Talane’s Blog of the Week, September 18, 2006

I’m sure you have heard the expression, “A fool and his money are soon parted.” Well, I sure feel the fool. After moving into our new home in January, my husband and I have been on a bit of a spending spree. I suppose it was having all the cash in hand (we deliberately held money back from the down payment to use for renovating this old house) that made us feel momentarily rich. Or maybe it was just feeling so lucky and prosperous to be living in such a grand house. In any case, we finally sat down and looked at our spending plan/budget and discovered that we had been living way beyond our means. Gasp! That was a shocker. And, the worst of it was, for most of the stuff we bought (luxury items like a huge flat screen TV to replace our 9 inch one – and we don’t even watch TV!) we now wish we could get the money back.

One very wise man once told me “nothing is worth financial stress.” I can assure you a big TV definitely is not! As with all home renovations, ours is taking much longer and costing much more than we originally thought. So we have used up most of our house savings and still haven’t renovated the loft or finished the kitchen. Now what to do? Well, after closely studying our spending for the past six months, we realized we could have been adding to our savings if we hadn’t done so much luxury spending (TV, BBQ grill, big party, expensive Turkish carpets, etc.) And, since we didn’t really need any of these luxury items, that’s good news. If we stop the extra spending we’ll be fine. For one bad moment, we had thought we might have to move.

The lesson, an expensive one, has been learned. We now evaluate our income and expenses every single month. We write down the items we’d like to buy and their cost, and then wait until we actually have the money to buy them. Not a new concept, just a good discipline. This also gives us a 30-day “cooling off” period, to decide if we really truly want that particular thing. When we added up everything we spent, we realized we could have taken a spectacular cruise or renovated the loft. Most of our spending was on impulse buys we didn’t talk through in advance. It was a lot of money for stuff that didn’t add real value or joy to our lives.

The point is: get the maximum value and enjoyment out of every dollar (or pound). We both agreed we didn’t do that, and that is a bummer.

Take a look at your own spending. Are you truly enjoying your luxury spending? Or, do you wish you could have the money back?

All the best,
Talane