When I first started receiving an allowance, I did what any kid in my shoes would have done…I stole my brothers old velcro neon yellow wallet, and from then on I would walk around with my wallet just like I had seen my dad and brothers do. A wallet was like magic, you open it up and money comes out. “I’m a big kid now,” I thought to myself.

I went everywhere with my wallet, but I soon came to realize that my wallet was always empty. A couple years later, in an effort to make extra money, I began helping with my brother’s lawn business; but my problem remained…I never had any money for what I wanted and I was always broke. This especially hurt because I was now doing hard work with my brothers instead of the little made up chores my parents would pay me for to rationalize my “allowance.”

“I’m broke” is a funny thing for a 10 year old to say, and even though I still had full access to the ATM (Bank of Mom and Dad), I cherished being able to say that I bought stuff with my own money, so I had to figure out the problem. I remember looking around at all the stuff in my room and figuring out where all of my hard earned money went. I saw tons of crappy toys that I never played with, a pair of really cool sunglasses that I could never wear because I wore regular glasses, and a bunch of baseball cards in drawers. I realized that I had spent money on a ton of stuff that I never used and/or didn’t even like, and to make matters more ironic, I had bought most of it on impulse because I had my wallet with me and thought “Why not?”

After I came to this childish epiphany I began saving by hiding money around my room. Before I knew it, I had enough money to buy the new baseball glove I wanted, and when my parents realized I had started saving, they took me to the bank to open a savings account.

As children it’s easy to realize why we save. We set our savings goals for the short term in the form of the items we want. We save up, get our new toy, and set our eyes on the next savings goal, but as with everything in life, our perspective changes as we grow older.

I went a long time just making deposits to that savings account, in fact even at 16, when I finally did touch it, I managed to not waste all of it lifting my Jeep (OK, I did waste most of it). Soon after spending way too much money on my Jeep, I set my sights on homeownership. And for the next 6+ years I saved and invested with this end goal in mind; then when Mary and I got married, our combined savings allowed us to realize this goal.

As we grow older our financial goals change from being weeks away, to months away, to years away, to decades away. And now as I write this, financial goals are harder than ever to define. For us, goals are no longer defined by material things like a car or a house, but they are defined by ideals and the dreams of another generation that wanted to escape the workforce all together. Now these dreams that once seemed so defined are now obscure words that mean different things to different people. Words like entrepreneur, travel, and retirement.

To you retirement may mean leaving the workforce all together and escaping to some exotic beach. To me that sounds like an empty world of boredom because I don’t plan to retire in the traditional sense. I want to be just like my 89 year old grandfather who is still a highly sought after consultant; he doesn’t need to work but chooses to, and thus he remains the smartest and most quick witted person I know.

Saving without having an understanding of what you are saving for makes saving that much harder. You say you are saving for retirement but what does that mean to you? How much will it cost to live the lifestyle that you want for the number of years that you want? You want to start your own business? Awesome! How much does it cost to be an entrepreneur? You want to be able to drop everything and travel the world? How much will it cost, where will you go, what will you do? And most importantly, how long do you need to save to achieve your version of these goals?

Going through a series of questions like these either by yourself or with your spouse may be the most important time investment you make. Doing this allows you to define your goals and have a true understanding of why you save the way you do. Maybe you’ll find that in order to finance your goals you won’t need as much money as you thought so you can cut back on saving, or maybe you want to keep the same pace to achieve those goals earlier. Regardless, having a name to every dollar you save makes saving that much easier because it gives you a defined end goal.

Why do you save?

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In college I got a Tivo with lifetime service, which added fuel to the fire of my TV escapism. No longer did I have to plan my evenings around TV, my Tivo would allow me to be free from the agony of ads and timeslots, but my Tivo was smarter than  me. It started recommending new shows that I might like. Soon I was staying up until 1 or 2am every night just to finish my TV Shows. My schedule began to conform to the shows that Tivo recommended and now I was back in the same rut as before except I was watching more TV. 

Then something magical happened, something life altering, something fantastic… Hollywood writers went on strike. There were no new episodes for me to watch, and I found myself having <gasp> free time.

This concept of free time is something that I had never felt before, I had always consumed myself with TV because it gave me a false sense of accomplishment. What would I do with this free time? Well, I became productive. I started working out more, I finished the many half-finished projects from remodeling the house we were living in at the time, and I started writing this blog. But perhaps the most surprising thing about all of this is that the only thing I missed about TV was the ridiculous antics on The Office.

Don’t get me wrong, it’s not like we don’t watch TV…truth be told the only shows I consistently watch are The Office and 30 Rock, and Mary swaps out 30 Rock for Private Practice; we just watch TV differently now. I have an antenna in the attic that picks up all of our local stations in HD, and I have a computer hooked up to the main TV. The computer enables us to watch whatever we want from the iTunes store or Hulu whenever we want, and we have our trusty Tivo set up in the bedroom.

Now Mary and I focus our time productively on being entrepreneurial. We each have business plans that we are working on, and we are working together to start selling some of our home baked bread at a local farmers market. Who knows, the lack of cable may not just save us money, it may make us money.

Have you ever thought about what you could do if you cut out TV? I bet it’d be pretty amazing.

The next paragraph is a bit of a rant, feel free to ignore:

I’m not against having cable entirely, I’m mainly against it’s pricing structure, much like gym memberships, cable companies take your money while giving little to nothing in return. In fact they don’t really give you anything except for the opportunity to spend your time watching TV. I would actually be willing to pay a premium per channel to be able to choose the channels I want, I don’t need 100 channels, I don’t even need 25, why not let me choose and make more on a per channel basis? But I digress…

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The book is filled with very good information on everything from budgeting, to living on your own and debt management, but I’d like to focus in on the section titled: Being a Smart Shopper.  (Keep in mind that as I go through and quote this that it was written in 1996 for teenage boys, but the lessons transcend age and date.)

 Suppose you have your eye on a really special skateboard.  How much does it cost? (Don’t forget to include the cost of protective gear if you don’t already own such items.)  You count your money and discover that you don’t have enough.  What do you do?  You Might:  

• Shop around.  Maybe another store or a catalog has the identical skateboard at a cheaper price.  A telephone can make comparison shopping easy.  Call at least three stores.
• Earn or save more money until you have enough to buy the skateboard.
• Wait for a sale.  A store clerk might tell you if the skateboard will go on sale soon.
• Look for discount coupons.  These can be found in newspapers, coupon books, or the mail.

What if you still don’t have enough money to buy the skateboard, or you decide you don’t want to spend that much money, even if it is on sale?  You have other choices.  Shoppers can’t always buy exactly what they want.  Sometimes they must compromise.  Thats part of being a good money manager – knowing when to say no to yourself. 

 Wow.  I’d say those last few sentences are something everyone needs to remember!  Mary and I are in this situation with our house right now.  We really want hardwood floors in our living room, but we know that we just don’t have the money for it.  We are forcing ourselves to say no, and it’s hard because we need want them.  It is very hard to say no to yourself, and it takes a great deal of self control, especially when (once you get older) it’s so easy to put a purchase on the credit card.  Luckily for Mary and I, we are able to hold each other accountable and it really helps.  

The Scouts are essentially saying, if you can’t afford something you have a few options: shop around, save more, wait for a sale, and look for coupons.  Very smart advice for anyone.  It also reminds us all to consider all of the costs we will encounter for this item, like having extra money for protective gear for the skateboard.

The passage goes on to recommend that you buy a less expensive skateboard with a different paint job, buy a used skateboard, check classified ads, and it even brings up building your own skateboard (which sounds fun and easy to me!)

The book then offers a checklist for smart shopping some of which are (my commentary in parentheses):

• Be wary of advertising…(Always!)
• Before buying a product, talk to…others who may already use [it]…  (Also seek reviews from consumer reports or on the internet)
• Try before you buy/demo
• Consider quality.  Price isn’t everything… Why buy something, even at a low price, if it falls apart quickly or doesn’t work properly.  (I am obsessed with quality products, if there is a difference in quality and price, I will buy the one that has better quality)
• Consider Service. (I’m usually willing to pay more for something if I know that the service behind it will be worth it.  For instance, I’ll pay a bit more for something at Costco in order to get their service and extended warranty)
• Don’t Impulse buy.
• If there’s a problem, take a product back right away (be sure to keep your receipt).  Don’t toss the item aside and feel sorry for yourself….Most stores…[will]…probably fix the item or give you a new one.  (I am terrible at actually returning items to stores.  It always seems like too much of a hassle.  But I’m going to make a point to return a broken glass bowl we got as a wedding present (in June) this week.  We have the receipt.  I hope they take it back!)

It’s not always easy to be a smart shopper.  Most people, myself included, aren’t good at the waiting part.  We impulse buy, it’s what advertisers and marketers try to train us to do, but we need to always remember to stop and ask ourselves if we need the item, or if we just want it.  We also need to ask more important questions… Can I afford this?  How long with this take me to pay off?  How long will it take me to save for this?  Those are the types of questions that should be going through everyone’s head when they see something they want to impulse buy.

Writing this has been very beneficial for me today, because Mary and I did our Tax return yesterday and when I saw the amount we will be getting back I got very excited.  I even caught myself drooling over Mac mini’s online today.  But I slowly moved my mouse up to the corner of the screen and closed the window, because even though a Mac mini is on my list of things I want and need (yes I do need a new computer), I want to achieve other Goals first.  Most of our Tax return will hopefully be going directly into savings to help us achieve higher goals.

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I’ve always been a jack-of-all-trades, never afraid trying to do something on my own, and always watching and learning how to do things.  I can’t help it, was raised this way. 

From a young age I pushed a toy lawn mower behind my dad as he mowed the lawn, in elementary school I spent afternoons with my grandfather who taught me about woodworking and tools as we built (yet never finished) a rocking chair, in junior high I hung out with carpenters and contractors everyday after school as they remodeled both my grandparents and my parents houses.  I was an early adopter of HGTV, yet This Old House remains my favorite home improvement show.  In high school I, like most teens, was infatuated with cars, and as a result I can, and have done just about everything on a car, short of body work.  Through all of this, I learned and did even more as I became an Eagle Scout.  I watched, I learned, I did.

I loved these aspects of my childhood, and these aspects built a foundation for me to know how to do an extreme variety of things, and as much as I love (and Mary loves) this about me, it’s a curse.

I constantly have internal struggles as three aspects of my life make it nearly impossible for me to make a decision on any variety of things.  These three things that alone are great, seem to deeply conflict each other.

1. I’m a DIY type of guy, born and raised, for the sake of being constructive, and seeing a finished product that I created, saving money is just a bonus.
2. I’m Frugal.
3. I’m a perfectionist.

As the saying goes, “jack of all trades, master of none.”  I’m a perfectionist that can’t do any of the things I love to do perfectly, yet I hate the concept of paying someone when I can do it myself, but since I know how things should be done (even though I can’t do them perfectly) I monitor to make sure things are being done right.  As Fat Bastard in would say “It’s a vicious cycle.”

This internal struggle is one of the major reasons that Mary and I decided to build a new house instead of buying an older home and having projects.  We’d rather move into a house already done the way we want it than have to live with imperfect DIY project after project.

JD at Get Rich Slowly, posted an interview with Tim Ferriss, author of The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich.  I have not read the book, but in the interview the concept of a “low information diet” is brought up.  Tim explains that the people who excel with this type of lifestyle don’t overload on information.  Instead they outsource what they can, and don’t feel the need to stay caught up.  Tim calls them “selectively ignorant,” not really knowing more than they need to.  In other words, they are the opposite of me.

I am going to try being selectively ignorant because in many aspects of my life I feel that because I know how something is done, I should do it myself.  As a result I have a handful of half finished projects, and quite a few that would look much better if I would have paid someone else to do it.

What it comes down to is focusing on the things that you truly thrive in.  If you can focus on these things, and outsource/outchore the rest to others, in theory you’ll be doing quite well in your career and in your life.  This concept is one that was first brought to my attention in the book Strengthsfinder 2.0, which has the reader take a personality test and then tells you the 5 things that you thrive in, and what type of people to surround yourself with in order to be most successful.  It is a great test/book and I highly recommend it, as it was the first publication that I read which focused on strengths and not weaknesses.

I have to begin accepting that just because I can do something myself, it doesn’t mean I should. I am excited that I won’t have any large or highly visible projects once we move, and I’m looking forward to being able to focus more on what I’m good at (like looking towards the future, advising, and teamwork), and getting better at a select few things I truly enjoy but am not great at (like writing). 

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In my pre-Tivo days I was a true slave to the TV, I would schedule my evenings around shows, and diligently watch the entire program. I wanted things that were advertised to me during the 8-20 minutes of commercials per show, I needed those items, and I would spend my money to buy them. Then one day, I impulse bought a Tivo with Lifetime Subscription, and I thought it would change my life. No more would I be a slave to timeslots and advertisements, I would watch my shows when I wanted to, and I wouldn’t have to worry about missing a show due to class (or occasionally missing a class due to a show). I would be free at last!   

Too bad that didn’t work out the way I wanted it to, my life didn’t change. Instead, I became a slave to the Tivo, and ended up watching more TV as a result. Wouldn’t you? The average 30 minute show has 8 minutes of commercials, so you could watch 2 shows in the amount of time it used to take me to watch one and a half. I could stay up a little later and watch 4 programs in the time it used to take me to watch 3!   

Soon I was staying up just so I could find time to watch all of the shows I needed to watch. It didn’t matter if I had never seen them, if it was a Tivo recommendation I’d need to watch it to see if I liked it. Of course I usually would enjoy it and would add yet another show to my season pass list. With Tivo, I would watch 1.5 to 2 hours of TV a day, but because of the strike I cut down my viewing to about 30 minutes before bed.

With that time not wasted, I’ve been reading, writing, and running; all things that I feel have enriched my life. Even more importantly, I am not being advertised to nearly as much as I was. I no-longer am forced to view targeted pop-ups during a show or convenient and overly blatant product placement (after all, every Office fanatic needs a Dwight bobble head doll).  But over all, giving up TV hasn’t been too hard.  It’s been much easier since all of my friends and coworkers aren’t talking about the shows the day after, because they simply aren’t on.   

I’m upset about the strike ending because everything I had grown to love, and now hate, will be back for me to learn to love again. I’d be lying if I said I didn’t miss Jim’s witty antics toward Dwight, but I’m going full force in trying to not watch TV.  Ok, I will watch The Office…and Heroes, but I want to maintain these things that have enriched my life and not fall back into my old ways.   

When we move Mary and I have decided that we will only have local channels, and we will hopefully keep it that way for many years to come. This will definitely help us out from a financial standpoint, because instead of spending $60+ a month on cable, we will be able to save that money.  Plus it will give us more time in the day for more important things, like each other, keeping fit, and working to achieve our goals.   

The bottom line is that being frugal isn’t about just finding ways to save money, it’s about finding ways to save time too.  This fits the bill for both!

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