My Money Habits

I think our spending habits depend a little on our personality and a lot on our priorities. People who love concerts spend money on concerts. People who like to travel, spend money on travel. We put money into things that help us meet our basic needs, like food and shelter. But also into things that make us happy. While spending and money habits come naturally, in whatever form -- good or bad -- they might take, there is still wiggle room to make changes to increase your happiness or the number of dollars in your savings account.

Let me preface this post by saving that I’m definitely not a financial expert. I’ve always been frugal, a classic under-buyer, so when a few friends asked me how I bought my home and still afford to travel, I didn’t think much of it at first. But years of saving, squirreling away my money for a rainy day gave way to the nest egg I needed to make a major purchase - buying a house while maintaining a commitment to myself to travel.

Let’s dive deep into my money habits:

Credit Cards

My financial habits were formed early. My mom always made purchases with debit cards, not credit cards, and I this made an impression on me early on. Subconsciously her reluctance to use a credit card transferred to me. Spend the money you have, not the money you think you have.

I didn’t get a credit card until halfway through college and even then I never used it, too afraid that one purchase would lead to another and I would be burdened with credit card debt. I had read enough stories about women racking up credit card bills that they couldn’t pay down and knew that I didn’t want to end up like them. It wasn’t until my mid-twenties that I figured that with my pragmatic, responsibility-driven personality, I probably wouldn’t let myself drown in credit card debt. Student debt, sure. But not credit card debt.

Now I almost exclusively use credit cards, accumulating points and cash rewards that can then be redeemed later. Credit cards can really work to your benefit if you are vigilant about paying them off and not subjecting yourself to the high interest rates. I use them for everyday purchases like groceries, coffee and Target runs. This builds my credit, all the while giving me cash back to spend on travel. For my recent trip to Argentina, I reimbursed myself several hundred dollars worth of cash rewards. It made me feel better about splurging on the expensive trip.

Accumulating credit card points all year round help me accumulate cash-back to spend on travel. 

Accumulating credit card points all year round help me accumulate cash-back to spend on travel. 

Travel-specific credit cards allow you to accumulate points and avoid pesky fees while abroad. 

Travel-specific credit cards allow you to accumulate points and avoid pesky fees while abroad. 

Things I don’t spend money on.

I don’t care much about the latest fashion. This for sure helps because I am not the kind of person who will go out and change my wardrobe with each new season. In fact, the dress I am wearing as I write this is a few years old. I want to look cute, but I don’t need to be on trend. My aversion to shopping helps as well. I can typically shop for about an hour before becoming agitated and desperate to leave.

I also don’t spend much money at restaurants or bars. On average, I go out to dinner once a week with my partner Mark and once for lunch during the workweek. Sure, sometime I go out to dinner twice in a week, but that’s more the exception, not the rule. While it’s fun going out to eat, I don’t make it a habit. Besides, It’s almost always more cost effective to get groceries and cook for yourself than to go out. And it’s healthier too.

Consider leasing instead of owning.

Whether it is a car or a house, sometimes leasing can make more sense than owning something. Last year, the day before Thanksgiving to be exact, a car ran a red light, slamming into my Honda Fit, scaring the hell out of me and totally my vehicle. Fortunately, I was not seriously injured but my car was done for - something I had poured thousands of dollars into had been destroyed. Insurance allowed me to pay off the car and get a little bit of money for a down payment on a new vehicle, but the money I had already spent couldn’t be recouped. Frustrated, I decided to lease rather than buy my next car. As someone who doesn’t drive all that much, this made a lot of sense for me. Now my monthly payment is lower, as is my car insurance, and I am able to save a little more money than I could when I had my old car.

Save a little every month.

Each month my checking account automatically transfers a hundred dollars to my savings account. Over the course of a year, that’s $1,200 that is scurried away. That is good money that could easily cover a domestic vacation or maybe even an international getaway depending on what season (and the destination) of your vacation. However this dedicated stream of cash to my savings is typically not the only money I am saving each month. Before buying my house I would save a couple of hundred dollars each month.

Don’t spend more just because you make more. My rent and now my mortgage has increased considerably since I originally came to Sacramento, but the rest of my spending habits have remained fairly stagnate. Weddings, special occasions or trips call for an influx of spending, but for the most part, I have not increased my spending habits in tandem with my salary increases.