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