Eddie’s off this week because he has to study for an MBA exam. Or maybe because his mom won’t let him come play. So you’re stuck with Nelly again. Suckers.
Oh hey, it’s the 14th million post on budgets. Geez Nelson, could you be any less original?
Well, yes. But that’s besides the point.
I’m currently nearing the end of two weeks in Japan. Much has been said about how expensive this country is, especially the major centers. Kobe beef apparently costs 14 million dollars per ounce. Rice is expensive because the GUBMINT subsidizes the hell out of it by all buy banning imports. And we all know how the Japanese stock market has done over the last 30 years.
I heard the same things when I was planning my trip. Undaunted, I went ahead and planned it anyway. I wasn’t about to lose out on the opportunity to visit a country I’ve been fascinated with every since I was six years old. (I used to look up the entry for Japan in our 1963 edition of the World Book Encyclopedia. Yep, I was that cool.)
Since I don’t bother with separate savings accounts for things like vacations, cars, and so on (they’re nothing but cheap psychological accounting tricks, sorry guys), I took a look at the amount of cash I had on hand, and realized that I could easily afford the trip.
So I did it.
Using a combination of hotel coupons, cheap transportation options, eating plenty of Yoshinoya beef/rice bowls (less than 500Y each!), and limiting myself to a few top tourist attractions in each place, I’m on pace to spend less than $1800 for two weeks here. I’d call that a win, especially considering how expensive this place is known to be.
I had one huge advantage of flying over from South Korea instead of North America, which probably saved me close to $1000 right there. My flights are only going to set me back $125 return. That’s both ways for $125. No, I couldn’t believe it either.
But I also splurged a little. Hostels are for the poor and homeless, so I stayed in business hotels. These are places featuring small, no-frills rooms that Japanese businessmen stay in when wanting to be close to downtown and save a few bucks. There’s no pool or conference rooms attached. I like having my own space, but I’m no hotel snob.
And the fact is that traveling with a companion is more efficient than traveling alone. Just look at the hotel savings.
Anyway, I’ll get to the point, since this is beginning to have way too much to do about me. Imagine if I had of said “well, Japan is expensive. Looks like you better accept paying $100/night for crap hotels and another $100/day to do anything.” I would have allotted myself a $3,000 budget, spent it, and showed my friends all my pictures afterwards.
But I didn’t. I went into the trip saying “hey, I’m gonna try to save money wherever possible, and try to see the place at a leisurely pace. And whatever it costs, so be it.”
When we have a certain amount of money to spend, human nature is to spend it. When the government allocates a certain amount of money to a hospital, school, or free condom/birth control clinic (OOOH EDGY), they spend it all, even if they waste some. Because there’s no incentive to not spend it. The director doesn’t get a bonus if they come in under budget. They just end up getting less money the next year.
That’s fine if it’s the government’s money, or head office’s cash. But what about when it’s your own money?
I see this happen with budgets all the time. Folks make $5,000 per month after deductions, spend $4,500 of it, and declare themselves fiscally responsible. Okay, but what if they could comfortably live on $4,000 per month? Or $3,000? Have they accomplished much of anything by living on $4,500? I’d say no, and so should anyone else who’s serious about saving.
For the majority of us, we base our budget based on our salary, or how much we’ve got saved up for something. But what if we did it differently?
Instead of budgeting $500 per month for a car payment, gas, and insurance, why not follow the Financial Uproar car buying guide and save yourself a few hundred bucks each month?
Instead of budgeting a certain amount for a purchase and buying one of the nicer models, why not patiently wait and get a cheaper one on sale? I’ve owned two laptops over the past 6 years. One cost $379. The other cost $1099. Without a doubt the cheaper one was the better buy.
There are a million other examples, but you get the idea.
I’m not saying you shouldn’t spend money on things that you like. But by relentlessly searching for the cheapest way to get your desired utility out of something, you’re bound to save money on things. Don’t be limited at how much you “should” spend on things, considering how outside forces will have probably factored into the price you’ve considered fair. Realize this, whether you’re coming up with a monthly budget or saving up for something, and chances are you’ll find cheaper ways to do it.