pay my full credit card balance this month?  If my house needs a major unexpected repair, how am I going to pay for it?  If I become really miserable in my job, can I afford to look for another one?  Am I going to have enough money to retire at a reasonable age?

When I worried about money, I didn’t have answers to these questions.  All it took to rid myself of worry was to have good, solid answers:

Q:  Am I going to be able to pay my full credit card balance this month?
A:  Of course.  My spending has been within budget so I’ll have the cash to pay the bill.

 

Q:  If my house needs a major unexpected repair, how am I going to pay for it?
A:  From my emergency savings fund. 

 

Q:  If I become really miserable in my job, can I afford to look for another one?
A:  If I ever feel miserable because I’m being put in a position that violates my personal or professional ethics, I can afford to resign and live off of emergency savings while I look for another job.  (Note: This is obviously an extreme situation, and not one I have ever been in or expect to be in.  But it’s very good for my peace of mind to know that I can afford to get out of a seriously bad situation.  If I simply didn’t like my job, I would probably never quit unless I already had another one in the bag.)

 

Q:  Am I going to have enough money to retire at a reasonable age?
A:  Yes.  I am contributing to my 401(k) aggressively and when I calculate my compounded return over the next 30 years, I can see that I’ll be in great shape. 

 

It was really important to realize that I could stop worrying about money simply by having a plan and sticking to it.  I’ve definitely lacked discipline in my spending over the last couple of months since I bought my new house, but I know I can get back on track.  In a way, getting off track has been good for me…  I absolutely love my new house and the things I’ve bought for it, but I hate feeling the financial worry creep back into my life.  This has been a good reminder that I love independence and financial freedom more than I’ll ever love things, even beautiful things that make my house look amazing.

The past couple of months have been a financial hiccup for me, but I’m going to take it in stride.  I’m going to use the worry that I feel to reinforce the importance of my long term goals.  There’s no reason why I can’t be worry-free again in a few months, and that’s something I will work toward with focus and confidence.

Viva la Frugal!

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Filed under Frugal, Money Philosophy, Motivation

Hobo Chic, Without the Chic

In the days before HotFrugal, I spent a LOT of money on clothes and shoes.  In fact, I put a much higher priority on shopping than I did on saving for my future.  That’s certainly not the case any longer.  Now I save one third of my income and live on a pretty strict budget.  If I manage to live below my budget in any given month, I take the extra money and put it in a second savings account for vacations, gifts, and shopping.  (This isn’t really a savings account since it’s where I keep money I intend to spend, so I’ve borrowed a term from my mom and I call it my “mad money” account.)

When I first began my efforts to live frugally, I really missed going shopping whenever I felt like it.  I would anxiously await the time when I had accumulated enough mad money to buy a few things.  Then I would gleefully hit up my favorite shopping websites.  This was actually a pretty responsible approach to shopping… I spent money I actually had, and I accumulated that money by being disciplined in other areas and coming in under budget.  It was truly guilt-free shopping. 

But a few months ago, I noticed a change in how I felt about buying new things.  Suddenly, I didn’t want to part with my money.  I no longer looked forward to shopping with giddy anticipation.  Instead, I dreaded having to buy new clothes to replace the ones that were becoming worn and out of date.

It’s good that I’ve become less materialistic.  However, I may have taken things too far.  When trying to get dressed for work the other morning, I spent ten minutes staring at my closet and I realized that I have very few nice clothes anymore.  By “nice” I mean decent quality and in good shape, with a flattering fit, and at least somewhat in keeping with current trends.  Much of what I saw in my closet was faded, boring, worn out, and outdated. 

It appears that I’m in danger of becoming a bit of a hot mess.  HotFrugal: Good.  Hot mess: Bad!

There is a balance one must achieve between being frugal and being stylish.  Like it or not, clothing does have a major impact on how we look, how we are perceived, and how we feel about ourselves.  This is especially true for women.  A guy may be able to get away with dressing somewhat sloppily and with little concern for how he looks, but a woman who takes the same approach is going to look like a hobo.  I know, I know… It’s not very liberated of me to accept society’s double standards and the importance it places on a woman’s appearance.  But damn it, I don’t want to look like a hobo!

So it’s time to go shopping, and it’s time to go shopping in a pretty big way.  In an effort to not get completely carried away, I’ve gone through my closet and made a list of all the things I need to get.  I need some basic pieces (black blazer, grey pants, denim pencil skirt, etc.) and some more fun and trendy things to make my wardrobe interesting.  I’ll spend decent money on the basics since good quality clothes should last two or three years.  For the trendy stuff, I’ll hit up sales and discount stores. 

I’m excited about looking more put together and less like a hobo, but I’m not looking forward to breaking into my mad money.  I’m still a little emotionally traumatized by the realization I had in my last post about the money I wasted in my twenties.  That realization will definitely keep me on track in achieving my big picture goals, but it shouldn’t make me feel guilty for spending money on things I can actually afford. 

With that little pep talk to myself, I’m off to shop…

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