Wednesday, July 11, 2012

Fantasy Spending - The Danger Zone

People are often amazed that I live so happily on so little money. For me the key is to separate out which expenses are helpful and necessary and which ones simply aren't. When it comes to frugal living, people often talk about separating needs from wants.

And while I heartily agree with this idea, in my experience trying to categorize expenses in such an either/or manner is sometimes less than helpful. For my own purposes, I like to think of spending in five separate categories: necessities, secondary necessities, investments, luxuries, and fantasy spending.

Of these five, by far the most insidious - and least discussed is the fantasy category. But before we get there, here's a quick run down of my 5 basic spending categories.

Necessities. When I talk about necessities I mean it in a very literal sense. To me, necessities include food, water, shelter, basic clothing and medicine/health care. These are things I never feel badly about spending money on.

Secondary Necessities. Secondary necessities are things that you need in order to provide the primary ones. This mostly includes job/income related expenses. So for me right now that's mostly computer, server, camera, and related expenses, but for most people this probably includes the cost of commuting, work appropriate clothing, and other things that you need in order to earn your living. These sorts of expenses are generally necessary, though as you free yourself from the world of employment, they will go down considerably.

Investments. When I refer to investments, I'm not talking about things like retirement contributions or other methods of stocking away money - these are not really "expenses" in my book, rather they are "lack of expenses!" When I talk about investment spending I'm referring to things that help to provide for necessities or secondary necessities in the long term. 
In this category I include things like extra principle payments on the mortgage, home repairs, the chest freezer, tools for the home/car and garden, kitchen/cooking equipment, and I also include in this category expenses related to staying healthy such as healthy food, vitamins, and exercise related expenses. This category might also include educational expenses. This sort of expense I generally allow myself - though it's sometimes easy to convince yourself that something is an "investment" when it's really fantasy spending (see below.)

Luxuries. Now, when I talk about luxuries I mean things that actually make your life better, easier or more fun. For me these include things like air conditioning - seriously - we just suffered through the hottest June on record and I was SOOO happy to have the A/C! I also include my car in this category, as well as my bicycle, television, Netflix, all entertainment and recreational expenses, any alcohol or wine, any desserts or snack foods, the occasional meal out, pets and all of their associated expenses, appliances like dishwashers and laundry machines, and even things like hot water for bathing. 

You may be surprised to learn that a hefty chunk of my day to day expenses fall into this luxuries category. I try not to go overboard with this sort of thing, and I also try to make sure that I'm really getting enough enjoyment out of the item or service to justify the amount of work I have to do in order to pay for it.

Fantasy Spending. OK... now this is the category you've probably never heard of before, and I would venture to suggest that it's the most dangerous spending category. My personal belief is that in this culture we are all master picture painters. We excel at creating images of ourselves as "successful," "beautiful" and "important" people who wear the "right" clothing, live in "good" neighborhoods, and drive "nice" cars. We are masters at creating fantasies about who we are and we spend an inordinate amount of time, money and energy simply to pump up these fantasies. 

This type of spending is often confused with luxury spending, the difference is subtle, but very important. While luxury spending actually improves your life in some way, fantasy spending only improves the picture - and the giant marketing machine exploits this angle at every turn.

Examples of fantasy spending can differ wildly from person to person, because our "picture painting" can take so many different forms. But here are some examples. Anything that might be classified as a status symbol is definitely fantasy spending - fancy cars & houses come to mind. Women are particularly susceptible to the fashion industry - believing the nonsense that if we just have the "right" shoes, or blouse, or outfit or "look," it will somehow make us happy. 

Collections and hobbies are also ripe fields for fantasy spending. Many of my musician friends have fallen into the trap of collecting instruments. If you're a professional guitarist it's perfectly plausible that you might need several different instruments for different situations, but I've known plenty of folks who can barely strum three chords, yet have 20-30 expensive guitars that they never play. And then there are people who fill their homes with books & magazines that they don't read, DVD's that they don't watch, craft materials that they don't use - I mean people even have fancy "front rooms" filled with expensive furniture - and these rooms are never used... they're just "for show." 

Replacing perfectly functional items with new varieties, simply because you want something new is also a form of fantasy spending. I was chatting with a neighbor who moved in a year or two ago. She was telling me how she replaced all of the household appliances because they were "old" (purchased in the 2000's.) I asked her if the new ones worked better than the old ones had, and she said, not really - she just felt like she "deserved" new appliances. OY! 

But wait, it gets worse... she started telling me all about her wonderful new convection oven - I've never been clear about what exactly a convection oven is, so she explained that it circulated the heat around making it cook more evenly. I asked her if she felt it had made a difference in the cooking results, and she said she didn't really know because the only thing she uses the oven for is to bake pumpkin pie once a year at Thanksgiving! Talk about fantasy spending! It took some real effort to keep my mouth shut on that one!

I could go on and on with different examples of this sort of spending, and that's the thing about it - it's endless. And the reason it's endless is because when it comes right down to it, it's all form over substance - none of it really makes our lives any better. Having the "right" clothes, or car, or house or whatever won't make you happy. Neither will surrounding yourself with guitars that you don't play, or books that you don't read, or convection ovens that you don't use, or home decor designed to pump up your personal image as an xyz kind of person.

OK... so I know that I probably spend way too much time harping on the idea of dealing with your emotions and facing yourself - but here's a great example of why I think that's so important. It's really hard to cut back on fantasy spending if you're not willing to let go of the fantasy.

But I have found that the more I let go of the whole idea that I need to be a certain kind of person, and portray that image through my stuff and my purchases, the less I feel drawn to this sort of spending. And once you start letting go of the pictures, it becomes a self-reinforcing cycle. You let go of the need to pretend to be something you're not, so you don't need to spend money pumping up that fantasy, then you don't need to spend so much time and energy working to afford the expenses, so you have more time and energy to simply be, and to explore who you really are.

At any rate - if you're trying to pare down your expenses, my suggestion is to take a long hard look at the things you spend money on, and ask yourself if it's really, truly making you happier, or if it's only helping you to maintain the pretty picture.

So what do you think? Do you have any examples of fantasy spending to share?


  1. This is a hard thing for me as I have found that "prettiness" in some area DOES increase my happiness. For example, we completely renovated our kitchen. New cabinets, countertops, appliances, etc. Thankfully we didn't spend bucket loads, but I'm still happy we did it for the most part. Now we're in the process of about 5 other large renovations. It makes me wonder why we are doing it, but I do know I feel MUCH better with the after than the before. It's hard because I'd like to find happiness outside of "thing", but I'd be lying if I didn't admit that I adore my decent vacuum or new (to us) couch. Aesthetics I love calm me :/

    1. Well, I'm not entirely sure that's the same thing. I mean if it calms you, and makes you feel better, then it is serving a real purpose in your life - which is different from things that simply make you feel like you're "in fashion." And I totally LOVE my new dishwasher - because it actually works (unlike the previous ones I've owned.) I still consider it a luxury, but one that makes my life much, much easier and better!

    2. Yes, I have had to learn that I actually want a few more decorative things around the house. And that my car is a luxury rather than a fantasy; I want locational independence as well as financial independence.

      Dishwasher that actually works? What kind?

    3. My new dishwasher is a Bosch... but it wasn't the incredible cleaning machine that it is now until I discovered the Finish Powerball Tabs - I think it took the combination of the machine and the right detergent. But, holy moly! I can actually put un-rinsed baking dishes in there - even with baked on cheese and they come clean! It's a life-changer for sure!

    4. oh yes! Though I think for me the "pretty things" applies to clothes. If I have a great looking, great fitting outfit on one day, I'm much less likely to have eating disorder issues that day. So i don't *need* a pretty outfit, but it sure does help. Not sure what category to put that into!

    5. Hi Joanna,

      I've been there with the eating disorder self-image thing. My opinion is that you need to put your healing first, and all other considerations (like frugality) should be secondary to that. I went through a serious clothing phase - which I'm pretty much done with now - but at the time it was fairly vital for me to be able to look in the mirror and like what I saw. I think there's an argument to be made that at this point in your life clothing could be considered a "medical expense!"

    6. Hearing you say that means a lot. Thanks for the support!

  2. I love your categories. I get tired of people who don't know what a real need is and still think that you should spend only on needs. I've never thought of splitting out the secondary needs, but that's useful because that's something you might be able to change over the long term. I've used the word "tool" to include some of the things you call "investments."

    I think another kind of spending that fits best in the category you call fantasy spending is the kind where you're just doing what everyone else does because you're supposed to, without even evaluating whether this is something you actually want. In this case, it's more like other people's fantasies. Examples could be going to college, getting a car, buying a house, having a big wedding, or even just things like beer, coffee, dessert, and movie outings.

    Pretty picture spending I have done in the past but have cut:
    * books (now I just get books I've already read and know that I will re-read or lend to everyone)
    * cookbooks (I barely use the ones I have--I mostly re-cook tried-and-true recipes or try ones I hear about from friends or the web)
    * fabric and yarn (now I don't get these unless I have a specific project in mind)
    * college degrees might fit in this category--I loved college and grad school, so I don't think those were fantasies (maybe grad school was), but additional degrees are something I'm not going to get unless an employer pays me or promises me big raises. I'm still reading and auditing classes, though.

    I don't THINK I'm still doing much of that. I do feel a lot like those dogs contemplating the pizza in your picture--I can't help thinking that way too many calories are totally worth the cost, but maybe some of them aren't. I'm getting better at not continuing eating the ones that turn out not to taste as good as I hoped (though there is still plenty of room for improvement there).

    I do have a lot of hobbies, too many to be doing all of them at the same time. It's hard to tell which ones I'm done with forever, though. So I probably have some hobby clutter I don't need, though at least I don't buy more things for hobbies I'm not currently doing.

    1. I'm chuckling about the hobbies... I've spent more money than I care to think about buying all sorts of supplies for projects that I was all excited about. Problem was that the excitement wore off pretty quickly when I realized how much work the projects would actually be! Oh, the road to hell is paved with unfinished projects! I'm really trying to get out of fantasy land with that one. I'm really not as "crafty" as my internal picture of myself wants me to believe I am!

      I think it may be genetic though - When I was 3 years old my Dad decided that he wanted to build a grandfather clock. So he went out and bought a kit and got about a week or two into it before he pooped out. But he couldn't bear to let go of the pretty picture of this beautiful clock, so he carried that damned thing around with him for 40-some-odd years! He told me last week that he finally gave it away to an actual clock-maker who was delighted to have it. I guess some fantasies die hard!

      And I totally LOVE your description of living other people's fantasies. What a big trap that is!

    2. I'm glad the pretty picture of that clock is going to come to fruition!

      I didn't think up the idea about other people's fantasies--I read about it in a book where each chapter was another trap that could cause you to spend too much money, and that one was the most interesting to me--I'd never thought of it.

      I'm realizing I have clothing and food fantasies. I buy way more dresses and skirts and fewer pants proportionally than I actually wear. (It's hard ot find pants that fit--I don't even like trying! And dresses are fun, but I feel I have to wear sandals with them, which are no good for my freezing cold workspace, or high heels, which are uncomfortable.) And I keep the extra dresses and skirts because they don't wear out!

      I keep buying more fruits and vegetables than I will actually eat (but I need to keep that fantasy going! for health reasons!).

    3. Ha! I've got the same skirt fantasy problem. I never, ever wear them - similar shoe issues. I finally gave away most of them, but I still have about a dozen, only about half of which have ever actually been worn. My life just has very few skirt-appropriate activities in it these days.

      And I hear you on the fresh foods thing. I'm getting better though since I started doing most of my weekly shopping on foot. It's sorta hard to buy too much produce when you have to carry it all home! Plus I finally let go of this weird idea I was carrying around that fresh fruit and veggies were somehow a precious treat that should be carefully doled out - now I eagerly gobble them down and save the frozen stuff to use in case I run out of fresh.

    4. Sadly, I would never eagerly gobble down fresh produce. It's just not my favorite food. And there's only so many banana chocolate chip pancakes you should really be eating.

    5. Ha! Well, bananas are produce! Seriously though, for me the key is to buy stuff that I actually like fresh strawberries, or cherries, or grapes, or blueberries, or peaches - you know, the expensive ones. I refuse to eat mealy apples!

      The other thing that helps me eat more veggies was getting over the idea that the only "right" way to prepare them was steamed. There are just so many more tasty ways to eat veggies - grilled asparagus, roasted cauliflower with garlic and parmesan cheese, grilled fajitas.... I grew up with soggy canned veggies that were always sorta like punishment to eat. Discovering that vegetables were delicious was a complete revelation for me!

  3. Last year I did Buy Nothing New Month in October. It was a real eye opener as to how much unnecessary stuff I was buying. I actually consider myself to be quite frugal, yet there I was feeling an urge to go and spend for the mere sake of it. I will definitely do it again this year. I might even go more hard ass and try to live out of the pantry and garden too, a buy nothing month would certainly be a challenge. I share that crafty collection of projects never finished or some even begun, love the story of the grandpa clock. I really love being home with the kids and some women say they envy me and wish they could be home too - I can't help but think many of them could stay home if they learnt to do with less.

    1. I've never done a "buy nothing month" but I'm sure it would be eye opening! I've been trying to clean out my pantry and it's been a real challenge. I fear I'm a bit of a food hoarder, plus I tend to get excited about things that are in season and forget about canned and dry goods that are hanging out in the dark depths back there! But it's been quite an experience to force myself to actually use up a bunch of this stuff. I think it will make me a tad be more careful about which things I choose to stock up on in the future!

  4. "This type of spending is often confused with luxury spending, the difference is subtle, but very important. While luxury spending actually improves your life in some way, fantasy spending only improves the picture - and the giant marketing machine exploits this angle at every turn."


    My fantasy spending revolves around living in a gorgeous house in the country on a good chunk of land, where I spend my days as a stay-at-home mom doing homestead-y stuff. One time, I bought a massive butter churner. I had no idea of how to churn butter, but I remember old timers talking about doing it while watching the kids play outside, so I needed one, right? I mean, this was going to be my life! I had to prepare!

    Um, I'm 39 years old, infertile, married to a man who doesn't want kids, am the primary breadwinner (and always will be), and I live in a densely populated urban area in a less than 500 square feet concrete box on an endless slab of concrete. There is no house, land or staying at home in sight. My fantasy is absurd, to say the least, and even more so because I think that BUYING SHIT I ASSOCIATE WITH IT will somehow make it manifest! Never underestimate the power of denial.

    1. OMG, I totally LOVE the butter churner story. I used to spend ridiculous sums of money on camping and hiking stuff. Somehow I had this picture of myself as being "outdoorsy." But the truth is I'm a lazy slob who suffers from exercise-induced anaphylaxis, so I can't hike - at least not any place out of cell phone reach and easily accessible to ambulances in case I start to swell up like a sweet potato. Plus, I hate to be cold, and I get whimpery when my feet hurt, and in truth, I'd much rather be sitting at home with a cat on my lap.

      A few years ago I finally faced reality and packed up all of the barely used tents, camp stoves, skis, hiking boots etc. I fear my garden is about as close as I get to nature these days!

  5. Books and art supplies for my kids are my fantasy spends; don't get me wrong, we read all of those books, but whether we need to own them all is another matter! The art supplies also get used, but not at anything like the rate they did when my children were tiny (I think I still wish I had under-5s!!). This was a really good read and your categories are spot on!

    1. Glad you enjoyed it. Your comment sorta reminded me of my cat toy spending story. I used to feel terribly guilty if I came home from the pet-food store without some new catnip mouse or feather toy our something. One day back when I was still working and hardly ever home, I remember standing in the cat-toy aisle trying to find something that they didn't already have. I stood there for about 10-15 minutes when suddenly it occurred to me that my cats already had all the toys they could possibly want or need, and what they'd really appreciate would be an extra 10-15 minutes of attention from me. At that point I came straight home and played with them - and have never wasted time or money in the cat toy aisle since!

  6. Awesome categories. The fantasy purchases that fall into the NEED categories of those around me are the worst. That 50K SUV? NOT a need. The new clothes? Same. The gourmet foods from the swank store? Not even close to a need. At LEAST call it a luxury.

    What really slays me is when a certain friend tells me, "We all NEED a few luxuries in our life." Let's just say that our lives are very different.

    1. I hear you. It drives me crazy too, but I have to say that this sort of stuff really is its own punishment. My response (which I don't actually say out loud) is generally something like - "Well, if you MUST spend so much money on ridiculous things, hope you enjoy working your rear end off! I'll be thinkin' of you you while I'm enjoying my eternal vacation existence!"


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