16 Mar Purge so you can SPLURGE
In a previous post “Optimize Spending: Why I disagree with Rammit Seti and others that say to forget about trimming lattes. Find a balance, find a way to optimize. (Figure out what that savings gets reused for)” I broke down a number of ways to optimize your spending. I spent a short time asking my readers to quantify what that savings paid for, for example. I saved $115 on insurance when I put it out to bid with a broker, that $115 a month savings PAYS for the insurance policy on my rental property, or gas in my car, or that increase in ROTH contribution I wanted to make. Naming it makes it more real and meaningful. Today, we are going to talk about purging so we can do some splurging. I’m not all about pinching pennies but I pinch pennies so I can build long term wealth and so I can do whatever I feel like once in a while even though I haven’t reached FI.
My brother in law and I text and communicate a fair amount and I use him a bit as a sounding board on anything I’m doing, incase he thinks I’m crazy. He’s a really bright guy and understands personal finance very well, we have different methods but his is working, mine seems to be working, so we are both in good positions. Although we have some differences in methodology and path to retirement, we can agree on cost savings and cutting, that is for sure. I’ll text or update him celebrating any saved or optimized expense I came across and he once texted me back “you don’t scoff at $20, do you?”. He then probably added the nerd glasses wearing emoji guy. The answer is no, I don’t scoff at $20 A MONTH saved because that’s $240 a year, which allows me to do something else with that money which can fall in the save or splurge category. Certainly we can’t splurge all our random optimized savings but its fund when we can. Like I said in the title, purge so you can splurge (within reason).
I love smoking meat, I absolutely love it. I often say if I won the lottery, I’d either open up a bbq restaurant or head out on the professional competition circuit (after investing my winnings appropriately of course into income producing assets). Truly I would quit my job after giving my boss a very fair notice, work remotely to be in support, but I’d be hard in pursuit of competition BBQ with my new freedom and potentially handcuffing myself to a restaurant to prove that if you make excellent food, experience, along with great service you can beat the restaurant failure rate of something like 80%. I have 4 smokers, I almost never use all 4 at the same time, as a matter of fact I think I’ve only used all 4 at once one time. The 100 year farm party at my in laws, we celebrated the 100th year planting, I trailed down all 4 smokers and smoked 8 briskets, 6 pork shoulders, and while they were resting 4-6 chickens. I bought all 4 of those smokers on a complete whim with no planning involved, they were all bought at different times, but they all were a splurge that I was a result of me purging something else. I have two pellet smokers (think of Trager if you’re familiar) but they are a different brand, one retails at $699.99 and the other at $899.99, add all the custom covers, and a few add ons and I probably have about $2k right there. Fortunately for me, one of my clients that we service has a company store they allow vendors to buy from so I bought those two, all accessories and the sales tax for a whopping total of $750! I also have two metal barrel drum smokers, they look like a garbage can that originally had olive oil in them, and a kit of valves/grates etc which I think all in are $400 combined. I have 4 smokers because I can, now surely the money I spent could have been invested but lets be real, we have to enjoy life along the way and I love my smokers and bbq!
My next big splurge that took me a couple years to pull the trigger on is a wide walk behind lawn mower. I cut my own grass, I value my time, its not about how hard it is to cut the grass or hot and sweaty I get, it literally is about my time. I’ve had a walk behind self-propelled 22” mower like everyone else has for as long as we’ve lived in this house. I have a .4 acre lot which isn’t massive but if I cut the whole yard and weed whip it on a Thursday night after work it takes a good 90 minutes. I was on the hunt for a commercial or walk behind 30-33” mower and the most popular one is a Toro that goes for $1000 new. Every single on that pops up on craiglist or FB Marketplace is gone within hours, and they sell for $700 typically. I wanted to spend closer to $600 so it took me almost two years of looking and being let down again and again. Finally one came up for sale about 40 minutes from my house, it was a Craftsman that was 6 years old, 33” wide, and the guy that owned it was in his late 70s and took perfect care of everything. $600 total and the added benefit I didn’t realize it had was the front wheels pivot like a commercial mower so I don’t even have to tip it up and flip around to go the other direction like a traditional mower. My mowing time is cut in half and I couldn’t be happier, I’m going to sell my regular mower for about $100-$125 so all in its $500 and I’ll have this mower for 10 years saving 25-40 minutes a week of my life from April-November. Well worth it!
My wife and I are food snobs, we don’t eat bad food and I promise some of you out there have a known restaurant chain or something that is considered great, we probably despise it. Sorry, not sorry. We rarely eat out because its expensive, I’m married to a food scientist, and its hard for us to go anywhere and be satisfied with the food and what we paid. Thus we end up at restaurants where we can rarely get the two of us out the door with dinner, and a couple drinks each plus a tip for under $100. Realistically it ends up being more like $120-$150. We don’t even do this once a month, I wish we could or would but we don’t because we live in a suburb and the closest restaurant that meets our criteria is about 23 minutes away. Close enough to go, but far enough to be annoying. We do frequent the local authentic Mexican taco place however, about once a month for $30 we can get after some incredible Mexican food typically via take out on a Friday night. We don’t have an eating out budget because we figure for $30 worth of tacos a month and maybe every 80-90 days dropping $100+ on fancier night out, if you average that out its basically a reasonable dining budget anyway if you value it. The beauty is I can have that random $100+ dinner out without even thinking about it because of all the other effort we have put into purging in other categories that bring us zero joy or could simply be bought for cheaper.
The last one is trips, travel, and getting out of state. We travel about once a year but often we head out by airplane twice a year. We never plan it, its not in our annual spending plan anywhere, and it will impact our savings rate depending on what we decide to do. We used to do the all inclusive Mexico, Jamaica type trips but we’ve since shut those off, partially because of the safety and security and also we just don’t value those type of trips as much anymore. We do still love the white sandy beach, but we don’t need unlimited alcohol, we don’t eat breakfast so one of our 3 meals is wasted, and we’d rather eat breakfast tacos for lunch every day anyway so we do that and only go out for dinners. This drastically brings the cost of travel down when we cut out 2 of 3 meals but on the flip side drives up the requirement to ensure we find top notch restaurants for dinner. We look at travel as essential for our lives, we know we want to get out of here in the winter and we know we can afford it. We don’t save for it or earmark savings dollars for it, we just tend to have a pile of cash building up which will eventually be invested in something and decide to take a month or 45 days worth of cash savings and give it to the airlines, Airbnb, and various restaurants and we don’t think twice about it!
We purge things that can be reduced, bought elsewhere more affordably, or don’t bring us equal joy to value. We purge things so that we can save more and reach FI earlier. We purge, so we can splurge when we feel like it without feeling guilty. I highly recommend you do the same, if you can do so while staying on an aggressive path to FI that aligns with your goals.
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