Posts by Cliff and Nirav about frugality and buying luxury on the cheap got me inspired to write something about "frugality" myself. Usually I don't write about this topic. I feel very comfortable with my level of spending and it isn't an area where I feel I need to improve - unlike my trading or investing - and most of the time I don't think it would be very interesting to anyone. I grew up in a pretty frugal family and the habits were instilled in me from birth. There never seemed like there was another way of living apart from being frugal, saving, and investing. My father thought me to be very spendthrift in fact. Most of my friends would say I was frugal. I rarely though buy the cheapest option, I try to get good quality stuff at a low price.
So here is an example. Moom and Snork-Maiden, Moomin's significant other, are going for a trip to Florida. There are four alternatives:
1. Don't go to Florida - invest the thousand dollars plus that the trip will cost.
2. Go to Florida and do all the cheapest things. Like buying $160 airline tickets - that arrive at 11pm in Florida and staying in a low price motel ($80 per night) on the mainland.
3. Buy tickets @ $250 that get us to Florida at 4pm. Still spend a while online finding this good deal. Moom and Snork-Maiden discussed this one quite a bit. Moom was insistent on spending the extra money, while Snork Maiden thought the cheaper ticket was better. Moom just thought that $80 extra each was a good price to pay for not arriving late at night especially if something goes wrong (flight delayed, hotel booking screwed up etc.). And if everything goes to plan we spend an extra evening in Florida visiting Snork-Maiden's friend. We also booked a hotel for the second two days of our trip on one of the barrier islands. It costs $120 per night. There are lots of much more expensive hotels surrounding it.
4. Just buy the first tickets we see that have good times and splash out on expensive hotels etc. with the best amenities right on the beach. You can spend more than $400 on a ticket and up to that a night at a hotel.
As you can see we ended up with 3. I think the extra money is worth it. But I am still doing option 3 instead of option 4.
What would you do? I am curious how frugal other PF Bloggers would really be in this situation? Would it make a difference if you had the same net worth and income as me (you could be better or worse off actually)?
7 comments:
Moom, this is great! I think your question, the same as mine, is the driving difference between the investment bloggers and the budget bloggers.
By the by, I would go for the 4 p.m. arrival time. After getting into a few places at 11 pm and trying to navigate around, I've learned day-time arrival is best.
I'd probably go for either a mid-morning arrival time (if any flights landed at those times, which isn't likely based on where I'm at) or the late night time, but that's because flying makes me tired anyway, so unless I got there very early in the day with time to take a nap, I'd just go to bed anyway. I'm with you on the nicer hotel though.
Yes, personal preferences like these come into decisions like these. Neither Moomin nor Snork-Maiden like getting up early in the morning (especially Snork-Maiden) so we won't be getting any 6am flights. Snork Maiden will probably sleep on the plane anyway and Moom doesn't need to sleep a lot.
mOOm, As you know, we are not poor but also have little dudes.... so. We are with you at 3. Our time is valuable and direct flights that hit nap time correctly are critical. One thing though, we go FRUGAL on hotels. We just want clean. Also, and I kid you not, we have almost 2 million Hilton and Marriott points from my wife's career days. This summer we have a company achievers trip at a Ritz. We'll use about 100,000 points to stay 4 more days. We could move but you try herding cats er... kids. We will use frequent flier points to get the little ones on a flight and my wife is a master at upscoping service. She knows all the tricks.
Short answer is, I am cheap but flight times and my time are critical to a good vacation. Don't cheap out to much...
Hey, also thanks for your support on TN. You must enjoy tweaking me :-)
InLibrisLibertas - the Pelican Post is the cheapest motel we could find on the barrier islands actually on Anna Maria Island. We thought being able to walk a block to the beach and Intracoastal Waterway as well as the local downtown is worth it. It's an old fashioned style motel. It's the peak season in Florida - this place is $80 or something in the off season.
One consideration is that if there is a snowstorm up here or any other delays we'd end up there the next day if we planned on a very late flight. Last time I was in Tampa I was "forced" to stay an extra day due to a snowstorm up here :)
hey mOOm, thanks for all the comments on my blog, as for answering your questions to my frugalness I would be a #1. when we goto port calls all my budies try to get the nicest hotel and buy $150 cuban cigars (which we always find out are fakes still) and I look for a cheap youth hostel to stay in over night or just sleep on the ship to save money. speaking of frugal... when we are inport while everyone else doesn't dare to eat on the ship (because its already taken out of your paycheck) I eat at least 5 full meals a week on the ship including breakfast, lunch, and dinner. also instead of getting a nice pad in hawaii like a studio or 1 bedroom i always move in with room mates to save half of the extra I would pay for. this is how i can keep putting my money into the market and building my capital faster and faster then them. i think everyone thinks im the nerdy financial expert now on the ship. i think its cool but when you are on an egoistic crowded highschool theemed workplace sometimes it would be a little bit cooler to be the jock.
once i'm superior in options i'm going to check out futures. i understand them to be buying and selling a market like corn, oil, a specific thing and the market never stops as you say over night trading because its trades throughout all the world markets. really cool. im trying to get some degree in business either finances, economics, real estate, or they have new programs for learning hedge funds which seems really cool.
back to frugal stuff you don't need to be being older and having more money. me being in my 20's still lives on a budget. sometimes i wish i could just let loose and live the high life.
i will soon.
later - finance ninja
There's no point in wasting money, but don't miss out on experiences to save money. Staying in the youth hostel is probably a good idea, eating on the ship maybe you miss out on the local experience. When I was younger I used to stay in youth hostels a lot. It can be a good way to meet people.... Until I was 29 I shared apartments. All these things eventually get a bit tiring (especially if you find it hard to sleep anyway like me)...
There's not much difference between trading QQQQ stock, NQ futures, or deep ITM QQQQ options. Futures are taxed lower in the US and you can make a trade AH which you can't on options. It's the taxation treatment that's the main benefit though.
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