This post is kind of all over the place in that train of thought thing I do. If you are looking for a more straight forward post, move along, this is not it. Sometimes, I just don't have structure. I'm currently outlining 3 versions of a research paper so my capacity for structure has been exhausted today. Appologies.
I have a pretty simple system of money management that I learned at a young age from my parents. It works like this. Get money (gifts as a child than income), put most of it into a bank account and leave it there. You are able to keep some cash on hand for spending based on income and needs but mostly save just in case. In hind sight, I don't see my parents operating this way and it really only makes sense when you are a child and don't have expenses like rent or an income which is direct deposited into your account. So, I've honestly adapted a bit to a much more simple version. Get paid each month, direct deposit all income into bank account, direct deposit a smaller portion into savings account which is untouchable. Visit ATM weekly for spending money, pay for things with debit card, keep a mental note of account balance. Check bank account every 6-8 weeks to be sure you are not running out of money. This is a TERRIBLE system but it sort of works. The point being is that I tend to focus on saving money as much as possible while still living my life. I aim to live below my means for as long as possible and hopefully build up a bank account to support owning a beach house one day in the near future.
In 2009, I challenged myself to not shop for a whole year and it really changed my outlook on needs vs. wants. It also took the excitement out of "retail therapy". At the time, I had recently took a new job which resulted in a decrease in income and wanted to be able to continue taking weekend trips so I cut out shopping in order to afford flying. Now I see the exercise, had long term positive effects on my spending outlook.
To the point, I have been holding out on owning a smartphone for some time since I was on a pay as you go type contract that I started in 2007 and my monthly phone bill was under 10 EUR most months. I saw that a smartphone would require the initial investment of a new phone to the tune of 500 EUR and then an increased monthy usage fee which I estimated would be around 50 EUR based on what friends pay for theirs. I was never against the technology, I was against cost. As more and more of my friends got on the smartphone bandwagon and I became more involved in social media, I couldn's escape the teasing. My Samsung slider from 2007 was not cutting it socially although it worked for phone calls just fine. I figured I would get a work phone with my next job and I could wait until then. For Christmas, P gifted me a very pretty white Samsung Galxey S2. I was completely surprised. Then I whined a bit about how much it would increase my monthly costs. He told me I could afford it and to get over it. For him it was not a price issue, it was more of a quality of life issue. I should add that he is now fully involved in the manageing of my finances since we combined so he knows what our bank accounts look like. I pointed out that 50 EUR per month amounts to an intercontinental flight (I'm still thinking about my airplane tickets) at the end of a year. This is when he asked when I have been in a situation where I wanted a flight but didn't buy it because of money. I haven't. This is also the point where I remembered we have totally differnt values on saving vs. spending. I think we both agree savings should be invested but again he is a bit more agressive than I in the investment sense.
The point of all this is that it made me reconsider my ideals. As a business student, I have taken my fair share of finance courses and I know money in a bank account with no interest is stupid. Especially in our current situation where inflation is coming on strong and governments are cash poor. I also can see that there are very few safe investments and most things are not inflation proof. Gold is the exception but it is also pretty high priced these days and storing gold is not exactly realistic when I plan to move across country boarders in the next year. So, what whould I do in an effort to be fiscally responsible? Spend my money and buy things while I can still afford them? This is stupid for many reasons but the moving plan is high on the list. I want to buy a beach house but that costs significantly more than what I have saved until now and is also not really practical at this point.
So, I will continue on my plan of putting money in the bank, taking money out of the bank, limiting unecessary purchases and giving my husband investment privelages. I do have my smartphone now but to my surprise, I was able to get a data plan for half of what I expected the monthly fee to be which made me happy. I still want to simplify my life and own fewer things. In the mean time, I guess I'm looking for advice on how to avoid losing savings to inflation. Anyone come across a good plan yet? Please share.