Do I need a budget?

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!


Just because it’s there

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.

Influence #2: Mr. Money Mustache

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.

Breakfast means oats

I think very nearly every frugal blogger loves rolled oats. This is a bandwagon I have to admit to jumping on. Although I used to eat eggs for breakfast back when I was getting huge, nowadays I’m muesli man. It helps that I’m living in the country where the stuff was invented.

I still love a good serve of scrambled or fried eggs with bacon, but it’s a weekend breakfast thing now. Oats are faster to prepare, which is pretty important when you’re as slow in the mornings as I am. I want to share with you my personal recipe for a very tasty bowl in the mornings.

It’s simple – mix up 2x500g boxes of rolled oats, about 150g each of slivered almonds, shredded coconut, and diced dried fruit (I usually use apricots), and 50 grams of lightly chopped roasted pumpkin seeds. Keep in mind I say 150g of almonds, etc., but of course I don’t measure and really just throw in an amount that looks good. Keep it all in a big tub and you’ve got breakfast for a couple of weeks.

To get the best out of this recipe, you’ll need to remember to put it in a bowl and soak it the night before (leave it in the fridge). I soak with just enough water to cover, with a squeeze of lemon juice. Milk would probably work just as well. The soaking does something to the texture that makes it creamy and delicious. I reason that it’s all the shredded coconut doing its thing. In the morning, pour over some milk on top, mix it and you’re good.

That’s it! Easy, delicious, healthy.
muesli ingredients

A simple living challenge: simplifying cooking

I like cooking. I can’t claim to possess a special talent for it, but I do quite a lot of it. If I was more talented at it, perhaps I would spend less time cooking, simply because I’d be more efficient. My most-often used style of cooking is generally to take a lot of different vegetables, perhaps some meat, throw them together in a big pot and stew with some liquid/broth/tinned tomatoes. This is great because eating lots of vegetables is good for you. This is not so great because all the flavours kind of blend together, and while sometimes that’s fine, sometimes it’s just kind of muddled. Furthermore, chopping all those vegetables takes most of the time.

When visiting Italy, one thing I noticed is that plenty of good Italian meals aren’t necessarily complicated by a lot of ingredients. Having made this observation, I was struck by the idea of a ‘simple cooking’ challenge. The idea is to go for a week, or two, or some arbitrary time, and only use seven ingredients per meal that you want to cook. The number is arbitrary, really. I think I did a thought experiment thinking up meals with only five ingredients and got bored (onion, garlic, spices, you’ve used 60% of your allocation already!). Anyway, hopefully the seven ingredient limit would require you to focus on getting flavour and utility out of each ingredient rather than just relying on having a lot of flavours. The qualifications, of course are:

  • Cooking oil/butter or the like doesn’t count as an ingredient
  • Salt (or whatever plays the role of salt, like fish sauce) doesn’t count as an ingredient
  • All your spices taken together counts as a single ingredient (for example, you don’t need to count ground coriander, cardamom, turmeric and cumin as four ingredients)
  • You are allowed to make side dishes for any given meal, but they also must pass the seven ingredient test.

That last one might look like it defeats the purpose a bit, but this challenge is tailored for me, and my weakness is that I often cook just by throwing a bunch of stuff together in one pot. If I cook three dishes for a single meal that are all distinct and unique dishes, yet use different ingredients for each, I think I’m still achieving the goals I’ve set for myself.

So: since I usually cook three or four dishes a week, I think two weeks is a good timeframe over which I can challenge myself. Since I’m currently travelling, I can’t take up this challenge right away, but when I get around to it, I’ll document my experience.

Fast, strong, healthy

I’ve been through a few phases of fitness over the years. Like most of us, I go through various periods of having higher or lower fitness levels, and I’m going to collect some of my thoughts on the matter here.

When I was in high school I was more into endurance sports. The kind where you would train pretty much every day, sometimes twice a day. With my body type, this is the kind I’m probably more naturally suited to – that is, I’m an ectomorph who has never struggled with my weight. Well, that’s not entirely true, there have been periods where I’ve been underweight. Towards the end of high school I kind of left sports for quite a while and concentrated on other things, like study and video games. I was never terribly unfit, but I was rail-thin. Later I got into martial arts, and for a period, general strength training.

When I was strength training, I wanted to get stronger and gain muscle. Eventually, however, I realised that being big and muscular just wasn’t for me – my food bills started to get me down, I was sick of eating all the time, and my endurance was suffering. I didn’t want to keep my endurance at too high a level because burning all those calories would mean I’d lose weight! Plus, for no reason I’ve been able to understand, the dreadful soreness resulting from strength training never, ever left me. I read in some corners of the internet that muscle soreness goes away to some degree when you settle into a regular strength routine. Well, I was strength training regularly for several years and each and every day I pretty much felt like I’d been run over by a bus.

I still kept at the weight training, as well as martial arts, but I ratcheted up the latter and reduced the former. That was the point I’d probably say I was at my fitness peak. I was training for my sport roughly three or four times a week, plus strength training three times a week, and I’d probably fit in a run or a ride somewhere too.

Since moving abroad it’s been difficult to keep that up. I had a good collection of training implements back in Oz, but I’m not keen to pack my apartment with equipment during the time I’m here. So right now, I’m training with:

  • 2x10kg kettlebells (they were on sale at Lidl)
  • A few resistance bands
  • A pair of running shoes.

That’s it. That’s certainly not enough to maintain the 140 kg squat I used to be able to pull off. But hey, this blog is about simple stuff! So I don’t mind making a foray into some simple fitness ideas. There’s no amazing open-air gym around here, but there’s a place a 10-min walk away where I can do pull-ups, bar dips, and box jumps. It also has a good set of stairs for stair sprints. Quite some time ago I spent a while trying to learn some isometric strength moves like planches, so I’m starting to work on that again (although I find it incredibly difficult to make any progress). After a bit of attention to ankle mobility I can do better pistols than ever, and I’ve started building up my rep count for handstand pushups (against a wall).

I guess the place I’m at now in my life is that I’ve internalized that fitness means different things to different people, and it’s more than a matter of preference but also about your body type. I think it’s advisable to try to maintain a bit of everything, and you have to admit to yourself that pushing a long way towards one component (like strength, endurance, or flexibility) will come with tradeoffs from the other components. Even if you don’t want to admit this from a physiological standpoint, you have to admit it if you take into account the opportunity cost of time. That is, if you also work a job, have a family, etc., and don’t have an uninterrupted life of training-eating-sleeping. I had a road bike back in Oz, but I quickly realised that I absolutely did not want to invest the amount of time necessary to become a proficient road cyclist. It was still handy for reducing car usage though!

So I say to everyone, do some strength work. Do some endurance work. Make sure you work on your mobility and do a range of movements, even if people think you look weird. Do handstands in the park! Cartwheels! Hold a squat position in your office to stretch out your hips and ankles! Join other people to play a sport, because it’s often more motivating than training alone. Remember that being fit means getting sweaty, getting sore, and sometimes it means feeling relieved to lie down in bed because you don’t have to move those aching muscles anymore.

A year without a car

cars roads

I’ve successfully gone for a year with no car. I don’t feel this is really a grand achievement, since Switzerland is generally pretty damn good with public transport. That said, the regional and intercity trains are expensive. Nevertheless, it’s been a great exercise in patience. As I said in an earlier post, there may be some things that are different over the Röstigraben, but buses here does not always run on time. Plus, the timetables change multiple times a year, every time school holidays roll around the frequency gets reduced and then bumped up when they end.

Of course I’d like to pretend that I’m some kind of eco-warrior but really I’m thinking more of the opportunity cost of having ten to twenty grand of my capital tied up in a rapidly depreciating asset, when the public transport here services most of my needs adequately. Still, taking close to an hour to journey the six kilometres to work does wear me down. For this reason I’ve picked up a new toy, and I’m going to become one of those badass scooter commuters. Well, maybe. I’ll do a lengthier post on scooting around later.

No car leaves me with fewer hassles like parking, petrol costs, registration, servicing, and all the other things that make car ownership a joy. Of course, it’s traded for things like less flexibility and lengthier travel times. Still, while I’ve been here it’s been working out just fine. I don’t miss driving at all. I can admit I’d like the flexibility of a car, but making sure I schedule my time and holiday travel appropriately is a good exercise in discipline all of itself.