What I like to spend money on

Posted on March 26, 2013 by Peg

Being frugal isn’t about not spending money; it’s about spending money according to your values.

Or as Marjorie Harris, author of Thrifty, says, “Being thrifty requires a brain; being cheap doesn’t.”

I’m frugal, but I’m not cheap. I will gladly pay money for things and experiences that match my values and that I will really enjoy. To do that, I’ve had to think carefully over what I really value in life.

When I first started my Super Frug lifestyle, I made a list of things I like spending money on and things I don’t like spending money on. Today, we will focus just on the likes.

Here’s what I like to spend my money on.

1. Mortgage
I love our house and I love our neighborhood. I want to live in this house until I die–which I hope is a long time from now. We took advantage of the great interest rates and refinanced twice in the last four years and now our mortgage is very affordable.

2. Utilities
I don’t know about you but I like having clean water, regular heat and electricity, gas for my stove, and the garbage and recycling taken away every week. I love that the city of Seattle composts! I’m looping in my mobile phone, land line, and Internet service under this category too. It may sound boring but I greatly value my utilities and I’m glad they are readily available and generally, reasonably priced.

3. Good, fresh food
Good food leads to good health and happiness. I’m happy to spend money on good food. I’m also lucky to live in a city where fresh food is readily available and reasonably priced. Marcus and I are able to buy all the fresh fruit and vegetables (mostly regular rather than organic), meat (sustainably raised only), seafood (wild only), nuts, grains, and a few processed foods that we need for about $200-$275 a month.

4. Haircuts by Jamie L. Scott!
My stylist and I always greet each other by calling out our respective full names. “Hello, Jamie L. Scott!” “Hello, Peg Cheng!” I love getting my hair cut and styled by Jamie at her salon CERES. She charges me $50 for my haircut and I give her a $10 tip. I know for some people, $60 for a haircut sounds like a lot, but again, being frugal is about spending money on what you value. I really value my time with Jamie and she always makes my hair look great, so paying $60 feels just fine to me.

5. Health club membership
This year, I joined a Tai Chi and Qi Gong dojo called Embrace the Moon. I’m taking classes twice a week and even though it costs three times more than my old gym membership, it’s totally worth it to me. It’s a great space with wonderful teachers and great students, and I’m learning an ancient practice that’s improving my mental and physical health every week. I feel that the money I’m spending now on Qi Gong and Tai Chi classes will save me thousands of dollars later when I have less (or no) health issues in my old age.

6. Travel
Marcus and I both love to travel! Over the past five years, we’ve developed better and better skills at traveling light and for less money. We love to experience and learn about new places, foods, cultures, art, architecture and people. Our goal is to travel to at least one international destination every other year and to U.S. destinations three times a year.

7. The Arts
This is a very broad category but for me it includes movies, plays, concerts, dance performances, museums, readings (usually free!), and lectures or talks by authors, artists, musicians and other creative beings. Because I want to go to many art events, I hunt down good buys such as pay-what-you-can nights and free events.

8. Art
This is one category where I don’t try to get a “good deal.” I admire people who are trying to make a living as an artist and I support them by paying the price they set for their art.

9. Excellent restaurants
If I love a restaurant’s food and service, I will come back again and again. While most of the places Marcus and I frequent are what we call excellent ethnic eats on the cheap, some restaurants we enjoy are more expensive and so we try to patronize them on special occasions like birthdays and anniversaries.

10. Exquisitely made, perfectly fitting shoes and boots
Need I say more?

Now that you know what I like spending my cold, hard cash on; what do you like spending money on?

Making a list is a great exercise for getting a grip on what you really value in life. I hope you’ll try it. Let me know what you discover!

Traveling light: why I stopped carrying a purse

Posted on March 4, 2013 by Peg

I don’t carry a purse.

Before I get into why, here’s a little history. I’ve been carrying a purse, or some kind of bag, most days of the week, for 30 years.

It started around age 10 when my schoolbooks became too heavy and numerous to carry in my arms. At that time in the 1980s, huge fabric tote bags emblazoned with Le Bag (remember those?) were very popular. I couldn’t afford one so I had to settle for a knock-off from Gemco or Kmart that was printed with many different sayings in French.

I think that’s when my bag-envy and love of big bags and purses began.

I’m now 41. And I’ve owned many purses and bags. I’ve also suffered from right shoulder and upper back pain for many years.

My massage therapist would tell me, try switching your purse from one shoulder to the other every once in a while. I tried. But the pain persisted.

Years ago, I considered not carrying a purse but the thought of not having my wallet, lipstick, lip gloss, mirror, Kleenex, water bottle, pad of paper, pen, hard candy, etc. close by at all times made me panic.

Then, one day, I got sick of carrying it all.

Maybe it was because I was tired of having to transport everything every time I changed purses. Maybe I was having a bad day. I can’t remember why. I just knew I didn’t want to do it anymore.

So, I stopped.

In the photo above, you can see what I now carry when I leave the house.

Loose change goes into one of my jean pockets. Cashiers love me because I almost always pay with exact change.

In one of my jacket pockets goes my zip-up wallet that holds my cash, credit and debit cards, driver’s license, bus card, library card, car and health insurance cards, and business cards. Also, tucked into my wallet is a plastic sleeve with an eyeglass shammy inside (in case you haven’t heard, it rains a lot in Seattle).

In my other jacket pocket I carry my keys and a Kleenex pack.

Usually I bring my phone in the same pocket as my keys, but not always. I know some of you are gasping right now. I don’t always travel with my phone and yes, life still goes on.

I haven’t carried a purse for five months.

Guess what? No more shoulder and upper back pain.

I still love purses. They are beautiful objects of craftsmanship. I usually carry one when I’m traveling (maps don’t fit well in my pockets), when I’m teaching (looks more professional to carry my handouts, business cards and dry-erase markers in my bag), or when going out to an upscale event (why doesn’t someone make a chic evening dress with pockets?), but I no longer carry a purse every day.

And I feel free.

Why personal finance is personal

Posted on February 24, 2013 by Peg

I don’t believe in dogma.

According to the Free Dictionary, dogma is “an authoritative principle, belief, or statement of ideas or opinion, especially one considered to be absolutely true.”

I think the key phrase here is absolutely true.

How can anything be absolutely true for everyone?

Through my experiences, and observing the experiences of others, I’ve learned that there isn’t just one absolute true way of believing or living your life. There are many ways.

This is definitely true when it comes to personal finance. When it comes to personal finance, I think the key word is personal.

It’s personal because it’s about your finances and not those of a business or organization, but it is also personal in that you get to choose how you handle your finances.

It’s about YOU and how YOU want to live your life.

When I was in my mid-twenties and finally working full-time instead of being a full-time student, I read the book, Your Money or Your Life (YMOYL).

I was amazed that it had a plan for becoming financially independent (F.I. they called it) before retirement. I had never thought that becoming F.I. early–really early like in your 30s or 40s–was possible unless you were rich. It blew my mind!

So, I tried it.

I tracked all the money that I made and everything I spent money on. I recorded all my daily expenses into an Excel spreadsheet. Every month, I’d look at the various categories that I had spent money on (Rent, Food, Transportation, Utilities, Clothes, etc.) and for each category, I asked myself the following questions:

Did I receive fulfillment, satisfaction and value in proportion to life energy spent?
Is this expenditure of life energy in alignment with my values and life purpose?
How might this expenditure change if I didn’t have to work for a living?

It opened my eyes to how I spent my money and how I could decide if what I spent was of value to me. And if it wasn’t, I could change it.

During the years that I was working towards being F.I., I met some people in their 30s who were F.I. through following YMOYL. Some had come from money and some had high-powered jobs where they made a lot of money. They did what the book said: they tracked their spending and cut back a lot; they saved a ton of money and invested it; they made enough interest to live off of; and then they quit their jobs.

(YMOYL also details stories of people who became F.I. who were schoolteachers and such and definitely did not come from money, but I’m just letting you know about the F.I. people that I met in Seattle during the 1990s.)

I don’t begrudge these F.I. folks their good fortune and their high-paying jobs. They chose to create a more frugal and more fulfilling lifestyle for themselves. That’s awesome.

But, could I relate to them? No.

I tracked my spending for about three years and it drove my former husband crazy. (Sorry, Erik!) After all the tracking and all the analysis, I could see that I didn’t spend much money. We lived in a one-bedroom condo with an extremely reasonable rent that included free laundry, free cable, free parking, and free utilities. I didn’t have a car and took the bus everywhere. I brought my lunch to work and treated myself to a lunch out once or twice a week. I spent little on clothes or shoes. I saved 10% of my income for retirement and a little less for savings.

I tried to cut my spending so I could save towards being F.I. After a while, it started to make me miserable. After a while, the daily and monthly tracking stressed me out.

So, I stopped.

Now, my personal finance routine is very simple.

I still use Excel but only to list out how much our monthly and annual fixed expenses are (mortgage, property tax, utilities, car insurance, health insurance, etc.). I revise it about twice a year. Marcus and I have agreed on a cash amount that feels reasonable for using on food, eating out, entertainment, and personal purchases. We withdraw that amount of cash each month, split it between us, and that’s all we use. We add to our savings every couple of months. We have no debt.

Are we fulfilled? Yes.

Are we on our way to being F.I.? Yes. Someday.

It’s been over fifteen years since I read Your Money or Your Life and there’s a new edition that is “revised and updated for the 21st Century.” I’ve added it to my library queue and am looking forward to reading it.

Do I think Your Money or Your Life is a form of dogma? Sure. But so is every other personal finance book out there.

To me the problem isn’t that there’s dogma being sold and marketed in our society; the problem is if you choose to follow it, and only it.

The great thing is that we, as humans, can choose what we want to believe and what we don’t want to believe.

We can try different ways of thinking. We are lucky to have that ability and it is truly a gift.

Experiment. Try. Adjust. Revise.

Find ways of managing your money that feels right, true, and good to YOU.

Why I save money

Posted on February 1, 2013 by Peg

Everyone has different motivations.

What works to motivate one person may not work to motivate someone else.

For me, I’m motivated to save money because I don’t want to have another job.

In 20 years, I’ve worked at 33 different jobs.

I’ve worked at everything from Public Toilet Researcher for a Seattle City Councilmember, to Communications Director for an environmental non-profit, to Pre-Law Adviser for the University of Washington.

I am grateful for the fact that I’ve had so many diverse opportunities. I’ve learned a lot about what I like and don’t like, met tons of interesting people, made some money, funded my retirement account, and gained some great skills.

Do I want to get another job? Not really.

I love being self-employed and I love being my own boss.

I am currently the founder, boss and sole employee for Prelaw Guru, a consulting company that helps people kick ass on their law school applications.

I love setting my own schedule every day. I love being able to take a break in the middle of a work day to go to my qigong class. I love sitting quietly and undisturbed for an hour just to think. I love making my own daily business decisions without having to check with anyone else. I love not having to go to staff meetings. I love being 100% responsible for everything that happens with my business–both the good and the bad.

The career of an entrepreneur is not for everyone. Many people would hate it. They consider it too risky, too much stress, and too much work. But it works for me.

Every day, I’m conscious of how I spend or save my money because I want to be an entrepreneur for the rest of my life.

Running my own business means I have to be able to ride the ups and downs of revenue (and losses). I have a hefty safety net because you just never know what might happen when you’re running your own business. I’d rather be extra safe than sorry.

I’m not going to say I’ll never take another job because I don’t know what the future holds. There might be an organization and a position out there that’s the perfect fit for me. Never say never.

But, for the time being, I know what motivates me every day to save money: being job-free and being my own boss.

It’s hard work but I love it.

What’s something (an experience, a goal, a lifestyle, an actual thing) that you love so much that you’d be motivated to save money every day in order to reach it?

What’s your motivation to be Super Frug?

How to know when a job is toxic

Posted on January 18, 2013 by Peg

I’ve had 33 jobs.

In college, I often had three jobs at the same time. There were some stressful times, but more often than not, I liked the variety, I liked the stimulation, and I liked paying my bills on time.

From doing database management for the food court, to walking around with a walkie-talkie as building manager of the student center, to cleaning and sterilizing lab equipment, I was thrilled with how much you could learn on the job!

I became a big believer in getting paid to learn rather than the other way around.

Not every job was good though. Some were boring. Some tasks were pure drudgery. Some had terrible managers. Some were temporary. When a job got bad or ended, I would just look for a new job and move on.

Once I graduated with my Master’s degree and started working at full-time jobs though, things changed.

I discovered that leaving a full-time job and finding a new one was not as easy as when I was working all kinds of part-time jobs.

I discovered that sometimes your new workplace has just as many problems as your last one.

I discovered that a workplace with toxic people, terrible management, and/or lack of ethics can deteriorate your health.

Do not wait until a job gets so bad that you start throwing up every day or having such terrible pains that you have to call in sick or pop Tylenol to get through the day. I know how that feels. It’s terrible and makes you feel fearful and helpless.

Through making my own mistakes and learning from the mistakes of others, I realized that it is much better to be proactive than reactive.

I learned how to recognize the canary in the coal mine.

Like canaries sent into a coal mine, I figured out how to sniff out the “toxins” in a workplace. But unlike the canary who would die if it detected dangerous gases, I could recognize what the warning meant and start taking action.

5 TOXIC WORKPLACE SITUATIONS TO WATCH OUT FOR:

1) Your boss consistently makes promises to you that they do not keep and this has been going on for more than a year.

2) You’ve caught your boss or the head of your organization lying to you and they don’t think that it’s wrong.

3) You’ve caught your boss or the head of your organization lying to your clients or customers and they don’t think that it’s wrong.

4) Your boss or coworkers do unethical and/or illegal activities on the job but when caught, they are not fired, prosecuted or justly punished.

5) Consistently, the most incompetent employees in your organization are promoted while the most productive are demoted or forced out.

All of these situations are like toxic “gases” warning you to get the hell out of the “coal mine.”

If you experience any of these situations, it would be a smart move to start looking for a new job. I have experienced every one of these situations and was able to move out before things got worse, which they inevitably did.

NOTE: Do not rush and do not get desperate. You do not want to leave this job only to go to one with just as many or more problems. Do your research and put out feelers to trusted contacts who can keep your search confidential. Do not share your job hunting with your coworkers and boss in order to avoid potential retaliation.

Take the time to find the right next job or position for yourself before you resign.

You might be asking, what has any of this got to do with being frugal?

I truly believe that the more unhappy you are, the more money you will spend. Visit any workplace and talk to people and you will find this to be true.

I believe that unless you find work that is a good match for you, you cannot reach your full potential in terms of how much money you make and keep, and how good of a life you can have by managing that money well.

Spending money to make ourselves feel better gives us a temporary boost. We feel better but only for an hour or part of a day.

Can you imagine feeling so good every day that you don’t feel the need to spend?

You can have this. Truly. I will cover this more in my next post.

If you are in a toxic situation at work, have faith and keep looking. DON’T GIVE UP. In time, the day will come when you can fly out of that coal mine to a better place and a better life.