Diana Clement: Cut coat according to cloth

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Eliminating unnecessary daily purchases is no real hardship

Moving to a more affordable house is one way to deal with financial pressure.
Moving to a more affordable house is one way to deal with financial pressure.

A chance posting on Facebook this week by a friend inspired this column.

Middle New Zealand has lost its understanding of hardship. Many have no money at the end of the week or month and think life is tough. If they had to reveal their budgets to scrutiny there would no doubt be a lot of room for movement.

The Facebook posting from my friend Jessica got me thinking. She announced she had given up shopping for clothes at the beginning of the year - after realising that she'd spent $6000 on the habit last year. "Even though I earn good money, I was always running out," says Jessica. "I decided I had enough clothes for my everyday use that I had built up over the years."

The clothes money could be better spent on her children, she thought. As a result of the clothing ban Jessica has the cash available for her son to go on a trip to Vietnam this year.

I had an interesting conversation with a man from Zimbabwe while on a tramp.

His family was in the rag trade. When his country's economy collapsed people stopped buying clothes. He reckoned people were having to make do and could wear their existing wardrobe for the next 10 years.

Jessica agrees. "You don't need 47 dresses for winter [which she has] and 50 for summer. I could not shop for 10 years and still be fine." In fact, she's enjoying wearing some of the dresses from the back of her wardrobe that haven't seen the light of day for a while.

She points out that not all of her dresses were super-expensive. Many were bought on Trade Me and from op shops. But she wouldn't hesitate to spend $500 on a dress if it was "right" for the occasion.

Judith Levine, the author of Not Buying It: My Year Without Shopping, says we're locked in a social and cultural economy based on purchase. The New Yorker, who has an average income, says she was amazed at how much less she spent in a year when she started to question the necessity of even minor daily purchases.

It's a self-indulgent book about the middle classes doing without luxuries, not low earners doing without true necessities. There were some things she refused to give up - such as $55 haircuts . Haircuts are free at some hair academies.

Despite its flaws I found the book motivating in the questions it raises about the things we "need" and about simplifying life. As I typed that last sentence I looked at the Kathmandu water bottle on my desk and the Dymo LetraTag label maker. They aren't necessities, although I'm sure most people who buy them think they are.

I wasn't the only person who was interested in the Facebook posting. Jessica's friend Paul Hope posted in support. A flood destroyed half of his belongings last year. "It was gut-wrenching, but also like a fresh breeze blowing through and releasing us from the past," he posted. "We decided not to replace anything and we haven't missed it at all."

Insurers often say people under-insure their household contents. I know like Hope that much of the stuff in my house wouldn't be replaced immediately, or ever, if disaster struck. Sure we'd need to buy furniture, kitchen basics, some clothes, toiletries, etc.

I'm sure some readers will be shocked at Jessica's clothes budgets. None of us are perfect. I'm a sucker for a good school fair. With the Devonport Primary and Stanley Bay School fairs on this weekend and next, more unnecessary stuff will find its way into my house.

Others will buy boat accessories or several nice bottles of wine a week that soon add up to thousands of dollars a year. I'm endlessly amazed at what people buy for their houses and their children without a second thought.

Fine if you can afford it. But some people say they can't pay for the basics on six-figure salaries. I wonder if they are being honest with themselves.

A reader who responded to my column a few weeks ago said his household income was $150,000. There were no children and the household didn't spend on "toys, holidays or luxury/unnecessary items". The posting didn't specifically say there was no money left after essentials, but that was the suggestion.

If there is no money left from $150,000 then there is some serious leakage somewhere in the family budget. Levine pointed out in her book that research found just about everyone thinks they need the things they buy and considers almost anything they want to be a necessity.

The reader admitted to non-essential spending such as gym membership and a Sky TV subscription. There were items that I would have said were luxuries such as $65 for the mobile phone package. The $16-$19 monthly packages from Skinny, 2degrees and Vodafone are more than ample for anyone with average mobile usage.

I have no idea what the problem is. Could it be the mortgage? Perhaps the answer is to downgrade to a more affordable house. I did a quick search on Realestate.co.nz and there were 496 three-bedroom houses or townhouses listed for sale in Auckland this week with a price tag of less than $500,000. That search excluded auctions and tenders, which would account for many more.

Jessica's clothes-buying ban has had unexpected, but good, spin-offs. She has more energy and isn't constantly thinking about the next shopping conquest.

"It has enabled me to focus on what really matters, which is going home and having energy to do things with my kids rather than think 'I need blue shoes to match my new blue dress', when black shoes would be fine.

"I have also learned that there are other things to do at lunchtime rather than look around the shops."

The clothes-buying ban has also made it easier for Jessica's partner to spoil her. Now that buying dresses isn't something she just does, he can treat her and that enriches their relationship. "Buying me a dress [as he did recently] was a way that he could treat me," she says.

"Most working women have the money [they need to buy things for themselves]. It makes it hard for their partners to buy them things they will cherish."

A reader once emailed that earning more was more important than spending less. It is true that if people earn more they can afford more. Will they save more? Probably not in most cases.

Yet the argument for earning more is sound. Combine it with spending less and it's a real winner.

I compiled a list of ways to do this. Before I get the usual "don't you know there are no jobs out there" response, income-boosting ideas include:

• Ask for a pay rise. If you don't ask, you don't get. Back it up with a good argument showing what you're worth.

• Go for a promotion. Someone has to get it. Why not sell yourself as that person? Even minimum-wage industries such as home care, factories and the cleaning industry have to have supervisors and managers who get paid more.

• Get a new job. People do this every day. They move jobs for better money. Someone has to get those jobs.

• Moonlight. Get a second job, although this isn't as good as making more money from the existing job.

• Think laterally. I know a family who paid for a holiday to Fiji with the proceeds from one litter of puppies. That's a nice earner.

Meanwhile, three months into her challenge Jessica has decided to extend the clothes-buying ban beyond 2014.

- NZ Herald

Diana Clement is a freelance journalist who writes about personal finance and careers. She has worked as a journalist for more than 25 years in both New Zealand and the UK. Diana has contributed to a large number of local and international publications. Her pet topic is the secrets of saving money.

Read more by Diana Clement

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