Poll

Should I buy item X?

Absolutely okay.
8 (25.8%)
No way.
17 (54.8%)
Other (specify in comments).
6 (19.4%)

Total Members Voted: 31

Voting closed: January 16, 2013, 03:53:55 PM

Author Topic: Settle our purchase arguement  (Read 9901 times)

cbr shadow

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Settle our purchase arguement
« on: December 17, 2012, 10:52:17 AM »
My wife and I are currently debating the purchase of an item and we agreed that we'd let other mustachians settle it for us.

Here's the background..
About 3 months ago I found MMM and really changed my lifestyle to be more frugal and less wasteful in general.  I send my wife blog posts and forum posts that we can relate to and she seems to have taken a liking to it as well.  I use to eat fast food for breakfast and lunch almost every day.. spending about $12 per day on crappy food!  Now I've had fast food twice in the last 2 months!  Also my wife has cut way back on her shopping, and we go out to dinner 1x per week now instead of the 3-4x previously.  These changes have made a big impact on our savings account. 

Both 29 yr old
She makes ~$100k before deductions
I make ~$50k before deductions + I always make several thousand during the year taking side jobs or random hussles

No student loans
No CC debt
Mortgage : $207,500 in a FHA loan, so we pay $215/month in PMI
No other debt

Savings: $22k
401k combined: $30k
Roth IRA combined: $10,600
Other Investments : $4k


So here's the issue.. I used to spend a lot of money on my hobbies, so we decided at the time that we'd have a budget for my hobbies. 
Hobby Budget: $110 per month for my hobbies
-  If I went over that amount she had an arguement, but if I stayed under that amount I could spend it freely on whatever I wanted. 
- That budget accumulates, so if I dont spend any month this month, I could spend $220 next month. 
- If I make money on the side (random side jobs) I would take 20% of that amount for the hobby budget, the rest in our savings

So I used the hobby budget money that I had saved for an electric bicycle.  This put the hobby budget at $0. 
At that point we found MMM and started saving a lot of money and I stopped spending money from the hobby budget.  It's been several months and I've accumulated a few hundred dollars in there.

Since my wife and I found MMM we decided to set savings goals, which we've been successful with.  More recently we set the goal to get rid of our mortage PMI.  To do this we need to bring money to the table (probably ~$30k) which will save us about $400/month in the end.  We're on track for this goal.

I want to make a purchase of an "item" (wont say what it is since it will probably bias opinions) that is a luxury item.  This item is not necessary but I still want it.   It costs $1200.  I decided that I could sell my electric bike (which was bought with hobby budget money) and buy the other item for $1200.  My wife does not like it because i'm still "spending $1200" while we have a goal.  My arguement is that this money isn't coming out of our income, I'm just trading my electric bike for another item. 

This is difficult because I've already sold the electric bike and deposited the money, which has shown up on Mint.com already.  I think this adds to my wife thinking I'm spending our savings away by buying this item.


I think the bottom line is that I do want to still have hobbies and the hobby I like costs money.  We save money on a lot of things and we make a good income, I'd like to spend $1200 on this hobby item.

Thoughts? 
I'm aware of the previous "can i buy a pony" thread and how this type of thread is looked down upon because people usually end up buying the item anyway.  Also we're not FI right now but there are a million other things we could still cut to save a small amount of money here and there, but they'd affect our lives negatively by not having them.
Also I'm linking my wife to this post, so we're actually going to consider the responses here.



gdborton

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Re: Settle our purchase arguement
« Reply #1 on: December 17, 2012, 10:58:50 AM »
I'd think the obvious choice is to compromise, save and knock out the PMI, and then buy your toy.  Saving $400 a month will quickly let you buy it pretty quickly.  PMI doesn't give you any value, and that money is just gone, you don't even get a depreciating asset for it.

jpo

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Re: Settle our purchase arguement
« Reply #2 on: December 17, 2012, 11:45:23 AM »
If the electric bike was bought with hobby money, I agree that you should be able to sell it and use the money for something else if you like.

How fast can you save up the $30k to get out of PMI? If it's less than a year (and it should be at those income levels)... could the new item and all hobby money wait? I can't think of many hobbies I'd keep over burning $200/mo for no reason.

JohnGalt

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Re: Settle our purchase arguement
« Reply #3 on: December 17, 2012, 11:48:51 AM »
It sounds like you guys need to reevaluate the whole hobby money situation in the context of your new goals and decide how or if it fits in. 

gdborton

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Re: Settle our purchase arguement
« Reply #4 on: December 17, 2012, 11:49:24 AM »
Just want to throw out that I'm not trivializing your purchase.  I like my toys too.

jrhampt

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Re: Settle our purchase arguement
« Reply #5 on: December 17, 2012, 12:03:09 PM »
I really like the suggestion to postpone buying the item until after you've knocked out the PMI, especially if you're on track to be able to reach this goal within the next several months.

swick

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Re: Settle our purchase arguement
« Reply #6 on: December 17, 2012, 01:16:18 PM »
I can totally see both sides of this, I think it is great that your wife is jumping on board and supporting making MMM changes! Its really exciting when you are just starting out and seeing new progress and if she is anything like me, she just wants to see more and more -  it's fun to see bank account grow and goals getting closer.

I can also relate to the fun money issue.  I think it is super important to have a little bit of discretionary money, and what you do with it should be up to you if that is your agreement - but - the PMI is a big chunk of money basically being thrown away. I completely agree with gdborton. If you get rid of that payment you will be able to get your toy and reach your FI goals much sooner!


DoubleDown

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Re: Settle our purchase arguement
« Reply #7 on: December 17, 2012, 01:25:08 PM »
I think you should get to keep half the bike money ($600) for the new purchase, and the other half should go towards paying down the PMI faster. The amount still needed for your purchase can be made up by any combination of:

1. Saving up once PMI is paid off (which will be earlier with your $600 contribution)
2. Selling something else of yours of value
3. You earning more money on the side

Keep in mind that for (2) or (3), I think any "revenue" earned should be split towards your purchase and saving towards your PMI goal! Meaning, you don't get to earn another $600 on the side and be done... you have to earn $1200 on the side, putting $600 toward the remainder of your purchase and $600 more towards PMI. That way you both benefit from any additional earnings. Same should go for your wife and any of her purchases and earnings, of course.

Togoshiman

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Re: Settle our purchase arguement
« Reply #8 on: December 17, 2012, 01:46:36 PM »
Am I missing something?  You saved up hobby money to buy the bike, no arguments there.  You sold the bike and got some money back, a portion of the original monthly hobby money.  Now you are topping that up with additional monthly hobby money for a new toy?  If this is accurate, I would say you are entitled on the rules you agreed to to purchase it.  Now, if you're advancing future hobby monies or taking money from elsewhere, or if the bike was not originally funded out of hobby money, then I would change my opinion.

As a married person, however, I think my advice would simply be to save up your monthly hobby money until you can afford your new toy regardless.  Everyone wins that way, even if you have to wait a bit.

As an aside, my wife and I have always maintained separate finances, with joint accounts for joint expenses.  We're the only couple I know who literally never fight about money.  It may not be romantic to 'give each other bills' each month, but it sure beats stressing and arguing.

MsSindy

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Re: Settle our purchase arguement
« Reply #9 on: December 17, 2012, 02:33:20 PM »
If I follow correctly, your new hobby purchase = $1200 = funds for the selling of the electric bike.  If the agreement was that Hobby money is allotted and spent with no questions asked, then you should be able to purchase it.

We have a similar arrangement.  My DH is into remote control airplanes - an expensive hobby, that I derive no pleasure from (well, except that he's super happy about it all!).  Would I rather him spend the hobby money on reaching FI?  Sure, but we made an agreement so that everyone was happy with the budget.  Sometimes he will buy a plane, decided that he wants something different, then sell it and buy another one.  Do I think he needs anymore planes?  No, of course not (but then again, I don't need anymore fabric!).  But as long as he stays within his hobby budget, everyone is happy.   Except now I think I need to put in some space limitations..... my basement ceiling is starting to look like an airport hangar!

dragoncar

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Re: Settle our purchase arguement
« Reply #10 on: December 17, 2012, 03:34:41 PM »
No hate, but am I the only one who thinks "hobby money" sounds more appropriate for a 10 year old?  I'm only talking about that phrase itself, the budgetary concept is fine.

tooqk4u22

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Re: Settle our purchase arguement
« Reply #11 on: December 17, 2012, 03:40:34 PM »
My wife has a "fun" account that each month money is deposited into automatically this was set up because I would sweat the small stuff and she didn't realize that the small stuff can really add up.  The agreement is that it goes in each month and I can't say anything about what she does with it - most of the time it is for little treats for the kids, a starbucks or stupid decorative stuff for around the house.  If she accumulates it so be it.  The account is not linked to anything and I don't see it so it is like recurring monthly expense.

arebelspy

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Re: Settle our purchase arguement
« Reply #12 on: December 17, 2012, 03:54:00 PM »
I added a poll, makes it easier to aggregate responses.  Hope you don't mind. :)

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needmyfi

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Re: Settle our purchase arguement
« Reply #13 on: December 17, 2012, 05:41:05 PM »
Voted other.  PMI is the worst waste of money and I can't bear to see the bank get another dollar of PMI. Anything else I may have voted okay. After pmi requirement is removed, spend your 1200 on toys.
« Last Edit: December 17, 2012, 06:06:11 PM by needmyfi »

chucklesmcgee

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Re: Settle our purchase arguement
« Reply #14 on: December 17, 2012, 06:09:48 PM »
I think it matters very much what item X is and the amount of utility it will provide you. Since you won't name it, I'm imagining it's some sort of adult toy.

Paul der Krake

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Re: Settle our purchase arguement
« Reply #15 on: December 17, 2012, 06:14:42 PM »
Siding with the majority here, get rid of the PMI first- your purchase will feel even sweeter.

arebelspy

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Re: Settle our purchase arguement
« Reply #16 on: December 17, 2012, 06:33:04 PM »
Voted other.  PMI is the worst waste of money and I can't bear to see the bank get another dollar of PMI. Anything else I may have voted okay. After pmi requirement is removed, spend your 1200 on toys.

Why's that an "other" and not "no"?
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needmyfi

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Re: Settle our purchase arguement
« Reply #17 on: December 17, 2012, 06:45:55 PM »
Voted other.  PMI is the worst waste of money and I can't bear to see the bank get another dollar of PMI. Anything else I may have voted okay. After pmi requirement is removed, spend your 1200 on toys.

Why's that an "other" and not "no"?
I would have voted okay if it was ANYTHING but buying insurance for the bank or paying a payday loan.Basically see the fairness of selling one toy and buying another without breaking the rules of the budget.  It would be fair to kick further goals down the road but not this one.  Feel free to change it to a plain NO,  but felt the No was based on the type of debt which I find personally odious.
« Last Edit: December 17, 2012, 06:49:40 PM by needmyfi »

gooki

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Re: Settle our purchase arguement
« Reply #18 on: December 17, 2012, 08:31:45 PM »
Spend the monies.

Nitpicking like this ins't healthy, and isn't improving your quality of life.

cbr shadow

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Re: Settle our purchase arguement
« Reply #19 on: December 17, 2012, 09:43:50 PM »
Thanks everyone for the responses.
Chucklesmcgee, your post made me laugh about the adult toy.  Are you thinking it's a high-end blowup doll or something?  It's nothing like that.

arebelspy

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Re: Settle our purchase arguement
« Reply #20 on: December 17, 2012, 09:44:48 PM »
Thanks everyone for the responses.
Chucklesmcgee, your post made me laugh about the adult toy.  Are you thinking it's a high-end blowup doll or something?  It's nothing like that.

Hey, we're not judging...

;)
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mm1970

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Re: Settle our purchase arguement
« Reply #21 on: December 17, 2012, 09:56:36 PM »
I said other.  In some ways, it's probably perfectly okay for you to buy the toy because you sold your bike.

But I don't know what your spending split is. 

My husband and I used to have "hobby money" pre-frugal days (quilting/fabric for me and woodworking/building furniture for him).

Well, I spent so much on my hobby there is no way that he could ever catch up.

That's more than a decade ago now.  Water under the bridge.  If I was your wife and didn't have an expensive hobby, I would probably resent it a little if you did and put the hobby above a shared goal.  If I did have an equally expensive hobby, then I probably wouldn't care.

So in "other", I agree with the posters that say you should work on knocking out the PMI.  I wouldn't say don't buy the toy until you finish, just that you should put a certain percentage of your hobby money/ side job money towards that.

secondcor521

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Re: Settle our purchase arguement
« Reply #22 on: December 17, 2012, 11:25:30 PM »
Not that I ever did this successfully in my marriage, but here's my comment:

Whether you buy X or not isn't the question (I think) you should be asking.  So I won't answer that one.

Why your wife and you have a disagreement, and getting to the root cause of that, is the question (I think) you should be asking.  It sounds to me that you don't understand your wife's feelings about why she's not comfortable buying X, and she doesn't agree with your opinion about why it's OK to buy X.

Letting the internet vote on X will resolve the purchase decision but won't address the underlying issue.

If I were the person I wished I was and I found myself in your shoes, I would have a heart-to-heart discussion with my wife about what's going on, paying particular attention to her *feelings* and perceptions about money.  This presupposes that you're both mature people in a loving relationship.

Good luck,

2Cor521

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Re: Settle our purchase arguement
« Reply #23 on: December 18, 2012, 12:59:28 AM »
Accept the punch in the face by your wife and move on. Your PMI is an emergency and you should use the $1,200 fund your $30K savings goal instead.

cbr shadow

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Re: Settle our purchase arguement
« Reply #24 on: December 18, 2012, 07:49:04 AM »
Thanks everyone for the opinions.  It looks like I lose on this one.  I'll let my face punch bruises heal until the PMI is paid off before buying the item.

I dont think there are any "underlying issues" that we're avoiding talking about.  She likes clothing shopping and I like my hobbies - both of us were spending a fair amount of money on those things so we agreed to set a budget for both.  This method has worked out great up to this point.

Since the decision to wait has been made I can tell you what the item is.  I shoot competitively and the item is a handgun.  I know that's a touchy topic for some and would bias opinions so I didn't mention what the item was.  Also I didn't want people to keep thinking this was a high-end blowup doll. :)

-Ryan

fiveoh

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Re: Settle our purchase arguement
« Reply #25 on: December 18, 2012, 08:34:46 AM »
Thanks everyone for the opinions.  It looks like I lose on this one.  I'll let my face punch bruises heal until the PMI is paid off before buying the item.

I dont think there are any "underlying issues" that we're avoiding talking about.  She likes clothing shopping and I like my hobbies - both of us were spending a fair amount of money on those things so we agreed to set a budget for both.  This method has worked out great up to this point.

Since the decision to wait has been made I can tell you what the item is.  I shoot competitively and the item is a handgun.  I know that's a touchy topic for some and would bias opinions so I didn't mention what the item was.  Also I didn't want people to keep thinking this was a high-end blowup doll. :)

-Ryan

Good decision.  Happy wife = happy life.  Or thats what I'm told...

Also I think when you reach your goal of paying off the PMI, you should buy your gun even if you have to use non "hobby money" as a reward.  Make sure your wife gets to buy something she wants too. 

arebelspy

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Re: Settle our purchase arguement
« Reply #26 on: December 18, 2012, 09:40:35 AM »
Also I think when you reach your goal of paying off the PMI, you should buy your gun even if you have to use non "hobby money" as a reward. 

I think that's sensible.

Make sure your wife gets to buy something she wants too.

I usually disagree with this type of thinking.  Just because one person gets something they've really wanted doesn't mean the other person does as well to be "fair" or something.

I think if she has something she's really wanted for a long time, she should get it (perhaps regardless of the PMI, etc. as well), but if not, she shouldn't get something just because he is...
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
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eyePod

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Re: Settle our purchase arguement
« Reply #27 on: December 18, 2012, 10:05:39 AM »
I think if she has something she's really wanted for a long time, she should get it (perhaps regardless of the PMI, etc. as well), but if not, she shouldn't get something just because he is...

Especially if she's also delaying her purchase to get rid of the debt.

deciduous

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Re: Settle our purchase arguement
« Reply #28 on: December 18, 2012, 11:40:28 AM »
I think you've reached the same conclusion I would in your shoes. Good use of tact and patience to keep the peace... Perhaps you could find a cheap alternative that you could both enjoy right now for a fraction of that hobby money, so that you can feel that you aren't coming out as the "loser" in this? Like maybe a night in a B&B or renting snowmobiles, whatever you'll both enjoy?

cbr shadow

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Re: Settle our purchase arguement
« Reply #29 on: December 18, 2012, 12:46:35 PM »
Deciduous,
I like what you're saying about the compromise.  When we set the goal to get rid of the PMI we agreed to go on a big trip to another country to celebrate the milestone.  My wife LOVES to travel, and I like to travel.  Even though we travel inexpensively, big trips far away from home still cost a lot of money.  The only part I dont like about waiting for the gun purchase is that we're going to spend a lot of money to get rid of the PMI, then the big trip.  Then more waiting to save to get my hobby item.  Waiting is difficult but getting out of the useless PMI is more important because I feel like it's holding us back from so much.  Plus it hurts my heart to pay for it every month hahaha

Anyways - I'm glad I can come here and count on people bringing reason into the situation.  Both my wife and I are obviously biased but in the end we want to do what makes the most sense.  To be honest I'm surprised I got so many to agree with me in the polls!  It's hard to show passion for something like a hobby on a financial forum, especially since the general idea here is to cut spending.  Obviously on paper it makes no sense to buy the gun (or to have hobbies at all haha) but I'm sure that was factored in to the decision.  For now I'll have to be happy with what I already have, which is a lot (2 great dogs, library nearby, gym membership, forest preserve nearby, etc).

Sylly

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Re: Settle our purchase arguement
« Reply #30 on: December 18, 2012, 01:04:43 PM »
To be honest I'm surprised I got so many to agree with me in the polls!

As one of the 7 who agreed with you in the poll, I'll clarify that I see your purchase as justified because it's coming out of already agreed upon and budgeted hobby money. I personally don't believe in cutting expenses at the cost of quality of life, so 'fun' money IMO is completely acceptable. That said, it doesn't mean I don't think the best course of action is to pay off the PMI first to put a quicker end to throwing away money every month. :)

c

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Re: Settle our purchase arguement
« Reply #31 on: December 18, 2012, 05:27:33 PM »
See the resolution has been reached, so edited my response (which was to work towards the shared goal first)
« Last Edit: December 18, 2012, 05:30:05 PM by c »