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.
Onward to May. Happy spring philosophers!
🙂
16 comments
Skip to comment form
I think you are doing admirably. And that Mrs. HP did a wonderful thing by offsetting a $150 pair of shoes with a $25 dress. Good luck and bravo to Mrs. HP!
🙂
Congrats on the FF mile score! I’ve done a similar “just before I click confirm” thing before. And yes, some airlines do have miles that expire but I find they’re increasingly rare. Last time I ran into that issue was with the old U.S. Airways (remember them?). I had 30k or so miles that were going to expire and that’s a free domestic flight plus some. All I had to do to “reset the clock” on my account was to buy some miles from them. For $25 I purchased a small number of miles and that counted for “account activity” which reset my clock and gave me another two years. It was an easy fix. Other airlines will let you buy merchandise to do the same, so you can get something small to keep you account active.
I’ve let so many points and miles expire it’s almost embarrassing. My new strategy is to just focus on a couple of programs and set up some low recurring monthly bill and put it on auto pay. That way there is monthly or yearly activity.
I gave up including my wife’s purchases. At the end of the day, it is about behaviour and mine…not hers.
Nice work on another month done!
True, but in our case many of the decisions are not one person or the other but a mix of both. If I didn’t discuss her purchases it would give an incomplete and potentially misleading picture on my/our consumption. I don’t want my readers to get angry at me and think I am deceiving them somehow 😉
I appreciate your transparency and honesty, man. Failures happen. I think it’s more important how you bounce back than whether you fail or not. To err is human after all.
I have been thinking hard about getting a credit card for frequent flier miles. I’ll definitely use POF’s links if/when I do it.
I look forward to seeing the next update and anticipate (hopefully) hearing how you got back on the horse.
TPP
Start with 1 miles card with the airline you fly the most. Usually you can get a huge signup bonus bolus of miles, and many give you perks like free checked bags or discounted companion tickets. Sometimes there is an annual fee, but it is often worth it.
Was just listening to Tim Ferris’s podcast and he was talking about failing forward. I think reaching a point where you think you are failing just means that you are really testing the limits. I mean this whole experiment wouldn’t be interesting if it was easy.
Hear hear! I don’t think an update that ends in “everyone in the family is much more intentional about what we buy” counts as a failure.
I was just thinking about your experiment the other day as I was contemplating my own consumption decisions, and it occurred to me that what I would consider the most important are not the times where I did not spend anything (because it was easy not to), but those where I considered spending money on something but elected not to (a more difficult show of will). Your last second decision to check for frequent flier miles to offset spending captures this in my mind.
Yeah, just because the experiment doesn’t go exactly as planned, it is not really a failure as long as you learn something. I have 8 months to go, so I’m anticipating more challenges 🙂
One more tip: skiplagged.com
Great for last minute flights, as long as you don’t associate it with your frequent flier numbers.
We used it to fly 4 people to and from a funeral, booking a couple of days beforehand, and it was a multi-thousand dollar savings.
Cool site. I’ve heard of this concept but never found a site which searches for you.
Yeah… just do what you can do. I really think the success comes in the fact that you are consciously thinking about every. single. spending decision. Because once you’re conscious of it, you’ll start to make changes and things will be better in the long run.
Also, as for the miles, yeah, we’ve just been hording them. We’ve got about a million at this point. What we’ve found is that since we can travel mostly as expenses for our company, it’s actually better to get the tax write offs on that and then use the miles for things we can rope in work excursions. So we just save them up. It’s worth while to have a huge stock pile of them, though.
1 million miles? I’m so jealous…
Dear HP,
How goes your card reward tracking, I thought I remember you starting to dip into it but can’t find the exact post, thought it may have been this one… how many accounts do you end up having open at a time? Wife and I started doing it 2-3 years ago but tracking it all is starting to be a bit much.
By the way, I’m really looking forward to an upcoming book called Digital Minimalism by Cal Newport, I preordered it but it’s not out yet so can’t recommend it as of yet. I hope it has good ideas on how to cut back on non physical clutter, but thought you may be interested in the book if you haven’t heard of it.
Jeff