Creating a sustainable lifestyle is not only about giving you peace of mind, it’s also financially wise. The sustainable part is not necessarily about being eco-friendly (but it’s a side effect sometimes), it’s about having a lifestyle that doesn’t have constantly having to upgrade. Keeping up with the Joneses can wreck your monthly cash flow and put you into a position of taking a job just for the money.
Avoid unnecessary debt and heartache by channeling your finances towards people, experiences, and things that matter to you. I want to share some things that we’ve dealt with personally and what has helped us. I’m hoping that you share some of your thoughts and perspectives later in the comments.
Managing Gadgets and Reducing Impulse Buys
I admit it- we love our gadgets and we find many of them to be convenient. The problem is making sure we don’t buy things that don’t really matter to us and/or are just redundant technology.
It doesn’t sound like much, but you save money and reduce the clutter of your place by avoiding impulse buys. There are some things you can do to reduce unnecessary expenses, whether it’s gadgets or other big purchases.
We’ve learned to analyze our purchases and see if they are helping us or if they are a financial and/or time burden. I think you’ll find that you can cut back on unnecessary purchases by taking a few moments to reflect. You can start by asking yourself some questions.
- Why am I’m buying this?
- How often will I use this?
- Are there any recurring bills associated with the new gadget?
- If so, how will I adjust my budget?
How much you can save? With an iPad (32 GB w/ wi-fi) around $599 and a new Droid Incredible going around $199.99, you can cut back on expenses significantly.
Evaluate Your Transportation
Many of us are connected to our cars emotionally. When my car finally died a few years ago, I looked around for a replacement. My plan was to get something affordable. Looking at my college student income, I should have focused on finding a car that I could purchase with cash. Instead I let peer pressure and competitiveness with my coworkers and some classmates get the best of me. I found a used car at a dealership, but it was too much for my income at the time.
Not having car payments would’ve helped me financially, but also not pressure to increase my work hours to keep up with the payments and insurance requirements. I could’ve had more time to focus on my studies. While I did fine grade wise, I could’ve relieved myself of undue stress.
I’m happy to no longer have car payments and I now put aside some of the money saved into a car replacement fund.
How much you can save? With a third of cars driven having a car payment of $475; this is a huge savings. You also have to consider the amount of leeway you have with insurance coverage when you own the vehicle completely.
Finding Your Lifestyle
I’ve shared some of my thoughts, I’d to hear your take. How do you handle big expenses in your life?
{ 17 comments… read them below or add one }
Hola Elle, I’m surprised you have Managing Gadgets as one of your main subjects. Are you fighting major impulses currently?
Gadgets are just too complicated for me, as I’m old school.
Best, Sam
@Sam: I love gadgets, but I’ve been cutting back on just keeping up with the latest. As a general rule of thumb, I wait 6 months and see if I still want it. Most times, I realize it’s not too much of a big deal and I can just visit my mom (She’s into gadgets too).
I’m with you on recurring expenses. If you can fix cash flow, the rest of your problems fall into place naturally. Sustainability has to do with your rate of consumption and the rate of replenishment. That means looking at your income too.
As for me, I have a cheap “iPhony”. It’s an iPod Touch I got as a gift plus a basic cell phone out of contract. I also have a nice camera that I bought for less than one year’s worth of data plan payments. I’ve rarely found that lacking patience is worth extra money each month.
One of the things my dad told me before college and again when I got married was this – “With the exception of your housing costs, make sure that every time you increase your salary you make a decrease in one of your expenses.”
This is effective on two levels:
1) Our tendency is to spend more when we make more. By making one cut in expenses after a salary increase, we form the habit of living within our means and resisting that urge to spend more. The adage that “when you make more, you spend more” is, in general, true. This helps you be more disciplined.
2) It really pushes you to minimize your life. You start to learn what you “want” versus what you “need,” and the overall picture of your finances and net worth becomes very clear.
3) The act of cutting expenses when you get a raise acts as a multiplier and will supercharge your savings, debt reduction, and your overall net worth. Your personal wealth contribution doesn’t increase incrementally, but by quantum leaps.
So getting back to your original question, I only consider there to be 3 key “big purchases” the average person experiences: Car, Home, and School.
The easiest to handle is with cars. I almost always buy mid-range used, and pre-arrange financing with a bank or credit union to get a lower rate and more favorable terms. But negotiation is key! Never negotiate a deal during the day (go at night about 90 minutes before closing – it works wonders. If you must do it during the day, go at around 2:30 or 3:00 when that after-lunch crash is hitting). And most of all, I never buy a car without walking away at least once – usually 2 or 3 times. I have saved thousands from the simple act of getting up, saying “thanks, I’ll think about it,” and walking out the door. They’ll always call you back and give you a better offer.
Always remember this when negotiating deals on anything: You do not owe the other person anything; they need you a lot more than you need them; there is never a real relationship between salesman and customer (more like between the salesman and your money); and there is ALWAYS greener grass somewhere out there.
Whoops!
Paragraph 2, sentence 1 should read: This is effective on three levels.
After I quit constantly paying attention to the newest gadgets for a few years, I’ve lost much of my interest in them. It’s rather satisfying to not be stressing out about buying the latest and greatest.
Two things help me keep any gadget-lust under bay:
- pay attention to recurring fees: It amazes me how many people don’t think about the monthly fee – Sure, I can get an iPhone for $100… then pay at least $50 each month for two years (that’s $1,200!)
- Will it do anything that I can’t already do? Using the iPhone again – I already have a GPS, I already carry a pen and paper around for note-taking and calendar jotting, and I don’t have urgent enough emails that I need to check more than a couple of times a day… so while the iPhone might be fun or come in a sleeker, it doesn’t provide anything that I don’t already have.
Great article Elle, I am staying away from fancy phones in particular right now…. although I am an Apple geek. The convenience will be great but do I really NEED to be online more than I already am?
Hi Elle,
sorry I didn’t get this:
“How much you can save? With an iPad (32 GB w/ wi-fi) around $599 and a new Droid Incredible going around $199.99, you can cut back on expenses significantly.”
Not sure about the meaning of the example…. but anyway, I’ve no iPad, no Droid and much more than that no intention to buy any, so I’m just curious about what you mean
Ciao
Daniele
@Daniele: I’m just pointing out if you hold back from purchasing a needless gadget, you can save some cash.
The total cost of all the electronic gadgets I currently own is $150, with 2/3 of that my Sony Reader, my one splurge purchase, and even then, I bought a used, outdated model as cheap as I could on ebay. The only “gadget” I’ve ever bought new is a cell phone, and even that is a basic flip-phone that does little more that voice and text.
Good post, I actually just made a post along the same lines. I like to think thoughtfully through my decisions on what would be best for my lifestyle dreams. Successful people aren’t buying everything with high interest rate credit cards and buying useless junk to fill up their house.
I recently read a book entitled “Not Buying It” about a couple who gave up making unnecessary purchases for a whole year. It’s a fascinating read for anyone concerned with our consumer culture.
Thanks everyone for sharing your insights. I think finding a balance is important rather than focusing on how many (if any) gadgets you have. For some people, they really use what they have and it has value to them. For others, buying more is a knee jerk to what the neighbors have.
I found that evaluating what’s important to you can make decisions on what to buy a lot easier.
I found that when I actually OWNED a house, I tended to want to fill it more with stuff. Since I got rid of my house, I have tended to not want to fill it so much because I feel more mobile and I don’t want to be responsible for either storing or transporting all that stuff when/if I move on or travel.
I also love my gadgets. But I find that most gadgets are not worth their price. They’re usually at the cutting edge (iphone/ipad) and you pay for the newness of the technology and the desirability of the product. I just can’t bring myself to buy something that expensive no matter how much I want it! But if I was working full time, I might well reassess the value for money equation…
I almost always buy mid-range used, and pre-arrange financing with a bank or credit union to get a lower rate and more favorable terms. But negotiation is key! Never negotiate a deal during the day (go at night about 90 minutes before closing – it works wonders. If you must do it during the day, go at around 2:30 or 3:00 when that after-lunch crash is hitting). And most of all, I never buy a car without walking away at least once – usually 2 or 3 times. I have saved thousands from the simple act of getting up, saying “thanks, I’ll think about it,” and walking out the door.
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Any Car Finance
I like gadgets too, but try to resist the temptation. We currently own 3 cars that are over 10 years old. We have three because if one breaks down we then have a back up.
Nice job maximizing the lifetime of your cars! I love gadgets too but have trouble swallowing the giant price tags. I’d really love to have an ipad for when I travel, but I’ve put that on hold since they are so darn expensive and my smartphone already does everything I need.