Thursday, December 8, 2016

Hypothetical Questions: How should disparate earners split expenses in a relationship?

You buy the PBR, I'll buy the axe


Hypothetical Questions is a feature where Frugal Bagel and Practical Cranberry Nut Roll discuss other people's personal finance and relationship questions from advice columns, online forums, and social media.

How should disparate earners split expenses in a relationship?

Context: A forum poster expresses his frustration that his girlfriend, who earns one-tenth of what he earns, insists on splitting all expenses 50/50.


Frugal Bagel
Questions about splitting expenses in a relationship come up a lot, but the income disparity makes this an extreme case. They just have completely different standards of living. He can't invite her to do the things he likes to do, like nice restaurants and travel, because she can't afford to pay half. They can't move in together, because he's unwilling to live in a place she could afford, and she turned down his offer to live in his condo rent-free. He also says he offered to help her get a better-paying job with his connections, but she didn't like that idea, either.


Practical Cranberry Nut Roll
Yeah, I wouldn't want to owe him either. But i can see why he's frustrated.


Frugal Bagel
Right, I see both sides.

As a frugal blogger, my bias is always toward the lower earner teaching the higher earner how to be frugal, rather than the other way around. And as a woman, I definitely relate to having baggage about not wanting to be "taken care of" by a partner, especially a male partner. The letter-writer did come off a little condescending when describing his girlfriend's situation, which made me totally sympathetic to her digging in her heels about equality.

At the same time, as the higher earner in my relationship, I'd also be frustrated if my wife insisted we only live in a place that she could afford on her own.


Practical Cranberry Nut Roll
Yes, but you're married and they are not.


Frugal Bagel
Yeah, we have totally joint finances. But we kind of backed into that with devices like: Croissant moves into my house, but pays me a nominal amount of rent. And: I loan her money to pay back her student loans at a 0% interest rate, then use the money she pays me to buy dishes for our shared kitchen. She had to kind of agree to let me subsidize her a little bit so that we could live in a nice place and save money in the long run.

So, I think part of his frustration is wondering, "How can we ever move forward in our relationship (living together, marriage etc.) under these rigid conditions?"

At the same time, I totally understand her not wanting to become dependent on him. I've never been in the position of having my housing expenses subsidized by a partner, but it would make me worry about things like: what if we break up, and I get stuck with half of a lease or a contract I can't afford? Or I just get used to a lifestyle I can't afford?

It also sounds like the girlfriend in this particular letter considers it important to make it on her own and not have to have that asterisk of, like, "well but my boyfriend was covering my rent."


Practical Cranberry Nut Roll
I think the housing is actually the easiest - she figures out how much she's willing to pay for housing, and pays him that much. Even if it's not half the mortgage. She isn't going to own the house anyway.

She still gets credit for covering her own rent, since it's an amount she would have paid anyway, just for a different place. He's not paying for her housing, he's paying for the upgrade.


Frugal Bagel
We haven't heard from her, so we don't know if she would feel like that's charity or something, that he's renting it out for under market value. He would have to make it very clear that it's worth it to him to rent for under market value because he wants the right kind of roommate (i.e. only her).


in general, I think that if she's a fiercely independent person, he'll do better putting things in terms of what he wants than in terms of helping her. "It's worth it to me to pay twice as much to go to Paris if you will be there" comes off better than "I want to treat you/help you afford a trip you could never take on your own."


Practical Cranberry Nut Roll
Yep. Trips, I think, are even easier. If they break up, she can just not go on trips. She's not stuck with any ongoing expenses, and you don't really get used to the lifestyle you live on a trip; it's self-contained.


Frugal Bagel
True! It's like Elizabeth Warren says in All Your Worth. If you are spending a lot on luxury, and you income suddenly goes down, it's actually a lot easier than if you were overspending on necessities. You can recover quicker by just not spending on the luxuries. You're not locked in, the way you are with leases and things.


Practical Cranberry Nut Roll
For dates, I think they could institute a "whoever thinks of it pays for it" sort of system, where she can suggest making fancy meals at home and he can suggest a weekend in Paris.


Frugal Bagel
Good idea. It's another way of doing 50/50, but instead of 50/50 on the cost of each date, you're alternating who "hosts" the date, and the host can pick a level of expense they're comfortable with. Personally, I'd advocate this system even if you're not navigating a huge income disparity; it's just nicer. It feels good to treat, and it feels good to be treated, but it doesn't feel good to be sitting down with a calculator divvying up the bill at the end of the night.

I don't know if either of them would be satisfied with these suggestions. He definitely painted a picture of a pretty stubborn partner. But he also seems kind of to miss the point. The question he actually asked in his advice is "How can I show her that I'm willing to pay for everything?" - showing that he doesn't really understand the problem. She knows he's willing, but she's not willing to take it.

He needs be willing to live like he's poor sometimes, gladly; and to let her solve her own problems unless she asks for help, or her solution is causing him significant needless hassle. And she needs to be willing to let him treat sometimes, even if it's for an unimportant luxury; and to sacrifice principle for practicality in situations where it's in both of their long-term best interest. If they're both serious about the relationship, they both need to be willing to give up some control over their finances and their lifestyle choices to accommodate the other.

So I guess like many relationship problems it comes down to meeting each other halfway.


Practical Cranberry Nut Roll
Hrmph. I like problems where one person is 100% right.


Frugal Bagel
I know! It seems like at the moment, both the letter-writer and the girlfriend think they're 100% right and the other person is 100% wrong, so they're both 100% wrong about that...???? (It's a stretch.)


Practical Cranberry Nut Roll
Sure, sure.


Psst! Want more from me today? I have a new Key Episodes up for Switched at Birth!

Tuesday, December 6, 2016

2016 Year in Review: The Bagel Family's Annual Spending Report

My goal for the last few years has been to keep our household spending under $40,000 (that is to say, spending out of our net paychecks: this doesn't included taxes and other paycheck deductions, nor does it include savings.) This year, I massively failed. Right now, we're coming in at about $65,000 with maybe another $5,000 in projected expenses for the month of December.

Here's how it (roughly) breaks down, including projected December expenses. This is for both my wife and me.



Regular Expenses

Housing: $27,000
Avg. $2250/mo
This includes mortgage/condo fees/property tax from when we lived in a condo, rent (including as yet unpaid December rent), utilities, insurance, etc. We live in an expensive city, and our rent is higher than our mortgage was, so I'm not sure $40,000 is really realistic now that we're renting. Now, it's kind of disingenuous to be beating myself up about this without taking into account the gains we realized when we sold the condo. But that's what I'm doing!

Transportation: $500
Avg. $42/mo
Given my impassioned plea to consider housing and transportation costs together, our light transit costs should hopefully balance our heavy housing costs (a bit). As of July, our commute costs are nil, since my wife works from home and I got a rail pass from work.

Food: $10,000
Avg. $833/mo
$5,500 of this is groceries, Our grocery costs definitely went up at our new apartment. We no longer live near a grocery store, so we've been getting Instacart routinely. About $3,000 of this is my wife and I eating out together (dinner dates, brunch with friends, ordering pizza, etc.) The remaining $1,500 is me getting lunch and coffee out almost every day.

My Personal Spending: $6,500
Avg. $541/mo
This is the category I usually break down in my monthly reviews/one year purchase reviews. There's a lot of miscellany in here, but major subcategories include hobbies ($900), which includes fitness clothes and art supplies; work clothes ($550); and casual clothes ($500).

Wife's Personal Spending: $6,000
Avg. $500/mo
This is not as big as a disparity as I thought it would be… but note that I don't itemize my wife's free spending, so this figure includes all her personal eating out/coffee/drinks with friends/etc, whereas mine is reported in Food above. So really, my free spend was more like $8,000 to her $6,000.

Irregular Expenses

Moving-related: $7,000
This includes things we wouldn't have had to pay if we hadn't moved: up-front rental fees, the move itself. Some of this will be returned to us (security deposit, etc.), but not until next year. I can't say we won't have these expenses next year, as our lease is for one year so we might have to move again. But we should be able to put our returned deposits toward those fees.

Home Furnishings: $4,500
We usually spend some amount on home furnishings, but nowhere near this. I think we replaced nearly every item of furniture we own around the move.

Travel: $2,000
Most of this is family-related travel. $750 is airfare for an upcoming non-family vacation we haven't taken yet (and doesn't account for the full cost of that trip.)

Charity: $5,000
This is one area where I hope to do more before the year is out!

Invisible Expenses

These are expenses that are taken out of our paycheck before we see it; things I didn't include in my $70,000 projection and wouldn't ordinarily include in my $40,000 per year goal, but which nonetheless affect our financial state. I'm calculating this mostly out of curiosity!

Medical - $1,200
Avg. $100/mo
We pay for most medical expenses through our FSA.

Health insurance - $4,550
Avg. $379/mo

Taxes - $25,000
This is definitely a rough projection. I won't really know until I do our taxes. This is assuming our withholding is more or less correct, but a lot of tax stuff has changed this year (income, savings, property ownership) so I really don't know.

Total Invisible Expenses: $30,750

Next Steps

Sooo…. It's kind of upsetting that our total outgoings are about $100,000 year! Definitely not frugal. We have to make so much to maintain that standard of living!

That said, taxes scale with income, so we don't have to worry too much about that in a retirement/pay cut situation. (That's why I usually don't bother calculating taxes as outgoings when I evaluate how frugal I'm being.)

So, for everything else, what can we do differently next year?

I don't anticipate being able to reduce housing much as long as we stay in the same city/housing market. We'll either stay in the same place or go somewhere with equivalent rent. Given that, $50,000 may be a more realistic goal than $40,000.

But we should be able to keep moving-related and home goods down even if we move within town. This year's move was our first after a long period of living in the same place, so we took the opportunity to replace a bunch of stuff, and we were also not as savvy as I think we could have been. Hopefully, if I look back in the same way next year, these expenses will be very different. This accounts for over $10,000 this year, so getting rid of them would make a huge difference.

I don't have big problems with travel, charity, or medical.

Food and personal spending jump out as the ongoing categories with the greatest scope for cutting the fat, but they've also proved the most resistant to change. Because I love them! I LOVE FOOD. Each savings dollar is going to hard-won here.

Friday, December 2, 2016

One Year Purchase Review: November 2015


November 2015, a simpler time. I was about 2 months into my current job, and still gathering work clothes for winter. Little did I know, the winter ahead would be extremely mild, especially compared to the last one I'd experienced. Here's what I bought.

Misc winter gear - $98

This consisted of wool underwear, mittens, and glove liners.

Worth it? I'm going to go with overall "not worth it" on all of these. For the underwear, the amount of extra warmth and/or whatever other benefit you're supposed to get from wool underwear just didn't happen for me. I found the feel of it weird, and I prefer the cotton kind. The mittens were too large (I ended up giving them to my wife), and the glove liners tore after less than a year. The idea was better than the execution. I mean, I have mittens and glove liners now, just different ones.

Lessons Learned: Kind of contradictory ones. For the glove liners, it was a case of not investing in quality, but I wasn't sure I'd use glove liners (I'd never owned them before), so I'm not sure it would have made sense to do that yet. For the mittens, I did invest in quality by buying well-regarded boiled wool, and once I got them I convinced myself they were great because of their great reputation; it took almost a year of distance to realize I didn't like them as much as the $10 knit acrylic pair I subsequently got. Similarly, I wore the wool underwear even after I'd decided I didn't like them as much as my normal underwear, just because they were expensive and not returnable.

I don't think it was necessarily bad to try any of these things, they just didn't work out.

Pajamas - $14

Not worth it, I didn't keep any of these pajamas (I ended up getting different ones). The ones I got for $10 at Primark weren't even stitched properly.

Lessons Learned: Primark is cheap but boy is it cheap.

Work pants - $128

I still have the more expensive pair of these pants ($95), a light gray wool flannel pair. I'm wearing them now! I really love them. They're professional yet comfortable. I actually wear them much more often now than I did a year ago; they were too long, which looked sloppy, but I got them hemmed recently, and they're just perfect now!

The other pair, which were used, were very good until they ripped from me stepping on them all the time. My fault entirely.

Worth it? Judging solely by "have it now vs not", I'm going to say $95 worth it, $33 not.

Lessons Learned: Hem your work pants!

Software licenses - $100

These were for work tools; I bought them so that I could work from home while I was sick. It might be the kind of thing you could expense in a corporate workplace, but since I (a) work in government and (b) love working from home, I quietly took on the expense personally.

Worth It? I'm undecided since I probably could have found a free/open source way to do most of the things I wanted to do with this software. But I do still use these tools when I'm working from home, and I have worked from home more often due to pain. Definitely the ability to work from home is worth it, since I'd have to take sick days more often without that ability. So, I guess philosophically worth it.

Lessons Learned: None really. This was a rare one-off kind of thing.

T-shirts - $18

While I was sick, I got on a weird kick of shopping for casual T-shirts on eBay, most of which I didn't buy, but it was a good way to pass the time when I was super tired. I still have the amazing t-shirt with WPA-style, outdoors-themed art which I got on this kick ($10), and I viscerally remember the joy I got from purchasing the light purple men's Express T-shirt covered in skulls ($8), even though I didn't ultimately keep it.

Worth it? I'm going to actually say worth it for both.

Lessons Learned: Sadly I have to conclude that the main lesson here is "shopping brings me joy."

Jute bin - $18

Definitely not worth it, I don't even remember this.

Metallic sharpies - $7

Christmas-related, I think. Sure, fine.

The Sims 3 - $13

Ha ha! I only played this a couple of times since it only runs on my wife's computer, but probably still a good bang-for-buck considering the Steam sale price.

Ebooks - $2

Can't complain.


Summary

Total Spend: $408

Total Worth It: $245 (60%)

Total Not Worth It: $163 (40%)

Lesson Summary:
  • Invest in quality, or don't.
  • Hem your pants.
  • Go ahead with those small bursts of joy from deep-discount Steam games and eBay T-shirts in moderation.

Bonus! One Year "One Year Purchase Review" Review

I've done a full year of one-year purchase reviews! My earliest one is for November 2014. So as a bonus, I'll see if I still agree with my one-year-ago self.

Of the $657 I spent in November 2014, I wrote in November 2015 that $471 of it was money well spent. Let's see if I still agree with those "well spent" purchases.

Heavy merino long underwear bottoms - $82

Still going strong, still worth it! I actually appreciate these even more than ever since learning about the different weights of wool performance gear. Lightweight T-shirts are like 120-170 grams per meter square (g/m2). Midweight sport gear, like the equivalent of a fleece pullover, is like 220-250 g/m2. Most long underwear is around this range. These bottoms? 400 g/m2. That's the heaviest weight I've ever seen in any merino performance wear ever, and I stumbled into it without doing any research.

Winter boots - $200

These remain my go-to snow boots although I've since learned that I misread the size chart and that's why they fit so oddly. They're too big, even with thick socks. But they're so cozy and warm and waterproof and useful that I'm willing to stuff them with insoles and heel spacers and wear extra socks. Not a bad idea in cold weather anyway!

Mittens - $27

I've since replaced these in the Color Revolution but I got something very similar. How was I to predict the Color Revolution? I like mittens, so I'm going to go with "still a good idea."

Phone - $64

This phone served me well for a year and a half. I liked to brag about how cheaply I got it. But it was already a generation or two old when I bought it, so it rapidly became outdated and difficult to use apps on. I replaced it this year with a $200 phone that is 2 generations later and it was a surprisingly huge jump in quality. Still, phones are planned-obsolete so I don't think I can fault myself for not still owning a phone I got 2 years ago, especially since it was such a bargain then.

Smart lightbulb system - $90

I have to admit I still love this and I've even gotten another bulb for the system since then, although I feel ridiculous every time I spend money on this. It's soooo frivolous. And it's not as necessary now, since we've moved and our new bedroom gets more light in the morning. But when I lived in a dark bedroom, I think it was actually really good for me, especially in the winter. It sets a much nicer tone for the day to wake up gradually to light, vs. snapping awake to a shrill alarm in a night-dark room. (Also helpful? Vitamin D supplements!)

As much as I think spending on "internet of things" gadgets makes me a ridiculous, bloated, credulous fat cat, I have to admit I still think this was worth it!

The Life-changing Magic of Tidying Up ebook - $8

Obvs yes.

Summary

Yeah, I still think all the same things are worth it.

I wrote in this first purchase review post in 2015, "I thought that this exercise would show a lot of dumb mistakes, but for the most part, I got things I needed and that I still use and no longer think about because they just work. I guess it's still hard to tell if I'm succumbing to lifestyle creep, or if I was (and am) on a 'buy it for life' kick that will ultimately save me money in the long run."

I'd have to say that, after a year, my spending shows no sign of abating (and is in fact more silly than ever), "lifestyle creep" seems like a more accurate answer. Which is depressing. But I still feel like most of my purchases aren't that ridiculous, or useless, or regrettable when I review them one by one! It just always adds up to a lot. Maybe I need to exercise more restraint and buy the same things, but over a longer timeframe? And not have any more color revolutions!

Wednesday, November 30, 2016

November 2016 Month in Review


Here's what I bought for myself this month. It's worth nothing that the only things I bought post-election were luggage. FLIGHT FLIGHT FLIGHT

Necklaces - $80
Huh, that looks like a lot to me now. Buying two necklaces for $40 each seemed a lot less expensive, somehow. Anyway, I got these as two options to wear with my fancy outfit for the wedding I attended this month. I ended up wearing the one I was less confident about before ordering, so I'm glad I got them both. But I think they will both see some regular wear, and not just on fancy occasions (which are rare). I'm trying to accessorize more to improve my work fashion sense. Right now I just wear a lot of navy and gray basics, and it's pretty boring.

Boots - $116
This actually breaks down as $90 for the boots and $26 for insoles. Should I have been picky and returned the boots that weren't comfortable enough without insoles? I don't know, all I know is that Bean boots come in navy blue and hot pink now, and I NEEDED THEM.

They also both count as "seduced by sale" purchases, since the boots are normally $120 but I preordered them on sale in October, and the insoles are normally $50 which is arguably way too much for insoles but they were half-price on Cyber Monday which brings them down from "ridiculously expensive insoles" to "pretty expensive insoles." Only the best for my delicate tootsies.

These purchases were almost certainly not warranted.

Winter accessories (gloves, hat) - $23
Okay, I have a lot of knit beanies already, but my beloved Carhartt is too big for my head, so I got the brilliant idea to try a youth size. IT WORKED! And it's such a charming shade of hot pink. New favorite hat. I also didn't technically "need" more gloves, since I have mittens and glove liners, but gloves are still nice since the liners are sometimes not enough and the mittens are sometimes too much. (But really, it was spur-of-the-moment. I got caught out the first cold day without gloves, so I dashed into a store to grab some.)

Wall charger - $18
I got this to charge my new(ish) phone at work. By the time it came, though, I'd realized I have another charger already (from my e-reader, which uses the same kind of cord), so I guess I didn't need it. But it's kind of nice having two at home, since my wife and I were previously sharing one. What happened to hers? I don't know.

Backpacks - net $127
Okay, I admit to having a backpack obsession. I used to be able to get by with one backpack. Now I have three: Basic, Hiking, and Luggage. This month, with some models I'd been eyeing on sale, I upgraded the Hiking pack and added the Luggage pack. The reason I specify "net" is that it breaks down as follows:

-$75 for Hiking Backpack
+$45 for selling previous Hiking Backpack
-$97 for Luggage Backpack

The hiking backpack is the 20-liter version of the 9-liter pack I got last Black Friday. Its small size was actually a major draw for me at the time, since I wanted something that I could just carry, say, a pair of binoculars and a jacket without adding a lot of bulk. After carrying the pack on increasingly long day hikes with more and more supplies (water! lunch! camera! rain gear!), I quickly ran up against the size limit. It turns out that it wasn't a small pack I was after, really, but a comfortable and compressible one.

I guess now that my hiking pack has nearly as much capacity as my "basic" pack, I could probably get rid of the basic one and just use the hiking one all the time, but I haven't quite reconciled myself to carrying something with whistles and ice pick attachments dangling off it on the subway.

The Luggage pack is a new addition which is part of my Daydream of Being A Person Who Travels. To be fair, my wife and I are currently planning a vacation, but I don't really travel enough to have fancy luggage. I usually get by okay with my basic backpack; that's enough for everything if I'm just going somewhere for a weekend, and if I need more space, I grab a cheap old duffel which is still looking good after 15 years (which gives you an idea of how much I use it.)  

But on a recent trip, it occurred to me that I have it backwards wearing a light backpack and carrying a heavy duffel by the handles. And Practical Cranberry Nut Roll recently came back from a vacation extolling the joys of not checking any baggage. You just land in your city, and off you go with everything you need on your back. Since the trip we're currently planning is going to be that type of trip - Explore a New City, Hopping From Couch to AirBnB, Frequently Carrying All Your Things - I figured it was the perfect opportunity to get the most out of Big Backpack Travel.

Standing desk mat - $52
Something at work left our department so I stole his convertible standing desk. I got this anti-fatigue mat to help me stand for longer. This is part medical since sitting for long periods can sometimes exacerbate my pain issues… but it's also just kind of a silly, trendy thing.

Ebooks - $36
More than usual! I had some pain this month, and when that happens, I often turn to books for comfort. Some of these were not available at the library, because they were niche books sold directly by the author. Some, I could have gotten from the library, but I was too lazy. But I don't mind. I'll probably read or reference all of these books again.  

Misc clothes - $36
Nothing at Goodwill this month! Shockingly. I did not need $36 worth of additional underwear--I have enough--but the patterns were so cute.

Total: $498. Since I give myself a $500 budget, you'd think this would be okay, but that budget is also supposed to cover things I didn't report here, like the $130 worth of eating out I did.

Thursday, November 17, 2016

Cognitive Dissonance: Why We Jump Through Hoops Not To Think Certain Thoughts



My October 20 post, Sales Resistance Tactics from "Influence: The Psychology of Persuasion", touched on one of the mental biases that salespeople can exploit: our need to believe we are consistent, that our beliefs and our behaviors line up. In the "foot in the door" technique, for example, you are asked to make some small and seemingly insignificant gesture, such as agreeing to a vague statement like "I like having fun." When the salesperson actually wants something from you -- buying a year membership to the amusement park -- you will not be able to refuse without seeming inconsistent with your earlier action. This tactic is very effective because most people are very attached to the idea of themselves as consistent people. Who wants to believe that they are a mess of random decisions, easily influenced by external forces? No, we are who we are, dammit!

This is an example of cognitive dissonance, or the discomfort of holding contradictory ideas or perceptions. Our statement that we like fun is in conflict with our refusal to buy an amusement park pass. Conflict is very uncomfortable to us. We have to do something to relieve the dissonance. We have three options:
  1. Change the belief. Maybe we don't like fun after all.

  2. Change the behavior. Buy the amusement park pass. This is what the salesperson is counting on.

  3. Rationalize a way that the belief really is consistent with the behavior. For example, you might say, "Well, I like having fun, sure, but I don't find amusement parks fun." Or, "I like having fun and amusement parks are fun, but it's not the only kind of fun I want to have, and I have a limited fun budget, and this is not the optimal way to spend it, fun-per-dollar-wise." 
Notice that "accept I am inconsistent" is not on the list. This is not even an option.

The tricky part is that any way we resolve the dissonance, it will revise our self-concept and may change our behavior going forward. If you decide you don't like fun after all - if a salesperson asks "Do you like fun?" and, sensing a sales pitch, you snap, "No!" - you may come to see yourself as a ruthlessly practical and hardened person, and start to resent children and people who smile. If you buy the amusement park pass, you may start to see yourself as a real young-at-heart goofball and wind up on the mailing list for every practical joke catalogue available. Rationalizing can also send you down increasingly complex contortions.

I think about cognitive dissonance whenever I see people obviously rationalizing purchases which may not have been in their best interest. (I include myself.) The forces of advertising, marketing, salespeople, and even store layouts are adept at getting people to make purchases, purchases they later have to justify to themselves while avoiding at all costs the unacceptable belief, "I am at the mercy of sales exploits."

Here are some examples of possible cognitive-dissonance-creating realities, and ways you might reduce the dissonance.

You consider yourself an environmentalist but you drive a gas-guzzling car.
  1. Change the belief: "I guess the environment isn't as important to me as price and convenience."

  2. Change the behavior: trade in the car for a hybrid or electric model, or a bicycle.

  3. Rationalize: "I bought this car before I discovered environmentalism, so it's kind of grandfathered in. Creating demand for a brand-new car would be worse, right? Probably. Anyway, it's only for emergencies. I take the bus to work, when I get up early enough. And I recycle." 
You consider yourself a low-maintenance tomboy but you just bought $400 worth of make-up after getting a makeover at Sephora.
  1. Change the belief: "I guess I'm pretty girly after all."

  2. Change the behavior: Return as much as possible of the makeup unopened, vow never to enter Sephora again.

  3. Rationalize: "It's only while I'm actively dating. You have to look good to reel 'em in. When I've landed someone I'll stop wearing it."
(This one is based on a true story and the strategy I picked was ALL OF THEM.)

You believe that the business world is cutthroat and "survival of the fittest" means that only the best businesses survive, yet you are considering giving your son $100,000 to bail out his floundering microbrewery.
  1. Change the belief: "Maybe I was wrong about the way business works. Having a great business plan is one factor, but support or a safety net is also helpful."

  2. Change the behavior: Don't write the check. "You know what, Junior, you can succeed or fail on your own merits."

  3. Rationalize: "Business darwinism still holds most of the time, but the food and drink industry is a little different. Besides, wasn't it a very smart choice of my son to choose me as an investor? That's part of his business acumen!"
Two days ago you'd never heard of this charity, and now you're standing a hot parking lot begging unwilling Food Fair visitors to sign a petition.
  1. Change the belief: "I must really care about this cause."

  2. Change the behavior: Drop your clipboard, shout "PEACE!" and leave.

  3. Rationalize: "I'm learning a skill right now. This is valuable. I'll also score major brownie points with the cute guy from charity office. I bet he'll ask me out." 
You recognize that you have an abundance of resources while others have very little, yet you don't give to charity.
  1. Change the belief: "Actually, I don't have that much. Compared to like Bill Gates, I'm really quite poor."

  2. Change the behavior: Start giving to charity.

  3. Rationalize: "There must be a reason that I have more than others, probably I worked harder. Also, some charities are scams, and it would take a genie to tell which ones." 
As you can see, none of the strategies are necessarily 100% right, although some are more logical than others. It seems like there is a lot of fooling ourselves that comes with rationalizing and other cognitive dissonance resolution strategies. I think this is because of our desperation to avoid unacceptable thoughts, such as "I am easily influenced by others," "I am powerless," "Life is essentially random," and "Death is inevitable."

It's really hard to tell when we're actively working to reduce dissonance, but being familiar with the phenomenon may help us to recognize it sometimes (in hindsight if nothing else). I think it's important for us to do our best to take a clear-eyed look at our beliefs and behaviors and the reasoning for them, and whether that reasoning is valid, especially in situations where emotions can tend to override logical decision-making, such as the mall or the voting booth.

Good luck out there! And remember, life is essentially random, so don't sweat it.

Tuesday, November 15, 2016

Hypothetical Questions: What's the right amount to spend on an engagement ring?


Welcome to the first of hopefully many installments of a new feature: where Frugal Bagel and Practical Cranberry Nut Roll discuss personal finance & relationship questions from advice columns, reddit, forums, social media, and anywhere else on the Internet where people ask things. For anonymization and simplicity, we summarize them, simplifying them into broader Hypothetical Questions.

Our first Hypothetical Question comes up a lot in various forms.


What's the right amount to spend on an engagement ring?

Context: forum poster's fiancee requested a $30,000 diamond ring.

Nut
i can't even
it's like asking how much you should spend on a car
i wouldn't know nor care
not applicable? not applicable

Bagel
but at least a car does a thing
I buy that you have to spend $10,000 on a car (?????)
if you want the benefits of a car
but an engagement ring provides no benefit, so it's hard to justify advising more than approx. $0
like I buy things that have no utilitarian value, even jewelry
but only for amounts of money I consider small, like in the tens of dollars
I might spend like $50 for a nice necklace
I dunno, maybe we don't bother with this one, it's going to end with blah blah blah de beers corp scam

Nut
i do spend money on things that have no utilitarian value; i can see spending up to a couple of thousand dollars on a piece of art, i think
but some people spend 30k on a piece of art, i guess that's fine too
museums, for example
i think it's weird to demand that other people buy you a 30k piece of art?
i think if you're interested in that, you have to buy it for yourself?

Bagel
yeah, it's such a huge investment
on something that can easily get lost!

Nut
well, you lose things more than normal people

Bagel
a ring is a lot more losable than a statue or painting
I've never lost a statue

Nut
have you TRIED though? i bet you could!
lose a statue

Bagel
I never TRY to lose anything
it just happens!
trying to understand the mindset of demanding an engagement ring... I guess it's like a deposit? like a show of financial commitment
it just seems like a real mercenary way to look at a relationship, and counterproductive since it diminishes what is available for other things that would benefit you both more, like a house

Nut
only if you want a house!

Bagel
or whatever
kids' college fund, retirement fund, etc

Nut
sure, but if a ring is important to you, i guess i can see spending it on a ring instead. but it still comes back to spending your money - the joint money should be spent on joint priorities
which is why i don't believe in joining all money
i want to make financial mistakes
(i have made so many financial mistakes)

Bagel
I mean, the whole ring thing kind of assumes traditional gender roles where the man has a lot of money and the woman does not
so maybe she can't afford a ring
but I feel like most people who want engagement rings, even if they financially could, would not buy such a ring for themselves
it's important that it IS an engagement ring
I think they feel like the amount of money represents the seriousness of the relationship
(even though it's an inverse relationship I think)

Nut
it's a polynomial relationship?
i think that spending too little is also weird unless it's meaningful
like $50 on a special ring made of tree bark from the place of your birth or something

Bagel
if you're going to have a ring, yeah. I wouldn't bother with like frugal twist tie rings, but nobody says you need a ring.

Nut
is different from a $50 ring that's a super fake diamond solitaire thing

Bagel
yeah I think it has to be special emotionally to bother, which is why the anonymous diamond ring that looks like everyone else's has always struck me as odd
I mean, the idea that all rings have to be diamonds and more money = better relationship is successful marketing. blah blah blah de beers. but I'm not sure how to talk someone out of it without looking to them like you aren't serious about the relationship.
I would chalk it up to difference of values and not marry them, but assume that's off the table.

Nut
i guess you have to decide to what number you can go in a compromise
like how much are you willing to throw away for the sake of it being important to them
i guess people spend 30k on a wedding even if one partner isn't into it
that does happen
i don't super see a difference between spending it on a wedding or a ring

Bagel
yeah, but I bet this person wants both
if you want the ring you probably want the wedding

Nut
maybe he should say how much he's willing to spend on all wedding-related things, and she can split it up however she wants?

Bagel
hahaha turn it into a budgeting exercise

Nut
so if he says 40k for everything, and she spends 30k on a ring, that's cool?

Bagel
that's great because it's hard to argue with, yet it would completely ruin the fun of getting an expensive gift
it's like she's getting it for herself
in a practical sense it's great because it's getting them both used to budgeting with joint funds and balancing each other's priorities, which they are going to need to be able to do
but it's so unromantic and dull
I love it

Nut
Problem solved!

Thursday, November 10, 2016

Relaxation Techniques & Restlessness Remedies


I found these two lists in the same document on my Google Drive. I'm not sure if it was meant to be a post here, or just for my own reference, but I thought I'd share it, while we're on the topic of self-care.

Relaxation Techniques

  • deep breaths

  • think about your feet (takes your mind off other body parts - good for pain)

  • lie on your back and consciously relax each part of your body in turn

  • candles

  • soft music

  • warm bath/shower

  • cup of tea

  • light & fun tv/youtube videos/books

  • gentle stretching yoga

Restlessness Remedies

  • go outside!! (weather/time of day permitting of course. go for a walk, look for pokemon, do errands, birdwatch, take pictures, or even just sit in a patch of sun & read)

  • do something from your "to do" list - just one unpleasant thing gets you a treat

  • exercise (running, yoga, workout video with mat/weights)

  • home improvement/nesting (tidying, cleaning, organizing, repairing, fixing up)

  • cooking or baking
  • play (puzzle, card/board game, video game, etc.)

  • call/text a friend to say hi or make a plan (not social media likes - actually reach out)

  • writing (blog post, diary entry, short fiction, letter, etc.)

  • art (abstract, comics, blog illustrations, giftable books/cards, etc.)

  • music (play instrument, or even just putting on music to listen to)

  • learning (coursera, duolingo, brainy nonfiction book)
  • a movie with popcorn - marathoning short tv episodes can make me even more restless, but a movie can feel like more of an "event"

  • check out a new book from "to read" list from the library