Stop Milking Me! - Cow’s Journey To Financial Freedom

This morning I wrote a short post titled “Budgeting For Golf Clubs, Bridesmaid Dress, GPS and Bras”, I got the following interesting comment:

“How is it possible to spend $600 on bras? Not to be overly judgmental, but I find this expenditure ridiculous. Since I am not familiar with your blog, I went back and checked some of your earlier entries, including the one from March in which you wrote that “[a]fter working 10 years, I finally hit the moment that I can’t even pay my bills. … I had about four hundred bucks in my saving’s account.” If these are your financials, may I suggest that your spending habits are a tad bit out of control? “

Besides the fact that the person missed a lot of my posts and the facts that I save 45% of my paycheck, I own rental and commercial properties and I do have more than 400 bucks (they are just not cash I can use right away), he does have a good point: The 600 dollar bras does sound like ridiculous.

Yes, as frugal as I am, I would throw down 45 bucks on a piece of bra. But when it comes to a pair of nice shoes, I can easily pass and move on (Yep, not all women are crazy about shoes). My friend Paco who gave me his set of golf clubs is a very frugal person. He saves even more than I do. But these clubs are Taylor Made that probably cost him about a thousand bucks! And I am sure there are a lot of people out there who would spend hours cutting the coupons to save a few dollars but spend 50 bucks on a piece of whatever because it is important to them. You start to question what is frugality?

I don’t think there is a right or wrong answer out there. But I do believe that being selective frugal is probably the way to go. Like what I answered in my comment to that guy,

“As why I would spend 600 bucks on bras,.. I think as much frugal as we want to be, certain life quality we enjoy should not be compromised. My bra is one example…”

So if this is something you can live without, then go cheap and save the money. But if this is something that will make a significant impact to the quality of our lives such as the quality sexy bras or the recreation gear (such as Paco’s golf clubs and my rock climbing and snowboarding gear), then budget it and get it. After all, it’s all about how important that “stuff” means to us.

I don’t really know how much I save since I deduct or withdraw everything out of my paycheck automatically each month. I only use the left over money. Out of curiosity, I looked at my last paycheck and did a quick calculation to see how much I save each month. Wow! I put away almost half of my paycheck each month! I used to distribute the money in 401K, Roth IRA (mainly Growth funds), cash savings and non-retirement stock and bond funds. Since I am saving money to buy a house, other than the 401K contribution, everything else goes to my online saving’s account these days.

So to give you an idea of what saving half of the paycheck feels like, here is a summary of my life style and spending habits comparing with those of my co-workers who make the same amount of money:

Cars:
Co-workers: Bimmer 3-series is normal. Many own Mercedes or large SUVs

Me: Toyota RAV4

Homes
Co-workers; 400K – 500K is normal for my co-workers. Many have vacation homes too.

Me: Bought a home for my parents for 245K. I still rent and live in a one bedroom apartment. I am about to buy a home in 4 months.

Family
Co-workers: married with kids
Me: single and no baggage

Vacations:
Co-workers: Cruises, Hawaii, Europe, Carribean vacation experiences are constantly brought up in our weekly status calls.

Me: I can only spell “C-r-u-i-s-e”. Ok, I do hop on the planes a lot to see friends and families. Matter of fact, majority of my monthly spending is related to travel.

Nail caring
One of my female coworkers have in-house manicure and pedicure service every week.

Me:
Buy some nice bottles and do-it-yourself.

Here is a post about my spending habits and my budget.

Ok, I admit that my income is probably in the top 10%. I just try not to spend what I make. The fact that I am single with no kids also helps a lot. I guess right now is the golden years to save before the little ones come out to empty my piggy bank.

As I am approaching my next major milestone - buying a home, I have to remind myself the “lavish mistake” I’ve made before. So here is the post I did on my personal site waaaay back when the pain was still fresh because of my extravagant life style.

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When I bought my house in Chicago, I went nuts on stuffing it with the latest and greatest gadgets and furniture. A $2500 TV, $1200 front loader washier, $1100 Onkyo home theatre system, $300 big-mama-ass oil painting, $2500 Jennifer convertible leather sofas, $1200 refrigerator, $1000 formal dining room set, etc … The list goes on and on and on … After a year of stuffing and stacking, I pulled all the receipts together. Holy Cow!! I spent over $20,000!!! When I split from my ex, we got rid of the house and all of my latest and greatest gadgets and accessories went into the storage room.

Now I am staying in a one bedroom apartment in Denver, Colorado. Since I wasn’t sure how long I would stay here so I pretty much went for the cheapest used furniture I could find on craigslist. A $100 27-inch old fashion big tube TV, $25 used breakfast dining set (chairs included), $200 used bedroom sets with mattress and box, etc.. Total price tag? $800. The apartment is comfy with everything I need. Yes, I miss my big screen TV, but my 100 dollar TV and the 10 dollar DVD player work just fine. With fewer rooms to clean and less stuff to worry about, I actually feel much more relaxed.

Do I feel the place is less sophisticated? Yes. Is the difference worth $19200? Absolutely not! And I don’t miss my $2400 Chicago housing bill a bit! Now I have all kinds of left over money to buy the mountaineering equipments, save for retirement, and plan for future big trips to see the world.

I am not saying that everybody should get on craigslist.org and start digging for used stuff and jam your entire family in a one bedroom. However, living simple does give us the power to live freely. Maybe you don’t need 100 candle holders in the house after all? A DLP might just be as good as a Plasma? 3000 sqft house with 18 feet ceiling may be a waste of space?

Too many of us live from paycheck to paycheck. If we can downsize a bit, maybe we don’t have to, right?