The Family Money Coach
Can Spending ever mean Saving?
Updated: Jul 10, 2021
The answer to that is no, isn’t it?
Or is it?
A few weeks ago, we had a bit of car trouble in the Family. Richard drives a 14 year old Honda Civic, and due to an unfortunate blind bend, it was written off. The front end of the car took a bit of a collision, and due to being uneconomical to repair, we were all of a sudden down to one car – mine.
Now that’s not a problem. We are fortunate in our house to each have a car – and this fortune provided us with the flexibility to manage once Richard’s car took its final journey.
That was, until, my car then had its own issue.
Not more than 13 days after the “accident”, my car developed an engine fault. To replace the broken component, it was a mere £705. Happy weekend to me.
Initially, mine and my husband’s reaction was to decide to simply pay the bill, retrieve my car from the garage where they were "fixing it" and carry on – until we began talking and thinking (always two very dangerous things to do!) We realised that my car, being 7 years old and not particularly valuable, was only actually worth about £3,500 more than the cost of the component we had replaced; and if more things were going to start going wrong, we could very quickly end up in a situation where we spent more to keep the car running, than the car is actually worth.
What’s unusual about that? Well, nothing really. For those of us who drive older cars, it is almost inevitable that things will start going wrong, that they will start costing a fair amount of money, and that eventually, you may spend more on your car than the actual value of it. So far, so normal.
But what brought this situation to our attention was that we were now in the place of having only 1 car to rely upon – this car would have to be all things to all people, at all times. We now felt consciously aware of our reliance on the car – and whilst that might not be an issue if you live in a large city or can walk long distances (living on the edge of the countryside with a very heavy toddler I can do neither), this made us start talking about whether it really was time to change the car.
Now, as we all know by now, as a money coach, I’m supposed to be good with numbers. And I am. I’m good enough to realise that buying a new car would still mean a £200 per month increase in our household expenses, and that made me uncomfortable.
“I don’t like the idea of increasing our expenses just before Rosalind goes to Nursery” I told my husband – hoping that the idea of yet more cost might put him off. “But the current car will end up costing us more in the long run” he retorted.
And as much as I don’t like to admit it, he’s probably right. And that’s fundamentally the point of this week’s blog post – knowing when to spend, to save in the long run.
As parents, it is very easy to get fixated on the “cost” of things – after all, most children’s stuff IS expensive, and the way in which most children’s products are marketed is designed to create a sense of desire and necessity in our brains. Not everything that is marketed to us we need, nor will our children actually get any use out of (this has been the subject of many blog posts that I’ve written in the past).
But sometimes we do NEED things – even if they cost a lot. So how do we rationalise spending that money to ourselves, particularly if we are on maternity leave, or down to just one income, for example?
My answer is to think about what the spending saves you. Counter-intuitive? Not really.
Just like my car – when you are debating a purchase or an expense, perhaps thinking that it is A LOT of money, that you can’t really afford it or that it is unnecessary; I want you to step back and ask yourself:
“What will it save me?”
The important answer here is that it doesn’t actually need to be money, either. In the case of my car, choosing to buy a new one would save me maintenance costs in the short term, but also save me anxiety and worry over the reliability of our mode of transport – meaning that I am saving myself stress.
I know that everything that we buy with children is expensive – you know it too. But the key thing isn’t always to focus on the spending itself – but on the saving that the cost can provide. By adopting this strategy, you’ll begin to find it easier to make purchasing decisions too – as you’ll start to become acutely more aware of when you are spending in a productive way, or spending in a way that perhaps isn’t acutely aligned with your goals and family needs.
It’s also important to remember that not every expense that you make has to save you something, but this strategy will help you on those occasions where you aren’t sure whether you SHOULD justify the expense or not.
And just like me having to make a decision over the car, remember that there are very few decisions were there is a clear cut “right or wrong”, the best answer is always just the one that works for you and your family.