Sunday, September 26, 2010

Money, money, money

I hear a lot of people complaining about money (specifically, the lack of it), and yet they do things I would never do - like buy lunch every day or trade in a car that is less than 3 years old (and still has a car loan) for a new vehicle. (Admittedly, I used to buy lunch every day, but that was before the layoffs started at the big telecom company in 1998. I didn't get laid off, but I did start bringing my lunch.)

That made me wonder - what financial decisions do I make that seem like poor decisions?

The first big one is that I bought a house, on my own, when I was 28. (Well, actually, I started the process when I was 27.) Don't get me wrong, I love my house, but it would have been a lot cheaper to keep renting. My mortgage is more than my rent was, and that doesn't include property taxes, repairs and upkeep. Buying is a lot more expensive if you're only looking at it from a financial perspective.

Related to the house purchase is snow removal. I pay for a company to plow my driveway every time it snows. Yes, I could do it myself - in theory - but you have to remove snow when it snows (you can't wait until you have time) and doing it myself would have a negative effect on everything from getting to work on time to leisure activities.

Boxing is another one. I love boxing - it's good for me physically and mentally - but boxing for the year costs around the same as my gym membership for the year. The difference is that for that money, I can go to the gym as often as I want, but I can only box once. (For that matter, I don't need to go to the gym - but I do value it, so I'm willing to pay for it.)

There are little things too - I've mentioned my newspaper issues, but I could also save money on my phone bill. I could get rid of cable TV. Theoretically, I could get rid of my internet access (although that is unlikely to make it to the top of the list anytime soon).

Should I change any of those things? Well, I probably could check into making changes to my phone bill (and I should definitely cancel the newspaper), but hopefully I won't be in a financial position where I need to make changes to the others.

A new car every 3 - 5 years isn't my priority - but that doesn't mean that it's the wrong decision for other people. If you drive a lot or really dislike having to get your car repaired, maybe it's the right choice for you. The key is to spend your money on what you value. For me, a new car is lower priority than my other choices.

1 comment:

  1. Great post. Hits on the areas we are discussing at the microfinance startup where I am working two days a week. We are providing an alternative to payday loans. I had no idea that people could be in such messes, or at least so many people. 25% of Americans take some kind of predatory loan. Stop spending money. I have taken my lunch every day and we eat at home most nights. House and cars are all paid for and we aren't going to sell. Of course, my big splurge--an apartment in SF.