“This is the last thing I need – all this spending in the middle of a health pandemic and, possibly, the worst economic downturn in decades.”
It was my last thought before falling asleep last night. You would be correct to assume that I didn’t have a peaceful night despite my mindful refusal to worry about money – our subconsciousness doesn’t always concur with our decisions.
I decided to tell you all about it in an attempt to make my subconsciousness listen because, in this case, it is wrong – there is no reason to panic about money and haunt my sleep with nightmares coming straight from a Dickens’ novel. Make yourself comfortable and hear my reasoning – after that, you may let me know whether to chill or embrace the angst of an expensive month.
Why is August an expensive month or my spending confession
Do you remember the exercise I developed several years back to identify what I call ‘protected wants’?
(If you don’t remember this exercise, or you are a newcomer to The Money Principle, click on the link and read the article – it will take 3 minutes to read and approximately 7-10 minutes to complete the exercise. It may be the one thing you did today worth the effort because the payback is enormous.)
My top ‘protected want’ was computers and electronics more generally. Still, I have not bought any new electronics for well over five years and made a bit to-do about having to buy a new mobile phone (my old one got drenched in water because my husband didn’t screw the top of a water bottle properly; just saying).
No, I have not been depriving myself completely. I did make sure, however, that my employer meets my work related (day job) needs – after all, computers, iPads, etc. are ‘means of production’ and should be supplied by the employer.
A week ago, I went and bought a 27-inch iMac with 5K Retina display. What changed?
I have decided to get serious about building my online business, that is what. For that, I need a powerful machine, and I need to pay for it – fair is fair.
I go a good deal – with education discount (one of the few perks left to being a university professor), free AirPods, and claiming the VAT back, the second best 2020 model worked out at slightly over £1600. (My breath caught, must admit. My husband claims this is not unreasonable for what I am getting.)
Next, my son is off to university, and he will be doing engineering. After giving it some thought, I decided to get him a laptop – a MacBook Pro. Another £900 gone (after education discount, free AirPods, and VAT back).
On top, we are paying for my son’s accommodation, and there is a bill of slightly over £1,000 as a first installment. (You may be wondering why we are paying his accommodation and not go the ‘debt’ route. Two things. First, helping with his education, I view as paying it forward investment – my dad invested in my education, I will do the same for my son; as we did for the older sons. Second, the maintenance loan my son could borrow is less than what he needs for accommodation.)
You see, friend, August is turning out to be an expensive month. Still, I do not begrudge the expense – my computer is an investment that could pay for itself in six to eight weeks. Investing in my son is longer-term but worthwhile.
Why do I refuse to worry about money?
Ten years ago, I would not have spent anything even approximating £2,600 on computers – we were paying off our rather massive debt and spending only on essentials.
Fifteen years ago, I would have spent £2,600 on computers, stick the balance on a credit card, and lost sleep worrying about money for the next month or so.
This time, I just drily recognised that this is a bit weird in a pandemic and an economic downturn and went to sleep.
(Ignore my subconsciousness, please; I do.)
What has changed, so I do spiral into a blind panic about money?
Several things, really:
- First, we have a healthy, positive monthly cash flow. It took several years, but for the last five years, or so, we have had a positive monthly cash flow. Some of it gets invested, some gets into a cash account we call ‘Investing’ – not very imaginative, I know. It is the account where we keep easy access cash for opportunities and for months where we need to top up.
- Second, we have enough easy access cash to weather spendy months.
- Third, this year we have not traveled at all (you can guess why). All money we would have otherwise spent on travel we saved; some of it we will use to pay this month’s bill.
- We are piling Airmiles hoping, and praying to a supreme being of our choice, that there will be a coronavirus vaccine by the end of the year.
So, you see, there is no objective reason to worry – we can easily pay the bill when it hits our account.
(Here, I do not wish to go into irrational worrying about money; working on something much more detailed about that.)
August is turning out to be a costly month for us. While the timing to spend money is not ideal, it could not be helped – buying these computers and paying for our son’s accommodation, I see as investments. (I’ll let you know how the investment is working out at my end – Macs are perfect for video so…)
A massive bill is coming at the end of September, but I refuse to worry about money. That we have a healthy positive monthly cashflow (hard-earned) and a decent cash savings account helps me to sleep at night – my subconsciousness be damn.