Wants v. Needs: A lesson in refusing to hide your crazy

I'm a little obsessed with personal money management. As previously mentioned, I come from a background where money was tight; thus, I have always lived with a fear of debt. I think this is a good thing - it keeps me in line and helps me to work harder for the things I want rather than behaving as though I "deserve" things. But, while I feel great about the way I choose to make financial decisions, there are definitely some people in my life who think my approach is a little crazy.

I have been a die hard fan of the television programme Til Debt Do Us Part for YEARS now. I used to watch it religiously in Canada - where it's on at least three times per day - and was thrilled when it began to air in the US directly following another favourite, The Suze Orman Show. TDDUP is hosted by money maven Gail Vaz-Oxlade (who has since begun a new series for spoiled brats, aptly titled Princess). The premise of the show is simple: concerned individuals/couples request Gail's assistance in figuring out their completely jacked-up finances. I can't get enough.

Gail places an emphasis on simple - yet incredibly important - priorities. Namely:

1. Knowing how much money you have coming in and going out;
2. Living within your means;
3. Having an aggressive (yet reasonable) plan to pay down debt;
4. Contributing to savings/retirement and an emergency fund on a monthly basis;
5. NEVER using pay advances or pay-day loans;
6. Being able to determine what is a need, and what is a want.

It's remarkable to me how many people simply do not know how to create (and stick to) a budget. I mean...seriously?? It hasn't ever occurred to you that money is a finite resource and maybe you should take some time to think about it?! Apparently not.

One of the ways in which I have managed to stay so disciplined in regards to money is through my obsessive use of spreadsheets. (Enter the crazy.) I use my budget spreadsheet in the same way others might balance a chequebook, but with a twist: in addition to recording the date of the purchase, location (i.e. store), amount paid and total remaining in my account, I also separate purchases into needs, wants, bills. I have found that a visual reminder of where my money is going is incredibly helpful - especially when one column is especially weighted at the end of the month. Now, if the act of recording such details doesn't seem crazy to you - ahhh, my peeps - bear in mind that updating my spreadsheet is often THE FIRST thing I do when I walk in the door (save for putting away groceries and greeting my spouse). I do this chiefly so I don't forget, and so I can update the running balance I have in my head so I never find myself in embarrassing "insufficient funds" situations. The final column in my budgeting spreadsheet is the "cleared" column, which I highlight when the new purchase clears my bank account. Keeping such rigid records also ensures that I monitor what goes on in my bank account very carefully, thus allowing me to contact the bank immediately if any discrepancies arise (which, trust me, they have!). Helpful on so many levels...

Now, does waiting for each purchase to clear my account mean I charge everything? No way! Debit/controlled credit (where you can use your card like a credit card but can't spend more than you have in your account) is my BFF. For several years I was fortunate to have a free chequing account which allowed unlimited transactions, making things infinitely easier to track! (Plus, I hate carrying cash for anything other than bus fare.) Lost cash is lost forever, but if you're smart with your bank card - choosing where to stash it and when to take it out - you can improve your chances of keeping your money safe. (And, if you lose it or it falls into the wrong hands, you can shut it down and file a claim with your bank. Annoying and time consuming? Sure. Worth it? I think so - it's MY money after all!)

So, how do I determine which are needs and which are wants? Common sense and honesty. I love clothes and accessories, but at this point I would be lying to myself if I said I needed any more. Therefore, any clothing/accessories purchases at the moment are purely wants. Now, if my boss came in one day and told me I needed to purchase X article of clothing, that might change things. First, I'd find out the reason why - change in protocol, etc. - and request a written copy of the new expectation. If it was something I felt was beyond what my employer could reasonably expect of me, I would probably challenge the premise and request complete or partial reimbursement (being sure to state that it was an unexpected item not accounted for in my budget). If I had to then purchase said item, I would look for the highest quality item at the best price (regardless of who was ultimately picking up the tab).

An example of this would be requiring employees in a business environment to wear khakis for more casual events. Personally, I loathe khakis, and I don't know a woman alive who looks good in them. Period. If I have to buy and clothe my body in something the colour of baby puke, at least let it be a skirt (of a respectable length). Yeck. Another favourite of mine are those ghastly polo shirts some people in my field can't seem to get enough of. You know, you can make people look respectable without also making them look completely sex/shapeless. Where are Stacy and Clinton when you need them...

Another way I determine a need v. a want is to seriously consider how purchasing the item will impact my life. Will it be useful in a way which no other item I currently own could be? Is it absolutely necessary for my immediate health/life, or is it simply something I desire? Once I've worked through those questions - and sometimes others, which I'll post as I think of them - I move onto more pressing questions such as: Can I afford it? (As in, can I pay for it right now and not worry about the remaining balance of my chequing account?) Can I get it at a better price? Sometimes the decision to purchase something I really want as opposed to need is aided significantly by my ability to get a good deal on it. Yes, sales are great, but sometimes if you wait you can't get what you're after. (Which is still better than buying something you can't afford, especially if it's a want!) Therefore, I prefer a different approach. Ladies and gentlemen, may I introduce to you the most beautiful words in the English consumer language: Price. Adjustment.

Several big name retailers - particularly in the US - offer one-time price adjustments on merchandise which goes on sale within a week or two of purchase. (Stores owned by GAP Inc. are great for this - Banana Republic, Old Navy, and, of course, GAP.) No need to bring the item back with you or keep the tags on - simply present your receipt at the register within the store's stated post-purchase timeline and ask if there has been a price adjustment. If there has, you can expect to be refunded the difference on the spot in the same method you paid - cash, credit or gift card. It's just that simple! (Sometimes you get lucky and they give you cash no matter what.) Is it really worth it? I think so - as long as you're not spending more money than you get back in order to get the price adjustment (i.e. spending $3 on bus fare or petrol when the refund is only $2).

Here's an example of a time when this approach REALLY paid off.

Last year, my mum-in-law came to visit us from Australia during the crazy January sales. She shopped a lot the first week and returned home to our flat one night expressing frustration that several of the items she had purchased the previous week had since been marked down significantly. I asked her if she had kept her receipts and when she said yes, I told her to go back to each store and enquire about price adjustments. She was sceptical at first, but the next day she returned with $75 extra dollars in her pocket! Not bad, eh?!

A couple of cautions with this - since you can only do it once, you want to do whatever you can to ensure the most bang for your buck. Ask staff at the store about upcoming sales, and, if they fall within the stated timeline for a price adjustment, go back then. Make sure you know and understand each store's policy so you don't miss out - some are posted for all to see, whereas others are sneaky. Sometimes a website or customer service hotline are great places to start (especially since you don't have to show your face to do it!).

Another thing I love are promos where you get something free with purchase. Please note - this is only a great deal when it involves something you were planning to purchase anyway or genuinely NEED. Last year as the holidays were approaching I found myself in Banana Republic picking up a sweater and scarf I had been eyeing for months, waiting for a price drop. When it finally came - coupled with a store-wide 35% off "one day only!" sale, I jumped at the chance. As I was waiting in line, I saw a big sign behind the cash which said "Buy a gift certificate for $100 and get an additional gift card worth $25!" Now, since Banana is a place I regularly shop, this represented a great deal. But, I wanted more. When I approached the cash, I lowered my voice and asked the salesgirl - in my friendliest tones - if I could use a purchased gift card/bonus card directly after purchase? She said yes. So, I told her I would like to purchase a gift card. When that was done, I put my other items on the counter and used the bonus gift certificate - plus some of the money from the other card - to pay for them. She laughed a little when I did this and said, "This is technically against the rules...but, good for you!" Honestly, I have never had a salesperson turn me down for something like this. They work at a big box store - what do they care? Would I do the same at an independent store? Maybe not...but if it made good financial sense, I just might.

One last thing I do - particularly with Banana - is keep the tags on items until I actually wear them (and hold onto their corresponding receipts). That way, if I'm beyond the price adjustment period but the item goes on sale, I can easily return it and then buy it back. (This is much less cheeky if there are more of the items available in your size - otherwise you have to hang around waiting for the stock to be put back before you can pick it up again.) Is there more risk with this approach? Sure. But my desire to save as much money as possible always beats out my fear of losing the item. What can I say - I live on the edge. (Sometimes if I have a friend with me I get them to approach the cash and ask them to purchase the item after I collect my refund and walk away. Excessive? Sometimes. But it's a nice insurance policy. :)

How do YOU determine which are wants and which are needs in YOUR life?

Taking stock of STUFF

Several of my dear friends are hoarders. (OK, not by the extreme standards we've been introduced to via reality television programmes, but they do, nonetheless, have a lot of physical STUFF.) In many respects I am the opposite - while it's true that I like nice things, I am constantly looking for items I can donate (most often) or sell (which end up being given away/donated if no one wants to pay for them) so that I can live a more clutter-free existence. (My partner says he can tell when I'm calculating what to get rid of next.)

I think one of the elements involved in my obsession with downsizing is the amount of movement in my life, both professionally and personally; I have a career which (happily) requires me to move often, and a passion for travel which I love to indulge whenever my partner and I have the time and money. Through four years of undergraduate study I spent my academic terms in Canada (my home), and my summers in the United States (working). I moved to the US full-time in 2006 for graduate school and spent the following summer interning in another part of the country. After completing my master's in 2008, I took a job in Hawai`i which meant an overseas relocation (even though HI is a US state), followed by five moves in three years as required by my job.Throw in personal travel - which is neither quick nor painless when you live in the most isolated chain of islands in the world - and you can probably see why it's necessary for me to be able to move expediently and for as little money as possible.

The second element in my obsession with keeping STUFF down to a minimum is manifest in the way I choose to spend my money. I strongly believe that every physical item in our lives represents a choice. I didn't grow up in a household where we had a lot of STUFF - my parents have never owned a home, have only ever had one new car (which was driven for more than 500,000 km before being hauled to the scrap heap), and my older brother and I were never really given an allowance. (We began delivering newspapers seven days a week when we were around 8 and 10 respectively, which I think has to be one of the best jobs out there for kids. Exercise, responsibility, money management, people skills...it has it all! Or, at least, routes back then did.) When we outgrew our paper routes and were old enough to get "real" jobs, we both worked in a restaurant at night and on weekends. I got my lifeguard qualifications as soon as I was able, and added those hours to my schedule (on top of school, sports and my restaurant shifts). When I was old enough to be a summer camp lifeguard, I jumped at the chance. I also graduated high school early so I could work full time for a semester before going to university (which I paid for myself, save for $5,000 from my grandparents).

My first year of university I got enough scholarships and bursaries to cover my housing, and paid for my tuition and books with savings and loans. After that, I worked a minimum of one full time job (usually one full-time plus one part-time) until school was over - in grad school I worked three jobs simultaneously. When all was said and done, I had two honours bachelors degrees, a master's, and just over $16,500 in educational debt. (I was also very fortunate in graduate school to receive an additional $5,000 from my grandparents, which I put chiefly towards my job search. The field I'm in required me to attend conferences on the other side of the country, as well as fly to on-site interviews across Canada and the United States). I was also fortunate in that my parents and aunt purchased me a laptop between undergrad and grad school, which I still use today (six years later). I bought the desktop computer and printer I used throughout undergrad, but the technology changed so rapidly between 2002 and 2006 - coupled with the fact that I moved between countries and had to ship my belongings - that switching to a laptop was hugely helpful.

When I got out of grad school and landed my first professional position, I made a vow to get out of debt as quickly as possible. I sold many of my books, CDs and DVDs, walked EVERYWHERE (even 45 minutes each way to Wal-Mart for toothpaste) and budgeted my money like my life depended on it. I didn't buy any new clothes, go home for Christmas, or even take the bus - every cent I could scrape together went towards my debt. In addition to my regimented savings, I also benefited from the strong US dollar v. the loonie at the time - on average, one US greenback was paying out $1.13-$1.18 CDN upon exchange, which meant that the interest accruing on my loans was virtually wiped out. After nearly a year of tough-as-nails budgeting, I paid off my student loans in full. It was the most satisfying day of my life. I still have the letter which reads: "CONGRATULATIONS! Your integrated Canada Student Loan is now PAID IN FULL!" Someday, I'm going to have it framed.

Having worked from a young age, I know the value of a dollar. (Which is not to say I always spend mine wisely - we will definitely get into that.) I was incredibly fortunate to have my grandparents contribute $10,000 over six years towards my educational costs. Conversely, many people I know had their educations paid for completely by their parents and never considered working while in school (unless it was to offset the money they were spending on booze). In fact, several people I knew had parents who purchased a home in the city where they were going to school so they could live there rent-free whilst their roommates rent paid the mortgage. A smart investment? Absolutely. But did it teach their kids anything about working, saving and spending responsibly?

Because I had to work to be able to attend university, and because I come from a background where I have watched my parents struggle financially, my perspective on what constitutes "money well spent" is, generally, discernibly different from my counterparts. In essence, I know that at the end of the day there is no one to bail me out if I get into financial trouble. As such, I have developed a clear understanding of the difference between needs and wants.

Here's what I'm talking about. As someone who will turn 29 this year, I:

1. Have never owned, leased or otherwise possessed a car (though I have been a licenced driver since my sixteenth birthday);
2. Have never paid interest on a credit card (because I only ever buy things I can afford and pay the balance off immediately afterwards);
3. Do not have a fancy phone, tablet, ipod (beyond my 4G Shuffle which is 2 years old and used daily), laptop (remember, she's nearly six), GPS, bluetooth device or any other kind of fancy electronic gear (although I do have a Kindle...bought the cheapest "special offers" option and have only downloaded free books and games, and share possession on a Wii Fit Plus with my partner);
4. Don't have any habits which quietly suck away at my savings incrementally. Namely: coffee, smoking, drinking, eating out on a regular basis, etc;
5. Have no debt, good, bad or ugly. Ignored the oft-expressed "You have the rest of your life to pay off your student loans!" and tackled the beast head on to avoid the excessive interest I would have been charged by drawing out my payments. As such, I can now put that money - and more - into savings for other goals. 

What I do have are a collection of incredible experiences, all of which - save for the life-changing budget trip I took to Europe between grad school and starting work in HI - I have paid for myself. (The former was a gift from my grandparents and aunt, and I will never be able to put into words how much the experience profoundly impacted my life.)

My first order of business after paying off my student loans was to save enough to fly my parents to Hawai`i for their first ever vacation. It.Was. Awesome. They stayed with me - which helped cut down majorly on costs - and we had a great time. After that, my next goal was getting myself to the two countries I wanted to visit most in the world - New Zealand and Australia. So, I priced things out, found out about options and sales, and saved my pennies. About six months prior to my departure, I booked my trip - I got great deals on flights and insurance, arranged to stay with friends in both countries upon arrival and after I finished/before my departure back to HI, and, because I booked months in advance, booked two budget tours at once (one in each country), paid in full at time of booking and booked with the company I travelled with in Europe, I saved well over $1,000.Had I not already saved the money, I would not have been able to get such a great deal!

The same goes for the 5-month trip my partner and I just completed. We booked the portion in Africa 7 months in advance and paid in full so we could get a significant discount. We camped through the first 10 countries (60 days) with an experienced over-landing company and did two more countries on our own. We then went to Europe and visited 10 countries, again taking advantage of off-season deals, staying with friends, and sleeping in hostels/eating for cheap. We paid cash for everything and maintained significant savings for our re-entry into the working world.

In my life, I have prioritised education and experiences over physical things. Sure I have some great treasures from our travels, but I shopped smart, bartered, and only bought things we really, really wanted and couldn't get anywhere else. We have the luxury of being educated and from well-to-do countries - Canada and Australia, respectively - but we both work very hard and make good decisions with our money.We're not at the stage yet where we wish to take on the financial burden of children or a home, but if we unexpectedly found ourselves expecting tomorrow, we would be able to make it work.

STUFF is all about choices. What do you need, and what do you want? How do you determine which is which? That's what we'll talk about next. :)

A little inspiration, please

A year or so ago I heard about a global social experiment called "Six Items or Less." Basically, everyday peeps like you and I would take an online pledge to wear only six items (or less) of clothing for a period of 30 days and blog about the results. Now, before you get too weirded out about the concept, I should probably let you know that there were a few loopholes put in place to make the process more attractive/livable:

1. Underwear/socks/bathing attire and workout clothes did not count towards the six item limit. (Phew!)
2. Shoes, accessories and outerwear also did not count. (Excellent...)
3. Truly identical items - i.e. same exact colour/brand/size - were counted as only one item. (Thank YOU two pairs of Levi's skinny jeans for $22 at Ross!)

Also, any uniforms required for work or school weren't included in your total.

The "Sixers" (as they have come to be known online) were asked not to tell anyone in their lives that they were participating in the experiment until it was over, the result of which was...surprising? By and large, it seemed that no one else really noticed what the Sixers wore day in and day out - not coworkers, friends, partners, casual acquaintances, potential partners...everyone simply went on living and breathing as they had done before. Now, is it possible that some people noticed but didn't say anything? Absolutely. But does it really matter?

What most people seemed to take away from the experience was the realisation that they could do way more with way less. When forced to answer the question of what they wanted to clothe their bodies with for an entire month, each individual had to not only sit down and think seriously - probably for the first time ever - about the answer, but to live with the decision they made. And, for the most part, they did. Annoying as it was at times, those who stuck with it realised, in some small way, how much those of us in the developed world truly take for granted.

I've never done the Six Items or Less challenge myself, though I reflect on it and the wisdom gleaned by those who have on a regular basis. In a way, that's where the idea for this blog came from. Well, from there and from another concept I learned about online: New Dress A Day. This fantastic blog - which has been operating since November 2009 - is, in my opinion, the gold standard in "upcycling." Thirty-one-year old Marisa Lynch decided that as of her 30th birthday, she was going to give up "traditional" clothes shopping for 365 days. Instead of hitting the mall and blowing cash on throw-away items from her favourite stores, Marisa gave herself a budget of $365 and vowed to create a new outfit every day from craptastic thrift store finds. Intrigued? You should be. Marisa's incredible upcycled wardrobe is tailor-made to fit her unique personal style. But it gets better. Now that year one has wrapped up with undeniable success, Marisa is accepting donations from fans all over the world so that she can continue to do more with less! As someone with NO sewing skills whatsoever, I really admire her creativity and eye - and thoroughly respect that she walks readers through her reconstruction process step-by-step. If you haven't already, check it out!

But, back to this blog. :) The purpose of Every Last Feather is simple: I've reached a point in my life where it's time to take stock and make some (potentially tough) decisions. As such, over the next year I'm going to conduct what I feel is best described as a "personal inventory." Nothing is off limits, kids. In addition to physical items - mainly clothing and accessories, of which I am very, very fond - I am going to take a critical look at my habits, hobbies and relationships in the hope of becoming a happier, healthier person. Instead of buying new things, I'm going to make an effort to spend some quality time with things that already exist in my life, and truly consider what value they hold. Every last feather that makes up my life is going to be examined, with to-be-determined results.

I hope you'll join me.