Lazy Man and Money

Five Questions I Ask Myself Before Making a Purchase

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When I was learning to drive, my mom decided she would teach me herself to make sure that I was well educated and wouldn’t get in an accident when I was of age to get my license. She told me to be the key in the ignition and turn the car on. Check. She then told me to put the car in drive. She neglected to mention that the car would move even if I wasn’t putting my foot on the gas. In fact, I had to put my foot on the break – a critical step she forgot. As we almost went through the garage door, she decided she wasn’t cut out to teach me. Just because she’s really good at driving it doesn’t mean she can explain the process to someone else.

I was thinking about this the other day. I often forget that there are lot of people not like me. Well, I know I’m a weird freak, but in this case I’m focusing on my financial mindset. Part of this financial mindset is these five questions that I ask myself before making a purchase. I’ve gotten to the point where I’m like my mom driving, I don’t think about each of the steps any more. It’s all just muscle memory. In fact, it’s more difficult to explicitly think about the steps than it is for me to just do them. Nonetheless, I decided to take some time and outline my buying process:

  • How Much Does it Cost? – This sounds easy, but you’d be surprised how many people would buy something without asking the price. I’ve seen people fall in love with a product and bring it up to the counter already deciding that they want to own it. If you get to that point, you are very likely to over-pay for it.
  • How Much Do I Need the Product? – There are some products that are clear cut needs. I need to eat food. I need transportation to my job to protect my income. There is a gray area when it comes to things that improve my quality of life. Do I need a faster laptop? For something like that, I try to ballpark my productivity gains. Am I going to be able to do more work in the same amount of time and thus have the laptop pay for itself? Am I going to spend less time patching my old laptop? These are usually difficult questions to answer with no right or wrong. I generally lean towards keeping the old laptop. That’s probably just my frugal nature.
  • How Much Do I Want the Product? – This is a much easier question to answer. I want things like the new set of Buffy the Vampire Slayer Comic Books, a Blu-Ray player, etc. These are clearly not needs. If it’s something small (like the comic book compilation), I will roll it in my head for a while and either get it or put it on a wish list for a birthday or the holidays. I try to limit these small splurges to one or two a month. The Blu-Ray player, at around $200 is the kind of thing that I would allow myself to splurge on once every four months or so. I don’t have a rigid budgeting system – I’m much too Lazy for that – it’s just one of the 700 balls that I’m juggling in my head at any moment. This might not be ideal, but I find that it works for me.
  • Have I Researched the Product? – Am I buying a good quality product that will last or am I just throwing my money at a short term solution? I already wrote a bit about how I research a purchase, so I won’t repeat myself here.
  • How Can I Save Money on the Product? – That’s always a big question. If I can save a few dollars, obviously it opens up more room in the “want” category – or it can be used for investing my long term goal of financial freedom. This is why I write about saving money on: cars, golf, restaurants, environmental purchases, vacations (Aruba or anywhere), clothing, movies, music, television, and books, razors, hobbies, gas, housing, groceries, even beer, wine, and almost anything on the Internet.

Do you have a different buying process? Let me know in the comments.

Thoughts on Middle Class

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I came across what’s wrong with being middle class by Mrs. Micah the other day. It’s a simply and beautiful question. Some of my closest friends who are doctors, lawyers, and financial Wall Street somethings or others. (I can never really figure out what the Wall Street guy does, but I think it involves TPS reports and a high degree of education and I expect pay). While they are still a little young side to be in the upper class, I suspect they are in the upper-middle class – and probably will be in the upper class in 5 to 10 years.

I’m not sure we are headed in the same direction simply because I made the choice to skip the big paycheck for two reasons. I wanted a better quality of life. I was not happy with being a software engineer. I think it’s a fine occupation, but it’s very competitive and I’m at the point where there’s more to life than coding a computer. It’s nearly two full-time jobs – one producing code and one learning the latest tools and technologies. It’s extremely difficult to do both and have an outside life for any length of time. I was simply juggling too much at one time.

The second reason is that I wanted to build something sustainable for the long-run. You can call it a rat-race or a treadmill, but unless you love what you do exchanging time for money is a losing proposition. Earlier this week, I was recently reminded that time is our most precious commodity.

There was a time when I had to have every new electronic gadget when it came out. I was one of the earlier adopters of Smartphones, DVRs, home automation equipment (everything that X-10 had to offer), and MP3 players (my first had space for 7-8 songs). Even though I had all this stuff, none of it made me happy. Not only that, but each purchase meant that I had sacrificed precious time for what amounted to very little. It was not until the last few years that I realized that experiences made me happy. I now evaluate purchases by their possibility of providing those experiences. It’s one of the reasons that I recently purchased a Wii. Thought we’ve had it a short time, my wife and I have enjoyed a few hours being active and playing tennis.

So to sum up all these thoughts on what’s wrong with being middle class… there’s nothing wrong with it. I will be happy to trade extravagant meals of caviar for hours of simpler pleasures with the people I love.