This is another post in my series “spending habits draining your net worth.” I finally settled on a not-ridiculous name for this series just as I’m probably nearly done with it. These are specific items that I don’t spend money on and instead I buy VTSAX.
Lottery tickets
Yes, of course, I understand the upside of playing the lottery. If you don’t play, you can’t win. In one day, with the right guess, you could solve all your problems and all of your friend’s problems and all of your neighbor’s problems. Money solves everything. Large volumes of money solves large volumes of everything.
I will concede that there is a slight, tiny, miniscule chance that the dice rolls in your favor and you’ll win the jackpot. But if you don’t already have a healthy relationship with money, there is a better than even chance that you’ll blow it all and end up less happy than when you started. Money doesn’t solve everything and as Notorious B.I.G. eloquently pointed out, Mo Money Mo Problems. Also, I’ve heard that the state of Illinois is so broke, it might not even pay you.
But, really, you won’t win. I’m not going to tell you all the many things that have better chances of happening because it’s all so cliché, but just know that you will not win. I view buying lottery tickets as essentially paying for delayed disappointment. I bought a bunch of scratch-off Lotto tickets for a Christmas White Elephant present this past December. I spent $30 and the recipient won $21. So…not a great return on investment. The government counts on this. They wouldn’t sell tickets if they thought they were going to lose money off them. Everything is carefully calculated and the odds are not ever in your favor.
Some of these scratch-off tickets can cost up to $30 EACH! Surely, there are better ways to spend your money.
Manicures
I’ve had my nails painted at a salon in the past and I absolutely understand why people like to get this done. It’s fun! You feel pampered during the process and oh-so-pretty afterwards. Most of the time my old law firm would foot the bill (as a summer associate or mentoring event), but I did quite enjoy it.
Unfortunately, the polish never seems to last for more than a few days before it’s an ugly chippy mess that I feel compelled to pick at. Plus, as my chemical engineer father always used to remind me, nail polish is a carcinogen and the UV-curing step in salons can also cause cancer. Add in the possibility of nail fungus and the probability of nail damage, the appeal greatly lessens for me. I’ve also read that some nail salons take horrible advantage of their employees.
The final bullet point for me though is the cost. Fancy nails can easily cost you $30 and perhaps even triple that for fake nails, nail art, gel, studs and accessories. Those costs quickly add up.
Late fees
I can’t think of any upsides for paying late fees. You know you owe the money to a utility company, credit card company, DVD rental company, etc. Why pay more by paying late? Especially if you have the money in the bank to pay on time. It makes no sense to me. Laziness perhaps? It takes only a few minutes and I love the feeling of accomplishment when I cross off “pay such and such bill.” Put the bill on automatic payment and you’ll never be late. Easy peasy, lemon squeezy.
My next article will detail the ways that I, Thriftygal, drain my net worth. If you don’t spend money on those items, you can feel superior and tell me how I’m wasting my moola. Stay tuned!
Did you miss the other articles in this series? Check out the links below.
Article 1 – cigarettes, pop, interest on depreciating assets
Article 2 – cable, coffee, meat
Article 3 – books, music, movies
Article 4 – cars
Article 5 – television set
Article 6 – expensive cell phone plan
Here is my conversation with someone at work a few years ago… He says ‘ you must be on much more than me on account of your overseas holidays every year’ and my reply was that ‘My sailing trip to the Greek islands cost as much your annual coffee bill’ I make my own of course. and ‘Your annual phone upgrades, dvd buying habit and other tech disposable knickknacks cost the same as my trip to Australia (from UK)’ and ‘your eating lunch out every day is not only boring but what you spent of that bought me a new guitar and amp and a lap top which will last 5 years’ and to top it off ‘your night club habits for a year (Nightclub? this guy was nearly 40!) bought me my last car which I will keep for 10+ years…..
The list is endless.
I should decrease my expenses, because I don’t have enough money. Thanks, because we have to save some money not only to be rich but also to prepare emergencies or special needs.
Your recipe is less expensive meal also, but still healthy. Wonderful.
“Laziness perhaps? It takes only a few minutes and I love the feeling of accomplishment when I cross off “pay such and such bill.” Put the bill on automatic payment and you’ll never be late. Easy peasy, lemon squeezy.”
I read a blog post recently about using methods of “gamification” to increase your productivity. It was essentially about “achievements” and (very important) “crossing off check boxes”. Its the same methods that video games use to make you addicted (instant gratification in short repeating intervals) that allow you to achieve your goals more easily. I found out that managing your life with tasks and subtasks (very important for short intervals) like in project management makes you skip the “ill do it later” procrastinating phase, because you want to cross off the item now and be rewarded with a green tick and the item becomming strikethrough now.
I agree with nearly everything, of course. However, there is one statement you made that I find both paternalistic and unintentionally uncaring to the workers. You wrote, “I’ve also read that some nail salons take horrible advantage of their employees.” No one has forced the women to work there, so it is their decision which you are criticizing. In their position, do you think they would prefer that people stop receiving their services?
I could argue the same way about a position closer to home. I hear that law firms take horrible advantage of their employees. Law firms are notorious about running their employees absolutely ragged. If everyone were to stop buying their services, the lawyers would be better off, because then they would be without their current jobs. Or would they?
I think we should let employees to decide for themselves whether they are better off with their current jobs or not, and we should not reject their services out of a misguided idea that we are helping them by making their companies less profitable.
That said, I agree with the larger point about all these things.
How do you buy VTSAX? I’ve tried but Fidelity won’t let me 🙁
Vanguard
Quite a few of my coworkers are mani/pedi addicts. I tried it once and found all the sitting and wait time quite boring…seemed like a medical appointment to me. So I think of it as a non-invasive, elective, cosmetic procedure. I prefer to DIY my nails (Sally Hansen no light gel products last for about a week and even then, the degradation is minimal). I get the hope and fantasy appeal of lottery tickets, so the $1-2 ones don’t seem too harmful, especially if they spark lively discussion among family/friends. As someone else has pointed out, we all make choices and they all involve trade-offs. If you choose to live in a car-dependent place, more of your income goes down the auto drain. If you accept a job offer that’s far from your car-dependent home, you’re trading more of your time and $ and energy for that job. I often question anyone who says “but I HAVE TO.” What makes it mandatory and what happens if you don’t or if you delay? Or is it just a comforting /addictive habit that’s easier to choose than rethinking other options??
Love you blog. I like that you worked in a reference to Biggie. 🙂
Great post. I know a couple people who buy lottery tickets and actually *believe* they will win. I can’t imagine how much has been spent over a lifetime of scratchers and lotto tix. If you did the math on 55 years of gambling vs investing in an index fund (were index funds available then), could you imagine? I am working on early retirement (hopefully 18 months away) but I have always felt that I work way too hard for my money to flush it away to lottery tickets and gambling. I find it hard though to convince some people that investing is for everybody (not just high income earners)and all that money you spend on silly things like lottery tickets would be your “ticket” to financial freedom little by little.
I know you covered this in “Cars” by getting rid of the car altogether. . . but if you need your car (for now) to get to work (some of us have our reasons), consider cancelling collision insurance. I’m saving big money on that now, after years of losing. My wife and I are safe driver’s with just one accident caused in 20 combined years of driving – and if someone ELSE damages your car, you still get paid. Also, if you damage your own car (assuming its paid off) you have a choice of whether to repair it or just live with the damages (i.e. refuse to pay for cosmetic repairs to a depreciating asset). I detailed my logic further in the comments to your “Cars” article.
I have tried to make this lotto arguement with my family to no avail. If you don’t like your life before you win lotto, you’re not going to like it afterward. Great post.
I think this is where everyone’s particular values come in, at least with respect to entertainment . I would rather spend $30 on a pedicure every 3 months, or buy music CDs I will play incessantly and then frequently for years (although technology has subverted this cd inclination) or go to a movie once a quarter with friends, than travel. I travelled a lot my first many decades . The thrill is gone.
We could all save scads of money if we didn’t go anywhere or do anything. The art of life is to maximize our personal joy-to-resource ratio.
I agree 100% and I love the way you phrased that “maximize our personal joy-to-resource ratio.” My biggest problem is that most people seem to spend mindlessly.
Joel: No one has forced the women to work there, so it is their decision which you are criticizing. In their position, do you think they would prefer that people stop receiving their services?
Somehow I don’t think most of these women go into it knowing their job is going to give them a miscarriage, or give them cancer, or give their children birth defects, due to the continual chemical exposure. There is something extremely distasteful about inflicting serious health issues on poor/marginalized women so that more privileged women can get their nails done.
I actually haven’t read the article Thriftygal linked to, but I read this related one a while ago and it horrified me enough about this industry: http://www.nytimes.com/2015/05/11/nyregion/nail-salon-workers-in-nyc-face-hazardous-chemicals.html
If you had to choose between getting cancer later and keeping your job now, would you choose your job? Maybe. If you’re desperate enough. Would you choose to risk damaging your baby? Maybe that too. Sometimes there are no good choices. But maybe things should change so that’s *not* a choice you have to make, and maybe all workers deserve a minimal level of safety where they work. Maybe it should at least be mandated that all salons give their employees gloves and a well-ventilated workplace (doesn’t that seem like the barest minimum a decent society would owe these people?) I *don’t* think the answer is to just let the status quo continue because people need jobs. At the very least, customers should take a good hard look at a salon before supporting it with their business.
On the macro level, I don’t think this industry should exist, because the damage it causes to people is not redeemed by its benefits – but if we’re going to keep it, and no doubt we are, then it needs to be better regulated, and consumer pressure for better standards will help.
There’s one late fee that I’m willing to suck up every now and then, and that’s at the library. I come out so far ahead with my library habit that if there’s the occasional time I can’t get something back there or renewed in time, I don’t sweat it… I think of it as a small operating cost for the use of my gigantic book treasury.
Totally with you on all the other stuff, though! And I bet you’ll be able to squeeze out at least one or two more lists as more things strike you. Right now I would add “mediocre restaurant meals” to my list.
I do not waste money on most things. My biggest issue is internet. I only have Time Warner Cable in my area and they charge a lot more than I would like to spend on fast enough internet for my needs. Any suggestions on cheaper internet service? What do you use?
Internet service is hard because I agree that it’s a necessity and if you only have one company in your area, you don’t have a choice. I wish I had a solution for you, but I don’t. 🙁
I’m currently traveling around S. America, so I don’t have a provider; I just make sure my airbnb apartment includes free wifi.
“Somehow I don’t think most of these women go into it knowing their job is going to give them a miscarriage, or give them cancer, or give their children birth defects, due to the continual chemical exposure. There is something extremely distasteful about inflicting serious health issues on poor/marginalized women so that more privileged women can get their nails done.”
My father worked one of the deadliest industries in the country for 45 years, constantly being exposed to cancer-causing pollutants. He was keenly aware of the risks he was accepting on behalf of our family. It is a shame that he didn’t have a safer job, but I’m happy that he was given the opportunity to make the decision he did. My grandfather was killed in a similarly risky job making things better for his family. I’m sure that the very real option for both of them was homelessness or the risks of the jobs that they took. They both chose to improve their families’ circumstances through risky work instead of taking worse jobs that would not have provided enough for them. Both of them could have their jobs regulated into non-existence. These were both relatively low-skill jobs in places with very limited opportunity.
” I *don’t* think the answer is to just let the status quo continue because people need jobs. At the very least, customers should take a good hard look at a salon before supporting it with their business.”
Yes, it would be better if people considered these things. However, before we push these women into joblessness, perhaps it would be better if people just took the time to inform them of the risks so they can better decide for themselves. It could be that they are already aware of the risks. They may ask, “What other option do I have?” They may or may not have better options, and it would be cruel if they lose their jobs if they truly don’t have better options.
“There is something extremely distasteful about inflicting serious health issues on poor/marginalized women so that more privileged women can get their nails done.”
There is something extremely distasteful about privileged men and women in society making paternalistic decisions for poor and marginalized women based on the assumption that they are too ignorant about their jobs to make that decision for themselves.
Most important, I think, is that you live on less than you earn while working and draw down savings in a rational manner in the draw down (retirement) phase. But beyond that, I believe we should permit ourselves selected,rational luxuries.