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Last post, we covered some foundations for financial literacy. This week, I’m going to bring us closer to a pillar that is near and dear to my heart – mindful spending.

“Seriously, Dr. FIREfly? You like to wax poetical about mindful spending? A) Who does that? B) Aren’t physicians notorious for bad spending? C) I earned this money – I’m going to spend it as I see fit!”

A) Yep, I’m a bit of a weirdo. (But far from alone – shout to all those who are so inclined!)
B) Yep…that reputation certainly exists. I think it’s the flashy spenders who stand out more, though?
C) Absolutely! This post is not going to be about telling you what you should do. It’s about exploring another way of looking at things, and seeing ways that you can optimize your spending to line up with your ultimate goal.

You know how there’s the phrase, “Where does the time go?” Sometimes, when I talk with people about money, a different version pops into mind: “Where does the money go?” Unlike with time – where at the end of the day, you realize it’s time for bed and yet there was so much that still didn’t get done – this same awareness does not necessarily seem to exist for money. 

So I started tracking every dollar of what I spend in the last year of undergraduate studies. Yep. Every dollar. In the research lab that I worked in, a fellow undergrad student set up an Excel file that could reference values between sheets and I was like, “This is it!” I took the formula home and set up my own Excel file that could reference between sheets (so that each sheet was a different month, and there was a summary sheet at the end) and it was off to the races. (You can download a version of this here – it has been modified over the years. Undergrad was a lonnngggg time ago. Please contact me if there are any issues with downloading!).

Because I found it cumbersome to keep track of when I bought something with cash, I wound up just keeping track of whenever I withdrew cash and trying to maximize my credit card use (which made sense for me anyways, in order to try to maximize my credit card reward points).

Keeping track of my spending did for me what budgeting could never do – it opened my eyes to how much and where I was spending, and helped me rein it in. I slowly re-calibrated as I found dissatisfaction with certain areas. For instance, I would notice that I spent a lot on eating out one month, so I would scale back the next month. I noticed that I made a lot of frivolous purchases that I probably didn’t need, and so I would be more mindful next month in the face of temptation. I stopped buying bubble tea once or even twice a week (roughly the price of a fancy Starbucks drink) when it was shown to me how much that was adding up to be and started buying it every two weeks – or even monthly. Let’s not even get me started on the clothing problem…

So those examples above were some of the bleeds in my pocket (ranging from the slow trickle of an occult bleed leading monetary anemia, to a hemorrhagic degree of loss at times). It’s actually pretty amazing how much money can be left over if I decide consciously where I want to allocate my dollars instead of reflexively going, “Yes! I want this – and this – and this – ” etc. Some months, I spend more than I might have meant to. No sweat. I scale back the next month. All of this happens in a rather amorphous fashion, but it works for me. Because I know what is most important to me.

In terms of spending, through intermittent reflection, I have decided that experiences are the most important thing (for me). Experiences, rather than objects themselves, will provide me with memories that I can reflect upon and feel like I have lived a full life. These memories (hopefully) will allow me to die tomorrow without regrets. There are some things I have postponed “till the timing is better” (having children, maybe owning a home) but I will not forgo all (or even most) of the pleasure in the present to postpone till “someday”. #notwaitingforretirement

Shared experiences generally (but not always) take precedence over solo experiences. I will typically forgo an individual trip to the art gallery in favour of meeting up with friends, and will always try to find a travel partner first before going on a trip solo. Next is individual experiences – these are precious experiences because they are the moments in which I can focus on my relationship with myself.* Last are objects. Objects have importance in terms of how they add to my experience. I bought a new couch much earlier this year, despite knowing that I might have only 2 years left in this location. But the new couch provides wonderful experiences – a pleasing visual experience, a comforting tactile experience while doing work or reading, a place to have less cramped snuggles with my husband, a longer place for him to stretch out and take a nap, etc. And I have worked to consciously savour this couch as much as possible, in order to avoid taking it for granted (hedonic adaptation), which leads to lifestyle creep (see bottom of this post).

With this framework in mind, here is my current standard of living in 2018:

• $1350 approx. for rent near the downtown area of my city, in a moderately older building, 750 sq ft 1 bedroom (rent split with Mr. Sparks) – seems about average in the city
• Yearly salary (before taxes and CPP, not including call stipend) – $78,245.00
• Earnings so far for 2018, before taxes, including locums – $64,740.20
• Cost of travel-related expenses (flights, lodgings, food, sights, shopping, etc.) – $12,000 approx. (5 domestic trips, 3 of which were cross-country, one trip to the U.S., one to Europe)
• I never say no to going out with friends
• Made a couple luxury purchases this year (and wedding-related purchases)
• Dependents – none
• Average rate of savings (money put towards student debt payment + investments) – 40% – effective spending of about $40,000 per year. Comfortably.

It feels like I’m living a good life. I’m not sure that I need much more than what I have. (Children entering the picture will be an expense, although perhaps not as much as I might have once thought). Saving 40% is on the high-ish side, and a number that I’m comfortable with for now. Once I transition to a staff physician salary, I hope to increase that percentage significantly by increasing standard of living only minimally, which should hopefully lead to a good amount of savings, which means more investing, which means walking sturdily toward financial independence.
So that’s me. Let’s turn the focus to you. Here are some questions to help guide reflection, and perhaps action:

1. What are my priorities in life? My suggested categories are personal/individual, personal/relationships, and occupational. There’s also a great set of two books that can help shed some clarity if this question is paralyzing in its enormity – Start With Why and Find Your Why. Bear in mind, these books don’t hold THE answer – they’re just one way you can start trying to find some answers within you.
2. How much money do these priorities require?
3. What am I spending my money on now? Tracking for a month – even a week – could be useful for this. Again, here’s a link to a version of the tracking sheet I made.
4. Does my spending match what’s important to me?
5. What do I want to do about this? This does not have to be “forever”. Just what do you want to do about this for now? And revisit the question as needed.

Have fun! I would suggest putting aside a 20-30 minute span of time in a day to close out the world and dig into to these questions. The results might just be view-changing!

* Earlier in the post, I mentioned “a relationship with myself”. You might ask, “What is a relationship with myself?” I wanted to dedicate some space here to go into it.

Do you like yourself, who you are as a person? Do you not? Some people cannot be alone with themselves and always need someone around – that is not having a good relationship with oneself. It is possible to feel better about one’s relationship with other people than one’s relationship with oneself. Then there are some people are just as comfortable alone as they are with others. And some people are more comfortable alone than with others.

This could be several books’ worth of material in and of itself. To come to the root of things though – the only thing we take with us when we die…is nothing. At the end of life, all we have are our memories, and if we were lucky and the circumstances lined up, maybe loved ones and/or friends at the bedside when we pass. My view is that part of living a life without regret is to live a life where you’ve had a meaningful relationship with the others in your life – and also with yourself. Money and financial independence are just tools along the way to achieve this.