Barb wrote this following comment in response to my March 2013 (insane spending) month:
You say you “earn like a princess but living like a ‘pauper’ and “live moderately, and I try hard to avoid lifestyle inflation” but you spent 263 on MAKE UP BRUSHES?
I mean, if you can afford it, go for it, but that doesn’t seem very pauper!
(And $600 on underwear? Is it made of GOLD?)
I know Barb is not saying to NOT spend (go for it, she says), but her incredulity speaks volumes.
Other than the fact that it sounds great in English (princess earning versus pauper living), that statement does have some backbone to it.
Here’s my (long-winded) response:
THINK ABOUT WHAT I EARN IN RELATION TO WHAT I SPEND
To put things into perspective, I make about $20K a month when I work. I work on average, 6 months in a year but my best years are 9 months or more. (PRINCESS)
When I worked about 9 months on one year, I saved (net, after taxes and expenses) — $130,000 in my pocket out of $180,000 gross or $145,800 net income after taxes. (PAUPER)
I aim to save about 50% of my income, but secretly want to save 75%, and generally bank $50,000 net a year when I make money.
On average, I save more than 50% of my income each year, upwards to 90% at my peak of saving (that 90% was during the time I worked for a company and traveled a LOT for work).
Or at least, that has been my average, not including a year I took to travel around Europe and Asia.
I haven’t worked much lately, but even so, let’s keep in mind that I still managed to bank about $62,000 last year after expenses and taxes which included working for a couple of months and moving from country to country.
Now that you know all that, let’s look at my income in relation to what I spent:
$263 Makeup Brushes / $20,000 Income a month
= 26.3% of what I make in a day
= 1.315% of what I make in a month
Or 0.219% of what I make in an average year.
…for makeup brushes that will last, and are not made in cheap countries.
$600 Underwear / $20,000 Income a month
= 60% of what I make in a day
= 3% of what I make in a month
Or 0.5% of what I make in an average year.
What’s the point?
It’s that in one day’s work, I could easily pay for what I just bought.
I just need ONE day.
It doesn’t take me 2 weeks or even a week to earn $1000 when I am on contract. It takes a day.
(My idol by the way is Zooey Deschanel for spending.)
Sure, it isn’t a “pauper” lifestyle for you or for most people, as in I am living on food stamps and spending $500 a month, but compared to what I make at about $1000 a day on average, I can safely say that $863 is not going to bankrupt me.
My income is irregular but my expenses are not, and I will eventually make money sometime in the next 5-10 years as I am using these items, to clear my expenses.
$263 ON MAKEUP BRUSHES – NOT SOMETHING I DO REGULARLY
These are pretty rare expenses.
See, if you read my post on “Can we trust anything in China“, I have been replacing all my cheap Wal-mart and Target makeup brushes with ones made in Japan and France from MAC.
I already set aside $10,000 as a budget to replace all my cheap things and $863 comes out of that.
The last time I bought makeup brushes was when I was on a trip to Target last year, and the time before that, was about 2 years before that, when I bought my first 2 MAC brushes (which I kept, by the way).
I don’t plan on replacing these makeup brushes for the rest of my life, but in the event I have to, they SHOULD last at least 10 years based on what I have been told in terms of how great MAC brushes are.
(My 2 brushes from 3 years ago are still like new.)
Even if they only last for 10 years, that’s $26.30 a year or $2.19 a month. Other brushes I had, wore out in no time, shedding hairs all over my face when I used them.
Good quality at fair wages costs money.
I didn’t pay for the right items before last month, because I was being cheap with my money (I thought it was being frugal at the time), but I’m sucking up that mistake and paying for it now.
I am being conscious now to pay once, not twice or thrice.
$600 ON UNDERWEAR – AGAIN, NOT A REGULAR EXPENSE
$600 on underwear, is the cost of underwear not made in Third World sweatshops where they could use harsh chemicals that seep into your skin and absorb into your private parts and cause health problems.
(80% of these chemicals wash out on the first wash, but 20% remain and “release toxins slowly” during each wash, as per Greenpeace’s research. Just think about that. Victoria’s Secret was my entire underwear wardrobe and I’ve junked it.)
The underwear I bought is from Cosabella, it’s made with European cotton in the U.S.
BF recently purchased boxers made in Canada by Stanfield’s, and they cost $30 on sale. The original price was $35 or $40 I think.
For ONE pair of men’s boxers.
For women, it always costs more because we’re considered flighty creatures who would pay a lot of money for very little fabric. My underwear cost $39 (before taxes) for a single pair and I needed 7 for the week.
$39 X 7 = $273
And 2 new bras:
$160 x 2 = $320
Plus taxes of 13%.
Like makeup brushes, I also don’t buy underwear daily, monthly or even yearly.
The last pairs I bought before this month, was about 4 years ago, and they were cheap ones from Victoria’s Secret where the elastic stretched out, it had started ripping and pilling, but I didn’t care because I was being cheap and too lazy to go out to buy new pairs.
(I contemplated sewing them tighter, actually.)
These pairs should last me about the same amount of time — 5 years, but I am hoping they won’t start to disintegrate about a year after wearing them, and I am no longer keeping a stock of underwear.
$600 for my underwear / 5 years
= $120 a year as cost-per-wear
= $12/month as cost-per-wear
You find it expensive, but if I had been proactive on replacing my underwear, I would have needed to replace the cheap crap I bought, every year.
Let’s do the math to see how much more I’m really paying:
For $30, I could buy about 3 pairs or more of underwear at Victoria’s Secret, or $60 for 6 pairs (enough for a week) and pretending that they actually last 6 months to a year.
They’re still making a sweet profit margin, but the material is suspect, and so are their labour practices as well as their quality.
So in contrast, buying cheap underwear:
At $60 for 6 pairs and $50 for a bra
= $110 a year (every year) assuming you don’t go to Dollarama
= $10/month as cost-per-wear
The cost-per-wear works out to be about the same give or take $10 a year, but I am not freaking out about the way they made what I am wearing, the guilt over the labour being used to produce them, and my things are lasting longer.
Which brings me to my next point:
CAN YOU REALLY PUT A PRICE ON YOUR VALUES?
My values have drastically switched to fair trade, fair labour and to avoid suspected toxins, which is why I created that $10,000 budget to replace major things.
So I ask you:
Can you put a price on what you believe in?
Can you really put a price on your health?
Can you put a price on cheap labour that forces other people in other countries to literally be our economic slaves all for the sake of super low, cheap prices?
They can’t even afford childcare in China, but they still need to take care of their kids, so they chain them up at work while they work.
I am not joking, here’s a photo:
It’s easy to shame me for spending $5000 last month, isn’t it?
It’s easy to say with sheer incredulity:
OMG how can you say you save money and are smart with it, when you spend like crazy on underwear?
$600 is insane!
….until you look at the faces of the innocent children of those workers who are trying to make a living.
Once you put a human face to what your cheap underwear costs, it changes your perception, does it not?
You think underwear at $600 is expensive and it should be “made out of gold” to quote your words, but you actually don’t understand what it costs to pay a worker real, respectable living wages because you’re too used to paying for cheap labour items from Victoria’s Secret, even J. Crew and Dollarama.
We’re all too used to low prices that are kept artificially low by the Chinese government regulating the RMB currency, and because I, like many others, was a lazy consumer who would have rather saved that money in our pockets than give it to someone for fair wages.
It IS my fault for having just looked at prices in the past and thinking the same thing:
$39 for some underwear? Are you kidding? I can buy 3 pairs for that price.
Those stores are making a pretty decent PROFIT off selling 3 pairs of underwear at $30, or $10 each.
Let that sink in, because at $10 per pair of underwear, how much do you think it cost for them to make a pair of panties as in raw materials and labour?
A buck? There’s not much material, and it’s not even good cotton to boot.
Then you factor in marketing, advertising and First World country selling, and it’s maybe $3 for a pair of panties, and they’re taking $7 in profit. Maybe $5 to be conservative.
I was so used to paying low-labour prices that I gagged a little when I forked over $600 for underwear.
It’s an insane amount of money based on what I used to spend before (3 for the price of one!), but if that’s what real goods at fair prices costs, then that is what I am going to damn well pay.
As another example, just I recently paid about $40 for 8 handkerchiefs made out of organic cotton manufactured in Canada.
Because I don’t know where the other handkerchiefs I had were made, and I’m constantly using them on my face, so I might as well use something that won’t make me sick in the long-run due to dyes, pesticides and whatever else they’re putting in handkerchiefs.
(Also the organic cotton ones are amazingly thick and absorbent! I prefer them to the other thin ones, truth be told.)
I also paid $7 for a single scrunchie for my hair.
Why? Because the fabric and the manufacturing is all done in the U.S.
That’s what it costs for a scrunchie bought at fair wages. $7.
Everything costs at least 5X (sometimes more) more when you take into account fair wages and profit, especially when you realize that stores like Banana Republic, Zara and their ilk are always putting everything on 50% – 70% ON SALE!!… but stores like American Apparel rarely every give a sale more than 10% – 15% off even on a good day.
On to my next point:
IT IS FRUGAL WHEN YOU CONSIDER THE LONG-TERM IMPLICATIONS
Never mind the financial side of things with cost-per-wear, as demonstrated in my underwear example above that point out how it is not that expensive in the long run.
You think it’s not a frugal or befitting of the “pauper” moniker, but when it comes down to it, I am not putting a price on my health just to save a penny.
I set aside $10,000 as a budget this year to replace everything that matters, and I am not buying multiples this time (too expensive to buy multiples!!!).
Happily, this serves a double purpose of cutting down on having stuff, which helps my minimalist streak.
The way I see it, — if I got sick and contracted a disease or a cancer (as many of my family members have), I am willing to pay any price to save my life, and give up my entire fortune to cure anyone I love.
I’d even be willing to go into debt to save someone I love, someone like my mother if she got sick.
So why wouldn’t I pay the price now and prevent any possible problems, even if they are a 1 in a billion chance that I am overreacting?
This is exactly what I’m doing.
You will notice my Gift section from March 2013’s budget was pretty high as well, as I replaced all the cooking and food-use items at my parents’ house because I was concerned for their health as well.
What is $600 to me in the long-run, to make sure that I don’t screw up my body and cause problems with just a little preventative action?
What is $600 when I am dying of an incurable disease that no one can figure out because all this cheap, possibly toxic crap has only recently entered our markets?
Being rich is useless if you’re unhealthy and on the verge of death, and there’s no price you can put on peace of mind.
I’d pay $600 million if I had it, to be healthy and whole again if I was sick.
Maybe I’m overreacting, maybe I’m paranoid and a hypochondriac, but I am not the only one who thinks this.
There are plenty of people out there who are just as paranoid as I am, which makes me feel like there is something, however minuscule of a real problem it might be.
We are living in a world where we’re starting to realize that things are not really that safe for us, and not regulated by our governments whom we trust with our lives.
Did you know that the U.S. approves over 2000 chemicals each year, and Canada approves over 1000 chemicals a year?
Do you think they’re checking all of these chemicals before letting companies use them? I’m not so sure. It wasn’t so long ago that we all thought plastic and even PFOA in Teflon was fine to be re-heated in a pan or used in products, and it wasn’t until someone did the studies, that they realized it was releasing toxins into our food and causes serious problems.
But Teflon was on the market for so long, and it is even in things like rice cookers that I used for many years!
How about food as an example?
Buying cheap food in Dollarama would certainly increase my net worth hand over fist, but what’s the point of eating cheap, canned food preserved in chemicals, when I have the means to buy fresh food?
Money accumulation is great, but it is not the be-all and end-all of my life. I still want to be healthy and alive to enjoy my savings (and I want to enjoy it now too).
Life isn’t all about expenses being as low as possible — if I thought that, the logical route would be to kill myself so that I spend $0 for the rest of my life. Literally.
That’s morbid, but it’s the rationale I repeat to people who tell me that they want to spend as little as possible on their life, and that spending even $3 on a pair of underwear is impossible to fathom, let alone $39.
What’s the point of living then? It’s not a life worth living.
LET’S LOOK AT WHAT I DON’T SPEND
Now that you have a bit of history of what I earn when I work, and what I spend in relation to that income, and my values, tell me what YOU earn and spend before you judge me so I know where you’re coming from.
Do you have a car loan? Maybe a mortgage? Credit card balances? Lines of credit?
Do you go out to eat on a regular basis? Maybe pick up a drink around the corner once in a while, with a bag of chips?
How about buying convenience foods? Do you cook everything from scratch, even your sauces?
Regular treats like smokes? Coffee? Tea? Doughnuts? Bagel in the morning? Junk food?
Do you buy commercial shampoo, conditioner, body washes, and on a regular basis?
Do you pick up laundry detergent every 3 months or so, with a side of dryer sheets?
Maybe get your hair dyed on a regular basis, and cut every 3-6 months or so?
How about manicures or pedicures? Spa days? Facials? Massages?
Do you take a cabs on vacation, or even around the city?
Do you buy commercial cleaning products that smell nice and make you feel like your house is squeaky clean with just a spray that kills odours but leaves bacteria behind?
Now how much is all of the above relative to your income and how much do you save each year?
See for me, I don’t have any of those expenses, and things like treats (coffee or macarons) on a regular basis.
All of what I DON’T spend, is in addition to being a conscious spender who doesn’t want to use, eat or wear cheap things.
I save a lot, I spend my money, and I splurge on things I see a value in.
I have a drink at Starbucks when I am out to meet friends as a treat. That’s it.
I buy a drink there, when I have a social purpose to do so, otherwise, I am not spending money on drinks on any kind of regular basis.
Now let’s imagine you DON’T do all those things because you are frugal at heart and live on $100 a month, I’m going to be a big self-righteous, obnoxious brat and point out the obvious:
The majority of folks don’t make my kind of income and spend as little as I do, relatively speaking.
(Taking into account I also set aside a budget of $10,000 to replace everything this year.)
I don’t need to spend as little as I do, comparatively speaking. I choose to forego mini, daily luxuries like a Starbucks Green Tea Latte, and I choose to cut back on things that have little long-term value for me.
Princess, meet Pauper.
Most people I know in my income bracket, unless they’re “early retirement extreme” folks, spend every penny they have and then can’t figure out why they’re barely making it.
- Almost Rich – Making $160,000 a year and barely making it
Some are even in debt and think it’s fine.
I haven’t been in debt since I cleared my loans back in 2009, about the same time I stopped dying my hair, and started going to a hairdresser once a year (when my hair gets really unruly & needs a trim).
My cleaning products are basic ones: white vinegar, baking soda, soap, water and elbow grease. I don’t even buy laundry detergent or dryer sheets.
I’ve even given up commercial toiletries as of late except for things on my face (even those have turned natural), and I have been using soap nuts ($18 for a kilogram) as a shampoo, without any conditioner on my hair at all.
Generally, food is my largest expense each month because we buy good organic food, and cook at home. I tend to spare no expense in this category.
I don’t go out to eat very often these days.
When I do, it’s to meet friends for a social visit, and it’s to trustworthy (read: expensive) restaurants that won’t kill me with their rather questionable cooking methods and ingredients (source: The Food Network especially Guy Fieri cruising out to these restaurants, or Restaurant Makeover shows), and I definitely don’t pick up convenience foods whatsoever.
When I do travel, I spend the most that I can to go where I want, for as long as possible while being reasonable.
As an example, I traveled around the world in 2011 to many cities and countries for about $20,000, staying in low-budget hotels, eating (good food) in grocery stores not restaurants, and taking the bus/train/metro/walking everywhere I could.
CASE IN POINT: WHERE I WENT FOR 2011 FOR $20,000
TOTAL COST OF THOSE CITIES? $20,000
When I figured out the cost, people told me it was impossible to spend so little to travel where I did.
My aunt said she spent $10,000 just going to Paris by herself for 2 weeks (!!) but I know what is important to cut and what isn’t in a budget for me.
Cabs, fancy hotels and restaurants out each night are not important to me. Good food is.
Saving money on cheap underwear or suspect goods is not important to me. My long-term health & well-being, is.
So while I have expenses that are quite rare and are very high to you, it’s because I am literally putting my money where my mouth is, and living a conscious lifestyle based on what I want to spend my money on.
…which is the whole point of why I saw a value in spending $600 on underwear and $263 on makeup brushes.
You don’t have to do it (your values are yours, you can continue to ignore everything I’ve said), but you certainly don’t have any right to shame me for it either.
(Especially since you’re not the one living or paying for my life.)