Tuesday, May 17, 2016

Where the money goes

Now that we're getting more money than I had budgeted for, where will it go?

Well, like any good consumers, we've bought ourselves a fancy new vehicle!  In fact, our new purchase cost us three times the value of our current lovely car.  Ooh, we are riding pretty!

Heh-heh.  The new vehicle is indeed fancy, but it's a bike.  And our car is a 2001 Prius with an ugly crunchy dent on the driver's side, so its Blue Book value is fairly pitifully low.  So, while this bike is still expensive by normal standards (it costs four times as much as my SPDM did, and I think I bought a super-expensive bike myself), the cost was still just a tad under $6K.

My husband's fancy new vehicle.
The blue book value of our car.  

When the SPDM got a flat,
we could switch wheels between our bikes
while we got my tire replaced. 
The reason for getting this bike is that my husband's other racing bikes are 15-20 years old.  And while they're still perfectly good bikes from a commuter/weekend rider point of view, they are getting too old for the racing circuit.  For example, a cyclist who has a flat often just trades wheels with the race support crew, but modern racing wheels don't fit on my husband's old bikes (just like newer Microsoft Word documents can't be read by old Microsoft software.  bleah.)

Is this a "frugal" purchase?  In some sense, of course, no:  nearly 6000 times no, you might say.   On the other hand, my husband regularly rides with people who spent $10K or more for their bikes, so in comparison to theirs, his is super cheap (!).   And the bike is hardly an impulse purchase:  he spends 2-3 hours a day riding.  We're really spending this money on something that is central to how he spends his time and how he creates his identity.  It's meaningful to us, even if it is a luxury item.

Okay, but it's not like we're about to shower ourselves in material goods.  We haven't felt particularly deprived this past year, so it's not like we think our lives will be better if we start spending large parts of our days in stores.  In fact, this past year of wide-open schedules has been so nice, that it makes even more sense to put our money aside to make wide-open schedules a permanent thing in a few more years.

In fact, we're highly influenced by the Your Money or Your Life argument that increasing spending on ourselves brings diminishing--and even possibly negative--returns on happiness.  We just spent a pile of money on a bike that takes us past comfort to luxury.  If we start buying more for ourselves, the result will be clutter.  At this point, the best way to use the money to make ourselves happier is by diverting it into places where there are true needs.

What happens if we spend more money on things
is that we have to clean and take care of those things.
If we share with other people,
the joy just bounces back on us.

So here's the priority for the extra incoming money.
  1. Bump up the charitable giving to pre-sabbatical levels (or maybe even higher).
  2. Max out my retirement accounts.
  3. Set aside money for home repair projects (there are a bathroom and the kitchen that work fine, but should probably be spiffed up before we sell, five or so years from now).
  4. If there's enough extra left over, establish a Donor Advised Fund.
(A couple of people have suggested adding money to college funds.  Fortunately, those are already fully stocked (in fact, probably a little over-stocked, because my sons are likely to go to a nearby, inexpensive Tech school rather than a pricey four-year college).  And we've already started a 529 plan for my grandchild.  If we didn't have future educational expenses already taken care of, these would be fairly high up on that list.)

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