Smart SpendingSmart Spending

My 2009 discretionary spending

Spending on meals out has grown noticeably but I've also made progress in another important area.

By Karen Datko Jan 18, 2010 10:39AM

This post comes from J.D. Roth at partner blog Get Rich Slowly.

 

Every January since I started Get Rich Slowly, I’ve done an annual roundup of my discretionary spending. That’s not going to happen this year. The numbers are hopelessly muddled by events that created under-reporting in some categories and over-reporting in others. (Kris and I paid for our 2010 vacations in 2009, for example.)

 

Rather than sort things out, I want to talk about a couple of my spending habits instead. One is a worrisome trend, and one is a thing I’m doing right.

 

Food for thought
Longtime readers know that Kris and I love to dine out. It’s one of those things we’re willing to spend on. We cut corners in other areas of our lives so that we can afford to make this happen. Still, I’ve been concerned about my restaurant spending for the past couple of years. It seems a tad excessive.

 

How’d I do last year? Well, my grocery spending dropped, but my restaurant spending went up again -- a lot. Here’s a look at five years of data:

  • In 2005, we spent $1,423.39 to dine out 100 times, for an average cost of $14.23 per meal.
  • In 2006, we spent $1,869.58 to dine out 108 times, for an average cost of $17.31 per meal.
  • In 2007, we spent $2,051.93 to dine out 84 times, for an average cost of $24.43 per meal.
  • In 2008, we spent $2,628.08 to dine out 77 times, for an average cost of $34.14 per meal.
  • In 2009, we spent $3,443.61 to dine out 69 times, for an average cost of $49.91 per meal.

Holy cats! Will you look at those numbers? We’re dining out only about two-thirds as often as we did in 2006, but we’re spending nearly three times as much per meal. At the current rate of spending growth, we’ll be spending $300 per meal in 2015! Since I can afford our current spending -- I’m not living beyond my means -- the real question is: Am I getting my money’s worth? I’m not sure that I am.

If I’m honest, I have to admit that I don’t like the idea that we’re paying $50 per meal. I’d much rather return to our former habit: dining out more often, but spending less each time. To that end, I’ve been brainstorming ways we can work to cut costs:

  • We could do a better job of looking for discounts. We have an Entertainment Book, and the local paper often features specials at local restaurants. We should take advantage of both of these. We used to do this, but have fallen out of the habit (primarily because we’ve become so used to eating at the same places again and again).
  • We need to find more cheap places to eat. Half the fun of going out is just going out. Sure, we love the fancy restaurants, but we used to be happy with Dairy Queen. (This is lifestyle inflation in action.) The real problem is that the cheap places I know and love (Cha Cha Cha and Imperial Garden) aren’t Kris’ favorites. We need to find cheap places we both like.
  • When we do eat in the same old haunts, we need to make an effort to reduce our spending. It’s OK to have an appetizer, entree, dessert, and drink all in the same meal now and then, but we could save money by cutting one or two of these from the mix each time we dine out.
  • Finally, we should invite friends to our home for dinner more often. As soon as the book is done (getting close!), I’m going to make a habit of inviting one family to dine with us every couple of weeks. We used to do this a lot, but have fallen out of the habit. It’s fun and frugal to have folks over for dinner.

So, that’s one part of my financial life that still needs work. Next, let’s look at something I’m doing right.

 

Tangent: Portlanders, help me out. What are your favorite cheap places to eat around town? Bonus points for inner southeast, west of 39th from Hawthorne south to Oregon City.

 

A waning of want
Here’s something that amazes me (this post originally appeared on Jan. 12): We’re 12 days into 2010 and I haven’t spent anything yet on personal expenses. I haven’t even felt the urge. I’ve bought gas for the Mini and groceries for home, and Kris and I went out to lunch last Friday, but I haven’t spent a dime on gadgets or books or games or toys or magazines.

 

“Big deal,” you might say. “That’s how it should be.” You’re right. But for me, this is a big deal. All my life, I’ve had the uncontrollable urge to buy stuff. It used to be that I couldn’t go more than a day or two without buying something. Even while writing this blog, that’s been the case. (I’ve just learned to channel my desires into smaller, cheaper things.) Now, as last, I seem to have licked it.

 

I still want things -- no question! -- but I’ve become very good at ignoring the wants and moving on. How?

  • Sometimes, I just put down the thing I want, turn off my brain, and walk away. I force myself to stop thinking about it. (Usually by thinking about something else -- like our upcoming trip to Europe, and how I need to save for that instead.)
  • If I still want the thing when I get home, I put it on my Amazon wish list. For whatever reason, that’s often enough to satisfy the strange inner workings of my mind. I feel comforted knowing I’ve let myself put it on a list where I won’t forget it.
  • I’m very good about using the 30-day rule to control my impulse spending. My Amazon wish list plays a role in that, but so does my mountain of index cards. (My life wouldn’t be complete without index cards.) I have a handful of cards on my desk filled with notes about the things I want. It’s amazing how many times I sort through this stack and end up throwing cards away because I no longer want the item I’ve written down.

These techniques help me deal with desire. They don’t quell it completely -- nor would I want them to -- but they do keep it in check. That last rule is probably the most effective. By delaying purchases 30 days, I don’t feel as if I’m denying myself. I can still buy what I want if I want it 30 days later, but I’m not just giving in to impulse spending. (When 30 days rolls around and I do still want something, it actually feels pretty good to be able to buy it.)

My current spending moratorium isn’t permanent, and I know that. In fact, the new Dick Tracy anthology comes out tomorrow, so if nothing else, I’ll be shelling over $25 for that.

 

Remember: There’s nothing inherently wrong with spending money on things that bring you joy. Problems arise when you finance those purchases with debt. If you’re meeting your other financial goals and have money left over, it’s good to indulge your interests and passions. Just make sure you’re getting value for the dollars you spend.

 

Here are the past installments in this series:

How did you do on your spending goals last year? Are there areas where you wish you spent less? If so, what strategies do you use to keep yourself in check?

 

Related reading at Get Rich Slowly:

2Comments
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT SMART SPENDING

Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.

VIDEO ON MSN MONEY

TOOLS

More