Bourgeois and Broke

In the last year, whilst completely overhauling my finances, I’ve gone from being a self-proclaimed bargain hunter to truly frugal. I used to think I was smart with money; I caught public transport, I rarely paid retail for anything and I was inherently cautious with cash. However I’ve come to realise that if you buy a LOT of stuff below retail you’ll be just as low on cash as if you just bought half the stuff at full price. Moreover, the reason I was so careful with big-ticket expenses wasn’t because I was frugal, but rather because I was just so terrible with money that I rarely had any to spare.

In the last 12 months though, I’ve begun budgeting like never before. I watch and record every single cent I spend and this has lead me to find ways to let go of less cash, allowing me to put more into other (more important) avenues. In this way, I’ve become someone who is truly frugal. But where does one draw the line?

There’s a segment on a local radio station here called “Tight-ass Tuesday” whereby listeners call in and tell tales of people they know who are ‘tight-asses’. These stories are usually about coworkers who take their ‘allowance’ of toilet paper home with them and folks who turn their cars off when driving downhill so as to safe on the fuel. Today though, as I was recycling the clingfilm from my sandwich I brought to work for lunch, I wondered… have I gone from frugal to just downright cheap?

I can’t even begin to count the number of times I’ve read and heard that if you’re trying to manage your money, pay for everything in cash. Apparently it makes you less likely to get (further) into debt because you can’t spend what you don’t have, and it gives you a better understanding as to just how much you’re spending if you actually have to fork over the notes and coins. Furthermore, it creates a sort of ‘barrier’ in that you can’t spend the cash any quicker than you can get to an ATM.

All this stuff is quite true… to a point. Except for the way that cash in your wallet has a habit of frittering itself away on little things. In most cases, you can’t put a bottle of water on a card. You can’t buy a scratchie, pick up a cup of coffee or a newspaper.

Alright, so chances are if you’re heavily in consumer debt you got yourself there by slapping more than you could really afford on your credit card. Moreover, if you’re just finding your feet in getting yourself OUT, there’s a good possibility you’re not the local guru when it comes to budgeting. If this sounds like you, well… that’s why the good bank has debit cards. Remember those babies? A card that only allowed you to access your own money?

In any given year, I spend around $1,000 on items under $10 a pop. Even then, I rarely carry cash. Pre-debt-annihilation, that number could easily have been quadrupled. I bought lunch many days a week, grabbed a coffee and often breakfast too, picked up magazines a couple of times a week and acquired cheap little jewellery and accessory knicknacks from my local purveyor of such items. This sounds ridiculously frivolous to me now, but at the time I both wondered how anyone didn’t do those things and thought of it as normal.

But hey, what’s $2 for a coffee? Or $5 for a magazine? Or $3 for a headband? These numbers sound incredibly small to me even now. The harsh fact of the matter is though they add up in a big way. If I weren’t carrying the cash around, buying those things just wouldn’t have been an option. In fact, nearing payday when I often didn’t have any cash to spare, I just went without.

So here’s the tip every other PF blogger, budgeter and money guru will disagree with… don’t carry cash. Put everything on a card - even if it’s a debit card rather than credit. Your budget will thank you.

Well. It’s been an interesting year. Okay, so I’ve been the world’s most sporadic blogger, but I’ve spent a lot of time working overseas to earn more to pay off my debt quicker, and I’ve also been reading a lot from some of my favourite bloggers, like NCN, Tricia at Blogging Away Debt and Clever Dude. High five to you - I can’t tell you how much your posts have kept me on track.

As of next Friday though, we’re going to see a new phase of my life. I’ll be completely debt free. HOWEVER - I’m buying a house with my fiance, so in some ways, that’s going to be short-lived. But hey. At least it’s not consumer debt, right? Better yet, my financial focus and skills developed in the last 12 months mean I’ve already budgeted to pay the thing off in ten years.

But now I’m going to have a new problem. All this money I’ve been throwing at my debt can now be used for other things. Sure, there’s the mortgage, but logic says you shouldn’t be throwing all your eggs in one basket and it seems to be that looking to make some prudent investments is going to be the next part of this journey.

So… if I’m going to continue this blog, does that mean I need a new name? I suppose I’m still technically broke though!