Spending Less: The Philosophical Divide

One of those common New Year's resolutions is to spend less. I'm always trying to do that, but I find that it's harder and harder to do it with each successive year. Today my textbooks cost me a pretty penny, but fortunately it's not nearly as much as previous semesters. On top of that, one of my other resolutions (keeping in touch with friends more) will cost me more money. When we go out to do things, or celebrate birthdays, or see long-lost friends, dinner is usually involved. Remember that episode of "Friends" when half of the buddies talked about how the other half seem to pick expensive restaurants when they go out? Yup, it's happened to me before, though thankfully rare.

It goes without saying that having a budget is important to achieve the "spend less" goal. If you're pretty good about keeping the numbers straight in your head, there's no need to write things down. When I started college, I also started a budgetary spreadsheet, but I gave it up eventually because I hardly spent at all--other than a few necessary expenses, everything stayed in my savings account. It's easy to set aside money each month for recurring, necessary expenses such as utilities and rent, but the biggest pitfall for the "spend less" plan is "discretionary spending" (e.g., eating out, entertainment, and shopping). As much as I've tried to minimize my spending, I found myself buying a lot of non-necessaries last year. To scare myself straight, I want to establish better written records so that I can see what I'm doing. I'm going to crack open one of the unused journals I've received from years past and start writing down every single expense I've incurred. Writing things down helps in another way--we can identify "junk" we've been buying but didn't think about before, and then work on eliminating wasteful spending.

Before devising a discretionary spending bill for 2007, I think it's important to figure out how we want to live our lives. Consider the schools of thought embraced by various members of my family:

1) Enjoying life to the fullest--the thinking is that money is limited, but so is youth, so why not indulge and have fun? Using what limited money is available, buy what you want, go to concerts, have fun. Pro: life is fun; Con: not much money in the savings account;

2) Pulling an Ebenezer Scrooge--"Bah, Humbug!" all year round. The dollar sign is the bottom line, always saving for the rainy day. Scrimp and save, spending little or nothing on things other than necessary expenses. Even the necessaries like food or clothings are kept cheap and minimal. Pro: money (sometimes lots) in the bank; Con: work and no play = dull, boring, and maybe friendless;

3) Various shades of gray--something in between the two. Sometimes it's skimping on food and more on other purchases, sometimes it's the other way around.

Finding that middle ground is really hard to do. I used to be an Ebenzer Scrooge, but I've come to learn that life really is short and we should enjoy it while we still can. Still, we have to live within our means, to think of what we're willing to sacrifice. After all, if we're spending more on one thing, then less has to be spent on another. Ultimately, we have to examine what we value more than others, allot the budget accordingly, and figure out creative ways to make up for the shortfalls.

When it comes to clothes or groceries, there are lots of options to keep costs down because there are so many retailers, discount and otherwise. When it comes to transportation, public transportation and carpooling helps. Sometimes driving slower or taking out unnecessary things out of the car will help you get better mileage. But there are situations when we have less say in the matter. Socializing is one of them. Maintaining your sanity is another.

Friendships shouldn't be taken for granted--you have to work for it. It's possible to avoid a couple of social occasions, such as an out-of-town wedding, for the sake of saving money, but when you keep saying no to invitations, people may stop asking. One of the solutions is to skip a few expensive events but send a nice gift (not my idea, but I read it a few days ago from an article on wedding etiquette). Another is to take the initiative--choose a cheaper form of entertainment, or entertain people in your own home. No matter if you're supplying all the food or having a potluck, it's still cheaper than eating out. Having movie or game night at your place can be more fun than going out--you can laugh and cheer and cry as much as you want (as long as you don't keep the neighbors awake, of course).

Another consideration is personal sanity. When I started writing this post earlier tonight, I told my friend about what I was writing. I was arguing that there are times when one has to be a Scrooge, but I think he had a point--sanity and productivity goes hand in hand. If shopping a little or eating out a few times a month will help you feel better, by all means do it. Yes, R&R costs money, but you can't get any work done if your mind isn't in the right place. Life sucks if you have all the money in the world but lack happiness.

If your funds are meager but still want to maintain a certain standard of living, you'll have to think of a way to enhance your income (legally, of course). Getting into debt is just not worth it. With eBay and yard sales, you can recoup cash for things you no longer want. It may not be much, but it's something. Another thing you can do is to make your money work harder for you by making better investments (after lots of homework and using lots of caution) or using high-yield saving accounts. Finally, if you have some kind of talent, it might be worth it to go into business on the side. This is obviously difficult and not for everyone, but if you can make it work, all the power to you.