The Cost Of Living Luxuriously
Michael Pascoe, at the Sydney Morning Herald, has clearly been eavesdropping on my conversations. I bemoan my lack of money. How can I support myself with rising cost of living? How am I going to absorb higher rent, higher electricity, higher food prices? Am I ever going to be able to save? And I say all this, while drinking a nice bottle of red at my local brasserie. You don’t really have to look too far to see what causes a lot of my budget deficit. Drawing from his fantastic article, here are some examples on how we’re spending money as a luxury, while thinking of it as an everyday expense.
Where Does The Money Go?
The mantra of the current age. Don’t get me wrong- I think people are doing it tough, and I genuinely think people are in a slump about finances and the global economy. I’ve seen the effects of this current phase. That said, there’s a lot of truth in Pascoe’s article. Bottled water. Soap that costs $5 a bar. Cable television, personal trainers, luxury outfits you wear to the gym. Hundreds of dollars on phone bills so I can check my facebook. Hundreds of dollars on high heel shoes so, 30 years from now, I can spend some money on a knee replacement. So much of what I spend money on is unnecessary. Think about supplements. Instead of eating a balances diet which provides all of our nutritional needs, I spend money on supplements to provide it. It’s insane! A completely redundant expense. So, it could be said that we might have more money for savings if we rethought what in life is a luxury and what a necessity.
Luxury VS Necessity
Pascoe suggests we get a sense of reality about our finances. For instance, our electricity bills are about the same price as our Foxtel contracts. And our water and sewerage bills are much cheaper than our gym memberships. And, oddly, I can’t recall myself complaining about how much my gym membership costs me any time recently, in fact often I congratulate myself on how cheap it it. Reality: Households are reverting to a more traditional model, where their spending and saving is in keeping with their incomes. Reality: Consumption is in keeping with income growth, it just can feel like a big slump as our spending has been so out of control in recent years. It’s likely to feel like a knee-jerk for a while. Reality: Travelling overseas is a luxury. What my grandparents saved their whole life to achieve, I’ve already done three times. And I think it’s a fantastic thing- we’re blessed to be able to head to other countries. I wouldn’t give up my gym membership, I like spending money on it. The important point is to be realistic about it, and include these things as part of our discretionary spending. Acting like we’re victims of global finances, while we still eat out, watch Foxtel and head across to Fiji for a week is missing the point. We make those decisions, we should own their consequences.
Own Your Finances
If you want to spend money on these things, then it’s absolutely cool. But do it, and I say this as much to myself as anyone else, with the awareness it will mean you can’t do other things. If you’d prefer to travel than own your own home, then that’s your call, but don’t expect to be able to do both on an average income. Good finances are not a right, they’re an achievement, and I’m tipping my hat to Monsieur Pascoe for his timely reminder of th
