My wife asked me to do a post on budgeting when the reality is I’ve never been able to sustain a formal, rigid practice for tracking and managing my finances. (This is Jennabel’s hubby if you didn’t glean that from the first sentence.) I made several attempts in my twenties to use various systems, GnuCash being the best, but I grew weary of the bookkeeping.
And even when I had kept up, I just didn’t use the stats for any meaningful decision making. This hardly makes the practice worthwhile. It’s like reading minus the application.
Do not merely listen to the word, and so deceive yourselves. Do what it says. – James 1:22
The reason I suspect my wife thinks I’m good with money is that I’m a saver while she’s a spender. She’s not excessive in her purchases and she does her best to find bargains, but truth be told she likes shopping. I, on the other hand, find it a drudgery.
It helps that I’m a minimalist. I’m not fond of owning something if I feel I can make due without it. I’m content with what I have and hard pressed to think of things I want. I mean it’s true we all need a certain amount of stuff to get on with life, like clothes and some kitchenware, but I fight to resist the impulse purchase.
I mean, sure, I like fresh bread as much as the next guy, but do I really need a bread maker? Am I really going to make enough bread to warrant owning such a gadget? From my experience most of us, self included, get far more gadgets than we actually need or end up using.
My wife wanted an electric roaster oven. We found that during the holidays we needed it. As my parents live nearby and they have a roaster, we found it convenient to borrow theirs. We made due with doing that for several years. But when the pattern became apparent, it no longer seemed unreasonable to purchase our own — so we did. So you see, I am not opposed to owning something useful — if we’ll use it consistently.
I avoided owning a roaster until I couldn’t. The trouble with deciding to get something outright the first time you think you need it is that it’s easy to justify a purchase in a moment of need and to consider only its benefits. Everything — even an occasionally-used bread maker — has some benefit.
In Deep Work, Cal Newport cites the “any benefit mindset” as a flawed way of deciding. While the book is not about spending, the principle is relevant. There is always some benefits to owning a thing, but there are also cons and when you’re contemplating a purchase you’re more inclined to consider the pros. Anyone who ever purchased a timeshare can attest to this.
Take smartphones. I’ve never owned one and I haven’t felt the sting of not having one.
My wife has one but has no data plan. She just loads it with pay-as-you-go minutes that she/we use sparingly. The culture will tell you being connected is as necessary as food and shelter. And when you do get one it begets more spending. You’ll want better data, apps, accessories — and you’ll most like be pulled into the allure of keeping up with the bling of the latest generation. Your old smartphone will look a little less shiny.
I’m not saying you’re wrong to have a smartphone. I’m just saying that we don’t often actually need what we say we need. We find ways to justify “need” when actually we’re just overwhelmed with want. It’s hard to resist the pull of culture.
Part of minimalism is really about seeking to find contentment with less. It helps with spending. And where I’m lazy with budgeting, let me offer you one spending strategy that has for me trumped all my earlier attempts: automation.
We automate transfers into separate accounts to cover important expenses we might otherwise neglect — things like property tax, home/car maintenance, tithing, and retirement. Some call this putting first things first.
The reason this works for me is that it helps me make good on important financial objectives without the fuss of bookkeeping. All it requires is setting up a few extra accounts and setting some automation parameters. This allows the primary checking account to better reflect our actual means for daily living.
Now I’d be remiss if I automated for “need” without also automating for “want.” If we fail to address the “want” category, we’re not being realistic. I mean, it’s like a diet. You have to allow yourself an occasional piece of german chocolate cake or you won’t sustain it.
That’s why my wife and I both have personal spending accounts. These accounts are fed automatically, the same amount, every week. By doing this, we avoid a whole category of argument that might otherwise crop up in a marriage.
What’s good about personal spending accounts is it keeps want-spending real. It puts a reasonable cap on non-necessity purchases like Michael Kors handbags (her) or strategy board games (me). It also means that if you want something expensive, like the next Samsung Galaxy, you have to save for it.
Here are some practical suggestions I hope you’ll consider:
Set up separate bucket accounts and automate.
For some of us, it can be difficult to keep and abide a budget that tracks every dollar. When you automate you avoid the hassle of bookkeeping.
You don’t need a lot of extra accounts. Apart from your allowance accounts, 2 or 3 would suit most households. A bucket covers a category of spending. For example, you’d funnel monies for property tax, home improvement/maintenance and insurance all into the home expense account.
You use bucket accounts to make necessary future provisions. Things wear out. If you’re not anticipating the need of a new roof or setting aside for big expenses like vacations you’re going to face some stress when the time comes and you haven’t prepared. People cite these kinds of expenses as unforeseen or bad luck when, in fact, they should have been anticipating them all along.
Cap your spending.
If you don’t have a hard cap on what constitutes reasonable non-necessity spending, you’re not going to have to make tough choices about what you can or can’t get. I like to say to my wife and kids, “you can’t have everything you want.”
When you see your whole bank account as a fount for spending, you’re more likely to overspend. That’s why it’s smart to separate your spending account from your main checking account. You’ll be in a far better place if your cap has you regularly making choices between having this or that but not both (e.g. you can get the Michael Kors bag, but then you won’t be eating out with the girls for lunch for a couple months).
Curb your impulse to buy.
You don’t actually need everything you say you do. One of the best things I’ve learned is to simply curb my impulse purchases. When I want to buy something (usually online), I just drop it in the shopping cart and abandon the cart for at least a fews days. I allow the thrill to subside.
Just deferring a purchase for a few days allows me to think more rationally about whether or not I should get it. I have more often regretted buying a thing than I’ve regretted not buying it.
Take inventory and declutter.
I’d put decluttering as a tactic under curbing your impulse to buy simply because I believe most Americans have far too much stuff already. If you’re thinking of more goodies you can buy, take a day and root through your attic and basement and fill a few boxes for donations.
If you’re thorough you will likely be amazed at just how much expendable income you had to accumulate all that stuff in the first place.
How much of it do you actually use? My personal metric is that a thing is not worth owning if you don’t use it at least once a year. How many things have you kept “just in case.” Too many, I bet.
The point in taking time to do this is to come to terms with the finiteness of life. A few years ago I realized that of the 200 some board games I collected, I hadn’t found the time and I may not ever find the time to play around 20% of them. (Sorry, but there are some edge cases to minimalism!)
This realization helped me curb my board game spending. When I first discovered the hobby I bought between 10-15 games a year. I worked hard to reduce that to 3 or 4 and I could probably stand to do even better than that.
Stop window shopping.
Some like to visit malls or online shops under the guise of “just browsing.” The trouble with doing that is it gradually steals your contentment and you’ll come to the point where it’s too hard to resist the temptation to buy.
We’re all guilty of it at times. For my wife, it’s Amazon or HGTV. For me, it’s BoardGameGeek. The point is, if you keep putting the things you love in front of your eyes, your resistance will eventually wear thin.
So rather than browse aimlessly thinking there’s no harm in it, find a more constructive alternative. My wife, for example, started a blog.
Vow to always buy on the cheap and never at a premium.
In as much as I can I try to exercise patience with purchasing in order to stretch a dollar. If you have a heart that wants immediate gratification you’re going to pay a premium (esp. if you’re keen to buying on credit). That is, you’re going to get less for your dollar than I get for my dollar.
For almost all things you buy there is a time for the sale and if you’re willing to buy only at these times, you’ll get a better value.
When I used to play video games, I relegated myself to buying only those which were a few years old usually to the tune of around 75% off. In many areas if you buy a few years behind trends you’ll save a ton.
Discover that minimalism promotes more purposeful living.
Your stuff owns you as much as you own it.
Let that sink in because it’s true.
Few things are simple purchases. Many purchases beget further purchases. Things take up space and time. They require organization and management. I have on occasion bought things simply for not being able to recall where the one I already owned was. That’s a first-world problem.
It may sound absurd that I own so many board games and claim to be a minimalist. Well, minimalism, from my perspective, is not primarily about owning less but about focusing more on what truly matters to you. Owning less is part of it, but the reason for owning less is to eliminate distractions and a whole category of problems that comes with ownership.
My primary pastime is playing board games with my friends. For you it’s something else, but hopefully not a lot of something elses. When we partake in too many things it leaves our mind scattered and our homes cluttered.
The worse problem, if you tackle this from a Christian perspective, is there is a serious danger in materialism. It does something to the heart.
Board games have at times in my life become an idol. We are supposed to live as if we are just passing through this world so that we can set ourselves to doing the good works to which we are called. And it’s hard to do that when we’re set on accumulating stuff and feeding our distractions.
I definitely have work to do in this area myself. I too get caught up in the culture.
Minimalism is a good and healthy mindset for all Christians. I would go as far as to say it should be the default mindset. We should all be working to put on a mindset of being content with less. (Jesus didn’t even own a pillow on which to lay his head!) Because if we’re not careful we end up looking like culture and we lose our saltiness.
God’s not against our having fun, but He definitely never meant for us to make it the priority. When we look just like the culture, as I do more frequently than I’d like to admit, we’re failing to maintain an eternal perspective and really put first things first.
Mario
Games pictured: Yokohama, Heaven & Ale, and Uptown.
