The Ways We Don’t Listen to Dave Ramsey, Part One

Dave Ramsey was my gateway drug into the world of personal finance. Mr. Steward and I were just married and happened to begin attending our awesome church just as they began a huge push to put everyone through Financial Peace University. We attended the class, and the “baby step” program that we learned there not only helped up get out of debt those three years ago, but still forms the backbone of our financial plan today.

I admire Dave for creating a foolproof financial plan that works for anyone following the steps. Creating such universal advice comes at a cost, though. Because Dave needs his advice to work for everyone, it is often more conservative than it needs to be for everyone. To that end, we have disagreed with Dave on a few things. In this series, I’ll talk about a few of the ways we have diverged from Dave Ramsey’s advice, why, and if we would recommend it to others.

We Did Not Put a 20% Down Payment On Our House

In the United States, home buyers are required to either put 20% of the home’s value down on a house or carry PMI (private mortgage insurance) to offer the bank some extra protection against taking such a risky loan. The PMI on a traditional mortgage can be removed after reaching the 20% threshold. Dave’s advice would be to never, ever buy a home until you could pay 20% or more as a down payment.

We put about 7% down on our thirty-year mortgage. Let me paint you a picture of 1.5 years ago, when we bought our house: Mr. Steward and I were living in a 750-square-foot apartment with a new baby and lots of visitors. We had committed to living in our current town indefinitely, and that town happens to be a college town. That means that rent was high relative to the surrounding market. The most recent rent hike ourhousemeant we would have been paying $680 for that apartment, with only water included. The mortgage on our 1,500 square foot house, once we found it? $703 ($50 PMI included). And, since our home is well-insulated and our apartment was a third-floor unit built in the ’60s, the energy bills make it come out pretty much exactly the same for double the space. Plus, we get to own it at the end!

Would I Recommend Our Choice to Others?

I don’t regret buying a home without a full down payment because the math was the same difference for us. The key was getting the mortgage we could truly afford, even with the PMI, rather than getting a “dream house.” We did not try to maximize the amount of home we bought. Instead, we chose a comfortable payment and reverse-engineered our home buying process from that number. Since we paid our rent when I was in grad school on just Mr. Steward’s income, we felt it would take a lot to make us unable to afford payments similar to our rent. So, we stuck with that number as our goal.

Interest rates being exceptionally low when we bought (ours is at 3.75%) also helped a great deal with our being able to afford a home. Interest rates have gone up since we purchased our house. Interest rates are very difficult to predict, however, so they shouldn’t be a large contributing factor in the question of whether to buy or not.

I regret that we used about half our emergency fund as a down payment (yes, that emergency fund we recently completed saving up again). Retrospectively, that was riskier than I thought. There were several variables that made us feel more secure at the time. We had many offers from family to help with a down payment. We wanted the pride of doing it all ourselves, but we knew that we would have monetary assistance in an emergency situation. We also made sure that we got a one-year home warranty on the house, which helped us feel confident we would not face major home emergencies. Nonetheless, a series of emergencies at that moment could have been very hard on us financially.

All in all, I think Dave’s advice that you need to have the full 20% down payment to buy a house is somewhat overly conservative. I think in certain markets, families with a healthy emergency fund, moderate housing expectations, and a plan to get the PMI off the loan as soon as possible could go ahead and buy with little impact to their financial picture.

Would you ever buy a house with less than a 20% down payment?

Monthly Review: December 2016 and January 2017

Welcome to our monthly review! Every month or so I review the progress we’ve made on our goals and any frugal hacks I’m trying out. Older updates are here. The background on our money journey can be found here.

Goal Progress: Mr. Steward’s Roth IRA

I announced in our 2017 goal update that our first goal for the year would be to open a Roth IRA for Mr. Steward. We’re trying to keep all of our investments in one place (we’re with Fidelity), and the minimum buy-in for Fidelity’s total market index is $2,500. (Not sure what a total market index is? Click here.)

December: $282
January: $953
Current Amount Saved: $1235

We’ll knock out the remaining $1300 or so in February, assuming we get our tax refund. Then it’s on to getting the PMI off of our house!

Improvements

  • We opened a 529 for the Bean. When Bean was born, we were given lots of cash. People asked us to use it to buy a big ticket item for her. The “problem” was, people were so generous that we haven’t needed anything for her. We decided it was time to pull the trigger on putting the money to work for the Bean. Now it sits in index funds in an Indiana 529 plan. College is a big ticket item, right?

Goal Changes

  • I also mentioned in our 2017 goal update that there was a chance we would need to go to Florida for a family reunion. Those plans seem less likely, since our brother and sister-in-law are no longer bringing their family. There’s no firm decision either way (and we might decide to go anyway, just because!), so we’ll keep saving the ol’ credit card points. Big travel looks less immediately imminent, however.

It’s been fairly quite around our house these past few months. How did your December and January go?

How to Frugalize Your Period

The feminine hygiene market really pisses me off. Why, you ask? Look at this freakin’ box:

tampax

You take a lady whose body already hurts and whose emotions are maybe not totally in control, and I have to go to the store and put one of these stupid things in my basket. It’s nice and colorful to grab consumer attention be a freakin’ neon sign screaming, “WHAT UP SUPERMARKET, GUESS WHO’S BLEEDING FROM THEIR GENITALS TODAY?! THIS GAL RIGHT HERE DING DING DING”

And “jumbo”? Are you effin’ kidding me with that nonsense? Thanks, I already feel like crap, but please remind me that there are so many bodily fluids pouring from my body that I need an elephant-sized rag to plug that shit up.

And then I finally get to the register and learn–this is the part that really gets me–this box costs $9.97. For several tubes of plastic with cotton and string tucked inside. That will be used once and thrown into a landfill. Because I’m a woman with basic bodily functions. And, bee tee dubs, there’s a small chance I’ll get Toxic Shock Syndrome and a subsequent ER visit.

Let’s conservatively assume this box lasts for two cycles. That’s just shy of $60 a year (before sales tax) on feminine products. The average woman is fertile for around 35 years. That means she will drop around $2,100 on feminine products in her lifetime (not accounting for inflation). If she had been able to invest it at a 7% return instead, she’d have an additional $9,500 to her name at the end of her fertile life.

flames

The Frugal Solution

Fortunately, friends, there is a solution to basically all of the problems with the feminine hygiene market. What is this sorcery? Allow me to introduce you to the menstrual cup.

menstrual-cup

A menstrual cup is a small cup made out of medical-grade silicone or rubber that collects menstrual fluid. There are many different brands, but I use the Diva Cup. The cup is folded up (so don’t let the size scare you) and inserted into the vagina, at which point it pops open. The gentle suction it creates means the fluid goes into the cup with little or no leakage. Most users report that they don’t feel it at all when properly inserted, because it sits much lower in the vagina than a tampon. Because of the larger capacity, it only needs to emptied every 12 hours, rather than every 4-6 hours with tampons. There’s also no more sneaking crinkly packages into the bathroom. You’re already carrying your product with you… so to speak. When it needs to be “changed” you simply break the seal with your finger, dump the fluid in the toilet, re-insert the cup, and go on your merry way (after washing your hands, heathen).

But the best benefit to a menstrual cup? At very most, you replace them once a year. In my experience they last several years longer, but that is the general guideline provided by the Divacup website. The cup is kept hygienic by washing it with soap and water and boiling it before each cycle.

Let’s repeat our calculations from before, taking the one-year replacement estimate. A DivaCup costs $28 on Amazon right now. (Other brands may be slightly cheaper or more expensive.) Using our earlier assumptions regarding tampons (half a box per cycle), the menstrual cup pays for itself in about six months. That means a menstrual cup costs the average woman half of what tampons cost: roughly $1,050 over her fertile life. Calculating in inflation and investment potential, the average woman misses out on about $4750 buying menstrual cups. It would be nicer if the number was $0, but that’s a significant improvement from before (which subsequently makes me feel less stabby). And it’s better for the environment!

Other Ways to Have Your Period on the Cheap

Even if a menstrual cup is not your thing, there are plenty of frugal alternatives to other types of feminine hygiene products. A simple Etsy search will net plenty of options for cloth pads, many in cute designs. Look at these chibi Harry Potter ones! You would carry a wet bag (a zippered waterproof bag designed to temporarily store wet items) and place used pads in it until you could wash them at home. For those familiar with cloth diapers, the process is quite similar. A single cloth pad costs roughly the same as an entire box or two of disposable pads (unless you sew it yourself). I’d guess that the outlay for a a full set would be roughly equivalent to a year’s worth of disposable pad consumption. With proper care, however, cloth pads can last for many years.

Period panties are another reusable option. These are panties with a liner of varying capacity sewn inside. They are not designed to be used as standalone protection except on very light days. Instead, they are intended to be used in combination with tampons (or a cup!) as leak protection. The same pair would be worn the entire day, then they would be washed and worn again. The most heavily advertised option I have seen are Thinx, although I would not consider them a frugal option at over $34 a pair. I have seen more brands come onto the market recently, however, so hopefully the cost of these panties will come down soon.

Do you know of other frugal feminine hygiene solutions to aid in my quest to destroy the current feminine hygiene market? Have or would you ever try a menstrual cup?

How We Handle Our Financially Mixed Marriage

Mr. Steward and I have differing views on finances. I’m not talking monumentally different views. Mr. Steward is not maxing out credit cards while I eat beans and tearfully balance our checkbook. We agree on the big stuff: debt is bad, we want a secure life for our family, and we want to retire someday. Nonetheless, Mr. Steward is a spender, while I am a saver.

There are a lot of rewards to be had when two people both get really intense about saving, as some of my favorite heavy-hitting blogs like Frugalwoods or Mr. Money Mustache show. Our marriage is not that marriage, though, as I suspect many (most?) people’s marriages are not. Case in point:

financialcrop

Good chat. So, how do we deal with our money differences? Do we hash it all out in polite conversation every month until we come to consensus? Ha! No. Have we completely separated our finances so that we each control our own earnings? Nay! I argue, friends, that there is a middle way, and that way is the spending money account.

What’s a Spending Money Account?

The concept is pretty simple. We earmark a certain amount of money per month for each of us that we can spend on whatever we want. (We do this in Mint, because that’s where we do all of our budgeting.) Anything we don’t spend rolls over into the next month. That means I don’t criticize Mr. Steward when he spends all of his money on a huge stack of movies, DVDs, and books every month, and he doesn’t say a word about the amount of money I spend going to events with my bestie, paying library fines, or adding to my Roth IRA. It’s ours to do with as we wish.

Our spending money covers any money spent on hobbies or events. Basically, any discretionary purchase that isn’t from the grocery store, for our child, for a date night, or for work clothing has to come from this budget line.

Assuming there is enough wiggle-room in the budget, I could see this working for any couple that disagrees on how much to spend versus save. In my biased opinion, it is the perfect compromise. Whatever amount you were arguing about saving versus spending is essentially halved, then you can each do as you like with your portion.

A word of caution: I can tell you from experience that the halved part is essential here in order to avoid resentment. There is no argument you can make to not halve the discretionary money without denigrating your partner. It’s a one-way ticket to resentment town, regardless of whether you “make more,” or are “more responsible,” or any number of things that will tumble from your mouth to try to justify your reasoning, but will only hurt your partner. So, please, just don’t do it.

You Can Still Learn From Each Other

I expected separate spending money accounts to hamper our ability to learn money lessons from each other. Fortunately, it has been the opposite. Having a hard-and-fast budget for his hobbies has made Mr. Steward more open to trying frugal tricks to get what he wants. He shops at deep-discount bookstores, he has found legal ways to get free music online, and generally seems more willing to wait for certain movies to come to Netflix. I’m still working on getting him to better utilize the library. He also, and anyone who knows him knows this is pretty shocking, routinely sells items he no longer wants or needs to raise funds for other entertainment he wants.

I have also learned from Mr. Steward. Having guilt-free discretionary money has made it easier for me to not err on the side of cheap rather than frugal. For instance, when a friend offered me a fabulous deal on the laptop I am currently typing on, I knew that I could take buy it with little hand-wringing, because the money was there and mine to do with as I wished.

Are any of you married to someone with different ideas of money? How do you overcome your differences?

What Metrics Matter for Financial Success?

Last week, our net worth in Mint crossed $100,000. When we were paying down my student loan debt six years ago, I tracked our net worth meticulously. I was elated when it finally climbed out of the negatives. Then, it felt like it crept up ever so slowly, languishing in the $20,000 range forever. I was desperate to see it grow larger.

So why was my reaction to a much larger number simply to think, “Oh, that’s nice,” fire off a quick tweet, and go about my day with nary a snake hips gif?

Back then, I think I valued our net worth so highly because it was a sign that we were building something. Paying down debt is just that–watching a number decrease. Intellectually, you know you’re making headway every time you mail in a loan check, but it’s psychologically much more appealing to watch a number go up rather than down.

I also think that net worth mattered more then because, as a young adult new to managing money, I somewhat equated the state of my net worth with personal worth, or at least with my success at “adulting.” It was hard not to feel kind of worthless on a whole when our net worth was negative. I would never equate someone else’s value to their net worth, but I’d be lying if I said it didn’t bother me back then.

So What Changed?

Our goals.

Trying to get our net worth into the positive was really motivating when we had debt and a low net worth. Now that we’ve been debt-free for a couple of years and our net worth is firmly in the positive, the number is less exciting. I think that is because net worth is no longer an accurate measure of our goals.

The main way we intend to grow our money is with investments. We don’t want to go into real estate, or buy any other fancy big ticket items. We do own some larger items, like our cars and our house, but those items are not investments to us. They are utility objects, providing our transport and shelter. The cars have mostly finished their deprecation descent, and we intend to drive them until the wheels fall off. The house serves as a hedge against inflation, but we don’t expect to make a ton of money on it. We intend to live in it.

For us, then, net worth isn’t a very motivating measure anymore, because all it really comprises is our investment portfolio plus a few bigger-ticket utility objects. Better to simply cut out the fluff and use the amount in our investment portfolio as our yardstick, since that number determines when we will be financially independent.

So What is a Good Financial Metric?

All of this has me thinking, “What is a good metric for measuring financial success?” I think it needs to encompass a few things:

  1. Your metric needs to keep you honest. Any metric that lets you finagle numbers so that you can lie about the status of your finances is, um, not good. This usually happens when the metrics become convoluted. Net worth and portfolio size are fairly simple metrics to figure out. If you’ve having to bend over backwards with crazy formulas to prove your point, something is probably wrong.
  2. Your metric needs to motivate you. Whatever the metric, it needs to be motivating. Net worth used to be motivating for us. Now that our net worth is positive and should continue to grow for the foreseeable future, it is less motivating. Now investment portfolio size is more motivating, so we’re going to start measuring our financial success with that metric.
  3. Your metric needs to reflect your goals. Using your investment portfolio as the way you’ll measure you financial success if you’re a real estate investor is going to be  disheartening and inaccurate. The metric you use should show your progress in achieving your financial goals.

Have any of you ever found you were using a financial metric that did not really match your goals? What are some of the creative metrics you’ve come up with to keep you motivated?

Our 2017 Financial Goals

2017 is almost here, so it’s time for us to set some goals. We have three big money goals for this year:

1. Open Roth IRAs and Contribute 10% of Our Income

As I mentioned in our last monthly review, the first item on the docket is to start investing 10% of our income into our Roth IRAs. That means, first and foremost, having Roth IRAs. I opened mine with the payout from changing jobs a few months ago, but we still need to meet the investment minimum ($2500) to open an account for Mr. Steward. We’ll save part of that total this month, and our tax return should mostly take care of the rest. We should be able to achieve this goal in short order. Mr. Steward and I need to decide if we’ll immediately start contributing the 10%, or if we will wait until our next goal is complete. I suspect we will do the latter, although the former could pose an interesting challenge to our budget.

2. Get the PMI Off Our House

We bought our house with a pretty small down payment. While I’d rather focus on investing than paying off our house, we’re currently paying $600 a year in PMI to have the privilege (ha!) of borrowing money. The PMI has to go. It will take about $15,000 towards the principal to have 20% of the home’s purchase value covered. Part of that amount will come from our normal payments (which will become more effective in vanquishing principal the faster that we make additional payments), so I suspect we’ll only need to contribute more like $12,000 in additional contributions to make it happen.

3. Travel

This one is a little more nebulous, because it basically depends on family decisions that have not yet been made. Either we will need to go to Cape Cod for Mr. Steward’s brother’s wedding, or we will travel to Orlando around Thanksgiving for a family reunion. I don’t think we’ll need to do both trips. I have started hoarding credit card points, but I figure we’ll need an additional $1,000 to $1,500 for either trip. I don’t intend to start saving for this beyond credit card points (since we have an emergency fund) until firmer details have been hashed out.

All in all, those three goals comprise around $15,000 of savings and additional payments that need to happen this year. Historically we have been able to save that annually, even before I got a better job, so it seems pretty attainable. I’d love to see us smash these goals and get started on some new ones toward the end of the year.

What are your goals for 2017?

How Aldi Helps You Treat Yo’ Self (in the Right Way)

If you’ve been reading very long, you already know that I really love Aldi. I realized on my most recent shopping trip that the aspect I love most about Aldi is that it encourages seasonal living and discourages lifestyle inflation, at least in the area of grocery shopping

For those unfamiiar with Aldi, the bulk of the store is a fairly traditional stock of

aldikeychain
A Christmas gift from my bestie, because she gets me

foods that you would need to prepare, and they offer no brand choice. There is a set stock of goods that rarely changes in composition. (Thank goodness! The choice fatigue alone makes me want to flee traditional grocers.)

The last aisle, however, changes every week or two. One side of the aisle is home goods, and the other side is seasonal foods. Since we’re almost upon Christmas, right now it is full of all sorts of Christmas sweets and crackers. Two weeks from now, it will be something completely different. October always has an Oktoberfest theme, other months they’ll spotlight the food of a different country.

I love this feature of Aldi, because I feel like I am setting myself up for success in treating myself appropriately. Our grocery budget allows for treats from time to time, but I’ve talked before about how those treats rapidly become things we take for granted, and, for me, abstinence is better than moderation. Fortunately, Aldi offers enforced moderation. If I buy an item from the last aisle and I love it, I cannot be tempted to buy it forever, because the item will simply be gone. Most of the items are things I shouldn’t buy forever, since they are typically sweets or pre-packaged foods.

Moreover, my treat will be in time with the season. I can celebrate the time of year with a little something, then move on to enjoy the elements of another season at a later time. It’s a great lesson in a country where we are increasingly offered anything we want exactly on demand of when we want it. Moreover, the scarcity helps me to enjoy the treat more while I have it.

Aldi is not devoid of temptations in their permanent stock (I’m side-eyeing you, cocoa-dusted almonds). You also have to be self-aware enough not to “stock up” when items are in the last aisle. Overall, though, enjoying the last aisle at Aldi from time-to-time can help you to keep your treats as, well, treats.

What are some of the ways you try to curb “treat” spending? Also, have you tried out Aldi? What did you think?

How Not to Be a Scrooge This Christmas

You have likely noticed that Christmas is coming again soon, a delightful time of joy, expectation, family, and relentless consumerism.

For the past few months, the biggest questions in my personal finance Twitter feed have been either how to opt out of Christmas gift-giving altogether, or how to accomplish gift-giving on the cheap. I have heard otherwise very kind people complain when they didn’t receive an equally valuable gift in return to theirs. I have also read the mockery of those “above-it-all,” who refuse to descend into Black Friday shopping with the plebes. (Penny has a great blog on that topic here.)

Gift-giving is a fraught social currency, perhaps moreso in a community of fiscally-minded folks. Therefore, I would like to present some basic steps for how to chill-the-eff-out this holiday season, brought to you by my past personal humiliations and Scrooge-like behavior. Learn from my example, friends, and have a lovely Christmas.

Be Grateful

Gratitude should not be that hard. After all, someone took their hard-earned cash, picked out something you might like bought it, and gave it to you for free with an actual freakin’ bow on top. What is there not to be grateful about?

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The infamous machine

Nonetheless, I have been a complete jerk when it comes to receiving presents before. The first major gift I received from a non-family member was a sewing machine from my first boyfriend. I was sixteen, and my then-boyfriend had just joined the Marines. I had a sewing machine on my Amazon wishlist, and had mentioned many times that I would like to learn how to sew. So what happened when it arrived in a huge box on my doorstep?

I freaked out, and not in a good way. I told him his (what I perceived to be) extreme generosity made me very uncomfortable. I told him he should not have spent the money on me, but instead saved it for a variety of more important things he needed. His feelings were understandably hurt, and so began our first big argument. At the time I felt quite justified. Looking back, though, I see that my logic had a whole lot less to do with wanting the best for him monetarily, and instead had more to do with my own feelings of vulnerability and embarrassment at not being able to reciprocate on the same level. Frankly, at sixteen, I also did not understand the diminished scale of a few hundred dollars when someone is making adult money.

Now I try to be much more open-handed with gratitude. Regardless of the gift (and whether or not you feel the person can afford it!) the gift-giver deserves to be recognized for having thought of you positively. Moreover, I’ve learned that any fears about being indebted to the gift-giver is a really unkind judgment of them. Such thinking assumes that the gift-giver has a selfish spirit. Even if it were true, it is not a helpful way to think of others, because…

You Can Only Control Yourself

I’d love to say I learned from the sewing machine fiasco, but last year I again found myself scrooge-mcduck-sniffingfeeling like a flaming pile of poo in response to another gift-giving situation. Bean was tiny, and I was having a hard time adjusting to the sheer volume of stuff that seems to magically apparate along with a baby. My coping mechanism was to try to talk everyone out of spending money on my child in the days and weeks leading up to Christmas.

I remember the situation vividly. I was sitting down on my grandmother’s floor, facing the matriarchal firing squad of my mom, aunt, great-aunt, and grandma seated above me on the couch. They were discussing all the toys that were going to appear on my doorstep regardless of my wishes, because “that’s what grandparents do.” Yet again, I lost it. I told them all in acid tones that they could do that if they wished, but nothing would stop me from immediately taking it back out the door to a resale shop or disposing of it as I wished.

Now friends, I don’t think what I said was factually wrong. People aren’t allowed to make you feel guilty with gifts, or have a say over what you do with them after they’ve been given. However, throwing my annoyance in the gift giver’s face at the time or even before they gave me the gift is incredibly rude and ungrateful. It robs the giver of the appreciation that they deserved for thinking of me, just because they wouldn’t conform to my wishes. I behaved like a full-on dictatorial Scrooge.

Instead of trying to change what others do–because seriously, has anyone succeeded at getting grandparents to not buy for their grandchildren?–we now modify our own behavior. After all, that is the only behavior we can control. We buy almost nothing for Bean on most occasions. Instead, we try to do special things for her for no particular reason, and save for big future expenses like college. I still try to suggest experiences rather than things when asked for gift ideas, but in the end, we will smile, enjoy the love the gift is meant to convey, and deal with the physical stuff later.

Put People First

I think the care that frugal sorts give to thinking about their expenditures can lead us (or at least me!) to focus too much on the spending or “stuff” aspect of Christmas. Spending way less than the average person on Christmas does none of us any good if it is only a mechanism whereby to judge others who spend differently or feel self-righteous about ourselves. Any measures of cost-saving or frugality should be undertaken only if they help us focus on the more important things in our lives–faith and love.

Has worrying about what others spent or what you’re spending made you a Scrooge at Christmas? What are some of the problems you experience surrounding holiday gift exchanges?

Monthly Review: November 2016

Welcome to our monthly review! Every month or so I review the progress we’ve made on our goals and any frugal hacks I’m trying out. Older updates can be found here. The background on our money journey so far can be found here.

Goal Progress: The Emergency Fund

Balance on October 31: 13515.05

Balance on November 30: 15000

Change: 1484.95

We’re finally done! The PTO payout from my old job was more than enough to finish out this goal and begin to fund the next. Let’s celebrate with my favorite snake hips:

snakehips
$15,000 is a lot of cash to have on hand. We know we have certain expenses (e.g. new HVAC) that will arise in the next 5-10 years, not to mention surprise expenses. We have several priorities we want to accomplish before we start saving for those mid-term expenses. It’s good to know that in the worst case scenario, our family will be able to swing any emergency expenses in the meantime.

Note to self: Next time add the Hiddleston gif AFTER you’re done writing the blog… Mesmerizing.

The Next Goal

Now that our emergency fund is complete, the next immediate goal is to begin putting 10% of our income into Roth IRAs. (This is to go with the 4% we respectively contribute to our 401ks, which is doubly matched.) We want to go with Fidelity, where all of our other retirement savings now reside (see below). Unfortunately, the minimum investment for their total equity index fund is $2500. While my payout from the job switch is almost enough to open mine, we’ll have to save a few months to reach the investment minimum for Mr. Steward. We will singularly focus on saving for that until the account is opened, then dial the savings back to 10% to let us simultaneously pursue other goals.

Improvements

  • I rolled over my 403b from the old job. I wanted my investments to all live together and I didn’t feel enamored with my old plan, so I rolled my 403b over to a Fidelity traditional IRA. (My new employer is with Fidelity.) I am happy to have all of my investments living in one place for now. I have to admit, putting in purchase orders for the funds was much scarier than simply checking some boxes and adding percents in my old plan, but I’m happy with the outcome.

The Do-Betters

  • We need to make a decision about Christmas budgets. We spend like a typical American family at Christmas. This is a choice we make joyfully, because I love to give presents. I enjoy thinking about the person and trying to introduce things that remind me of them or that I think will make them happy into their life. Nonetheless, every January I tell myself that we will scale Christmas back, not because we can’t afford it, but out of my fledgling minimalist desires. So, I set our Christmas savings artificially low at the start of the year, then the amount we save climbs over the year as we get more excited. Next year, we need to simply decide in advance and stick to it. Cut back or don’t, but make the choice from the beginning.

That was our November in a nutshell. How did your November go?

Why I Spent More on Clothes This Year Than… Ever

I hate clothes shopping. Numerous friends tell me that they have entire closets full of clothes for different seasons and across different sizes. I am basically the opposite of that person. Both Mr. Steward’s clothes and mine hang on the same single side of our closet. I purposefully buy clothes with sleeve-lengths that can be worn year-round with the addition of layers. I also wear pretty much the same few colors, so that I always know that everything will match. (Shout-out to the genius who decided that capsule wardrobes are a thing, so I can pretend to be trendy and wise instead of just lazy.)

Clothes shopping is an anxiety-inducing experience for me. I’m nervous I’ll spend money on something, then decide I don’t like it a short while later. I believe this stems from teenage years, when my awkward body shape made clothes-finding hard, but I was still figuring out my “look.”

I also have a hard time wrapping my mind around the impermanence of fashion. (You’d think this would be a comfort, given my former concern.) Even if I take exceptional care of my clothes, there are very few buy-it-for-life clothing items. As someone who values maximizing the value of anything I own, I find the fact that clothing wears out to be really annoying. Often, I go shopping for an exact replacement of something I owned before, then rapidly become frustrated when I can’t find it.

Despite my hatred of clothes shopping, I have spent more money on clothing this year than in the previous five years combined.

Why Have You Spent So Much?

It turns out that post-baby bodies, even if you get back to your original weight and size, are shaped differently than before. My older clothes did not look quite right with my now more prominent postpartum belly, and I often felt self-conscious. Also, my old clothes were wearing out. I don’t mean they were slightly faded or a little stretched. I mean the underarms were worn so thin on some shirts that I couldn’t wear them without jackets over them. I had sweaters with hemlines that unraveled as I sat at my desk.

Moreover, I got a new job. My new workplace has a less casual dress code, so about half of the outfits that I wore previously were no longer appropriate. I also have more upward mobility in this position, so I felt it was important to dress the part of positions I would someday like to reach. “Dress like the person you want to be” and all that jazz.

What Did You Spend, On What, From Where?

I spent about $400 this year on clothes. Now, you may be thinking that is pocket change, or you may be bemoaning how I could waste so much money on something so frivolous as clothing. For me, this is a huge amount to spend. In the past five or so years, I have spent maybe $75 a year on clothing; usually just enough for a new pair of work shoes and perhaps a top.

My $400 got me two pairs of flats, a pair of boots, two dresses, a decorative scarf, a new everyday bag, three button-up shirts, a sleeveless blouse, three blazers, two sweaters, and two pairs of leggings. In rough numbers, I’d say 35% of the money was spent at a department store, 25% at a discount retailer, 15% at LuLaRoe, 15% to a charitable organization, and 10% at secondhand shops. To highlight what a huge markup new clothing prices have, half of the items I purchased were secondhand.

Anything purchased new were classic pieces that I knew I would wear until it they were completely worn out, such as a black dress for work, my everyday purse, or shoes. Everything else came from secondhand shops.

Was It Worth It?

Definitely yes. I did not realize, until I started regularly wearing clothes that made me feel good about my body and seemed appropriate for my surroundings, just how much unnecessary grief I was putting myself through by not parting with a little bit of money. I not only felt less self-conscious (which makes for one less thing to think or worry about), but dressing more professionally at work made me act more professional. By dressing like a high achiever, I found myself striving to achieve more. A classic case of faking it until you make it.

I think naturally frugal people (at least me!) can pat themselves on the back for not spending money when, as I’ve discussed before, this is actually a sign of dysfunction or miserliness. Frugality should be about maximizing the happiness and use you gain from the things you do buy, not refusing to buy anything altogether. I think I thought new clothes wouldn’t make me any happier, both because of the annoyance of having to purchase them, and also because I thought clothing was not something I cared about enough that it could enhance my life (at least relative to the cost).

Partly I was also buying into the minimalist/no-spend trend, which says purchases aren’t going to make a big difference in happiness. While I agree in principle, what I overlooked is that I already wasn’t looking to clothing to bring me happiness. I didn’t need a “reset” on spending I already wasn’t doing. I’ve learned that having a modest wardrobe of clothes that fit well and are appropriate to your day-to-day tasks is a joy, one I can offer gratitude for continually. Clothes are the things that are literally closest to us all day long. I’ve decided it’s worth it to ensure that those items are in good repair, appropriate to the situations I am routinely in, and pleasing to me. I can sit comfortably surrounded by threadbare sweaters and money I didn’t spend, or get over my self-righteousness and get a few items that will fulfill their function beautifully.

Do I expect to spend $400 on clothes for myself next year? No. But I also do not intend to let my wardrobe degrade so far before I purchase new items moving into the future. I’ve discovered that it’s worth the small effort and the slightly greater expenditure to find good clothes.

How much do you spend on clothing per year? Have you ever discovered a financial blind spot where spending a little more money did a lot of good?