Friday, November 13, 2009

Shifting Financial Priorities

I've been musing about how we've been spending our money literally like water in the last six months or so. I guess there is nothing like a major stock market crash to shift your financial priorities. We had paper losses of literally hundreds of thousands of dollars in our funds and individual stocks and got nothing in exchange. We had worked so hard to save that money and were pretty devastated by the losses, temporary as they were.

So, I guess it helped us realize that maybe saving everything possible isn't the best long-term plan for us. We lived well below our means for our entire married life and had a lot less to show for it. What good is saving all those pennies cooking your own meals, washing ziplocs, etc. if you can lose literally tens of thousands in one day! I guess we just decided maybe it would be OK if we spent a bit more enjoying our lives now. We'll surely have to work for more years, but we'll have more life experiences and/or cherished things.

When my old PC died last spring and I couldn't get to Quicken anymore, I didn't run out and buy a replacement computer right away. That is absolutely shocking to me! For so many years, I visited Quicken nearly every day to either enter transactions or to update our stock prices and to keep an eye on our balances. I was proud of our saving efforts and I loved watching that net worth graph go up, up, up!

Well, this spring I wasn't really in the mood to have the losses so clearly delineated for me. Nor was I in the mood for a lot of budgeting. We had moved to California and we were living in an expensive rental and I was sick of feeling broke. I simply stopped paying attention. Luckily, after so many years of saving, we had plenty of cushion and could afford to do that. =)

Well, we finally dealt with our rent problem by moving to my grandmother's old house. Our rent is substantially lower, though we're certainly much more cramped for space. Since we had prepaid a year's rent and we had fewer expenses coming out of Jeff's income, our balance built up in the checking account until we had a too high balance. Well, I guess I'm ready to deal with the money again. We haven't recovered all the losses, but the market is only about 20% below the pre-crash levels, instead of the 40% it was in Spring. We're still down, but we're not knocked out.

Jeff is a saint and continues to go to a job he'd prefer to leave in order to give me time to work on my career. I'm working hard on school, but maybe not hard enough on finding a paid job. Maybe I need to work on that some more... It is a tough market, but I haven't even applied for a paid position lately.

I finally ordered that purple Dell computer last night and now I just need to buy a new version of Quicken; I was using the 2006 version and they'll have stopped supporting it by now. It will probably take me a week to enter a years worth of receipts and statements. I shudder to think of the huge unknown, uncategorized spending transactions I'll have to enter: all those farmer market visits, those fast food visits, etc. I got receipts when I could, but Jeff was a bit more careless of keeping track. Oh well.

Of course, if we had any faith in the United States Government's ability to manage our country's finances, we'd probably switch back into tightwad mode. But I'm not convinced they have any ability or political will to stabilize the currency for the longterm. I spend a couple hours nearly everyday reading housing and financial news and blogs. They debate about whether we're headed into hyper-inflation or into deflation. I don't see that it matters, really. Either way, we're screwed. The U.S. has huge deficits and once our foreign trading partners lose faith in the dollar, they'll stop buying and then we're really in for trouble.

I guess I figure I'd rather own stuff (including, preferably, a nice house) than some piece of paper saying we have some bank balance. At least "stuff" we aren't likely to lose because of the government's careless spending habits.

I still wash the ziplocs, because I don't want to waste money needlessly. Those thrifty habits are pretty ingrained, but I don't sweat the "small stuff" as much as I used to.

1 comment:

  1. Sounds like you've been busy! I would go back and forth about keeping track of expenses, but I gave up trying to track the small stuff, like fast food or other small purchases. They usually got lumped into "pocket money" for misc. expenses. :)