The Comparison Trap

I've posted before about why financially comparing yourself to others is foolish because it is often based on superficial things. In other words it is hard to really know what is going on under the surface. I've also posted about how easy it is to be jealous of others who do not seem to be as concerned about their future and finances (or those who have more money to spend). I like to think I do my best not to be jealous and not to compare myself to others when it comes to my finances. However, the other day I realized that I'm horrible about following my own advice when it comes to other aspects of my life.

I often find myself feeling like I'm behind when it comes to my accomplishments in life. For example it happens when I hear about someone I attended college or graduate school with who seem to be so much better off than me professionally. I end up feeling inadequate. I know it is silly to think this way because everyone's life takes different paths and in all honesty I am accomplished!

Part of the problem has to do with the fact that I work with many intelligent and successful women who I look up to. Okay so this doesn't sound like a problem, but it does when you take into account my lack of patience. I want to be as successful as they are one day, and a big part of me feels like I need to be doing more now to get there. Of course this may or may not be true, since I have no way of knowing where life may take me. In my head I know this comparison game I play is a waste of time and energy, but my emotions continue to play.

I think the only answer is to keep reminding myself that I'm living my life, not theirs. Of course this is easier said than done. Does anyone else struggle with these feelings of inadequacy? If so, how do you counter them?

A Cultural Shift

Since I'm swamped at the moment and can't seem to find the time to write a real post I thought I would share an interesting op-ed piece by David Brooks in Monday's New York Times.

Brooks argues that there needs to be a cultural shift in our economic values as a country.

Here are some snippets:

Centuries ago, historians came up with a classic theory to explain the rise and decline of nations. The theory was that great nations start out tough-minded and energetic. Toughness and energy lead to wealth and power. Wealth and power lead to affluence and luxury. Affluence and luxury lead to decadence, corruption and decline.

However, this was not true for the U.S.:

Yet despite its amazing wealth, the United States has generally remained immune to this cycle. American living standards surpassed European living standards as early as 1740. But in the U.S., affluence did not lead to indulgence and decline.

That’s because despite the country’s notorious materialism, there has always been a countervailing stream of sound economic values. The early settlers believed in Calvinist restraint. The pioneers volunteered for brutal hardship during their treks out west. Waves of immigrant parents worked hard and practiced self-denial so their children could succeed. Government was limited and did not protect people from the consequences of their actions, thus enforcing discipline and restraint....

Our current cultural politics are organized by the obsolete culture war, which has put secular liberals on one side and religious conservatives on the other. But the slide in economic morality afflicted Red and Blue America equally.

If there is to be a movement to restore economic values, it will have to cut across the current taxonomies. Its goal will be to make the U.S. again a producer economy, not a consumer economy. It will champion a return to financial self-restraint, large and small.

It will have to take on what you might call the lobbyist ethos — the righteous conviction held by everybody from AARP to the agribusinesses that their groups are entitled to every possible appropriation, regardless of the larger public cost. It will have to take on the self-indulgent popular demand for low taxes and high spending.

If you have time I suggest you read the whole article.

Why Budgets Matter

There is a lot of opinion in the personal finance world on whether or not you need a budget. Those of you who have been following my blog know that I'm a big proponent of budgets and that I'm always tweaking mine, trying to figure out what works best for me. For this reason I am also a big believer that your budget is a living document. It is a guide to help you plan, so it shouldn't just be created and set aside.

How you budget is completely up to you. I try to track every expense so I have a clear picture of where my money is going. I have a friend who just tracks what he spends per day. Others may just take out a certain amount of cash and when that's gone that's it for the month. The best thing about budgeting is that it is not one size fits all, instead it is up to the user to figure out what works best for them.

Lately I've been thinking about the larger picture of budgeting. In other words, why are they so important? Why are they necessary for business (for- and non-profits) and helpful for individuals?

When it comes down to it budgeting is about resource allocation.

In other words, it sets your priorities. In a perfect world I could buy whatever I wanted whenever I wanted. However, this is not a perfect world and I need to balance my needs, wants and debt with my priorities. In other words, I need to decide how to allocate the resources I have. Businesses do the same thing and looking at their budgets can help us figure out their priorities.

On the individual level my upcoming travel is a great example. Normally I wouldn't be so focused on increasing my travel fund. However, it has now become a priority, and because I have a budget I am able to reallocate my money to reflect this priority.

So yes, budgets do matter.

Picture by nimboo

Small Challenges

Sometimes it's the small things.

I've challenged myself this week only to spend the cash in my wallet ($8 and change), and so far it is going exceptionally well. The only money I have spent is $2.25 on a slice of pizza.

This challenge has gotten me thinking about how small challenges and short-term goals are incredibly valuable tools as we work towards a larger goal. In this case my larger goal is to reduce my spending so I can save more towards a big trip this summer. That trip is 9 months away, so focusing on the trip to save money isn't very realistic for me. However, since I love challenges, a bunch of small goals along the way could potentially make a big difference in the amount of money I save.

A good example of this is when I go for a run. My ultimate goal may be six miles, but to get there I focus on something closer. First I focus on the weird looking tree, once I get there I decide to focus on getting up the hill, then I just want to enjoy the run down the hill, and so on it goes until I've run six miles.

I also use this method when I have big projects at work. When I'm feeling overwhelmed I make a to do list and start with the quickest and easiest tasks. Before I know it I've checked off half the list and the project doesn't seem so daunting anymore.

Since it works so well for different aspects of my life, it makes sense to use this system for my financial goals. This way, rather than only focusing on the larger goal, I can spend time just challenging myself to see if I can pull off a week on $8 (not so hard to do when you went grocery shopping the week before).

While we should never forget the larger picture, sometimes focusing on the smaller steps can help us get there.

Photo by aldoaldoz

Planning to Travel

I'm planning a big trip come June with a couple of my friends. I don't like to talk about details until they are definite, which is why I'm not going to say much about it just yet. While I don't consider myself superstitious I also don't like to jinx anything!

The reason for this post is that I need to focus my savings on this traveling opportunity. Last night I took some time to reevaluate my goals and I've decided to put less into my emergency fund and more into my travel fund. Sadly though, this still won't be enough money. So I also plan on

• putting any money aside that I receive for my birthday (it is in November);
• asking my parents for, and saving any money I get for Christmas; and
• using my tax return for this trip.

I'm still not sure if that will be enough so I'm also going to look for ways to budget better and squeeze more money out of my monthly budget. So, in an attempt to get myself back into savings mode I'm going to have a mini-challenge for myself.

I'm only going to spend the $8 and change I have in my wallet from today to Friday, September 18.

I'm not expanding this into the weekend because we already have plans to rent bikes and have people over on Saturday. On Sunday my only goal is to get my hair trimmed, which I'm probably going to do at some walk-in cheap place, because really how much could someone mess up a trim?

If this challenge goes well I might try having more mini challenges for myself to keep the motivation to save strong. Wish me luck!

First Week - First Attempt at Balance

Last week was my first week of school. It went well! I'm very excited for the semester and to be studying what I'm studying.

My biggest concern about starting school was how to maintain balance in my life. Because of this I decided to only start with two classes. I'm happy to say my first week went particularly well. I managed to run 3 times, finish all my work and still have time downtime. Of course, the first week is often the easiest week. Plus I had benefit of labor day.

This week of school will be a better test as I have both classes and only a two day weekend (a weekend that I'm going to be out of town).

Out of everything that I do, I'm most concerned that my blogging will suffer. I'm considering having a set time that I work on blog posts every week. Does anyone do that? Are they having success?

Photo by kevindooley

Just Say No

Last night I'm rushing from the subway to make it to the first day of one of my classes on time. It is rush hour on a busy street so I'm doing my best not to walk into anyone and not to get stuck behind anyone slow.

As I'm walking I see someone with a clipboard and immediately try to avoid eye contact. But in a moment of weakness I do and immediately am asked if I have a moment to save babies. I say I'm sorry and keep walking already thinking about something else. And then it happens: "So you are a child hater then".

Are you kidding me!?

Because I don't have time or even want to stop and talk to you I'm a child hater.

Summer in New York also means that the number of people with clipboards seems to triple at best. While I understand these are jobs that people have, I do not stop. Ever. If I want to donate money to a cause I care about then I do.

This incident last night got me thinking about all the things I've said no too, that I do care about:

Them: Do you have a minute for the environment?

Me: Sorry, no

Them: Do you have a minute for gay rights?

Me: Sorry, no

Them: Do you have a minute to save the children?

Me: Sorry, no

The list can go on and on, and yet not one of them called me a "child hater" or an "environment hater" or any other kind of hater after I went on my way.

So thank you to all of those people who have not called me a name because I don't stop. And for those of you that do call names. Grow up.

Welcome September!

Even though September means the summer is over, for me, it still brings a lot of great things. My two year anniversary with my bf is today, my bf's bday is coming up, I'm starting school, and the weather is already moving towards perfect running weather.

September has always felt like a new beginning. Sure January is the new year, but September is when you get the chance to start fresh. This probably has something to do with the fact that I've spent more years in school than working full-time (I'm counting kindergarten through grad school here folks!)

Anyways, I haven't posted monthly goals in a long time, so in honor of a new start here are my goals this month:

1. Keep the Balance

Find someway to continue to work out, be productive at work, and keep on top of school work. I know this is vague, but I think I'll have a better idea of what I need to do once I've experienced a month of it. Also isn't it interesting that everything I want to do includes the word "work"?

2. Stay within budget

I haven't done this is a long time so this is going to be a challenge for me. I'm not sure if being busy will help or hurt this goal. I will have less time to spend, but less time to make dinners so may end up buying takeout more often.

3. Make a list of all the things I need/want to buy and go from there.

I've had a lot of things break recently including my camera and my ipod. I need to figure out everything that I need to replace, plus some things I kinda want, and see if I can fit them into my budget.

It is only three goals, but it is a start!

As for an August update. I went over budget but my networth still went up! All in all I'm satisfied with the month.