Buy Nothing 2018 Experiment – April Update

Failure

The problem with a buy nothing experiment where only one member of the family is participating (me) is that many of the purchasing decisions are really made by the family (and by family I mean Mrs. Happy Philosopher). Sometimes it is hard to assign a purchase to one person or the other. I could simply declare that all purchases are hers, even while I secretly applaud them in my head while mocking her on the blog, but this would be a little sneaky and dishonest. It is cheating the spirit of the experiment, so I have decided that if Mrs. Happy Philosopher buys something and I don’t actively try and talk her out of it (assuming it is a group purchase and she asks me) then I need to partially own that decision.

First let’s start with my purchases this month. I did not buy anything for myself, but I did get a few small items for my brother. They were small and inexpensive gifts and I thought they could really improve his well-being. I spent around $30. I know I said I would not buy any gifts, but these were not really for any occasion like a birthday so it felt a little different than the artificial contrived holiday gifting that I absolutely detest.

Happy Philosopher:

• Gifts for brother (about $30)

Mrs. Happy Philosopher:

• Picture frames ($30) – These were a gift for my daughter to frame a couple of prints to decorate her room.
• Shoes ($150) – I have only spent more than this once in my life on shoes, to purchase a pair of Allen Edmonds dress shoes that hopefully will last a lifetime. I can’t figure out why these shoes cost so much, but judging from how happy they make Mrs. Happy Philosopher I have come to terms with it.
• Dress ($25) – Impulse purchase (but I have to admit it is a very nice one).

Joint purchases:

• Mattress ($190), bed frame ($92), sheets ($40), mattress pad ($40) for a total price of $362 – We had no guest bed, only an air mattress. We used to have one, but my son claimed it years ago when he outgrew his bed. We anticipate a few house guests this year and my wife did not want to put them on the air mattress for a week or so. I can understand this. Sleeping in a comfortable bed while traveling is one of those wonderful things you only think about when you wake up and can’t turn your neck for an hour because you slept on a 25 year old couch. Having a beautiful and comfortable environment for guests is important to her, and I am happy with the purchase. (Also, we have a cat and Mrs. Happy Philosopher was a little worried he would pop the air mattress.)
• Curtains ($48) and mounting brackets ($8) – The old window coverings in the guest room were slowly inspiring rage in Mrs. Happy Philosopher who was sick and tired of the sheer window scarf that I (quite beautifully I might add) had hanging over some weird brackets that were here when we bought the house. At least we had an old curtain rod in the garage we could use. The new curtains do look quite nice.

Even though I see this month as a failure in certain regards, it is not black and white. I knew there would be many gray areas over this year, and although I made plenty of rules and caveats, I didn’t have the foresight to think of every scenario. The one thing that has been a success is the fact that everyone in the family is much more intentional about what we buy.

Financial tip of the week:

If you have been a long time reader of my blog, you know that I am quite interested in personal finance, although I seldom write about the tactical “in the trenches” kind of things that many other personal finance blogs do much better. I prefer to tell stories and write about my personal philosophy as it relates to money and freedom.

Today I want to share with you some tactical information on frequent flyer miles of all things. I recently had to take a semi-emergent flight on very short term notice. The price of a one way economy ticket was outrageous. It was about $450 (and I couldn’t even book round trip because I didn’t know when I was coming back). I was a little angry that the tickets were so expensive, but I knew this was just the cost of doing business.

I was about to click “purchase ticket” when in the back of my mind I remembered I had some frequent flyer miles. I took a deep breath and started searching. The same flight (actually a better one) was 12,500 miles and about $25 in fees. I saved $425. Doing the math:

$425/12,500miles = 3.4 cents per mile.

Most frequent flyer credit cards give you 1 mile/dollar spent.

This ticket effectively made my card a 3.4% cash back credit card which is a pretty darn good conversion.  Most cash back cards are 1% with a few perks thrown in for gas stations or other partners. Some cards you can get as high as 2%, usually if you reimburse for travel. 3.4% is insane. My trip back was about 2.8%. My new heuristic is to not use miles unless the equivalent cash back rate is 2% or higher.

And remember: Miles are like income that is tax free! That’s right. Not only did I get a $450 ticket for $25, but in order to acquire the $425 I saved with frequent flyer miles I would have had to earn nearly double that in order to pay the taxes on that money.

I have a whole new respect for frequent flyer miles and just how valuable they can be in an emergency. I used to just kind of waste them and get them used before they expired, but now I am going to start hording them. I look at them as part of my emergency fund.

You have to be careful because on many airlines they expire. If you have a credit card that you use each month this will continuously reset the expiration date. You also have to watch for airlines devaluing the miles; this is a risk that is difficult to hedge against. Keeping these caveats in mind, my strategy is to collect miles on one or two airlines that I know I will be able to use (and keep current).

80/20

Remember the Pareto principle. 20% of your effort will get you 80% of the results. Some people have 10 accounts, but this is just too much work for me. I don’t travel enough pr have the interest/brainpower to keep this system afloat. Keeping track of frequent flyer miles and gaming credit card signup bonuses can be like having a part time job. Make sure the time you put into this kind of stuff is worth the effort. I would be better off just moonlighting a few days a year rather than spending hundreds of hours a year trying to eke out a few more dollars in credit card rewards, but everyone will have different thresholds.

By the way, my friend Physician on Fire wrote a recent blog-post on credit card rewards which may be helpful.

Onward to May. Happy spring philosophers!

🙂