Wednesday, August 13, 2014

Discretionary spending

Just this morning, I read an article in Redbook called "What your spending says about you." (If you're wondering, by the by, how I came to have a subscription to Redbook in the first place, it was a freebie I got for taking some survey or other.) In this article, three successful businesswomen in their 30s share their "discretionary spending" over the course of a week, showing pictures of their purchases and the price of each item. At the bottom of the page, accountant Clare Levison—the author of Frugal Isn't Cheap: Spend Less, Save More, and Live Better—analyzes their expenses and suggests strategies each of them could adopt to save.

What struck me about the article wasn't Levison's money-saving tips, most of which I'd heard before, but the sheer amount of money these women went through in a week. Two of them spent around $220, and the third splashed out with a whopping $492. Their highest spending categories were:
  • Clothing. One woman went shopping with a friend from out of town and ended up spending $67 on a new dress, a T-shirt, and a swimsuit for herself, plus another $11 on a onesie for her soon-to-be-born baby. Another, a subscriber to a clothing subscription club called Stitch Fix, received a $185 box of clothing from them (five items, including a pair of jeans, a blouse, and a huge costume-jewelry necklace) and spent an additional $62 on a pair of ankle-strap heels and $40 on frilly underwear. Levison's advice to her was not, for some reason, to give up the clothing subscription; instead she said to promptly return any items she didn't love, and also to use coupons when shopping elsewhere.
  • Personal care. The lady with the clothing subscription also subscribes to a similar service called Wantable for "makeup, jewelry, and intimates," which she describes as "so good for the working mom." That may be true if the working mom has lots of cash to spare; the box she got from them contained five cosmetic items costing a total of $36, and she spent another $18 elsewhere. The second subject bought only three items—a pot of foundation and two bottles of what might be shampoo—but they cost a total of $64. The third didn't buy any cosmetics, but she spent $84 on a haircut.
  • Food and booze. The editors said their definition of discretionary spending left out "the things on the must-buy list, like gas and milk," but they apparently included food items that they decided should count as luxuries. These included all meals eaten out, all alcoholic beverages, all beverages purchased on the go, and certain grocery items that were deemed luxuries, including fresh fruit for the woman who lived in Juneau and ice cream for the pregnant lady. Even whole foods bought for use in recipes (fresh coconut, fresh herbs, lemons and limes) were dinged as unnecessary purchases. For one woman, a food blogger and cookbook author, luxury foodstuffs accounted for $83 of her $225 total.
Now, admittedly, some of the purchases the editors labeled as "discretionary" were questionable. While wine and desserts may be unnecessary, you can't be a cook without buying ingredients. Cosmetics may be luxuries, but I think most people would consider shampoo a necessity. And I certainly didn't understand why the $20 the Brooklyn dweller put on her MetroCard was labeled as unnecessary spending. (Maybe the idea was that, since she works from home, she doesn't really need to go anywhere.) But even so, these totals seemed awfully high to me. I mean, hundreds of dollars of discretionary purchases in a week? A month I could understand, though I'd still consider it on the high side. But a week? Do most women buy themselves a new outfit and over $50 worth of personal care items every week?

Then I wondered if maybe I was being too judgmental. Maybe my own discretionary spending was actually higher than I realized. So I decided I was going to put my own budget to the same test. I went back over all my purchases for the past week and pulled out all the items that I thought would be considered unnecessary according to the editors' criteria. I counted only my own purchases, not Brian's, since that appeared to be what the women in the article had done. I didn't treat the money I spent on fresh produce as an unnecessary purchase, since I don't live in Alaska and I'm not paying inflated prices for it, but I counted all the foodstuffs that could be considered treats rather than basic nutrition. I also, after some hesitation, included the bottle of body wash I bought, since I could, in theory, bathe with ordinary bar soap instead (though I don't think it would actually save me any money). So here's my week's discretionary spending. All prices include tax, where applicable.
  • Bath Basics coconut shower gel (to replace an existing bottle that was nearly empty): $5.34 at Rite Aid. This is actually a 3-in-1 bubble bath, shower gel, and shampoo, but I use it only for bathing, so a quart bottle lasts me several months.
  • Five pounds of organic, Fair Trade baking cocoa: $53.27 (including shipping) from Dean's Beans. I've stopped buying my coffee from them since I found a better deal at IKEA, but they're still the cheapest source I've found for Fair Trade cocoa, even with the shipping costs. The new bag actually hasn't arrived yet, so I photographed the old one, which we bought in January and have nearly used up.
  • A bottle of diet cream soda: 82 cents (on sale) at Stop & Shop. The limes you see in the picture were actually bought just over a week ago; there was a big bag of them on the reduced-price rack for $1.63, and Brian had the idea that we could use them to make our favorite non-alcoholic cocktail, a Knightsbridge. (Actually, it's only virtually non-alcoholic, because it contains a dash of Angostura bitters, together with cream soda, ice, and the juice of half a lime.) We bought one bottle of cream soda at the same time as the limes, then went back for a second bottle so we could share some with friends.
  • Two bags of kosher marshmallows: $4.28 (on sale) at Stop & Shop. As a semi-vegetarian (or "conscientious omnivore," if you prefer), I don't eat regular marshmallows, which are made with gelatin, a slaughterhouse by-product. However, I enjoy making s'mores over the coals from our barbecue grill, so I like to pick up a bag or two of kosher marshmallows (made with fish gelatin) when they happen to go on sale. These were reduced from their regular price of $3.29 a bag to $2.
  • One can of whipped cream: $3.19 (on sale) at ShopRite. I go through a lot of this stuff, but as luxuries go, it's not that indulgent: only 15 calories for a 2-tablespoon spritz. We go through about a can a month.
TOTAL: $66.90. This is actually a bit higher than average for me, thanks to that $53 bag of cocoa, but it's still way lower than what any of the women in the Redbook article spent.

So what, in the words of the Redbook article, does my spending say about me? Well, first of all, obviously, it says I'm not a big spender. It also appears to say that my favorite luxury items are foodstuffs, particularly foodstuffs that are Fair Trade and organic. It says that I'm concerned about animal welfare, what with the kosher marshmallows and the cruelty-free body wash. And it says that I'm a pretty avid bargain hunter, since nearly all the luxury items I bought (plus quite a few non-luxury items, not shown in the picture) were on sale or purchased in bulk to save money. In other words, it says that I'm ecofrugal, which is just what you'd expect it to say.

And, if Clare Levison wants to tell me how to trim the fat in my budget, she'd better bring her A game.

Anybody else want to play this game? Just post your list in the comments, or link to a blog entry covering the same topic.
Post a Comment