Happy Friday! I'm back with another finance post! On a recent Girl Next Door podcast episode, they talked about where they were cheap and where they splurge so I thought it'd be fun to share where are cheap and where we splurge!
Family of origin:
They started off by talking about their families of origin so I thought I'd start there, too. My parents had 5 kids and ran a business together. There was a huge emphasis on financial responsibility when I was growing up. I remember my mom teaching me how to reconcile my bank statements when I got my first checking account, and I also remember lots of comments/lessons on not using credit cards, or only charging an amount that you could pay off when the credit card bill came.
Erica and Kelsey talked about what their parents were cheap about and where they splurged, and overall, it's kind of hard to think of what my parents splurged on - it's just not in their nature to splurge and they had a lot of kids which is expensive! But then I remembered that they provided a car for each of us when we were in high school/heading off to college. We all got used cars but mine - a cute cherry-red 1997 Toyota Celica - served me well all through college so they made sure to set up us with something reliable. But providing cars for 5 kids is quite a splurge! They were also very generous when it came to birthdays and Christmas. They weren't over-the-top but we had lots of gifts to open and there was a feeling of abundance at Christmas time.
But overall, I would say my parents were extremely financially responsible. They worked incredibly hard, too. I have surely taken more vacation days in my 19 years of professional work than they did over their 50+ years of working. But that is the nature of being self-employed in a business that can be 24/7/365 (they ran an electrical/heating/AC business). There was a business line that rang in our house at all hours of the day and night. The business line had a different ring tone and when I was a tired teenager, I trained myself to sleep through it and only wake if our house line rang. Wild, huh?
I can see that my parents financial responsibility rubbed off on me and hopefully that will be the case for our boys - fingers crossed!
Current state:
Anyone who has read this blog for awhile has likely gotten the sense that we are are frugal couple. Phil is more frugal than I am, but both of us have a tendency to save instead of spend. We are very fortunate to work in well-compensated industries which has allowed us to do things like buy in the neighborhood where we live and pay off our mortgage, but we've been really thoughtful about paying off debt and living well below our means!
Cheap/frugal:
- I don't buy any books for myself unless I can't get a book club book from the library. We pick the books we will read for each year in January and then I set the cadence of the books based on library availability to make sure we can source books from the library. I do buy books for my kids, but I typically only at Christmas or for birthdays, and those books get read sooo many times so the cost/read is very low!
- We don't eat out very much. I usually get one lunch/week when I am in the office. We get take-out about 1-2 times/month and it's usually take-and-bake pizza which is very inexpensive and provides about 3 meals for us. I am starting to eat out with friends more often and my book club now meets at a restaurant so my spending in this category is increasing, but I think it's still relatively low.
- We also seem to spend less than the average family on groceries. I am sure this will change as the kids get older and eat more, but I'd say we spend about $100-125/week on groceries. We save a ton by getting as much as we can at Aldi. I am floored by how cheap their food is, especially their produce!
- We do not spend much on clothes for the boys. I'd estimate that about 75% of their clothes are hand-me-downs. If they need something, I usually go to "Once Upon a Child" first which is a consignment store for kids clothes. If I need something that can't be found at Once Upon a Child, I usually buy it at Target or through a Carter's online sale or something like that. I want my kids to be comfortable but I don't need them to look super stylish! This will of course change when they are older and have input on what they are wearing but I'm happy to get by as cheaply as possible in this stage of life. And we have paid it forward in terms of hand-me-downs and have given hand-me-downs to other families.
Splurge:
- We have both purchased new but affordable cars. I bought a Camry in 2016 and Phil bought a Corolla in 2013. Our cars both have about 30-35k miles on them which is so low for how old they are. If I sold my Camry now, I could get about what I paid for it in 2016 since the used car market is nuts. So I don't think buying a new car has been a bad decision for us. We like the comfort of knowing the car is reliable and will last for a very long time. We are looking to buy a Rav4 Prime which is a hybrid/electric vehicle that can run off the battery for trips under 50 miles which is about 90% of our driving. But with the tax credit, it will cost the same as a traditional hybrid. We just need a car to be available so I kind of doubt we'll buy one this year (we've been trying to buy one since last summer!). But I've been driving since I was 15 (you could get your license at 14 in North Dakota when I was growing up - my parents made me wait until 15), and I'm on my 3rd car (Celica, then new Accord in 2003, then new Camry in 2016) so my cars have lasted for quite a long time!
- We splurge on travel. We do not travel very often, but when we do we travel, we end up spending more than we could if we were cheap about travel. We book direct flights and are picky about departure times. We will not buy a flight that leaves before 8 am because getting to the airport at 6 is awful and we won't take flights that get us back late either, like after 8pm. We were picky about departure times pre-kids and are even more picky since having kids. We also do not stay in hotel rooms unless we are spending one night in a city, which is rare for us. Even before kids we preferred to stay in Airbnb or VRBOs so we would have access to a kitchen. Since having kids, we rent places with at least 2 bedrooms so that we are not all sleeping in the same room. Besides having access to a kitchen, we like having a common area to hang out in when the kids are sleeping. And when we've gone to Florida, we've splurged and rented a condo on the beach. Since we travel as a family so infrequently - typically 1 trip/year in the spring - we want to make that one trip as enjoyable as possible. I recognize our privilege in being able to travel like this, though!
- I don't buy clothes much but when I do, I tend to shop at places like Banana Republic or Ann Taylor. I find that my clothes from there last a really long time - like 5-10+ years. I never buy clothes at places like Target, H and M, etc with the exception of workout clothes. I splurged on a swimsuit from Athleta last summer because I wanted a 2-piece suit with board short type of bottoms since I'm always crouching down to help the boys with something so needed/preferred full coverage. It was worth spending a bit more on it versus getting something less expensive at Target. I really consider cost/use when buying clothes, though. I did go the less expensive route for maternity and nursing clothing and purchased most of those items at a consignment shop for expectant/nursing mothers. But outside of that stage of life, I'm willing to spend a bit more but almost never pay full price as Banana Republic often has great 40% off everything sales!
- I treat myself to a latte about once a week. Oof the price of a latte has really increased in the last 6 months but I still find the treat worth it!
Ok your turn - what do you splurge on and what are you cheap about?