• Shop today and save 50% next week
• Limit 5 per person
• Our big sale ends tomorrow/today/in a few hours
• Get 23% off
• We have a great deal on the accessories for that, too
• Save $250! (New Price: $500.)
• Get a free gift with your $50 purchase

While all these are popular, the get 23% off or odd number percentage is one I would think entices people to think they’re getting a special deal.

Real estate brokers have long known that uneven pricing (say, $524,755 versus $525,000) catches buyers’ attention, because those odd numbers suggest a bargain that has already been marked down — whether that’s actually the case or not. This year, retailers have picked up on that tactic this year as a way to separate their sales from the sea of 20% off offers…

Or, what about limiting the number of items sold per person.  I’ve seen this one presented quite a few times with deals on the internet.  Or, you may have heard this a lot during Black Friday or Cyber Monday sales.

Limits trigger a feeling that the deal is so great that, if not for that limit-four-per-customer rule, shoppers would be filling their carts to the brim, leaving none for you…

Which of these 7 sales pitches have caused you to make a purchase?

It wasn’t until I came across an article on SmartMoney.com this week did I start wondering whether or not my service was really free.  Let me explain.  Once I arrived at Starbucks I felt obligated to buy something in order to use their internet service.  They don’t have a policy that says you have to do so, but I imagine most people feel this personal obligation.  Otherwise, you might feel as if you’re a little out of place.  And after all, they’re giving you free internet, right?

SmartMoney decided to take a look at consumer spending habits from Mint.com to get a real idea of the price of Wi-Fi.  Here are the results for Starbucks:

The average Mint user spent $22 a month at Starbucks during the first quarter of this year, and the average laptop user at a Starbucks spent about an hour online per session.  If, the average customer spends about $4 per visit, that person would essentially be paying $4 an hour for Internet access. An average Mint user who went to Starbucks once a week for an hour would be paying $5.50 an hour for free Wi-Fi.

Starbucks is also offering other things to increase the interest of surfing in the store:

Starbucks has set its Wi-Fi service apart by also offering users access to exclusive content, including Wall Street Journal articles normally available only to subscribers. That “premium” offer is well-designed to appeal to the upscale consumer the chain wants to attract.

So, did I get my free Wi-FI the other day?  Well, no.  It cost me a $2 (for the cup of coffee).   Obviously, the value in this case was more than entertainment as I was able to get some work done.  But in general, this is definitely entertainment spending.

As consumers and money managers we need to be aware of such so-called free services and make sure they’re not motivating us to over spend our budgets.  While the internet service and additional online offerings are enticing we need to remember this type of spending should be considered recreational or entertainment spending and categorized appropriatley in the monthly spending plan.

Did you think you were getting free Wi-Fi? 

Looking back on my college days I remember paying hundreds of dollars for text books. I always bought used when I could, but not every text was available as used book, so many times I had to shell out big bucks for new ones.

It seemed most kids were excited to go sell their books back at the end of school so they could get a little bit of spending money. No one really expected that much, but it was usually enough to have a few fun nights out on the town.

Today, things are different. Many students are now opting to rent versus buy used or new. Given the costs associated with buying textbooks you can probably understand why.

Here’s what a MarketWatch.com article says about the costs:

Students at four-year U.S. colleges spent $1,122 a year on textbooks on average in the 2009-10 academic year, the College Board reports, a 32% increase from five years ago.

Tips to consider when renting textbooks

I also picked up on a number of helpful tips when I read the MarketWatch article. Overall, I would make sure you understand the rental agreement before you rent.

• You’ll need to follow the standards outlined for taking care of your books
• Underlining and highlighting is allowed (just not too much).
• You’ll have to pay replacement costs if you lose or damage your book.
• Don’t be late as grace periods run short.
• You can typically return or exchange a book within 30 days with no extra charges.
• You can buy a book you rented and pay the difference in cost.

According to the article, you should also keep in mind that renting isn’t always cheaper than buying a used book. With buying used, you can still recoup some of your costs if you do decide to sell.

Where can you rent textbooks?

There are a number of places you can rent books online if you’ve decided to give it a try.  I found these tips from Yahoo Answers.  Note: I haven’t checked these sources out, so let us know if you’ve had experience with them, or other services you liked or disliked.

• BigWords.com
• Amazon.com
• Chegg.com
• Textbookstop.com
• BookRenter.com
• ShareaSale.com

But, is renting text books really a good idea?

Here’s another perspective to consider:

I was a business major and one of the things I dreaded after graduating from undergrad and graduate school was that I had sold all of my books. I often wanted to pick up a text book and look up a term or concept to help me in the business world. Those text books can come in more handy than you think once you graduate.

Call me a nerd, but I visited a used book store in Dallas one-time and just happened to stumble across a used textbook section. After browsing around for a while I found many of the old business books I had used in school offered at ridiculously low prices (probably because they were outdated. Today, I have most of my books back on my bookshelf as handy resources when needed.

So, is walking away from school without having any of your textbooks a good idea? I suppose it depends on your field of study, or major. Renting textbooks may help you save money, but it may not always be the best option.  My advice:  rent if you need to save the money, but consider buying the book if it’s a class for your major and add it to your personal library.

Do you think renting text books is a good idea?  Do you rent textbooks?  If so, where do you rent them?

Defrag Your Hard Drive

If you’re not a power computer user, “defragging” may sound scary. But all it is rearranging the file system on the disk so that pieces that go together are closer together. A fragmented hard drive works harder and therefore slower. Most Windows operating systems come with the ability to defragment them. Here is how:

In Windows XP

1. Start -> RUN
2. This will bring up a command window. Type: dfrg.msc
3. This will bring up the Disk Defragmenter. Highlight the drive. You can then, analyze to see if defragging is necessary, or click on defragment to begin the process.

In Windows Vista

1. Start ->All Programs -> Accessories -> System Tools – > Disk Defragmenter
2. Click Defragment Now

In Windows 7

1. Click on the Start Button. Type in disk defragmenter in the search window at the bottom
2. Highlight the drive you wish to defrag. Click Defragment Now.

In Vista and Windows 7, your disk defragmenter probably runs on a schedule, but it is OK to perform manually if needed.

The process of defragging can take minutes or hours, depending on the size of the drive and the severity of fragmentation.

Scan for Viruses on a Regular Basis

If your computer is connected to the Internet, or you introduce external media (CD, USB drive etc) that has been in contact with another computer you need anti-virus protection. You don’t have to spend an arm and a leg for computer software. You can download Free AVG to protect your computer. This program has a solid following in the Windows community. In fact, many are cancelling their Norton subscription for AVG. Not just for the cost savings, but Norton AV is somewhat of a resource hog. In other words….it slows down your computer.

In addition to viruses, you’ll want to regularly scan for spyware, adware, and malware. Spybot Search & Destroy is a popular program to remedy the problem. If you are plagued by tons of pop-up windows, web browser redirects, and toolbars you did not install, you may be the victim of spyware / adware. Removing these programs will increase system performance and enhance your web experience. To prevent further spyware installations, only visit trusted sites and download trusted content. Peer to peer sharing programs are often infested. Be wary of “free” movie and music downloads. Not only is this often illegal, but you’re infecting your system and inadvertently slowing it down.

I have not found a definitive conclusion on which web browser is best in terms of speed and security. But my preference is Firefox over Internet Explorer. It does a good job of warning you before entering what may be a malicious site and also seems to load faster than the Windows default browser, Internet Explorer.

Disable Auto Launches

Often times, when a new program is installed the default setting is to automatically run when the computer boots up. The more programs that are launching on start-up, the longer it is startup process is going to take. If you are unsure what is running on startup, do the following:

1. Start -> RUN
2. This will bring up a command window. Type: msconfig
3. This will bring up the System Configuration Utility. Click on the STARTUP tab. You’ll see a list of files that are running on startup. Some of them (like ctfmon) need to be there, others do not. For example, does Easy CD Creator’s Drag to Disc program really need to auto launch? I don’t think so!

If you are unsure which programs can be safely unchecked, it is best to leave them alone and ask someone, or do a google search to find the answer.

Clear out the dust

Over time, dust builds up in your computer. This can impede the fans cooling and slow your system. This can be prevented with computer covers or remedied with a can of compressed air from any electronics store. If the idea of removing your computer case is a bit daunting, seek help. You don’t want to do more damage trying to fix a problem!

Implementing these should increase your performance. If your system is still running slow, you may need to delete some unneeded applications and files as a hard drive running near capacity can slow performance. Finally, if you’ve done all you can do and you’re at your wits end. It may be time to seek a professional or purchase a new machine. Computers will not run forever, however proper maintenance and care will ensure you get your money’s worth out of the machine.
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There are a number of ways to stop impulse buying if it’s causing problems for you each month.  Take a look at this list of 20 different ideas to stop impulse buying.  See if you can apply all or any combination of these to your situation to change this behavior.

20 Tips to Stop Impulse Buying and Get Spending Under Control

1.  Keep impulse buying cash with you

Okay, if you’re set on spending a little money every time you go to the store take a little bit of blow money or cash with you and use it for impulsive buying.  The only rule is you can’t buy something that costs more than the total of your cash.

2.  Take some time to think about your purchases

Taking 24 hours, or a few days (or even a week) will most often help you determine if it’s truly a need.

3.  Keep your financial goals in mind

Ultimately, you want to get out of debt, right?  You may want to build wealth by investing, right?  Well, you can’t do those things if you’re spending all of your money.  What are your current goals?  Keep them in mind the next time you want to spend more than you have.

4.  Determine if it’s a want or a need

Asking yourself if you’re purchasing a want or need is helpful to curtail spending.  Try to limit most of your spending to need related items.  Could you really not get by without the item this month? 

5.  Recognize some impulse buying is not all bad

It’s fair to recognize you may come across the best deal of the century.  So, if you can buy 1 box of diapers and get 4 for free go ahead and spend if it’s within your budget.  Just recognize that the advertiser’s job is to make every deal seem like it’s the deal of the century.

6.  Shop with a list or a plan

Having a game plan is important.  Try to only focus on the items that are on your list.  Great deal or deal of the century you say?  At least give it some thought while you’re in the store.  Don’t immediately place the item in your cart.  Stick with your list!

7.  Avoid dangerous hobbies (such as shopping)

Enjoy going to the mall just to go to the mall?  This is actually a dangerous hobby if you tend to spend more than you have.  It’s proven the more people are in front of items or in stores, the more they will spend.

8.  Shop with cash versus credit cards

Perhaps you know where you tend to overspend or impulse buy.  Leave your credit card at home when visiting these stores.  Only carry cash and follow rule #1 above.

9.  Recognize store strategy

Stores strategically place items where your eyes go.  The best example is the check out register.  Every item at the check out is a convenience type item.  The store is hoping to sell you the last minute item not on your list before you walk out the door.  Don’t get trapped by the convenience items.

10.  Be careful what you surf

The internet has become its own place to shop.  Many of the best deals are found in the internet today.  Recognize surfing your favorite stores online can be just like walking around in the mall.  The more you’re exposed the higher the changes you’ll make a purchase.

11.  Be careful what you watch on TV

Just like the internet TV is a shopping mall full of advertisements and info commercials.  I recently heard someone say that John Travolta watches info commercials for amusement, but after watching long enough he wants to the buy the product.  I think that’s probably true for most people.  The longer a product is dangled in front of us the more likely we are to want to purchase it.

12.  Send someone else to shop

Do you tend to overspend at the grocery store or when in particular stores?  If so, let someone else do the shopping for you so that you’re not tempted.

13.  Shop with an accountability partner

Tell your friend or spouse you need help with avoiding the temptation to buy while in the store.  Ask them to hold you accountable to not making a random purchase.

14.  Shop backwards

The deeper into the store you go the more likely you are to be enticed by more products.  Try starting in the back of the store and shopping forward.

15.  Don’t go to a store to just hang out

It’s easy to use the mall or stores as a source of entertainment.  Again, the more time spend in stores the more likely you are to buy something, Try to look for other sources of entertainment with less temptation.

16.  Recognize your feelings after the purchase

Most people recognize when they’ve made an unwise purchase decision and feel a sense of anxiety or frustration afterwards.  Consider this feeling when about to make the purchase.  If you go to a thought of what it may be like afterwards (do I really need this?) then it may help in avoiding the spending.

17.  Unsubscribe to mailing lists

Companies love when you sign up to receive their catalog by mail or special offers by email.  These are ways to entice you to spend online or in the store.

18.  Recognize the spending habit by tracking your spending

Probably the best way to determine if you have a problem or not is to review where you’re spending your money every month.  Good tracking of where you spend money and on what will tell you where your spending priorities are.

19.  Buy only to replace items

We often think we need a new TV or other item, but the truth is that the item we have at home works just fine.  Even if the latest gadget is at a rock bottom price, it’s not a good deal if you already have something at home that serves the same purpose.

20.  Establish a want list

Want lists are great to avoid the impulsive purchase.  By having a want list you’ve already established the items that can potentially entice you to spend.  Putting them on the list allows you to think about how important they really are and prioritize them for future purchase.

How do you feel about impulse buying and how do you work to avoid it?

The Grocery Game

For example, The Grocery Game is a gem, in my opinion; I learned about it a few years ago and it has saved our family a lot of money.  This creative online service provides the necessary guidance for turning your home into a grocery store stockpile where the products are purchased at the lowest possible prices.  For a small fee you can subscribe to a weekly shopping list of the best deals at your local store and you’re set to start saving money.

Collective buying power

And recently I picked up my Business Week magazine and learned about a new type of group or community shopping service.  Within this community, retailers sign up to offer mark downs on their products.  But they will only go forward with the offer or sale if enough people have committed to the purchase of the product or service online.  In other words, collective buying power wins the deal!

It’s a win-win in my book.  The merchant is moving product at the volume they desire (they set the quantity of people who have to agree to buy) and the shopper is getting the discount that saves money.

You can definitely save money with daily deal sites.  According to the article, some of the more well-known sites offering this service are Groupon, LivingSocial and BuyWithMe.  Groupon is apparently the most well-known with 1.5 million members.  It has only been around a year and has been launched in 45 cities total.

Groupon

To learn more about this new social shopping craze, I decided to venture on over to Groupon to see what I could find out.  First, signing up is easy.  All I had to do was enter my email address.  The website automatically recognized my city.  Keep in mind there are different offers for different cities.

Once I signed up, I was told I’d receive my first deal via email the next day.  And that I did.  Everyday thereafter, I’ve received an email with the deal of the day.  Some are of interest and some I just pass over.

How Groupon describes their service

Each day, Groupon features an unbeatable deal on the best stuff to do, see, eat, and buy in your city. By promising businesses a minimum number of customers, we get discounts you won’t find anywhere else. We call it “collective buying power!

1. Each day Groupon features something cool to do at an unbeatable price.
2. You only get it if enough people join that day… so invite your friends!
3. Check back the next day for another awesome Groupon!

If you see something you like, just click buy.  If enough people sign up before midnight the same day, you get the deal.  Obviously, there’s incentive to let your friends know about the deal, so they provide a way you can easily send a referral from the deal you see.  The more people the better chance the deal won’t be cancelled.

What happens if the Groupon doesn’t reach its required minimum number of purchasers?  According to Groupon, if not enough people sign up, then the deal is cancelled, and you won’t be charged. So if you really want the Groupon and not many have signed up you really have some incentive to advertise the deal to your network of friends.

Final thoughts

What’s next for such services?  With online collaboration and social media continuing to be hot, I think more and more people will be interested in going online for such deals.  In my opinion, you just can beat getting the deal delivered right to you without having to shop around town.

My advice:  Sign up for more than one service (Groupon, LivingSocial and BuyWithMe) so that multiple deals get sent to you in the same day.  Also, why not start a collective buying power group somewhere?   You could get your friends to follow along on your favorite sites to take advantage of the day’s latest and greatest offers together.

What do you think about collective buying power and this new form of getting online deals?

A recent Crown Financial Ministries Biblical Devotional points out we do have responsibility in this area of spending or investment management!

Boycotting products is good stewardship. It is spending God’s money in a manner that would be pleasing to Him and not supporting companies that use their profits to sponsor questionable programs.

“Make my joy complete by being of the same mind, maintaining the same love, united in spirit, intent on one purpose.” (Philippians 2:2 NASB).

A steward’s mindset

How does a financial steward view money management?  A financial steward knows money in his or her possession only comes from God.  People can’t earn it under their own accord; God does the providing.  Therefore, financial stewardship is all about managing wisely the resources God has provided which includes money.  Having a purpose or plan for money and taking steps to avoid wasteful spending is pleasing to God under this principle.

A Christian strives to grow his or her relationship with Christ and to also be Christ-like in daily living.  If we purchase products that could harm us, others, or that may be misaligned with Christian values, we may be inhibiting our ability to be Christ-like or united in spirit according to the scripture and devotional.

Beyond the obvious, I think the challenge can be in knowing when we’re making such purchases or perhaps investments.

We certainly all have a choice to make at our local grocery store when it comes to purchasing inappropriate material or things that can be harmful to our health and to our relationship with God.  Without throwing out all the examples, such items are created by companies that typically aren’t thinking along the lines of bettering society or the expansion of Christian values.

Moral investing decisions

What isn’t as obvious and more difficult to use good judgment is when we invest our money, perhaps in our company 401k, and mutual funds.  When purchasing mutual funds we don’t directly purchase company stocks that are in the fund.  The fund manager makes these purchases for us, but it is still our investment.  Therefore, unless we’re paying close attention, there may be company stocks in our mutual fund for companies we would typically avoid supporting.

So beyond the trip to the grocery or convenient store, should we be concerned with what stocks our fund contains?  Some would say yes because they feel it’s a component of financial stewardship and being like-minded with Christ.  Others would be less concerned because of the indirectness of purchasing stocks in the mutual fund.

Most people, me included, don’t spend a lot of time analyzing every company in which a fund invests.  Truthfully, if we did spend the time identifying all the companies and reviewing their websites, we still might not be able to identify immoral activities occurring with a company’s mission or product.  And at the same time, these companies are probably not going out of their way to make this information widely known to the public.

How to make moral investing decisions

But the subject of product boycotting, including investments has got me thinking that there may be more I can do here.  After all, I do want to be the best financial steward I can be and I certainly don’t want to invest in a company that produces for example, pornography that draws people further away from God and wrecks havoc on families.

I came across a resource that can help when it comes to making moral investing decisions. Moral Moneyis focused on helping people be Biblically responsible investors.  It helps people build a portfolio of companies that only support Christian values.  I noticed on their website they have something called the “Integrity I-Dex” which is a benchmark for Biblically based portfolios.  Companies are screened for their involvement in things that go against Biblical Christian values.  If you want more information, Christian PF conducted an interview with Moral Money.

Final thoughts

Whether you are for or against boycotting products, I think there is something to think about and consider here.  More conscious spending or investment decisions can help put a stop to furthering the growth of companies with immoral missions.  While investing decisions may be more challenging, we can see through organizations like Moral Money, it is possible to do some screening to help with decision making.

What are your thoughts about boycotting products of questionable companies and perhaps mutual funds that include stocks of such companies?

Photo by dooley.

As Christmas approaches us and we start thinking about gift giving, it’s important to keep wise planning and spending in mind.  The Christmas shopping season, while puts a lot of stores in the black, puts a lot of families in the red with much to clean up as the New Year rolls around.

There are a lot of helpful personal finance posts on the topic of Christmas spending and budgeting, so I thought I would share some of my favorites and their tips.

Budget first, spend second

You can enjoy a simple Christmas with a well planned budget according to a post in the Simple Mom archives.  I liked the recommendation to set a price limit on gifts before trying to search for the right gift for someone.  Often people get excited about finding a particular gift without having ever considered Christmas spending limits.  Once a limit has been set, you can be conscious of your limits and not spend more than planned.

Set up a Christmas Budget

Christian PF offers a simple step by step guide to setting your Christmas budget.  This guide to proactive planning your spending can keep you from getting yourself into spending trouble.

1. Make a list of the people for whom you’re going to give this season.
2. Determine how much you can spend.
3. Prioritize and categorize your list.
4. Make necessary preparations.
5. Stick to your plan.

I particularly like the advice to categorize the list into three groups: paid gifts, made gifts and no gifts.  Depending on your spending limit, you may not be able to buy something for everyone.

The “paid gift” group includes people for whom you’re going to buy a present.  The “no gift” group includes people, for example, you would send a Christmas card.  The “made gift” group includes people for whom you’re going to get creative and make something.  Having some priorities is important, especially when cash is limited.

Research before you spend

Bible Money Matters (from the archives) gives us some tips to avoid Christmas overspending at this expensive time of year.  I particularly liked the advice about conducting research before spending.  So, once your budget is in place and it’s time to do some shopping, conduct a little bit of research before purchasing a gift at the first store in which you find it.

Search websites like fatwallet.com, blackfriday.info, slickdeals.net, retailmenot.com techbargains.com and others to find the best deals, and money saving coupons for when you do buy. Find out the best time to buy, (black Friday -the day after thanksgiving – for a lot of items) and buy it before the price goes back up!

Reasons for giving

I don’t know about you, but I sure do want a debt free Christmas.  Money Help for Christian talks about how to have one.  A great suggestion is to think about your motives for spending before you start hitting the stores.

Sometimes we give gifts beyond our means to give a certain impression of our financial status.  Sometimes we give extravagant gifts because we fear rejection.  Sometimes we give expensive gifts because we are a giver at heart and giving is our love language.

Make sure your reasons are genuine this season.  Otherwise, the emotions around motives, such as these, can lead to impulse decisions which may then lead to credit card debt.

Consider a Tinselectomy

Finally, there is a real opportunity to touch others in a unique way, through investment of time and thought this Christmas.

To get into the spirit of giving this season, consider a Tinselectomy.  Our church has started a movement to encourage people to give, celebrate and live differently and turning Christmas upside down!

We all know Christmas has become too much–too commercial, too materialistic, too busy. This year, join a movement to turn Christmas upside down and give, celebrate and live differently.

You don’t have to go to our church to jump on board with the Tinselectomy movement, or start one of your own!

The movement includes three different ways to approach Christmas this year.

1. Give: give anonymously, giving to people you don’t know, or giving to people who can’t give back.
2. Celebrate:  venture beyond your comfortable circle of family and friends.
3. Live:  extend peace on earth and goodwill beyond men beyond the Christmas season

My favorite Tinselectomy ideas

• Give:  Go grocery shopping for the items you always keep stocked in your own pantry, and then deliver them to your local food pantry.
• Celebrate:  Help serve a meal at a local soup kitchen or homeless shelter
• Live: Send a handwritten note to someone who deserves some long-overdue thanks.

For other personal finance reading, the Carnival of Personal Finance was hosted by the Canadian Finance blog this week and included Thoughts on Mint and Mvelopes with Some Fiscal Fizzle.

Do you have any Christmas budgeting, spending or giving tips?  If so, share with us in the comments?

Material Pursuit

I’ve caught myself in the past thinking that  just another raise or bonus would provide more for our family and yes, maybe we would be happier.  Maybe not necessarily a truck load more of material possessions, but more money would allow us to experience more travel and vacations.  Or, it might help us become financially free and give more of our time and money to others.

I admit there are sometimes thoughts of having some material possessions that would only come with an increase in income.  I’ve dreamt of many of them.  And there have been past empty moments of material pursuit when the item, after getting it home, didn’t really mean that much to me after all.  I think the excitement seems to be in the purchase of the item itself and not a long-term investment of happiness.

Contentment

I’ve found that part of living in financial peace is to be content with the income and possessions I have today and not count on more tomorrow.  It’s my job to manage them wisely for today.

I recently read an article in the Dallas Morning News about money and happiness.  I thought the article was interesting because it talked about scientific studies that have tested the happiness level of people when they had more discretionary income and could buy more material things.   The studies prove people are not happier when they increase their material possessions.

Positive psychologists and so-called behavioral economists both turned their attention to the money-happiness nexus.  Mapping financial statistics against people’s self-reported happiness, the researches sifted data from rich nations and poor nations, from people up and down the economic ladder, and from individuals as their economic fortunes improved or deteriorated.  The connection between wealth and happiness, they found, was pretty weak.

The article reminded me of so many people who have climbed to the top of the financial mountain only to find themselves without anything once they were there.  They have all the money anyone could possibly imagine having, yet they are alone and unhappy at the top.  Pursuits of material possessions and more money for individualist reasons are empty endeavors, again as studies have proven.

Interestingly, the article discussed other types of spending that can indeed make us happier simply because they are more socially oriented.

One of the most consistent findings of the happiness literature is that having a social network is an excellent predictor of happiness, and it seemed plausible that you could use money to buy happiness that way.

There were two forms of social related spending discussed in which the results have shown to make people happier.

Giving

One of the studies conducted, showed spending money on helping others, or giving, makes people happier.  Most people enjoy helping others; they feel good about it and enjoy the selfless act they are performing.

Higher prosocial spending – gifts for others and donations to charity – was indeed correlated with higher self-reported happiness.

I can say that my wife and I have personally experienced reward with our tithing and giving.  We are happier and have feelings of comfort because we are using money to help people and at the same time giving related to our faith.

In the past, we’ve either cut out giving or reduced it for various reasons.  There was a feeling of emptiness associated with this decision that wasn’t filled until we began our giving again.  Primarily for reasons of faith and probably somewhat an empty feeling, we will continue to give and increase our giving as our wealth increases.

Experience Spending

Studies have show that experience type purchases can generate more happiness because they put happy memories in our minds.  Sure, sometimes you need a vacation from the vacation because some experiences might not be so positive, but apparently, the negative thoughts are often replaced with the positive ones.

Experiences are inherently more social – when we vacation or eat out or go to the movies it’s usually with other people, and we’re liable also to relive the experience when we see those people again.

I can relate to these feelings as I’m sure you probably can too.  Before we had children we had more discretionary income and could afford to travel more and take larger vacations.  If we had the choice of furniture or improving our house, we would typically choose the experience, or vacation over the material item.  There was a positive experience we received in the travel or vacation.  We thought of the furniture as just another item in our house that would soon grow old, but our experience would last forever in our minds.

Final Thoughts

If more money and material items beyond essential needs can’t buy happiness, but experiences and giving can, does that change the way we should think about spending our discretionary income?  I think it can, if we’re conscious about it.

It would seem that discretionary income could be used to stretch giving and also be used towards a moderate amount of material and experience purchases.  Even though the article mentioned experience spending makes us happier, I think  spending all discretionary income on such purchases may not make us happier because we’re focused entirely on ourselves.

Why not take the happiness path to financial freedom? My view of financial freedom is having more money and time to help others after acheiving such goals as funding retirement and eliminating all debt including the home mortgage.  And why couldn’t part of this financial freedom include some experience spending?

What do you think?  Do you think we are happier when using discretionary income for giving and experience spending?

Picture by emdot.

Many people dream of debt free day, or just think about having a balanced budget tomorrow.  Others have goals of paying for their children’s college education and some just want to help their children avoid the same mistakes they did.  

I often think about financial goals because knowing your goals and priorities is the foundation of every plan.  Think about it.  If you don’t have goals it’s difficult to determine spending decisions in your monthly budget.  Is your immediate goal to pay off debt or save for emergencies?  Without clearly establishing priorities you may not make the best spending decisions towards achieving your most important goals.  Therefore, everyone should know their financial goals and top priorities.

I sometimes visit CNN Money online and browse the content in their personal finance category.   I recently came across their Money 101 lessons and lesson 1 discusses setting financial priorities.  According to the article, there are 10 top things (summarized below) you should consider in setting your financial priorities. 

Top 10 things to know in setting financial priorities

Narrow your objectives

Decide on the goals that are most important to you and your family.

Focus first on the goals that matter

You can’t work on every goal at once.  Take the time to prioritize them and choose to work on the most important goals first.

Be prepared for conflicts

When goals conflict (you’re not sure which to tackle first), I personally recommend considering the priorities Dave Ramsey sets in his Baby Steps.

Put time on your side

If you’re consistent over time in your savings and investments they will grow.  The same could be said with following your plan to get out of debt.  The takeaway for me on this is to be patient.  Follow your plan and believe you will succeed.

Choose carefully

Choose the goals that matter the most to becoming a better steward of your money and building financial security for your family.

Include family members

Take the time to plan your goals with your spouse.  My wife and I try to sit down and review our goals once per year.

Start now

There is no better time than now to start managing your money wisely, setting goals and building plans to achieve them. 

Sweat the big stuff

Keep your goals in focus.  Consider other options, for example, if a large vacation may take you off track from paying off debt. Look for a less expensive way to relax.

Don’t sweat the small stuff

It’s okay to have some spending allocated for fun as long as you take your goals into consideration as you make spending decisions.

Be prepared for change

Goals may shift as stages in life change.  For example, we’ve learned there are plenty of expenses associated with having young children.  As the children grow older the types of expenses change.

Final thoughts

If you take away two things from this article, I would suggest setting the time to plan you goals with your spouse, if married, and start now.  Schedule time this week to list your goals on paper and priortize them!   

Can you think of other things to consider when creating your goals and setting your financial priorities?