Economic Elasticity (and the price of stretchy pants)

Recently, I heard a popular money expert discuss the concept of “economic elasticity.” Although a quick google search revealed multiple definitions, what I heard on the radio described our tendency, as humans, to consider some items as worth less than others. For example, $10 for a shirt? Good deal. $10 for a soda? No, thank you!

One could make some sort of argument about value, here. A shirt made of cotton fibers and woven in the US, made in non-sweat shop conditions, would actually be a steal at $10. And a soda made for pennies would not be worth the value of $10.

But let’s take a more realistic comparison (I’ve yet to see a $10 soda, though the day will come, I’m sure). How about the cost of ye olde PF favorite, a latte? I’ll put the price at a conservative $3.75. I would pay that, for a coffee treat. But spend $3.75 for two organic apples. I hesitate. $3.75 means a different decision in different circumstances. The question is rarely, “Can I really afford it?” The question is, do I want to spend this amount of money on this particular item.

This is not inherently bad if we are being very, very mindful about each decision we make. However, if we act like an $800 TV is out of the question due to price, and then spend $100 dollars a week unmindfully for the next two months, we are not accurately capturing our financial situation, we’re just haphazardly spending on what we perceive to be good deals.

We are frugal, it’s true. But not as intensely so as some other couples. We spend for fun, at times, and that is what we’ve chose to do, even with student loans to pay back. As I increase my mindful spending, I hope not to cheat myself and my little family out of future gains by falling prey to economic elasticity and my willingness to invest, vs. my willingness to shop at Ann Taylor Loft, or take in a movie with my husband, or indulge in a more expensive happy hour.

Currently, I’m sitting on the sofa in some cool* new spandex leggings. They are stretchy and awesome and look like the sky, and I spent $16 on ’em. I already had some lounging around pants, but I wanted some stretchier ones. I paid a hot 16 dollars for the pleasure of full range of motion. Price elasticity as relates to pants elasticity=a good bargain, as defined by me.

What items are easy to spend on, and what are difficult?

 

*as defined by 14 year old self, and currently 34 year old self. Turns out we have a lot in common.

A cool thousand

What does one do with a cool thousand kicking around in their pockets?

Here at Run of the Millions, this is exactly the question we have. My husband and I have cut a little deal, you see: he sells a particular product at work, brings home the bacon, and we split it in half. He uses his half to invest in individual stocks, and I use my half to…we don’t know yet. The idea has been to reach at least $1000 in order to buy a Roth IRA through Vanguard or Fidelity.

Now that I’m here, I find myself getting cold feet. I do have a student loan to the tune of 18,960. I also am 34 and feel that funding retirement should happen ASAP. I want that compound interest. I can feel it. And I’ve always loooved the idea of a Roth IRA—I lived overseas for many years, and do you know one of the best things about it? NO INCOME TAX. Once you get a taste of no tax, baby, it Just. Feels. Right.

However, in this idea that we are average, wanting to become greater than average, I know that paying off debt is something that many, many folks I admire would be all over.

My husband and I were talking about how we are not very strategic folks, and one of the benefits of paying off debt is that it is a plan. We are not natural planners or overly linear thinkers—remember, I am in the social services!! And we have more gumption and determination than we do numbers smarts. Cleaning up debt seems to fit in with our personalities, while following a strict plan (ie, paying off the loan ASAP), might be just the discipline we need.

What would you do with $1000 extra dollars?

 

Rhythm of Rest

It’s a Sunday afternoon, and my husband is out building a shelf to help organize our more than slightly crazy shed. He adores this sort of work and finds working with his hands to be an extension of his self. He finds the metaphor of building our home to be a comfort, and the time in the October air a refreshment. I may or may not go out in a minute to “help” him—it is a quiet, restful moment for him, and I confess that for me the quietude of that experience would be simply spending time with him.

As a non-profit worker, we are constantly talking about self-care and how best to rest, often while simultaneously being given too much work for too little pay. This is not a dig at my industry, it is an observation. I certainly admire the soul of non-profit work, which is scrappy and earnest, doing much with little. We are idealists, and rest is one of these ideals. My husband’s job is business based, and the dollar is bottom-line, pretty much always. Self-care is not discussed.

Average Americans work their tails off, are known to take fewer than their allotted days off, work longer hours, and often be available after hours for emails and phone calls. Run of the Millions is based on the concept that we are, in fact, quite average, but hoping to take average circumstances and achieve above average success.

Rest will absolutely not happen by accident in our culture. We do not live in a society that believes in rest. We believe in work, then zoning out by eating, drinking, gaming, gambling. Actual rest involving specific, literal rest, ie, sleeping, reading, slowing down, going for a quiet, no-destination-in-mind drive, taking a vacation, etc, is rare.

I once heard wisdom defined as “knowing the right thing and doing it.” To rest well, we need to know ourselves, first. My hardworking, introverted husband has a very extroverted job. Resting for him means space from noise, people, and data. Depending on the day and energy level, rest might mean sleep, watching a car show, a walk with me, or building a shelf. I am more prone to rest involving a long talk with a dear friend, a glass of (cheap) wine, a bath, or some low maintenance cooking. Each weekend we ask each other our plans, make suggestions, and figure out how to be together and quiet. At peace, even.

As average folk, we are determined to squeeze every drop out of the resources we have, with time being up there with money as a most precious item. We say no to extra items to save money, we say no to extra activities to create rest.

During the course of writing this blog, my husband decided that it was too much today, and the shelf was going to have to wait. He is currently taking a nap.

How do you unwind? How do the other members of your family rest?

Can we afford to buy new t-shirts?

Here at Run of the Millions, we are learning to practice moderation, and to be wise with how we spend money. Case study in point: can we afford new t-shirts?

My husband recently noted that some of his underly-sorts-of shirts were, shall we say, a little rough. Last year, when our finances were very stressed out, we probably would have made the old shirts last for a few months while once a week one of us reminded the other that we really should buy a pack of Hanes next time we are out and about.

But last week, my husband said, “I need some new t-shirts,” and the next time I was at Wal-Mart (I know, I know), I just went for it and paid the 13.97 to make it happen.

There is a cost to looking not-like-a-ragamuffin, and when the finances are tight, sometimes that cost has to be paid.

I keep listening and reading folks who are on crazy tight budgets, and as much as I admire the intensity, the reality is that we are not there. I want to be honest with ourselves, that we can buy the t-shirts, and pay down debt. We could live like we are poor (and in some ways we do), but a moderate approach to money says to spend money to meet needs.

I suppose it’s a bit like the serenity prayer, but with t-shirts? God give me the patience to wear the t-shirts that aren’t pristine, the courage to buy new t-shirts when the old ones wear out, and the wisdom to know the difference.

How do you decide when worn items get replaced? Do you go for it right away, or take a beat?

Run of the Mill(ions)

This is the story of how two average, run-of-the mill, joe schmoe types, became millionaires…a little at a time.

It’s an optimistic outlook, considering we’re about negative $50k networth, but we’re pretty positive people. Every morning, my husband looks at me and says, “Time to go make a million dollars!” and every evening, he asks, “Well? Did you make a million dollars yet?” It is simultaneously inspiring and frustrating. I did not make a million dollars. I made maybe 2 dollars. I work in non profit.

You see, we are not crazy high profile job sorts. We are not engineers or doctors or even lawyers. I am in non profit work, and my man works in the auto industry. We make a little more than the average American household, but not by much, and we’re in a moderate to high cost of living area in the west. We have $40k in student loans and are paying off a few smaller loans, too. We are not hyper intense, we are not frugal masterminds, and we are not financial experts. At this stage of the game, we are pretty run-of-the-mill.

And yet.

We still long for the American dream. Maybe the new American dream, the one where we gain flexibility and the ability to see the people we love who live so far away. We have the dream that a little above average, plus hard work, plus time, equals great success. We have the dream that if we get started now, we will gain momentum that will last a lifetime.

Believing that the American dream is not dead and that in fact we can run ahead of the pack is daunting, but exciting. This blog will evolve as we do. I’m thinking a little bit of laid back frugality, a little bit of common sense personal finance, and a whole lotta optimism.

Welcome to Run-of-the-mill(ions)!