Asian Pear went through her income and compared it to her budget at her various stages of life (read it here).

She found that she spent less when she earned less, but when she started earning more, she spent more.

It’s basically what all PF’ers call lifestyle inflation or lifestyle creep.

I don’t knock it at all because when you make more, you DO feel entitled to upgrade a little, and I can totally understand where she’s coming from.

I was and still am NOT a natural born saver like Asian Pear… and I was a whole out, knock ‘em down, drag ‘em out SPENDER when I started working.

So it’s an opposite story for me, and I am experiencing what I’d call lifestyle DEflation…

(Although I should note that I think my lifestyle has actually improved, not deteriorated, so that may not be the right term.)

THE HISTORY

When I flipped burgers, I made $7/hour and brought home maybe $300 – $500/month (net), working insane hours (after school, maximum hours on the weekend).

Yet, I spent $300 – $400 on junk (ugh, I can just see my Bonne Bell collection of Lip Smackers now), and saved close to NOTHING.

Okay, let’s just say I saved nothing. Maybe $1000 at the end of 4 years of earning pretty good money for a 16-year old.

When I went to college and hooked a part-time clerical job, plus worked full-time on the side with my side business, I brought home around $2000 a month (net).

I spent every penny save for perhaps $1000.

A lot of it went to rent, food and tuition, but I sure as heck could’ve saved a lot more than $1000 if I had been smarter.

When I graduated and got my first big job, I brought home around $3700/month (net) and it was in that year that I faced my debt & realized I was going to pay it off in never if I kept spending like crazy.

So I buckled down & cleared it.

Enter today

Now that I’m a freelancer, I can bring home around $10,000 net a month when I actually have a contract, but it has to last for 4-5 months because there are times (2009 I’m looking at you!) when I won’t work at all.

Due to those freelancing circumstances, and because I’ve turned a new leaf (you know, towards minimalism and all), my lifestyle has deflated from spending every penny I earned, to watching my pennies and making the cash last for as long as possible.

And I love every minute of it.

Isn’t that funny?

That being said, I do spend on occasion.

I will willingly plop down $30 for a box of macarons just because I want them. Or take BF out to a $200 dinner.

Or decide to spend $92 just to park 4 days in my building … oh wait, that wasn’t a choice as much as it was a necessity

The major difference now is I don’t spend like that all the time & I know my limits….. plus I don’t want to carry all that junk to Dallas when we move sometime in the near future.

What about you? Inflation or Deflation?

Know what kills me?

When people rationalize huge unnecessary purchases for strange reasons (when they can’t afford it) and then pinch on other things that are littler.

I’m not trying to rationalize or justify buying a huge flat screen TV or go on a $1500 shopping/dining out spree (*ahem* *raises hand*), but it’s because if you buy the TV or go on a shopping spree, you’ve done the math (like I have), and CAN AFFORD IT.

If I was still on a $60,000 salary, that $1500 spree would NOT have happened because that would’ve meant it was almost an ENTIRE bi-weekly paycheque down the drain on FUN.

Granted, the money I’m making now may or may not last, but in the scheme of how much I’m making, a little spree of $1500 is justifiable. Maybe not the brightest considering that the money COULD have been saved in an Emergency Fund or spent in a wiser manner, but at least it won’t put me into a credit card debt of $1500.

(Not only that, we can’t all be crazy budgeters working ourselves to the grave trying to save and deprive ourselves of purchases. I just happened to save up a lot of those little purchases and went hog wild at once instead of doing it gradually over the year.)

No, no.

Who I am talking about in my statement above, are the the people who ARE in debt, who have BIG mortgages, who have LOWER paying jobs and are trying to penny pinch and be frugal because of what’s going on in the economy.

But wait!

These people then go out and buy a flat screen TV, not from Best Buy, but from Wal-Mart because it feels more like a frugal store, and to top it off, they try to penny pinch on groceries and save $0.50 on a can of beans or cutting out their daily latte.

Those penny pinching measures on groceries or cutting out their beloved lattes are all great measures towards slowly trying to make some room in your budget and to cut the little frivolous expenses, but what good does it do if you go out and end up blowing $2000 on a flat screen TV?!?

That $2000 you could’ve saved by NOT buying that flat screen TV could probably have bought you tons of beans! MOUNTAINS!

It’s like they’re treating themselves for living on beans, and patting themselves on the back for saving $0.50 per can of beans!!!

And these people know they’re living kind of on the line.

Maybe not consciously, but subconsciously. They could have an Emergency Fund saved, but I’d bet good money on that they don’t have anything saved, because if they did, they wouldn’t be spending it on a flat screen TV they really ran the numbers on their budget and their income.

But if you can’t afford anything, and then you do some crazy shopaholic logic and justified it with math calculations over the can of beans savings but then blow $2000 on a flat screen TV before you have the cash saved up to buy it… then you’re just plain stupid.

As a side note, the worst part for me is that people pinch on groceries – the one thing that fuels our bodies to keep us going.

Instead, they buy convenience foods, thinking that spending only $9/day in 3 little frozen dinners will be enough, but forgetting that you could make much better food a lot cheaper, in a larger quantity and be able to freeze it all if you just did a little elbow grease and started cooking.

I guess I just love food too much to really understand why people would want to skimp on something that we have the pleasure of enjoying  on a daily basis.

So, what do you think?

This is a beauty and pharmacy chain available in Canada.

It’s called Pharmaprix in Quebec, and Shoppers Drug Mart everywhere else, and it has a Shoppers Optimum Program where every dollar is 10 points, and the rewards chart looks like this:

There are a few promotions ever so often where you get 20x the points or 15x the points, if you spend at least $50 and sometimes only in certain categories.

Anyway, recently there was a promotion that said:

15x the points on everything if you spend $50 in the store

Or 15% off on all regular priced items if you spend $50 in the store

The better deal by far, was to get the points, because you’d earn 7500 points on $50 to score a $10 store credit (7000 points).

The 15% off deal was good, but not so hot because it’s only on regularly priced items which is hard to do unless you have a long list of things to stock up on.

So if you spent $50, that’s about $7.50 in immediate savings.

$10 versus $7.50?

No contest for me, I shop there on occasion for certain Burt’s Bees products and other such brands I cannot find elsewhere.

I also had a list of other things to buy I had been saving up, and it was the perfect time to take advantage of the deal.

$10 / $50 = 20% return

$7.50 / $50 = 15% return

Note: To calculate any kind of return on savings, just take your savings ($10 or $7.50) and divided it by the amount spent ($50 in this case), then multiply by 100.

But is it all worth this SPENDING?

At any rate, all of this “must-spend-to-get-points” sort of thing got me thinking:

If I had to spend $50 to get back $10 in a store credit under something that gives me a whopping 15 times the points how much would I have to normally spend to earn the same $10 credit?

15x MORE of course!

(Which is $750 instead of $50)

I would have to spend $750 to get back $10. Wow.

Looking at the fancy chart here’s what these points equal to in real dollar spending and your regular return for what you spend:

At the very top of the range with 75,000 points, the 2% return is not too shabby!

The only caveat is that you fall into this trap of thinking: “but I get Optimum points if I buy this!”

Yeah. Just look at that chart next time before you say that again.

But the love affair is over for me..

I am SO over being totally dedicated to this Optimum Program.

I’d only consider buying anything there if it was a 20x or 15x the points promotion.

The only time it’d be beneficial in points is having the Shoppers Optimum Points Credit Card because every dollar I spent on my card, I’d get 10 points.

With my traveling as a consultant and general grocery store spending, I r-a-c-k-e-d up the points and every 5 months or so, I’d get $150 (75,000 points) free to spend at Shoppers Drug Mart, without ever having set foot in the store.

It was a sweet deal. Until they screwed up the card & tried to re-issue me another one under Mastercard this time.

By that time, I had clued in to the following:

• their products in general are more expensive than a grocery store, or even Jean Coutu (QC)
• their points (without the credit card) were painfully slow to rack up
• I much preferred the PC points program (100 points per $1) because it buys FOOD*

*and other stuff like beauty products and clothes if you go to the Superstore.

Ultimately, for my regular spending on non-points promotional days, I’d rather save my immediate cash by paying the lower sticker price.

What rewards programs do you use? Do you find them to be useful & worth it?

First, some real life Lion King cuteness..

INCOME = $0

• Still off contract.
  

EXPENSES = $975.90

CONFESSION TIME!

Yes, I am under $1000 this month, but admittedly, I could have spent $400 less this month, as I already pre-paid my rent for May & June to BF, but … yeah I have no excuse for that.

Bad FB!

My budgeting style is more laissez-faire, because I seem to have an internal “do not spend over this limit” budget, which is $1500. I do try to stay under $1000, however, which I’ve succeeded in doing a good chunk of the time.

I’d consider my expenses to really be $1360.40

*So I’ve just noticed that I should really put that Grooming/Spa category under Toiletries/Makeup.

For me, Grooming & Spa means haircuts, pedicures, manicures.. or services. Not products. I’ve fixed that in my budget, but.. am too lazy to re-upload a new chart.

DETAILS

GROCERIES: Holy cow we ate a lot!

But really… I’ve been trying new things such as cashew butter & miso paste, in an attempt to introduce more vegetarian and vegan options into my diet.

Note: I am not going 100% vegan or vegetarian. I just want to try out new food options, because it seems like the quality of meats here has been atrocious lately, and they just don’t taste good/smell good any more. :\

So I had to buy new things. Which leads to spending more money to try new foods.

Now that I know what might and might not work, it looks like I am sticking to miso paste with seaweed and cutting out any kind of butters or fats (even nut butters are gone as I react badly to them).

Trial and error, folks.

Still, we should really watch this and get it back down to $150. I have to stop going crazy on binging on this summer’s crop of Ataulfo mangoes — they’re $0.99 each, and I eat about 5-6 a week.

Sometimes more.

Plus my other fruit intake — bananas, mostly.

EATING OUT: People came to visit

I spent more on Eating Out in this category, because Asian Pear & Co. came to visit!

I had such an awesome time going out with them.

It was really nice to have a girls day out in the company of really friendly and funny company. We ate All-You-Can-Eat sushi, then some macarons at La Maison du Macaron (highly recommended!), had a break for cold drinks at Second Cup, stopped by Schwartz’s for some smoked meat, and then spent the rest of the evening in Old Montreal.

It was a perfect day*.

(*Even when I freaked out near the end and abruptly ended things because I was afraid that the place where I left the car would be closed by the time we were done! :\

They were totally gracious about it, and even though they were all exhausted, AP insisted that they all accompany me back to my car in the empty parking lot to make sure I was safe, before leaving me. *heart*)

Oh and I also took BF out on Sunday to Bâton Rouge as a treat, and we had a delicious ol’ time inhaling steaks, in a pre-celebration (more details to come).

ELECTRONICS: This is why you have double & triple backups

One of my hard drives happened to die yesterday, hence the new purchase (I like having a few data backups).

Can you believe it? LAST DAY of the month, and it dies. *sigh* It couldn’t have waited until Tuesday Jun 1st?

This is why I keep a loose budget.

IPAD THOUGHTS

I also touched the Apple iPad while I was in Future Shop, picking up my replacement (Western Digital Firewire drive, because the cable is much better), but was disappointed in the product.

BF was enamoured with the iPad (being an Apple fanboy), but even he said it was not what he wanted — still a tad too heavy, and needs a USB port or two.

To me, it wasn’t all THAT and a bag of kale chips to me… but then again, I’m predisposed to enjoy flexibility in my electronics, rather than having a closed-system product.

I’m waiting for the HP Slate/Tablet. They better not disappoint me, and I’m happy they bought Palm, because their OS is pretty good (compared to Windows anyway).

TOILETRIES & MAKEUP, GROOMING & SPA: Went a little makeup-happy this month

This should really be ONE category — under Toiletries/Makeup. This is what happens when you rush creating a budget post.

I threw out some products that have been in my bag for.. gee, 4 years and counting now?

I also got travel versions of my favourite products in anticipation of Europe!

(Big thanks to Revanche for her help and Arianne for her suggestions or should I say, enabling??!?!)

It’s mostly out of my system, I think I’m makeup-ed out.

TRAVEL: It was a necessary expense because I have no sense of direction

After being warned by Gemma (my GPS) for the millionth time that I should update her maps, I finally bit the bullet when I realized that I took a wrong turn, but couldn’t get back onto the right road, because .. THE MAPS WERE OUTDATED!!!

It ended up taking me half an hour on the highway before I found an exit that would lead me back to Montreal proper and not towards Ontario (yes, seriously..)

Seeing as I am anticipating using my car & said GPS a lot more often in the upcoming months, I figured I might as well get ‘er done.

Note: The update to my GPS unit was for a lifetime pass at around $120 USD, and in comparison each individual update would have cost $50 USD.

And since I don’t plan on replacing my GPS within the next 5 years, this was well worth it to pay for the lifetime update & use Gemma until she gives up the ghost.

With 2 more updates, I’ll see a full ROI (Return on Investment).

Read my gushy loving review of how much I love my Garmin Nuvi 255W GPS here.

MISCELLANEOUS: Random stuffs

Postage was half of this, as I purchased stamps to mail the 6 letters I’ve written in this week alone to correct information.

I also had to mail a couple of packages *grumbles at prices*; it is surprising how expensive these little packages can be. I mean, $9 for something as light as an envelope!? *sigh*

Aannnnd I bought a Bag Clip, but was stuck for 10 minutes holding 3 options in Old Montreal’s store “Pashmina” before I decided on the very girly pink cherry blossom design.

(Yeah, another thanks to Asian Pear & Co for helping me decide!)

And I ended up buying  this one, but with a pink background rather than a red one.

Pretty, no?

And now my purse will stay off the floor, be in plain sight & not on my lap or behind my back.

NET WORTH: $75,067.86 or -8%

Decreased: $6505.85 or by 8%

Reason: Living (spending!), prepaying my rent to BF, and disappointing stock market dips.

Good thing I only have $5000 invested in individual stocks

But overall, my index funds went down, and I’m just chilling out on them until they pick back up. Not like I’m planning on selling them anytime soon, anyway.

ASSETS

• Cash: $45.61
• Emergency Fund: $20,402.70 — In ING for the moment, earning 1.2%
• Savings: $2033.05
• Retirement: $25,139 — *sigh* Took a beating.
• TFSA: $9571.01 — *double sigh*
• Business: $16696.49
• Car: $1000

DEBTS

None.

There you have it. My deep, dark, money secrets

As a review of the last time I wrote about what I’ve eliminated that I no longer miss a year ago posted in April 2009, here is my new, updated list:

The original list of what I cut out:

• Spa Beauty Treatments — Misleading, I am not really into pedicures, manicures or facials
• Wash, cut and blow dry; now just a dry cut
• Paper towels
• Fabric softener
• Ready-to-defrost-or-eat meals
• Magazines
• CD’s — I buy the tunes I want on iTunes
• DVD’s — BF is more into this than me
• Buying lunch — 99% of the time when I work
• Fizzy pop
• Credit card interest — Misleading. I’ve never paid any.
  
• Newspapers
• Gift wrap
• Bottled water
• Cleaning items — I use baking soda and vinegar
• Handbags (Another big fat no for me. I love bags, shoes and jewellery. What can I say?)

April 2009 Additions:

• Student Loan interest debt — WOO HOO! I am debt free!!
• Shampoo Long hair in the summer takes too long to wash without shampoo. Am using green brands now.
• Conditioner Surprisingly, my hair gets very dry without conditioner. Switched back.
• Hair styling products in general
• Feminine products — Using the Diva Cup now
• Cable TV — I watch it online
• Books — I got some books for review, but now I read e-books
• Any kind of fruit juice or sugary drink as a regular grocery item
• Paper Statement — Saves me $1.00 each cycle, as per my corporation’s bank
• Accountant fees — I do my own taxes with UFile — dead easy, and QuickBooks for my corporation
• Gym Fees — I cycle and walk
• Dishwashing detergent
• Laundry detergent
• Starbucks — Got violent motion sickness last time & now associate that taste with nausea
• Cupcakes — Ditto. Belly hurt after overdosing on cupcakes.
• Paying for fees to check in bags when I fly—I never check anything in. 2 carryons, max
• Tissue Paper as Napkins — Bought cloth napkins
• Car insurance & leases—$300/year in full, bought car outright in cash
• Organic foods that have thick, inedible skins — What’s the point?
• Pens/Paper/Pencils — I have enough stock to start my own elementary school

April 2010 Additions:

• Plastic Bags — I use reusable ones now
• Paper Towels (Conquered!)
• All Tissue Paper! (I use handkerchiefs now)
• Fancy flavoured chemical creamers (Stuck vanilla bean seed pods into brown sugar for scent. Good enough!)
• Batteries — I try to get rechargeable lithium ion items, and I use these USB-powered Double AA batteries
• Paying for GPS and Car Rental Damage & Waiver Fees — Got a Visa to cover those fees if I pay with the card
• Giving and Receiving Christmas Cards and Gifts — I’d rather go out to have coffee
• Commercially-made Pita Bread, Cookies and Biscuits — I bake it myself, and avoid the preservatives
• Body Lotion & Hair conditioner that is not more basic — I now use shea butter, olive oil and coconut oil

I think I am near the end!

So, what have you eliminated that you do not miss?