Do I need a budget?

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Perhaps due to my fortunate position in life, I’ve never had a budget, and by budget here I mean specifically “In this month, you are allowed to spend $x on category a, and $y on category b, etc.” I don’t like budgets for a few reasons. Due to (warning: overused phrase) thinking like an economist I like to believe that I allocate each dollar to where it gets the most marginal benefit, roughly speaking. I don’t see any sense in labelling particular dollars as ‘grocery dollars’ or ‘restaurant dining dollars’. Each dollar is the same as the last, and each should be spent where it gets the most benefit, right? And that will change month-to-month! Money is fungible and I often physically recoil when people introduce ideas that implicitly suggest it is not: it is one of those ideas that I feel like I internalized perhaps too thoroughly during my education.

Also, as mentioned, I’ve been very fortunate. I don’t struggle to find the funds to pay my monthly bills, and the substantial amount that doesn’t get spent goes into the investment/retirement bucket.

What it is that I actually do, though, is track my expenditures. Every dollar that gets spent gets put into a spreadsheet so I know where my money is going. To some people, this counts as a budget, so I made sure to define that word up top. Where I really fall down, however, is doing any kind of ex-post analysis of this data. Sure, I look at the total monthly spend – and usually groan that I didn’t quite make my target again – but beyond that headline figure, I don’t really spend any time looking deep into this wonderful information I collect.

This lack of attention results in nasty surprises when I do, on occasion, out of curiosity, look at a particular category. Most recently exemplified when I calculated my average spend on dining out and see that that is where approximately 170 francs a month is disappearing.

So perhaps I do need a budget. This is where that old saying is useful: “take care of the pennies and the pounds will take care of themselves.” If I pay greater attention to the categories within my expenditure, then that’ll filter upwards to the headline expenditure.

I’m not going to try to come up with a comprehensive budget and enforce it draconically straight up. I know what I’ve been accustomed to spending month-to-month, so I will use this information for a few categories and see if I can hold myself to account. I won’t look at things like travel for now, which involve sporadic expenditure, but I will look at the grocery spend, the restaurant dining spend, and the booze spend. I will take the mean monthly spend over the last year, knock perhaps 20 per cent off, and try to keep myself within this limit to save a few extra dollars* in this manner.

*Dollars, pounds, francs, pick a currency and stick with it, man!

Simplifying digital life

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I tend to dislike New Year’s Resolutions – if you want to do a new beneficial thing, why aren’t you starting now? Still, the timing works out, and I will barely have a moment to spare between now and early January. So as a New Year’s Resolution I’d like to simplify my digital life. I need to begin with an audit – catalog every single online service I’m subscribed to/a member of, and figure out every single organisation/service/whatever that spams my mailbox on a regular basis. Try to remember my passwords, if necessary. Probably document them, too, and file them away in an encrypted location. Perform a software audit on my phone.

I’m on the lookout to find something that can lock the facebook app on my phone to certain hours. I’m already umming and ahhing about whether or not to delete accounts from certain services that I like, but don’t often use. For example, Instagram. I look at it a few times a week. It doesn’t seem to be a huge drain on my time. I sort of like scrolling back through photos I’ve taken, even though I take perhaps one or two per month. So what would I gain by deleting it? Well, the whole point of this simplification business is that if you don’t have a good, clear reason for retaining something you ought to knock it on the head. Leave space for more productive and life-affirming habits to spring up in their place, perhaps?

There are a few sources online to look at that discuss a sort of digital life audit, but perhaps fewer than I expected. This seems to be the pick of them, but there are also examples here and here. Nothing too groundbreaking. So in list form, I will try to:

  • List out all the companies that are regularly emailing me and see if I can unsubscribe from unnecessary mailing lists
  • Remove apps from my phone that I don’t want to continue to spend time on
  • Make a list of the online accounts I have, make sure I know which email address matches to each, and catalog their passwords
  • I’m going to try to redirect personal emails to one particular address, and leave the other for online accounts/notifications/spam.

I don’t think I’ll audit the programs installed on my laptop in the same way as my phone. Reason being, I don’t carry my laptop with me everywhere and don’t feel as though having utilities like Audacity tucked away weighs on my mind the same way as the games on my phone do.

If anyone has tips for doing an audit of digital life, or can share their experience of doing so, I’d love to hear about it in the comments. What did you cut, how did you go about it, how did you feel after you’d finished it? Importantly, did you find yourself regressing later?

A new way to read books

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A first-world problem I think many of us can relate to is that of being a hard person to buy gifts for. Independent-minded people with good salaries tend to just go out and purchase the things they need, resulting in dear wives/husbands shaking their head and wondering what could possibly be a good gift for their significant other. I always loved receiving books as gifts. Due to the whole cutting down on ‘stuff’ effort, though, buying books became something of a conundrum. If I like a book, I tend to like to hold on to it for reference and re-reading, so reading and then on-selling/giving away was not my preferred solution.

Dear Wife, after a gentle suggestion from me, gave me an ereader for my birthday this year. I don’t want to be a shill, so I won’t tell you which one unless you ask. It’s great, though. I have been taking it just about everywhere. It’s about the same size as a small paperback, and probably about the same weight. Certainly lighter than many of the tomes I read.* Now that I’m unworried by the concern of physical possession/storage/delivery/carrying around of books, I have been reading a lot more. It’s fantastic.

The next step is trying to figure out how to subtly let people know the details of how they can get me ebooks as gifts rather than the dead tree kind…

*Humblebrag! I’m the serious sort, look at the big heavy book I carry around!

Just because it’s there

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Do you consume things you don’t need just because they’re there?

Let me explain the question. I’ve noticed that I have a bad habit of sometimes consuming something I don’t actually need, just because it’s made available and I don’t have to pay (explicitly) for it. The easiest example is food: if I’m at some event for work, and there are sandwiches provided, I might eat even if I’m not hungry. Another example: I like to travel, and will often stay in hotels. Sometimes in these hotels you’ll find complimentary bottles of spring water. Clearly in places where the piped water is unsafe (Cambodia, etc.) I don’t feel guilty about consuming these. But if I’m in a developed country with perfectly safe water, why do I feel the need to take and consume these bottles even though I could use the tap? It is wasteful!

For this water example, in what sense is it wasteful? After all, I don’t have to pay for it. It’s not making me financially worse off. But bottled water is bad for the environment. I don’t need to drink it when the tap water is equally accessible and healthy. If I leave the bottle there:

  • There are fewer materials consumed to replace the bottle
  • The housekeeping staff at the hotel don’t need to take the effort to replace it
  • In the very long run, the hotel management could eventually reduce room rates (because they’ve saved on costs) and may choose to stop offering the extra resource to other patrons, most of whom won’t mind at all and will just fill a receptacle from a tap.

Perhaps you accept a ride in someone’s car, during which they take you a kilometre out of their usual route, when you could easily have walked the distance in twenty minutes. There are plenty of other examples, I invite you to come up with your own. Clearly, in some of these circumstances, there could be other reasons for consuming/accepting something free (maybe you valued the conversation in that car ride, and you were in a hurry to get home to see your kids!). But it’s often not the case.

I’d like to build my willpower up so that I less frequently consume a thing I don’t need “just because it’s there.” In some ways, I think this is a difficult change to make because if someone else asks you to justify why you aren’t partaking of something free, it is something that makes you stand out from the ordinary and appear sanctimonious. In addition, as mentioned, there’s no monetary reward that you’re gaining! But it’s just simply the fact that it’s better not to use up the earth’s resources when it’s unnecessary to do so, even if they seem small and insignificant.

Back on the Horse

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Since the arrival of my precious daughter, I’ve not been writing. As is often the case, following an interruption to a routine, it can be very difficult to get started again. Well, here we go: I’m back to blogging.

I’d rather not make excuses, but by way of explanation for my absence perhaps I’ll just briefly describe my new life as a father. There are, of course, the entertaining moments of listening to my daughter make new sounds and seeing her do new things. She usually greets me with a big smile when I come home from work. I’d rather reserve details about her in a place away from the internet, though, lest she stumble upon this blog in nine years’ time and gets annoyed with me. For me, it’s just unbelievable how much less time and energy I have. I know, I know… All parents will warn parents-to-be about this. But it really is different when you live it. It’s been difficult for me to find the time to go and exercise even once a week until just recently.

I find it difficult to remember my life before having a kid, actually. But this is the way it is with me (and probably most people) – after a significant life change, I can’t really fathom what I was like as a person prior to the change.

Since this is a blog about simple* lifestyles, one thing I’d like to mention is that the tiredness from being a new parent really wears down one’s ability to make what I would consider to be rational, reasoned decisions about expenditure. I don’t want to buy all this new baby-centric stuff and fill up my house with things I’ll only need for three months or less before I realise baby doesn’t need it, want it, or grows out of it. Still, given the constraints on my time and a reduction in willpower flowing from the lack of sleep, it becomes very, very difficult to avoid ‘buying solutions’ despite my best intentions. I think it could be worse – the baby’s a long way from sending us bankrupt – but I do still worry that cleaning up this place for our next move is going to be more difficult than it ought to be.

…and although I’m visiting home for Christmas, which will be a wonderful time to reunite with family, I’m dreading just a teensy bit what might be an avalanche of baby presents. That sounds horribly ungrateful. It is horribly ungrateful. I feel bad. Actually, before I became an expat two years ago people in my family did get the message that my wife and I were making our lives more mobile and didn’t want or need ‘stuff’ to weigh us down, so this is all probably a problem I’m making up in my head. So I’ll stop worrying about it and just look forward to the summer sun and being in the company of family again.

*Well, to hedge my language and be realistic, perhaps I should just say ‘simpler’.

Family hiatus

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My blog hasn’t been up and running long, and I very much doubt I have too many regular readers to disappoint. I’d like any passers-by to note, however, that the long-awaited birth has happened and I’m taking a temporary break while I adjust to life with a newborn.

There’s been a death in the family as well as a birth. Around my headspace and physical space it’s all been pretty chaotic. I’m confident, though, that things will settle and I’ll be stronger for the experience.

Influence #2: Mr. Money Mustache

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Following up on my previous discussion on influences, I have to mention Mr. Money Mustache, hereafter abbreviated as MMM. This guy’s got to take credit for popularising a more frugal lifestyle in a way that someone as hardcore as Jacob from ERE can’t do. MMM’s profile’s been slowly building and in fact he was even the subject of a feature in the New Yorker recently. Of course, any time the trashmedia kraken picks up the topic of frugal living the whiners crawl out of the woodwork to talk about how hard it is to make the loan payments on their ridiculous cars on a salary of merely $85k a year. But I digress. Also, it’s probably unfair to categorise the New Yorker as a tentacle of the kraken.

Where MMM differs from many other financial independence writers, in my opinion, is his emphasis on relentless optimism and really pushing the idea that teaching yourself to live with some discomfort is good for you. This is vital to your life if you’re going to reach financial independence earlier than others do. After all, by not spending money to consume all the nice material goods that are available these days you’re sacrificing, right? I use this in the sense of giving something up as a tradeoff for something you want more, not in the sense of giving something up period. By recognising how awesome things are right now and how much better they’re getting (optimism), and also that by enduring discomfort you’re building up an internal fortitude that means you’ll be stronger later, you can be happy in your frugal living. Anyway, making good choices that will help you in the future won’t make you an unhappy person.

MMM’s also really good on noting that lowering your consumption is a good environmental choice. In more recent years, he’s explicitly stated that his goal is not just helping people get their finances into better shape, but convincing people to stop wasting so many of the earth’s resources, in a very broad sense.

I was actually trying to think of a few criticisms of MMM to make this article less of a glowing review, but none are really jumping at me just now. There is something that bothers me a little regarding the community that’s grown up in his forum, but I’m not going to hold the guy directly accountable for that. After all, holding people accountable for user-generated content on the net is usually a bad move.