Friday, August 5, 2022

Finance Friday: Save and Splurge

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?

11 comments:

Anonymous said...

I’m still on vacation and having trouble commenting so we will see if this works (this is Nicole from the Boyhouse!). This was interesting to read, we have similar financial styles, particularly with travel and buying quality clothes. I have clothes that are over a decade old; I am so choosy about quality. And flights too! We eat out very seldom so that’s a big savings for us. We’ve had a few restaurant meals on this vacation and I can’t believe how expensive everything is now!

Grateful Kae said...

Hmmm, let me think. I'd say we are "splurgey" on: our kids' activities, our eating out/ entertainment budget (more due to frequency, not due to eating at super expensive restaurants), and traveling quite often. We are generally very "relaxed" I'd say also in terms of clothing for the boys- we don't pinch pennies or thrift or whatever. If they need stuff, we buy it, and usually pretty brand name- though my husband does a majority of the shopping for them and is skilled at shopping sales or getting stuff at outlets. He is also a rewards member at the big places he buys their shoes, like Nike and Adidas websites, etc. and again, is good at getting deals. But we don't worry much about the cost for clothes or shoes for them, and just generally spend whatever it costs. We are also kind of splurgey on certain technology items, but within reason. As in, we have a lot of nice TVs, the kids each have iphones, we put in pretty high tech kitchen appliances, etc. But those items tend to fall into gift purchase categories (the phones) and the TVs last a long time, as will hopefully our cool fridge! Other than that, we don't have every latest and greatest tech gadget.

We are more "savey" probably than some people in terms of our house. It's an older house, and we could certainly spend more updating things if we wanted (though it still feels like this category adds up quickly, despite choosing to NOT do certain things...for example, we badly need a new driveway, and our deck needs replacing, but we are kind of just dealing with that for now. We did prioritize a kitchen remodel and a garage update recently, though.) I don't spend much on girly things like oodles of makeup or products, fancy purses or shoes at all. My van is old now, and we bought it slightly used. My husband would like to upgrade his car eventually, but is keeping his for now as well because it's more economical.

Suzanne said...

This is SO fun to read! My parents were both very frugal -- like you, it's hard to think back on what they splurged on! We usually went on a week-long vacation together, but part of that was covered by my dad's employer because he did meeting there, so... We did always have very luxurious accommodations and expensive fancy meals, though.

My husband and I are the same way about travel. We are very picky about direct flights when possible, and arrival and departure times. (Although we do tend to leave super early a lot, but that is our preference.) I'd say we splurge on food -- I buy what I want at the store and don't really think about cost. I mean, I notice if it's expensive, and I usually buy chicken vs. steak or lobster or whatever. My husband splurges a bit on tech -- he recently bought me a new laptop (which I LOVE) because my old one had a bunch of problems. But it WORKED, and it wasn't THAT old, so I was reluctant to do it. And while we don't buy a new phone every time there's a new version, we definitely don't hesitate to upgrade when it makes sense.

We are also frugal with a bunch of things that probably don't make sense -- like, our fridge is NOT in good shape, but I just cannot bring myself to spend the money to replace it. That's because I am an appliance splurger, I guess -- I want a really nice, pretty, fancy fridge. But not enough to PAY for one LOL.

NGS said...

What an interesting post!

My family was quite poor when we were growing up, so it was frugal for everything. I still have leftover anxieties from this and stock up on things I struggled with as a child (socks and scissors are the main ones that come to mind).

We're not frugal at the grocery store. That is one place where things go in the cart and we don't really comparison shop. We're limited on a lot of brands because of my husband's restrictions and so we just do what we do. I might start to do more comparison shopping because of inflation, but for now that's what we do.

I do not buy a lot of clothing, but what I do buy, I try not to buy from any fast fashion brands. You won't see me hitting up Target or Loft or any mall store. So I spend money on clothes, but I also take care of them. (I'm still rocking a dress that I bought in high school.) So clothing is a real splurge. I also am a gift giver and probably spent way more money on gifts than the average person.

But we rarely travel. We rarely go out to eat. We rarely go to concerts. We're homebodies and that tends to save us money.

Elisabeth said...

Oh Lisa. You know how I LOVE these discussions.

I also grew up in a family with very little financial flexibility. I can't think of anything they splurged on (does going out for McDonald's once a year count)?

During the early years of our marriage, money was tight (in a sense by choice as we bypassed traditional careers and started two small businesses; we had no school debt because of scholarships/savings). Now that we have a lot more financial flexibility, I would still say we are frugal across the board. That said, to my parents it would look like we splurge - taking trips etc. Even on splurge items (like our trip to NYC), we did lots of free things, spent very little on food, looked for good deals on a hotel. I need to get better at splurging, actually. A lot of my frugal tendancies stem from my childhood and aren't necessarily rooted in current reality.
I did hire someone to help with cleaning for several years. That felt like a HUGE splurge.
We donate regularly to charity, in a way some might consider "splurging?"
We bought a house below what we could technically afford, I buy almost all my clothes second-hand, we drive an old vehicle (and went down to just one car over COVID). I'm an underbuyer and quasi-minimalist. Like you, we're aggressively paying off our mortgage which isn't necessarily a conventional strategy, but it's one that makes sense for us.
I do think that when you can be frugal by choice (as is the case with me) it's very different from being forced to be frugal to make ends meet. I recognize the privilege I have; if I can't find new sneakers second-hand, I can afford to buy them new at a store. While I shop sales, if I want fresh produce, I can pay full price and it doesn't impact my bottom line. I think this is an important consideration when I think about being frugal and the fact that I don't HAVE to be and that is not the same thing as so many people experience when they make hard choices about prioritizing food over internet or fuel etc. My parents often talk about a huge dental bill they received when my siblings were little and it was literally the full amount of my father's income for a whole month. This blows my mind! They went on to make a lot more money later in life and can retire comfortably and aren't nearly as frugal now...but to have a single bill total your net income for a month must have been horrifying.

coco said...

I think how one spends money says a lot about their values and the preference changes over the years. Now I splurge on travel, experience, my hobbies, our health, and save on households cleaning/staples, car, random shopping. I also tend to buy good quality clothing for me now as I think they last longer and love them when I wear them. For the kids, I still buy cheap staff but comfy as they grow out of them so quickly.
groceries bill is high for us as we eat a lot of fresh produce/fruit and seafood. I was just telling my hubby that when I was in grad school, some people can spend 200 per month while I was spending 400-500 just for me.

katielookingforward said...

I love this, we definitely splurge on food, whether it is grocery or going out. But I don't buy much in the home decor department. I walk through Marshalls or tj max a couple times a year, but rarely buy anything. We are still rocking furniture that our parents gave us, and I have a few side tables I bought at target in 2010. They've seen a duluth apartment, my parents house, the grand ave apartment, the golden valley condo, and now the Delano house. Jeff has a company car so we save there. And I agree, buying a new car can pay off in the long run if you play your cards right.

Jenny said...

Oh boy- your grocery bills are CRAZY CHEAP!!! I mean I know your kids are little, but you've still got four people to feed! Obviously I need to start shopping at Aldi. It sounds like you guys are doing amazing- frugal in all the right ways and slightly splurg-ey when you'll really enjoy it. We've been trying to reduce our spending lately- things got a little out of control with a kid in college- and it's hard. I would say I still splurge on Starbucks drinks, and we get takeout once a week (usually Chipotle, so it's not too too expensive.). Other than that we don't go out to eat unless it's a special occasion. I try to get most of my books from the library but every once in a while I'll splurge on a new book. This was a great post!

Stephany said...

It's actually very hard to think about what I am cheap about, lol. I grew up poor and it followed me into adulthood and it's only in the past few years that I've felt anything close to financial security. I guess the biggest thing I'm cheap about are clothes/jewelry. I was doing Stitch Fix for a while but most of my clothes come from Target/Old Navy. It's just hard for me to spend a ton of money on clothes, even though the cost-per-wear would be much better on higher-priced clothes. I also drove a very old car for a long time until it was finally time to get a new car, and I love having a new car so much that I'm like "Am I going to turn into the kind of person who gets a new car every 5 years?" HA. Frugality is just not in my DNA, though I wish it was.

Kyria @ Travel Spot said...

I love these posts. I remember you doing one of these back in the day and I enjoyed it then and I am enjoying it again now! As you know you and I are very similar when it comes to saving/splurging.

I have not bought a book or any new clothes (except for running shoes) in...maybe a few years? I always use the library for books, or read one I already own or if I really, really need one (I like travel books in print to own) I have a lot of gift cards to use up!

For clothes, I am not a big clothing buyer in general but definitely during the pandemic I decided to pretty much wear the same five outfits each week and get rid of a lot of the other stuff. Also, I buy Anne Taylor items as they are pretty much the best and longest lasting, but I always buy them either from the thrift store or a consignment store like ThreadUp, but even that has been a few years since I have done that. You are totally right; they last forever. My favorite pair of Anne Taylor slacks is probably 10 years old by now and it is just starting to get a hole in the inner lining but the outer pants are still fine!!! The other thing I do spend on is running shoes, although with those I buy last year's model or wait until they are on sale, as I cannot justify paying over $100 for shoes that I have to buy a few times a year!

That was a very long paragraph, but in short, I also spend on travel (big chunk at a time, but still frugally travel) and certain grocery items (ie I will buy blueberries out of season because I like them and I can!). I save on pretty much everything else! I don't eat out; I don't really go out; I am happy to camp or sleep in the car...

The Many Thoughts of a Reader said...

Splurge - books, face lotion, shampoo, vacation

Cheap - food, shoes/clothes