With holidays sales galore, it’s very easy to go overboard on spending. You work so hard saving your money all year only to blow it on some trendy tickle me Elmo doll that goes unplayed just a month later. Computer gadgets seem to be particularly popular as companies such as Apple discount their Macbook Airs by an uninspiring $100 dollars, and their iPad 2s by an even more unexciting $50 dollars off.
I’ve got a perfectly healthy 3.5 year old Macbook with 4 gigs of RAM and a 120 gig hard drive. Even though I just spent $29 to upgrade my OS to Snow Leapard to improve the operability of my computer last week, I still almost couldn’t help but buy a MacBook Pro for $100 off! Shopping is like crack where one saves more if they buy more.
Recognizing I have a problem with spending, I wrote out a list of things I wanted to buy: socks, shoes, cards, ties, toys for the kids, Macbook Pro, 40″ LED TV, round-trip to Hawaii, and a 2012 Porsche 911 Turbo in black. You know, the usual list of things every minimalist needs to have. Hey, gotta throw something really sweat in there right? Adding up the items excluding the Porsche, came out to a not cheap $3,500. Yikes! That’s a lot to spend in one weekend.
COMING UP WITH A FUN GAME PLAN
I don’t know about you, but I don’t particularly enjoy spending $3,500 on things that aren’t necessities. Socks, shoes, cards, ties, and toys are necesities, since they wear out and I’ve gotta get my nieces, cousines, and nephews something. However, the rest are just wants that anybody can do without.
Hence, in order to justify any spending, I made a pledge to only spend money if I were able to make online income between Thanksgiving to November 30. Furthermore, I could only spend as much as I made during this time period, and not a penny more. I gave myself a challenge to not just accept the fact everybody is on holiday and that things are slow. Instead, I made it my mission to contact all loose ends to see if there was any business to be had.
The other presumption is that I would pretend I’m flat out broke. If daddy didn’t work, there would be no food on the table or Elmo under the tree. Ready, set, go I was motivated now!
THE STRATEGY
With most Americans not working from Nov 23 to Nov 27th at least, I decided to cross out my list of American clientele. Instead, I went through the database and pinged my English and Australian clients one by one on Thanksgiving morning. Fat chance anybody would respond or have anything anyway, so I decided to also create a “Spam Back A-mail” that I would send to anybody who spammed me for solicitation. The Spam Back E-mail should contain a nice greeting, your advertisement page, and some rate ranges. You gotta create on of your own, they are awesome and effective about 25% of the time!
After sending just three follow up e-mails to clients in the UK and Australia, I was able to get a lead that lead to a $1,100 ad! It was almost like finding a wad of hundred dollar bills in the backyard because I decided to look. The UK client responded back thanking me for reaching out and that he was surprised to hear from me since things are pretty slow nowadays with the US holidays. In fact, if I didn’t ping the client, he probably would have called it a month or done business with another client in the UK where there isn’t a holiday.
With $1,100 in the PayPal account I got the green light to buy some shoes, socks, cards, ties, and toys with around $600 left over. $600 might be enough to buy a 42″ LED TV on sale, or a non-holiday round trip ticket to Hawaii, but not both. $600 certainly can’t buy me the cheapest MacBook Pro for $1,220 after tax and $100 off! But you know what? That’s OK! I used the money to pay for the necessities, and now I have several more days to try and make a couple thousand dollars more to warrant the purchase of the other items on my list. Furthermore, I’m going to see if the client would like to advertise with other Yakezie sites.
MONEY IS A GAME, SO CREATE A GAME FOR YOURSELF
Making money is one big game after a certain level of income sustenance. We all know that we don’t need that snazzy computer, or another big screen TV. We get in trouble when we let our desires overrule our finances. As a result, we get into credit card debt and begin the cycle of blowing up our finances.
Instead of going into debt or pounding a hole through our savings to buy things we really don’t need, we should create a game to justify our spending habits. If we are able to make extra money within a certain window of time, then we can treat ourselves to our desires. If not, no big deal as we don’t need those things anyway. If we really, really want those things, then we will try extra hard to make that side hustle money. And if we don’t, we probably won’t even try and just stuff our faces with mashed potatoes.
A lot of us make online income simply because clients come to us. Guess what? We can follow up and go to clients as well and work a little bit while others are playing. Not everything is about making money and it’s really nice to relax during the holidays. But if you are like me, and like to buy nice things you don’t need sometimes, pretend you are poor and try and make some extra money beyond what you normally make. That way, you’ll sharpen your senses, perhaps build new relationships, and you’ll never go broke in the process!
Photo: Downtown Union Square San Francisco on Black Friday. Sam.
Regards,
Sam
I like to always imagine how much everything costs in PRETAX dollars. If the pair of shoes costs $200, then it really costs more like $250-$300 in gross income! Whenever I goose anything up by 30%, my interest in the item decreases.
It really does amaze me how much money people have and can afford. I was at the Apple Store too and people were buying $1,300-$1,600 computers like pancakes! Is everybody rich and earning that much? I guess so!
Peter
Absolutely. Thinking in pretax dollars is definitely a way to curb spending, especially huge ticket items like a car! $50,000 car = $85,000 gross income makes it that much more painful!
I think people really do have that much money. From 18 year old kids to regular old adults, everyone was snatching $500-$1,600 computing devices left and right.
I know I feel way too guilty buying a new MacBook Pro since my Macbook non-Pro works just fine. In fact, I actually don’t think I can afford it, paying close to $2,000 in gross income for it. Hence, why I’m on a mission to try to make that extra $3,500 during this holiday weekend.
I think the issue is that Apple has created such a fantastic brand that even $100 off seems like a great deal. This is considering that their products almost never go on sale. Ofcourse I am not trying to justifying buying, but it does speak to the psychology of the Apple fanboy.
Nice strategy! Although if I did that I would really never buy anything…(I have the opposite problem of a compulsive shopper).
Hmmm…this was supposed to be a reply to the first commenter but it did not show up as such (about adding on the pre-tax dollar amount to any purchase).
I like that you set a goal to earn some extra money before doing any shopping. Very smart! Shopping really can get addicting when suddenly everything is on sale and the more you spend the more you save. The dangerous deals are the ones where you have to spend X dollars to get Y free and the ratio is usually not that great, like spend $200 to get a $10 free gift card or something.
I got some practical things I’d been waiting to buy through Black Friday sales today which was nice. I think I spent way too many hours searching through all the various online sales this year though. I did make it out to a few shops earlier today to check out what they were offering in stores and wow were the crowds huge. I saw one woman sitting down and she had 5 huge Gap bags stuffed with clothes. It’s no wonder she had to sit because I don’t know how she’d carry all of them on her own. I sure hope the retail sales were good this year so we can get a boost in the markets.
I hear ya on the bad discounts! I think Apple products have bad discounts too, so it really has to only be when I absolutely need the product and would buy it anyway when I will buy.
I saw Gap have 60% off, so those are good sales if you need the products. I’m trying to get rid of all my clothes, since I only wear like 30% of them. Hope you continue to find some good stuff!
I have been similar to Peter. I always calculate what the item really costs and how many days I have to drag myself into the office to pay it off so to speak. Regardless though, if it something that I really really want to do or have and that I will regret if I don’t get it, then I buy it regardless of the price. For me, being money smart is saving on the things that don’t matter and spending on the things that do.
“being money smart is saving on the things that don’t matter and spending on the things that do.” Brilliant comment! Summarizes things very nicely.
Speaking of clothes. I have downsized my wardrobe to the things I wear. For the longest time, like you I was only wearing 30%. What a waste. I have since donated the stuff and now have a lot more space.
[…] issues containing your shopping beast? I just wrote a new post on Yakezie.com called, “Controlling Spending The Fun And Easy Way“. Go check it […]
Black Friday fighting & crowds – bullish?
Also, I’m interested in the sort of ad sale you’ll need to do to get that Porsche 911. If/when you pull it off, just don’t try to reenact the chase scenes from Bullitt… unless, of course, you film it!
Definitely bullish. On Black Friday, I decided to not only do a little socks shopping, but dumped a large chunk of cash into the markets in the 401K. The mother fund is up 10.5% vs the market down 7.6%, so I figure it was too risky to be only 3.5% equities and 96.5% cash after this pull back. Who knows, but I’m willing to take a more positive view after this recent sell-off.
Hoping for the best!
Definitely bullish in my mind, but I guess we’ll get the retail sales figures come Monday or a week from Monday.
I hope people are spending to oblivion given I just allocated half my portfolio into the stock markets! Let’s go consumers!
I always thought I was the only one who creates a “game” out of things. I thought it was because I loved card and board games as a child. When I learned about games and strategy, it hit a chord in my brain. I use games, goals or strategies to do almost everything. When I shop online, I won’t consider buying unless I have x% discount to retail. I look for rewards to justify a purchase. It is also a good way to deal with things you do not want to do. You know those boring or tedious things you have to do. You can make a game out of those things too.
That’s a good point on loving card and board games! I love card games, so perhaps that’s why I love to play games with money as well.
I hear ya on the % discount to retail. 5% discount at Apple? Gimme a break! Gimme 40%+ or BUST! lol
Love your positive attitude Sam.
And are you truly 97% out of the market in all your investments? What has been your highest percentage invested in stocks this year?
The highest percentage invested in stocks this year was 100% at the beginning of the year. I sold 70% on April 29 when performance was up 11%, rode the markets down and went back to 100% long in mid September, and then went 97% cash on Nov 15 corresponding to Elle’s 50/50 challenge. Finally allocated 50% into stocks on Black Friday and will keep this balance until year end most probably.
I figure, since I have no idea which way the market is going, and if the markets rebound 3%, I lose 2.9% in outperformance since I was 97% cash, I might as well hedge and jump back in after the correction. I can’t see the markets selling off more than 5% from here i.e. S&P 1,100 as a floor, but I could see the markets rebound. Who knows! I’m never going to get rich making 10% a year, however I loathe losing money. Capital preservation!
Are you buying ETF’s of the market, like spiders? I am curious, cause I’m more of an old fashioned buy and hold, with changing market allocation to re balance annually.
Yes, ETFs that are basically index funds, or mutual funds. My primary concern is exposure in the mother fund. I have another account where I just punt around and pick stocks.
I rebalance at least once a quarter.
I like your plan. Creating an artificial sense of scarcity in order to motivate yourself to earn more is great in itself. I love that you also limit your spending to the extra money earned. That’s a great way to control your spending. Although I don’t play as many games as I should, I do often have preset percentages/amounts for certain investments/expenses that are paid first to keep us on track.
Yeah, playing games just makes things a little more fun and keeps spending in check. I could spend a lot of money and let lifestyle inflation really creep in if I’m not careful.
Even though I was able to buy my favorite Tod’s loafers on sale for work, I still am not 100% convinced as they still are $315 after tax (from $475 after tax), which is about $160 after tax more than I usually spend on shoes. I figure I wanted to go with less items higher quality, but it still feels weird spending so much.
Good stuff here, Sam. I like the way you’re defining the source of spending, and limiting it in that regard – yet theoretically it could be unlimited. You challenged yourself, had some fun with it (or so it seems), and ended up succeeding. You’ve earned your ability to spend. Such games are a win-win, I think.
Yep, it’s like Yin Yang and The Mental To Physical Connection For A Healthier Lifestyle!
Often times, I just end up not spending the majority of anything I make, since when you have to really work at making extra money, the last thing you want to do is spend it on useless desires.
That’s an excellent strategy that I might have to borrow. ;) I think if you can use your online income to fund the holidays, it’s as if you’ve broken even. Now, what’s your plan for the 911?
The plan for the 911 Turbo is simple: Make $160,000 in online income in the next several days, and if I do, buy a poster and laugh at the idea of ever spending that much money! Gotta earning $1.6 million for me to be able to think about taking down such an expensive vehicle!
I do try to get that side hustle money. It is a good way to give myself a pat on the back. I think it is very important to reward yourselves sometimes, often times though, this is what keeps me going and motivated to make more money.
I agree. We should do more back patting, at least in secret. Helps keep us motivated. I’ve been trying to find something to reward myself with every month I blog. It can be as simple as a $10 action figurine I liked when I was a kid, to a new pair of tennis shoes that costs $125, or socks! One of the things that I really get a kick out of is blogging business expenses.
That’s a good idea – creating a game. I like to make things last as long as possible – similar to your MacBook. I have my Dell from 7 years ago that I still use and works great!
Dang, 7 years? Time to pony up the $1,200-$1,600 and upgrade! I actually think you will find MORE value in your new laptop than normal since your laptop is so old. For you, It’s worth it! for me, maybe Black Friday 2012.
[…] just a picture, but I love it!)How to Productively Use Failure – by Your Finances SimplifiedControlling Spending the Fun and Easy Way – by YakezieHow to Be a Frugal Shopper – by Prairie Eco ThrifterMy Diet Can Beat Up […]
We’re not big spenders on the holidays. We make most of our gifts and get our kids one large present. I did take my girls out to experience black friday. Both are given an allowance for clothing so I can really take a backseat when we go shopping. I become an observer rather than a participant and it’s a lot less stressful.
I like how you say, “money is a game”. I think you’re absolutely right, but oddly enough, so few people want to play this game. Rather, they choose to watch a television set or go play softball… I just don’t understand. There’s quite a lot of money out there, AND it’s fun to explore all the avenues to get it. When my Paypal gets loaded up, it’s almost like the money isn’t real because I had such a blast getting it. Do I really get paid for this?? ;)
Haha, yeah, it’s just bonus money for a lot of us I guess. There is a danger though to look at the money as “funny money” and then spend it on “funny” stuff. Hence, it’s good to flush that money as methodically into the “real money accounts” so we aren’t tempted to spend it on stupid stuff!
I like the game idea, as it adds in a bit more pressure and leads to a reward as well. I took advantage of the discount and ordered a Macbook Air for the first time. My laptop is 4 years old and the battery no longer works, but it still works fine if plugged in so I will be giving that to charity. I decided to go for the Air simply because I will be able to (legally) do iPhone dev on it, and after doing a bit of research, it seems to be a pretty good machine for development with the SSD! Hope it outlasts the 1 year warranty though. ;)
Ah, nice! You got the laptop I was hoping to buy myself. Alas, I haven’t made enough to afford it! Actually, I got a $30 operating system upgrade and my 3.5 year old MacBook computer feels as good as new again!
Good luck with the longevity of your Air!
[…] Controlling Spending The Fun And Easy Way (Yakezie) […]
Sam, that is so clever. Okay, I admit it, I’m a bit jealous! (now I said it). But I’m also motivated and inspired. I loved this post.
Hola Barb, why you jealous of a broke guy with only $600 left to his name for shopping! Starving here with so many clients and readers on holiday!
I use games all the time! In a similar method to boot.
I’ll say “if I pay X amount on my student loans I think can save for my goal of a new tv or laptop” and I’ll put Y amount into an account. Recently I created another relationship with an advertiser and decided to use that income stream as payment for some type of martial art.
How about, “If you still have consumer loans and car loans” you are not allowed to buy anything more than the basic necessities! Now that would be fun!
I can agree with those rules! I have none but I still need the game.
Great story! This Black Friday I made more money than I spent as well. I sold a pc that I don’t use as I prefer my labtop (still going after 3-4 years ;) ) Actually made money by selling the pc since I bought it used at a great price, used it for awhile, and then sold it for more than what I purchased it for. Great feeling to make extra money and spend only some of it on something fun.
Congrats on MAKING money on Black Friday! That definitely is a great feeling given the majority of us are just spending money like crazy.
Awesome stock market moves. What was Elle’s 50/50 challenge? Love your attitude and making shopping for things you don’t need a game. This reminds me of a friend who plays with options in a similar way. If he needed to buy something he didn’t really need, he would have to earn it via his option plays before spending for it. Any violence in Union Square?
Elle’s 50/50 Savings/spending challenge is on couplemoney.com. Check it out!
The market is just luck. I stick to my desired rate of returns (10%+ is a sell in this market) and stick with it since the 10-year risk free rate is only 2%.
That’s a fantastic pull just by writing a few e-mails (of course, it helps to have a great site as well *lol*). Always a good reminder to follow up on Everything!
Ha! Thx. There seems to be gold everywhere. Just gotta look for it!
Never would have thought of this sam – great idea. Im thinking of upgrading my mac to snow leopard as well.
That’s a great idea Sam. I was too busy with families to do much this Thanksgiving, but I did get a deal going for Yakezie. It’s a great time to ping UK and Australia because everything is so slow here. I’ll plan on sending more emails out next Thanksgiving! :)
Great idea to make it a game – I might have to borrow that idea! And as far as Paypal goes, I purposefully keep my balance at $0 so I’m not tempted to spend :)
Hola Dana, are you always at $0 in the PP account as soon as money hits? I flush my account out to $0 at the end of each month so it’s easier on the data entry.
The good thing about PP is that they will warn you 5 business days in advance before they take all your money! lol
Yep, each time $ hit I always move it out…I found it best to keep myself “paypal poor” both from the standpoint that it can feel like free money to spend but also so I don’t get hosed over by PP….
Nice and disciplined! You must have to do a lot of transfer everyday then! :)
sometimes, i buy the big ticket item, then return it for a full refund. that way, i get the satisfaction of buying something without costing me anything. sounds dumb, but sometimes works.
I understand this feeling 100%! I LOVE the feeling of buying it, and I LOVE EVEN MORE the feeling of returning it and getting my money back!
If there was a return policy on new cars, I have to admit I would be the biggest offender! lol
I buy enough *stuff* for my wife, kids and myself throughout the year. I think we’re spoiled. I don’t like buying Holiday gifts at all (my wife still does it, though). I don’t enjoy receiving gifts for some reason either (I’d rather just buy things I want on my own). I do, however, donate money/gifts/time to food drives & donation drives through the local Salvation Army, Marine Corps, etc. It’s become a tradition for my family.
Sounds good Dave. I don’t really like receiving gifts too much either for some reason. I think it’s b/c my parents never really got me anything growing (cue violins!)
Good tradition donating!
I recently had the same experience with my MacBook. It was still functioning, but it was a lot slower after 5 years. I justified my MacBook pro upgrade by saying, “I work in the online industry, my laptop is an essential tool. Oh, and happy college graduation to me.” Voilà, laptop purchase!
Putting this purchase on a credit card was probably not the best idea. Now that I read your blog, I’ll make educated decisions on controlling my spending (the fun and easy way) :) Thanks!
Happy graduation! If you can afford it, and can pay it off, then all is good!
I think I can afford the MBP now as I just locked down another ad client. However , the $100 sale is over now so I guess I’ll have to try better next year! :)
Thank for you the happy graduation! It was a new card, 0% APR for the first year, couldn’t beat it. I’ll definitely pay it off before then.
On the Apple website you can get, “Apple education pricing.” This gives you $100 off your MPB purchase year round. If you’re funding someone in college, or you’re related to a teacher, could use that discount! Happy holidays :)
Controlling spending is one of the most important habits that a person must exercise in order to ensure not only future, but any kind of financial success. Sadly, today most people are convinced that they need much more to live on than they truly do, this is the catch 22 of our society. The idea that we need more, in our never ending quest for happiness and for many of us, unplanned, unaware spending is the crux of the matter.
Yeah, I almost got caught up in that Apple Store sale as well. I wanted an iMac so bad for that nice big screen, but decided to stick with my regular old Macbook as well. These Macs last forever it seems, I even have an old Apple Computer PowerBook from the late 90s, and it works fine, although the apps on it are like comparing Atari to Wii. I do need to upgrade my operating system though as well. I tried to justify buying an iMac by saying it would make me more productive, but even I knew I was lying to myself.
I also almost got caught up in the Ultimate Rewards Cyber Monday sale, as I wanted to redeem my points for a nice Fender Tele. I tried to justify that by saying my UR points were just extra bonus cash that I otherwise wouldn’t have had, even though you can just redeem them toward statement credits, so they’re as good as cash. I kept telling myself it wouldn’t be like spending real money, but I’m glad I held off in the end.
[…] pigeons to share with. I couldn’t believe just by sending out three e-mails, I was able to secure online revenue on Thanksgiving Day! Nobody works on Thanksgiving Day right? Well yes, practically nobody in […]
[…] I have a frugality problem which needs course correcting. Over Thanksgiving weekend, I decided to create a challenge to only buy things with only the money I earned online during that 4-day weekend. Who the hell […]
I thought I had some pretty good success with goal setting but I never created games. I really liked this concept. One thing I did rationalize was the purchase of a new bluetooth keyboard for my ipad. $100 doesn’t sound like a lot but I was determined to only spend that amount if I earned it via my blog also – I wish I could land an $1100 ad :) But I did and had it inside a month. I’m thinking of retooling more of my goals like this!
That’s great you made $100 through your blog! It’s a fun balance isn’t it?
I’m sure you can make $1,100 through your site if you spend 20-30 hour a week every week for a year! :)
I ran across this article for the first time and it’s funny how I look at it now after shopping season is over. The amount of times my wife bought something that I didn’t even know was on our xmas list because she “saved so much” was too much to handle. JC Penney and Kohl’s really have some geniuses working for them. You give an item an obscene price, then ALWAYS have it 50% off, then give another 10% off, and another $20 if you spend $100. they make you believe you are saving so much, when in reality what you are buying is overpriced to begin with.
[…] again!CONTROL YOURSELFIf you have a spending problem, you may want to challenge yourself to some income earning games to keep your spending in check. If you are addicted to cars, shoes, handbags, watches and […]