Delay purchase just to maintain monthly savings rate?

[Crusader]

I do not mean waiting to determine if you will purchase something. I mean that you know you will buy it, and I mean you know you will. But you push it off over a course of months or to later month just to maintain your savings rate.

Like right now I am splitting the costs of a trip I am taking over the course of like two months. I could afford to pay it all now, but just the psychological idea of having a lower savings rate for that kind of irks me. I know other people have experienced this. I just want to hear how you go about dealing with it, and what little or bigs things you have delayed because of this.

Thanks

[bobechs]

I can't say I have done that exact thing, but there were times when I was much, much younger that at times I avoided putting my foot down on pavement lines out of a concern for maternal spinal health.

I got over it.

[Choices]

It depends on your strategy. Are you puting it on the credit card and paying interest just to keep funding your savings instead? Or do you owe money to your co-travelers? Are you passing up good airfare prices that could rise?

If the price is locked in, you aren't in debt, and you aren't inconveniencing anyone else then when you pay probably doesn't matter, but it would be rare for all of these conditions to be met.

[pancakes]

Yes I do it.

There is an element of psychology in it for me. It is better for me to maintain a minimum monthly savings rate than it is to have it fluctuate. If I have a low month followed by a high month due to a large expense, I'll feel like the high month was more significant than it was and allow myself to spend a bit more in the next month.

[plainjane]

I held off on replacing my day-to-day glasses until a month where it would be the only large purchase on the credit card and not spike my rolling spend average. I do this for winter jackets, shoes. I don't do well with months where we're well below the budget, it makes me feel like I have licence to spend more and then I regret it - so I try to keep this steady.  This is a probably a form of artificial scarcity, but it works for me regardless.

I've never split one cost over multiple months though.  Travel and housing isn't included in my rolling spend average, if it was, I'd need to use a different approach.

[Crusader]

It depends on your strategy. Are you puting it on the credit card and paying interest just to keep funding your savings instead? Or do you owe money to your co-travelers? Are you passing up good airfare prices that could rise?

If the price is locked in, you aren't in debt, and you aren't inconveniencing anyone else then when you pay probably doesn't matter, but it would be rare for all of these conditions to be met.

I am do not have CC debt, that would be crazy just to have a savings rate. The trip is more of a road trip/hiking trip so right now it is paying different parts of the trip. Namely the different activities, lodging, and equipment.

[Expatriate]

I only look at yearly savings rate (and YTD) so no, I don't have this problem.

[Tabitha]

Our savings are automated, so if we have a spikey month I have to pull money back out of savings. I HATE that, so yes, I'll delay spending to even the cash flow/keep the steady savings rate.

[Bertram]

I do not mean waiting to determine if you will purchase something. I mean that you know you will buy it, and I mean you know you will. But you push it off over a course of months or to later month just to maintain your savings rate.

Like right now I am splitting the costs of a trip I am taking over the course of like two months. I could afford to pay it all now, but just the psychological idea of having a lower savings rate for that kind of irks me. I know other people have experienced this. I just want to hear how you go about dealing with it, and what little or bigs things you have delayed because of this.

As the saying goes: Never sell the bear's skin before one has killed the beast.

In the same vein, while I expect that I will have money flowing in next month, I do not take it for granted. And if possible I prefer to spend it after I have received my money. A lot of purchases look like they will happen anyway - until and unless the flow of money coming in stops suddenly, and then you switch into a different mode and suddenly the same purchase may no longer be as inevitable.

That's reason enough for me to do it as you describe, at least for bigger purchases.

[BudgetSlasher]

I work toward a savings goals for the year (set in dollars) both for investing and for other purposes/projects; when combined with other budgeted expense it leaves me with a leftover amount as discretionary. That discretionary amount remains relatively constant from month to month.

That means that if I reducing savings this month to buy something I will be boring from future months (DEBT) if I still want to meet my savings goal or I neck down on my discretionary spending for however many months to save and buy it outright. I prefer to save and buy rather than go into debt, even if it is to myself in regards to a self imposed goal. Actually, I've got a few things that I know I am going to buy that I am saving towards right now.

I would also be able to justify way too much by saying I will buy this at some point so why not now and I would be in too deep a hole to climb out of by the end of the year with just the discretionary funds. And if "will buy" is the justification for going into debt to myself (as I call it) where do you draw the line; well if I just spend 50 bucks a month less for the rest of the year I can afford that compound miter saw that I am going to buy today, well if just draw down my savings/sell so much of my taxable I investments I can do that bathroom remodel we are going to do now, well if I just put it on the credit card I have 6 months 0% interest, well the interest rate is only 0.9. . .You may be different, but for me I like to stay ahead of the spending rather than playing catch up.

Of course there are unexpected things that throw the discretionary into disarray, such as an unexpected health issue/home repair/auto repair, which needs to be addressed at that time and I just have to deal with it.   

In the past I have bought a few things that I was definitely going to buy early for various reasons (it went on sale, it will be easier to install before winter sets in, I will get more use out of it this season if I buy it now) and many times the budgetary changes after the fact made me resent the purchase (even though I still would have bought it); in contrast I rarely regret (at least as much) a purchase I saved up for and have no obligations to afterwards.

[Zikoris]

This really demonstrates the value of calculating savings rate on a longer scale than one month at a time. Our savings fluctuate wildly month by month, anywhere between 0% and 90%+, because our income is volatile and we cashflow vacations. So instead we calculate our savings rate annually on January 1st when we do our annual financial report, which smooths it all out and gives us more valuable information to work with.

[Tjat]

sounds to me that you're trying to trick yourself into spending more money than you are comfortable spending. 

[forummm]

I don't play games like that to juice my savings rate in a particular month. It just cuts the next month down anyway. If I'm going to spend money on something, I just spend it. We always have the cash flow to cover anything we are going to spend money on. A $3500 HVAC bill? Pay it out of cash flow. You can do that if you have great low routine expenses ($70k house, $20 cell phones, etc).

[human]

I give myself a mothly budget that I try my best to stick to. If some purchase comes up that will throw off the budget I may delay it. This just helps me keep my discretionary spending in check.

I spent 200 bucks in restaurants this month, not very happy about it. Got a night in a hotel already booked for a trip in a couple of weeks but I delayed payment to check in time so it will show up in next month's expenditures. I find this kind of shuffling helps keep spending in check. It's worked for over a year now.

[undercover]

I think it's a good idea since it gives you time to think whether you really want/need the purchase as much as you thought you did at the time you consciously decided to set money aside for the purchase. You may find that it really isn't worth it after all.

Depends on what it is. Necessary expenses and repairs wil always creep into savings rates, and there's not much you can do about that. A new computer, travel, or upgrading something else in your life is always discretionary and your wants will change over time so it's worth taking a step back and sleeping on it.

[renata ricotta]

sounds to me that you're trying to trick yourself into spending more money than you are comfortable spending.

For me, it actually tricks my brain into spending LESS. I delay planned purchases I can afford all the time. I have sort of a maximum queue of 3-5 things that I can be planning to buy at a time. If it takes awhile to get #1 on the queue purchased, that means I'm not adding a #6 or #7. If I purchased #1 right away, my brain would think it could add the next thing to the list. Plus, having a queue sort of tricks my brain into thinking I'm poor or out of money. (I'm not, but I'd like to spend as if I am). So I'm more careful about budgeting because I feel like if I don't have money for the new vacuum cleaner/airline ticket I'm dragging my feet about, what the hell am I doing buying sour patch kids at the register?!

[Metric Mouse]

I can't imagine delaying a purchase that would bring joy to my life.

Delaying a purchase so that arbitrary numbers in a made-up spreadsheet line up according to arbitrary periods of time seems strange to me.

That said, often times the feeling of accomplishing something is nearly as enjoyable as actually accomplishing something, so I can see why someone may get creative with their bookkeeping if saving and spending is a priority in their life.

[gggggg]

This is one of the reasons why I don't "budget". I keep it simple, and spend as little as possible in every category, allowing a little discretionary spending here and there. I don't have set dollar amounts per month or anything. It's just easier than dealing with a bunch of numbers and categories imo.

[slugline]

I think looking at finances from a yearly perspective is more useful than from a monthly one. Otherwise I look like a savings champ in months with three bi-weekly pay dates, and a savings chump in the months a tax or insurance bill is paid. So, tempting as it is, I try to avoid playing that timing game and just make smart purchases.

[Crusader]

As the saying goes: Never sell the bear's skin before one has killed the beast.

In the same vein, while I expect that I will have money flowing in next month, I do not take it for granted. And if possible I prefer to spend it after I have received my money. A lot of purchases look like they will happen anyway - until and unless the flow of money coming in stops suddenly, and then you switch into a different mode and suddenly the same purchase may no longer be as inevitable.

That's reason enough for me to do it as you describe, at least for bigger purchases.
[/quote]

That is basically how I feel, you think at the time you can buy it the cash flow will be uninterrupted next month or week. But if it is less or does not come the worst case is your shrug your shoulders and wait longer. You did not sacrifice future necessity for "luxury/upgrade" now.

I think it's a good idea since it gives you time to think whether you really want/need the purchase as much as you thought you did at the time you consciously decided to set money aside for the purchase. You may find that it really isn't worth it after all.

Depends on what it is. Necessary expenses and repairs will always creep into savings rates, and there's not much you can do about that. A new computer, travel, or upgrading something else in your life is always discretionary and your wants will change over time so it's worth taking a step back and sleeping on it.

Yea, the unexpected stuff is what breaks non-mustachian people. A lot of the stuff I am buying is not time sensitive. So the most having it in the now would be clearing off my plate to get it off my chest or to target the next thing to spend. I had my bike stolen recently, as much as it still bothers me now, I just starting hunting craigslist and bought another one to replace it. The sting I feel with it now is kind of between how much I spent on it and the very fact it was stolen in the first place. I will buy another one eventually, but until then its replacement is okay.

[Digital Dogma]

I do not mean waiting to determine if you will purchase something. I mean that you know you will buy it, and I mean you know you will. But you push it off over a course of months or to later month just to maintain your savings rate.

Like right now I am splitting the costs of a trip I am taking over the course of like two months. I could afford to pay it all now, but just the psychological idea of having a lower savings rate for that kind of irks me. I know other people have experienced this. I just want to hear how you go about dealing with it, and what little or bigs things you have delayed because of this.

Thanks

I've got a whole list of things I'd like to pay for right now, but don't. Its a combination of self-discipline, realizing that I've gone this long without 'that thing' and don't actually need it right now, and the hope that in the mean-time an awesome deal will pop up that I can take advantage of to get what i want for less.