This is a question I used to ask myself a lot. When I wasn't really making any money, which is when you should be really tight with the little you have (a.k.a. frugal), I rationalized every little purchase as "it's just $5 and I haven't had Starbucks all week" or "I only spend $4 for a chicken platter when I go to lunch, my co-workers spend $6 so I'm doing OK" or even "I don't really need a PDA but it's on sale for only $399" or even worse "Damn I haven't hung out all week, I could use a drink, lemme call the boys. It's my last $50 but I get paid again next week". If this sounds anything like you, be verrryyy careful how far you take that mentality.

I'm not telling anybody not to have fun, not to penny pinch and become a hermit. I like to enjoy life as much as anybody, I just go about it differently. What I used to see as lunch for $4 for today, I now as a $20 weekly expense, which adds up to $1,040 a year for the privilege of eating lunch in Manhattan. $4 may not seem like much, but think of it long term. If your a smoker, $7/pack on average and if you smoke even 3 every week. That's $84 a month and $1,008 every year. So if you brown bag lunch and quit smoking, your halfway to a fully funded IRA. If you don't want to quit or it's too hard, cut down to 1 pack a week and see how much extra money you have in your pocket.

For me, I was a heavy drinker. This took a real toll on me physically and financially. On average I would spend at least $50-$75 every time I hung out with my friends, that's without food. We hung out about 4-5 times a week and if I didn't have any cash I ran a tab on a credit card. And I would rationalize probably the same you many of you do, I was young, I was having a good time, I'll pay it off later, it's not like I'm out smokin' crack. I was also into gadgets, PDA's, disc men, Sony PlayStation's, cell phones, anything that used electricity found its way into my hands one way or another. It's 0% financing, I'll pay it off little by little is what I would say to myself.

The lesson here is, what may seem like just $3 today or even just $10 is actually a lot more if this a recurring expense/habit. And just because you put it on a credit card does not make it better, interest counts as money owed too. If you can afford it, go ahead and spend it. Travel, see the world, expand your horizons, go out with your friends, LIVE IT UP. If you know your on a tight budget and can;t spend much, think about how much money would you have in your 401K, ROTH IRA, or your savings account if you put that $4 in there every time you would have spent it on that habit? Think about it......

6 comments:

  1. Sistah Ant said...

    I think one thing that really gets people is work. They have coffee on the way to work and eat out for lunch. When brownbagging lunch isn't hard once you start the habit, and coffee from home in a mug isn't a bad idea, either...  

  2. Moneymonk said...

    I think everybody has a habit.

    I love seafood, drinks and vacations.

    It's all about balance, If I am not making enough money to support my habits. I must find a higher paying job.

    Like you said you cannot live like a hermit.

    But I suffered for years before enjoying my lifestyle

    I went to college, worked various low payings jobs for experience and finally I made big money. That whole process took 10 years.

    Everything has a price. I paid the price to enjoy my lifestyle.

    My point is in due time you WILL live it up! Just have patience.  

  3. Rad said...

    Work does get in the way of a lot of things, but like you said, as long as you plan ahead and brown bag it, its a lot aesier than you think.

    And Money, girl you stay livin it up, always findin a new hustle to support your habits :)
    that was part of my point, if you wanna keep traveling, enjoying good food and everything this world has to offer, find different avenues to make money and enjoy it. Just don't dig yourself a deeper hole and not realize it.  

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