Shifting the Spend

Like so many other personal finance enthusiasts, we have settled into a routine with our monthly budget. Most of our expenses, groceries and gas and utilities, are more or less the same from month to month. The once-a-year expenses, the life insurance and Christmas, don't sneak up on our budget anymore. Everything is ordered, everything is planned for. It's gotten to the point that we barely need to discuss our monthly budget, so much as to simply give it a glance and say, like great God Almighty did all those years ago, "It is good."

Blasphemy aside, there is a downside to our spending routine, in that routines resemble ruts. You don't want to do the same thing for too long. Like Big Tom Callahan says, either you're growing or you're dying...there ain't no third direction. When you've got everything figured out, dialed in, and ratcheted down, there isn't much room for improvement.

So, how do we change?

Cutting deeper into our budget, say, trying to save an extra one percent, does not appeal to me at all. At this stage, I don't want that kind of improvement. I don't see the point of saving 78% this month instead of 77%. Those sort of incremental gains now come too dearly, and I've played that game for years. We've scrimped. We've cut the fat. The remaining luxuries we have are worth keeping around. Instead of squeezing another hundred bucks out of an already wrung-out budget, I want to try something else.

First, a little story. Last week, my wife got pretty sick. She's lost her voice from a sore throat, walked around like an injured puppy, and coughed to the point that it hurt. The saddest bit was that she even held her ears when she coughed, as she said it eased the pain in her head. It was awful to watch, since I couldn't do anything to help. One night last week, settling down to bed, we realized that we ran out of Nyquil. Despite her protests, I went out to the grocer in my pajamas, socks, and flip flops (nerd Asian casual), to pick up more drugs.

While there, I figured I'd get some groceries. Peanut butter, some cream cheese, eggs, and some tomatoes. I usually get the on-the-vine ones, because I like to pick up a bunch and hold them close to my nose, and breathe in that tomato smell. It's my favorite thing to do at the grocer.

But I saw they had some cool looking heirloom ones: with the bumpy shapes and weird colors, and I wanted to give them a try. I usually won't get them, you know, because they're more expensive and, being a creature of habit, I always get the on-the-vine ones that smell good. Plus there's just the frugal habit itself: I have an ingrained routine of being as efficient as I can with our money, to retire early and all that. But I found myself putting the green and purple tomatoes in the basket anyway. So what if they cost a bit more?

And, like they sometimes do late at night, a new idea came to me. If I don't like spending more because I'm naturally frugal, but don't want to spend less overall either (because we already are frugal enough and spending less would have marginal benefits) the only choices left are to just keep doing what we're doing, or to shift our spending.

I'm pretty sick myself now, so maybe this idea is no good, or only makes sense to me. But here it is: we spend about the same every month, say, $2,000. And within that two thousand dollars are a bunch of static categories: $300 for groceries, $50 for gas, $400 for future travel, and on and on and on. Instead of trying to reduce the $2,000 figure to $1,900 to increase our savings rate, let's intentionally move some stuff around from one category to another, experiment, and see what the results are.

The one I'm starting with is to cut out restaurant spending (e.g. - no more chicken fingers) and put it in our grocery line item. (Maybe we'll buy organic chicken...and make chicken fingers. Really, the sky's the limit.) So we now have an extra $150 or so this month to spend on fancy groceries. We're going to eat like the other half does in February. I think we'll try caviar. Or eat more crab. Maybe we'll head to the food section of Bed Bath and Beyond and pick up some capers. I don't know if we'll have time.

Of course, if our overall spending doesn't change, neither does our savings rate. So what's the point?

For one, change is a good thing. There's a benefit in mixing it up, and varying our experiences. Maybe eating organic food makes you smile more. I don't know.

But the main benefit, for a dork like me who takes board games way too seriously, is that shifting our spending creates an opportunity for gamification. Like in Settlers of Catan or Power Grid, our budget now becomes about using our finite resources to the best of our abilities. If we don't want to spend more (or less) than we currently do, all that's left is to figure out is the best way to spend that $2,000.

We're in a position in which a whole lot of our budget, maybe the whole thing, is "discretionary." It can be whatever we want.

If we're just going to spend some set amount, we might as well spend it in the way that makes us more successful, more efficient, and happier. Let's figure out what that is. Suggestions are welcome. Who knows - maybe happiness is a fridge full of fancy chicken and weird tomatoes.