THE (NI)X FACTOR
There are a lot of things I do not care about. I’m serious. I am completely apathetic about them–it’s not neutrality, just nothingness. I will never lose sleep over these things. I will never shed a tear about these things. I’ll never scroll through Facebook and think about how much I am missing out by not doing/having/experiencing these things. I won’t be sighing in my old age about how I wish I’d focused more on these things.
So I’m quite ruthless in my approach to how these things relate to my finances: I don’t factor them in.
An example for me is new clothes. Aside from stockings (damn ladders!) I don’t think I’ve bought a new item of clothing in the last six months. Ever since I started my internship, I’ve bought a single item of clothing to replace something that died during a series of brutal calls. One item. When I was a student, I don’t think I bought any clothing–and I would get thoroughly irritated whenever someone sent or gave me new/hand-me-down clothing because I was very vocal about not wanting or needing more, not to mention I had nowhere to store my old stuff, let alone the new. (To be clear, my irritation was offset by my gratefulness. The clothes were always invariably nice and I knew it came from a place of love, even if it showed these people didn’t listen when I spoke 🙂 )
LIFE IS SO EXPENSIVE!
When I met with my second attempt at a financial adviser, she had me draw up a budget based on a template that she had set out. Every estimate I threw out, she told me was too low. She said I was underestimating future expenses because I had been so used to the impoverished student life and she didn’t want me to sacrifice the lifestyle I could afford.
(Interestingly enough, she said my estimates for student debt payoff were too high. Amazing how I couldn’t afford a debt free lifestyle, but apparently could afford R4000 a month for “Entertainment”…)
I remember leaving that meeting so shell-shocked.
“You know, there really isn’t that much money once you sit down and break down a budget!” I told a close friend who was due to have the same meeting soon after. “I didn’t realise how expensive life is!” Kindly, she didn’t jump in to correct this erroneous assumption. She simply smiled and told me she was eager to find out more.
You see, the problem was that I was treating every budget line as a compulsory expense with a compulsory spending limit. This meant that the things I valued, the things I really wanted to spend my hard earned money on, weren’t going to be as easy to fund or save up for. It seemed inevitable that my student debt was just the beginning of a long road of credit that I’d be using to achieve my goals…
I was almost indoctrinated, as most young people are when they start working, until one day I had a novel thought. I was looking at the “Clothing” line item, thinking about the fact that despite haggling over it, my adviser had insisted I would need to set aside at least a couple thousand a month to build up a professional wardrobe. I realised then that this was silly. I had clothes. I had spent the last phase of my medical education doing purely clinical training, and had managed to be professional throughout with my old outfits. I wasn’t self-conscious about the fact that they didn’t cost a lot or that the styles were slightly vintage from being generations’ old. I didn’t care that they weren’t brand names and wouldn’t land me on Instagram’s best-dressed doctors lists. And even if I did need new clothes, I didn’t care enough to be spending R2000 a month every month indefinitely. It didn’t need to be a recurring budget item. It could be a short-term saving’s goal or a once off expense from my first salary. And honestly, if I could make it through the first month of working without new clothes, they probably weren’t that urgent.
LIFE ISN’T EXPENSIVE, PEOPLE ARE
This was a revelation that helped me start looking critically at what I was being set up to “expect” from being employed. That “Entertainment” budget? What did I need to be entertaining myself with that would cost that much every month. I’d lived in high cost of living cities before (Hello, Cape Town. Hello, Johannesburg!) but I’d always been able to entertain myself quite thoroughly on much less than that. Maybe I could factor in the occasional splurge when out on the town with spendthrift friends, but that would happen once in a blue moon and, again, I could save up for that instead of expecting to pay that amount monthly. Slash that expense. Internet? I’m a chronic YouTube watcher and even I laughed my head off as I cut that budgeted amount down. Credit Card Payments? You mean, I wouldn’t be paying off my card every month with the money that I’d budgeted for the categories it funded? Definite delete.
And so on and so forth. If it didn’t matter to me, why was it in my budget? If it didn’t make sense to me, why was I spending mental, emotional and financial bandwidth factoring it into my life?
Even for things that did matter to me, the numbers were way off. My financial adviser loved the fact that I’m a vegetarian because it meant she could go on and on about how expensive good, nutritious food supplying all my needs would be. But I’d done the vegetarian thing for years–at one stage as one of four dependents on a pensioner’s income. I didn’t need R5000 a month to get all my nutrients in, and the final amount I settled on was still exorbitant only because food is something I love to splurge on. It matters to me, but I didn’t let that make me crazy and unreasonable. I don’t live on rice an beans like I did during the tougher times as a student, but I’m also not spending anything close to R5000 a month on groceries. Why? Because although great tasting, colourful, fresh and nutrtious food matters to me, labels don’t. I don’t need to buy all my vegetables at Woolworths. The potatoes at Checkers are just as good and hold up just as well to bulk purchase. I don’t need the special lentils from Wellness Warehouse. USave has great bargains on lentils and I can grab those while I stock up on other staples. Do I shop at Woolworths and Wellness Warehouse? You bet your Uncle I do. But not any more regularly than I did before (so far), and I feel rather fancy whenever I do walk out of either with anything resembling an entire grocery haul as opposed to one or two speciality items.
This ruthless prioritisation (and critical analysis) of every category opened up room for the things I valued. Generosity to family (very specific and not open ended) could be built into my monthly savings goals. I could accelerate my student debt payoff plan from the original plan of just over three years (which gave the financial adviser a real laugh because it was so ambitious) to just over half a year. I could plan to take full advantage of the new retirement reforms and their tax implications, as well as the new Tax Free Savings Account that treasury has introduced. More and more, room started opening up, not only for my more serious and long-term goals, but even for my discretionary categories.
For example, travel was another huge budget item (savings category), and an important one at that. I didn’t know where I’d be placed for internship and I needed to ensure that I put aside enough each month to afford flights home or short getaways when needed. But any way I squeezed that first budget, travel money didn’t seem achievable without incurring additional credit. Unfortunately (?fortunately) I ended up being placed somewhere so remote that there is no airport, and the drive to the nearest airport-containing city is equivalent to the drive to some of my closest immediate family members. So although daily travel expenses average on the low side (including the fact that I live walking distance to work), the occasions where I do have to travel further can work out to being much more expensive than they may have been in a bigger, more central location. I have always been more than willing to overestimate it in case I ever want to fly or drive out to visit family and friends, though. And because I cut the fat in other, sillier (to me) areas of my budget, I feel no guilt splurging out on this category. It matters to me. It’s something I would lose sleep over.
The shoes? Not so much.
MONEY IS JUST A TOOL
When people talk to “frugal” folk, I think the misconception is that we’re scared of spending money or maybe even a little obsessed with hoarding it. This is because most people don’t understand that money’s only relevance in life is to act as a tool. A tool to have the freedom to pursue your own dreams and aspirations, or to pay it forward so that future generations can pursue theirs. A tool for generosity and kindness, where you can help those who didn’t have all of your advantages and privileges you’ve had, if you are so inclined. A tool to broaden your horizons or fund your true passions and interests. A tool to regular great meals and a warm bed every night if that’s what you value (most people do), or to having all of the higher-end lifestyle alternatives if that’s what you value.
I don’t think any one way of using hard-earned money is superior to another. You often hear people tout things like, “I like to spend my money on experiences and not stuff,” as if they’re special snowflakes who have somehow “beat” the stuff-buyers with their preferred money drains. Experiences can still be expensive, just as stuff can be affordable. You’re still just using a tool in a way that is specific to your values at the end of the day, (And many people appreciate both. It isn’t about being right, it’s about being happy.)
I choose not to clutter my life and drain my wallet for things that mean nothing to me. This has nothing to do with the innate value of what I do choose to spend my money on (or invest it for) and more to do with what I have discovered makes me tick. Some people hate travel. It would be senseless of them to sacrifice things they do value and enjoy just so that they could fill some “experiences” quota for social media or for the approval of family, friends and colleagues. Others can’t imagine a fulfilling life without it.
It isn’t about the price of things, so much as it is about making sure that what you get out of those things actually adds meaning or value to your life. As one of my favourite personal finance bloggers writes: you can afford anything, but you can’t afford everything.
I like spending money on good food. I like paying for amazing experiences. I like saving and investing for future freedom. I look forward to a day that I can afford some of my more expensive interests (hello, recording music, I’m looking at you!). I even enjoyed (gasp!) paying back the money I owed that allowed me to obtain a degree in a field I am passionate about.
These things will all cost me something today or someday, but I’m willing to pay up because the benefits are truly priceless. It’s not so much about the tool itself, more than it’s about being intentional in how you choose to use it.
Or how you choose not to, if that’s what you prefer.