Student Credit Card and Credit Education Blog

Some people can live a frugal life, save all their money and derive great happiness and satisfaction from simple things in life. Ruby-orange sunsets, drops of dew on a rose petal or knowing that when you’re 85 you’ll have lots of money might be all you need in life but that’s not me. I’ll bet it’s not you either.

Since the $1,200 Handbag article I’ve gotten a wide spectrum of response; many of them defending the purchase of a pricey leather pouch stamped “Gucci”. I actually agree with buying the handbag in certain cases and I don’t mean just cases where you’re filthy rich. All work and no play or all saving and no spending is not what life is about for most of us. Living in self-imposed poverty until you’re 70 and retired might just leave you comfortable in your last few years but feeling like you’ve missed out. So how can you live a life sprinkled with frivolity and still retire in comfort?

The answer and challenge is to plan how you spend your money so that you can have the irrational things you might enjoy and save at the same time. It’s OK to spend your money on something that does nothing but make you happy like a pricey handbag, expensive shoes, a new car instead of a used car, especially if it’s a reward for saving and budgeting responsibly. You can’t buy everything you want because that’s irresponsible but if you don’t enjoy life along the way you could burn out and fail in the long run.

It’s like dieting. I’ve been successfully dieting using a really clean and healthy diet for several months and now I’m at and maintaining my target weight but continuing to diet anyway. People ask why I’m continuing to eat this way and say it’s no way to live. I tell them its super healthy and I eat pizza, ice cream and whatever else I want one day each week without an ounce of guilt. In fact my pig-out day is far more indulgent than I ever would have dared before. I can do this because I cut out the cheap fast food and burgers during the week which added the pounds and didn’t really taste that great anyway. Indulging is psychologically refreshing and enables healthy eating all the other days.

It’s the same exact thing with finances and saving. It’s easier to stay on a healthy savings and financial plan with a little planned fun to look forward to. You need it psychologically and it will make your life happier. As you save for college, a house and retirement also plan on rewarding your hard work with fun stuff along the way. Make sure you have some spending money set aside in your budget even if it’s just a little, then don’t feel bad about spending it.

If you keep track of the little dumb things you buy all the time and cut them out you might be surprised at what you could soon afford. Here’s an exercise I recommend you try:

1. Make a wish list of everything non-essential you want to buy in order of importance to you along with the prices (everything from coffee, to new jeans to a new TV)
2. Start another list of the non-essential things you actually buy with the prices and track it for a month
3. At the end of the month compare your lists and see how many things on your actual list were on the wish list, let alone on top
4. Add up the cost of all the things on the actual list and see what you could have bought on your wish list!

I’ll wager that for most of you the actual list will look much different than the wish list and hopefully this exercise will help you see how you can have some of the things you want. The main point here is that it’s important to budget and know where your money is going. It’s also important to leave yourself some money to use for fun and if you do you will meet your financial goals and have some guilt free pleasures along the way. I mean aren’t ruby-orange sunsets more enjoyable viewed through a new pair of designer sunglasses while wearing your best designer jeans and holding a Gucci bag?

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Somebody once told me “never go to your boss with questions, always go with answers”. As I was arguing on the phone recently with my motorcycle repair shop’s jerky service manager it occurred to me that the same advice applies to negotiating with people about money , services or any other issue needing fixing. Basically, if you give people options rather than just simply complain and demand your way you are more likely to be happy with the results.

You see humans are a competitive species. Our very evolution is proof that we don’t like to lose. When you disagree with anybody there are more elements at play than the essential rightness or wrongness of the issue. Emotion, ego, weather and even the mustard stain on your shirt can all cloud things and serve to influence any conflict. If you complain and don’t tell the person what you want them to do to fix the problem you will go around in circles and end up nowhere. If you raise a problem then demand your way, the only out for the other person is to lose and nobody likes to feel like the loser. I find the best thing to do when you have a problem with a product or service is to do the following:

1. Clearly state your problem or issue
2. State what you expect the other party to do to fix the situation
3. Offer an alternative choice or two that you might be willing to live with.

If you demand your way and offer other solutions which you could live with you are giving the person a way out of letting you win. You are subliminally painting in their mind the other options besides giving you your way. The thing is none of those options include “no”. With options they can give in and feel like neither of you completely won or lost.

In my case the mechanic promised not to charge me for something he did which I didn’t need done then when I got the bill he forgot about the promise and charged me anyway. I didn’t notice until I got home and reviewed the bill. I don’t think he forgot, I think he made a mistake and giving me my money back would entail him explaining to his boss that he screwed up. My approach was to call him and state my case to which he predictably acted like a jerk about because well, he is a jerk. I then told him I wanted a full refund and if that wasn’t possible I would accept a store credit or else be forwarded to the general manger to discuss options with him.

The reason I could accept a store credit is that I know I will need to have an oil change and service done in a month anyway. If he denied at least the store credit I would have never gone back and written a letter to the general manager explaining why and I told him that. He ended up giving me the credit rather than have me go to his boss and never come back. He sort of won because I didn’t get a refund but who cares, I get my money back in a month with the credit on service.

This advice can help you with your mechanic, boss, boyfriend or girlfriend or professors. The next time you have an issue that you need somebody to correct, try being clear about the issue and solution as you see it. Then paint the possible responses for them by defining alternative solutions. Odds are they will grab one of those and walk away feeling like they won. You just have to try not to smile until they’re gone.

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