Home > Cutting Spending, Enjoying Life > Just when I thought I was immune to impulse shopping…

Just when I thought I was immune to impulse shopping…

Over the past 12 months, I have developed an almost monk-like discipline when it comes to buying unnecessary consumer goods.  I purchase only what I need and have room for in the budget.  Each time I resist a purchase I give myself man-points for not letting silly desires control my actions.

I purchased the “Fitbit One” the other day in a moment of budget-busting weakness.  It’s a great product (more about that later), yet I’m unable to financially justify my purchase…

My Asset Hypothesis

I like to think that all of my purchase fall into a few simple categories, and they all contribute towards growing my assets.

1. Necessary expenses: nutritious food, monthly rent, clothes, and train tickets are good examples of stuff I can’t operate without.  Without any one of the these things I’d be unable to earn money which is the engine of my net worth growth.  This is stuff that I’ll always have to buy (until I buy a house and pay it off…).

2. Assets that will help avoid future costs: I am good with spending money on something if it has a payback or avoids other future costs.  Some great examples of this category are energy efficient light bulbs, a cheap bike to avoid car driving, and my CostCo membership.  These aren’t really “assets, but I count $1 avoided cost the same as $1 earned (after-tax).

3. Actual Investing:  The only things in this category so far are my index funds (profit-sharing retirement account at work, Roth IRA, and a taxable account), an emergency/house down-payment that I keep in a high-interest online savings account, and a small experiment with peer-to-peer lending.

4. Social: This is my category for stuff I purchase mostly because I’m with my friends.  Baseball tickets, dining at restaurants, movie tickets.

I try to convince myself that everything I buy fits into one of these buckets, and if it doesn’t, I mercilessly cut it out of my budget!

This rule has kept me from buying some pretty pointless stuff that otherwise would be decreasing my net worth growth.  For example, I think an Android tablet would be a lot of fun.  I’d use it around the house for reading the news and whatnot.

Q: After the glee of purchasing something new and shiny wears off, what would I really have.

A: A duplicate of other technology I already own, and a couple hundred dollars less to invest in assets.

So let me tell you about what the Fitbit does and how I momentarily convinced myself that it fit into one of my categories.

An Expensive Pedometer

It’s essentially a normal pedometer, except it stores all your info digitally, syncs with the internet, and keeps an online database of your health metrics.  Google Health used to have something similar where you manually entered your health metrics until they disbanded it at the end of last year.

After considered this purchase for a few weeks, I initially decided that it didn’t fit into any of my categories.

1. It’s certainly not a necessity.  I’ve been doing just fine without it.

2. Could it save/make me money?  Maybe in the sense that it might make me healthier and reduce medical expenses in the future.  This one is a little far-fetched, but could be true in the right dire circumstances.  If it motivated an obese individual to walk more and thereby saving their life, then I’d count it.  In my case, I already exercise every day regardless, so I can’t see how it’s save me money.

3.  There is no way the Fitbit is an income producing asset.  (unless I was able to sell it for a profit like I that tablet I bought… I should write a post about that.)

4.  It’s not going to make me more social. (unless maybe it links me to some of my friends who also use it.

The bottom line is that I did have a lapse and decide to buy it anyway.  I had been considering it for weeks, but found no solid justification.  I just decided one day that enough was enough, I’d just buy it because i wanted it.

Once I got to the store, I thought about it for about 10 more minutes and then just pulled the trigger.  The $99 purchase busted my Mint.com budget, but I don’t care!  It’s way cool.  I’m thinking I need to add a “stuff you just really want that doesn’t contribute towards growing your assets” category.

Some Cool Graphs! 

So here are some cool screenshots I took from the online portal.

It tracks your every movement and graph the data for you.  For example, today I had three periods of “high-activity” exercise.  My walk to the train, my midday workout, and my walk home.  I guess I walk home a little slower than I walk to work… interesting.

It also gives you daily, weekly, monthly, and yearly totals on a variety of metrics.  I can already feel myself wanted to hi 15,000 steps every day!

As a motivational tool, it really works.  Even better than I thought it might.  Then again, I am weirdly obsessed with health and fitness, so maybe it’s just me.

The point of this post is that even though I’m not anywhere near financial independence, I should still budget a little room for fun stuff that doesn’t increase my net worth.  I guess I’ve been focused on increasing my assets that I forgot to smell the roses.

Not anymore!  I’ve decided to add a “stuff I want budget” to my Mint account for stuff just like this.

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