Have you thought about these questions? Last week’s post talked about Opportunity Cost. “Money equals value equals opportunities.” Every time we spend money, we forego an alternative opportunity. The alternative we don’t pick is our Opportunity Cost. The point of the book – subject of the post – was that we often pick alternatives instinctively and based on emotion without thinking clearly about the value of the alternative opportunities.
This post discusses two of our priorities for the use of our money while we are alive. I wanted to write down our priorities (Here’s the detail.), because I find we spend money on some things that just don’t align with what we most value. I’ll discuss a few of those in an upcoming post. I generated this spreadsheet with four categories. On a long walk last weekend – training for our upcoming trip – I asked Patti what she thought were our priorities. She was in exact agreement and didn’t have the benefit of my spreadsheet to prime her thinking.
How would you describe what it is that you enjoy most? What is it that you want to do with your money in the time you have left? I’ll discuss our first two categories in this post, and I’ll discuss the other two next week.
==== The “Basics” ====
I include spending for what we all need to live, although our basic is a comfortable basic. Heck, most of us who live in the US have a basic that is far above the average in the world.
Our home is nicer than average. We love it. It’s right-sized for the two of us, but I’m sure our utility bills are above average. Our cars are nicer than average although I think we’ve kept them longer than most folks; I have far less interest in driving a new car now. Since we live in the city, we don’t put many miles on them, and our operating costs are low.
==== ENJOY MORE. NOW. ====
This is a big one. I have three headings in this category.
Travel. We both use our credit card extensively and I keep track of key expenses in Quicken. By far our largest discretionary expense is travel: airfare, lodging, rental car; tour costs; I include the cost of the kennel for Dudley as part of our travel expenses. I don’t count meals and entertainment, since we’d have somewhat similar expenses at home.
Patti and I have enjoyed active, walking vacations for years. I really like knowing we have an upcoming walking trip. It’s an incentive for me to stay in shape. It’s almost always just Patti and me; we rarely go with groups. We have not rented a car for many years now. So, for most trips our daily costs are really not that much.
In years past, we’d walk a long distance path in England – maybe 100 miles or so in ten or so hiking days. Now eight miles is good for us; ten isn’t that enjoyable. We now like staying three nights in the same location. We’ve gone to the Lake District of England for the past four or five years now. We know the three towns where we want to stay, the room we want, and about six day-hikes we really like. Train, bus, and cabs work great, and we don’t have the headache or expense of a rental car.
Oh, boy. Patti is pushing to get as many of these trips in before we just don’t have the physical capacity to take them. My health is good, but at my age 74, that may not be too many years in the future.
We booked a self-guided trip to Portugal (Algarve coast) for next week. Self-guided trips are not expensive. This one is five hike-days and a total of about 40 miles. We’ll end with four nights in Lisbon. We have a similar five-day walking trip penciled in for Sicily in the fall, but we’ll stay longer and rent a car – unusual for us – to explore the whole island.
I now target to stay at above average places and book a better than average room. That might add $75 per day to our trips and maybe $1,000 for the whole vacation. We find we really get more for that $75. Patti finally agrees with me on this added spending.
Here’s our big extravagance: we decided to fly business class for our long distance flights – generally those with five-hour time zone changes. We don’t sleep and are not comfortable in coach. The thought of uncomfortable, sleepless travel lessens the enjoyment of the whole trip. (I keep thinking of how much we don’t spend on Investing Cost relative to many folks we know. They’ve chosen the option – the opportunity – of high Investing Cost (for what?) and we’ve chosen the option of business class airfare. I like our choice.) Patti is a master at booking business class airfare at relatively low prices.
Extra help at home. I read this article almost two years ago now. It says money can buy you happiness, and a big component is to spend money to make your life easier – buy yourself time: don’t spend time on things you don’t enjoy. Most people fail to buy time.
We spend extra to avoid tasks that seem like chores. I used to like working in the yard and cleaning the sidewalks of snow in the winter. I dropped yard work a number of years ago: Doc takes care of the routine. Joe does the major spring and fall cleanups. This is the last year for snow removal for me. I’ve come to dread it. Maybe Doc can handle that for me next year. Cindy does a great job keeping the house clean. Steven is the greatest on window cleaning and getting the leaves off our roof in the fall. RJ does a great job planting the annual flowers.
At least once a week we don’t want to prepare dinner. We will take out or eat out. The Food Shoppe is less than ½ mile from here, and it has prepared main courses for $12 for the two of us. They grill two days a week in summer. I cook the vegetables or make a salad. We’ll toast nan bread or heat the rice medley I prepare. Fast. Healthy. Good. Patti is great on clean up. We can walk to about 15 restaurants. Bangkok Balcony, Dinette, and Kaya’s are favorites.
We both know we have to exercise if we are going to be active in the time we have left. We joined our local community center and go to exercise classes three or four times a week. We joined a country club years ago, and that’s another social network for us. I seem to have lost my passion for golf, though.
Other. The key one here is Patti’s PURE JOY when she buys something that she really likes at a deep, deep, sale price – especially shoes. “How do you like my new Sesto Meucci shoes? They’re sewn in Italy. They sell for $341, but they were marked down to $169, and then 50% off. I paid about $85. They are really comfortable. I love them.” “Yep, they look great. Terrific purchase!” Patti gets a LOT of happiness without spending a lot of money in the year.
Conclusion. We all have thoughts as to how we want to spend our money in the time we have left. I think it’s a good idea to think through priorities and write them down. Our priorities are to 1) spend on the basics; 2) spend on what we enjoy doing together and makes us happier; 3) help our families to be happy and successful; and 4) help to improve the lives of others.