Michael on December 24th, 2007
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My wife and I are expecting our second child shortly. You’d think I would have ensured a December due date (to take advantage of an increased child tax credit and additional personal exemption), but alas we are due at the end of January. You just can’t plan everything.

Before child number two arrives, we really wanted to get a night away, just the two of us. We haven’t done so since prior to our daughter’s arrival, so we knew real well we could be looking at 2010 before another similar chance presents itself. So we scheduled a little R&R in Boston for a Saturday night in mid-November. Of course, our daughter then gets sick Friday night. Result? Plans postponed. You just can’t plan everything.

We reschedule for a month later. Of course, our daughter then gets sick Friday night. Result? Plans postponed. You just can’t plan everything.

Mind you, this is a kid who is remarkably healthy. And, these two times that she just got sick, we’re not talking a little sneezy. This was the stuff that keeps parents awake at night. So we rescheduled, yet again, for this past Saturday night. The result: a great time.

What’s this got to do with personal finance? A lot. In going away for the weekend, we made a joint and explicit intention to enjoy ourselves far more (and spend more money) than we would on an ordinary weekend. But we never threw the baby out with the bathwater.

You: Interesting idiom to use.

It’s a slip of some sort. But definitely not Freudian.

You: Well, there’s a relief.

Gary: I’m confused.

Good enough. The point is that although we were on a mini-vacation, we still followed Saving Strategy Rule # 8: Spend on items you value highly. For us, that meant a nice meal in Boston’s North End. It also meant going out for dessert afterwards. But remember the obvious flip side of strategy # 8: don’t spend highly on things you don’t value.

You: Such as?

Parking. I admit that in general I hate paying for parking. But I really hate overpaying for parking. The hotel where we were staying charges $35 a night to self-park your car in their lot. During the workweek, when all the neighboring lots are full and street parking is non-existent, you probably don’t have much choice. But on a Saturday night I figured there would be nearby lots that would cost a lot less. But before I went into a neighboring lot, I decided to invest five minutes –

You: Invest? Five minutes?

You bet! Remember, you can invest far more than money. Your time is one of your most valuable assets (remember the miracle of compounding interest!). So I decided to invest up to five minutes to find street parking. It took only two minutes and I found a spot less than three blocks from the hotel. I had to pay $1.50 at the meter to take it to the time when the spot became free for the night. (This spot was free on Sunday.)

So instead of paying $35, we paid $1.50 to park overnight. Now I drive a 6+ year old Saturn so maybe street parking wouldn’t work for someone with a newer, more expensive car. However, that would be just one additional way in which a new and expensive car actually costs you more than you might otherwise expect when you are deciding what car to buy.

Coming up with ways to reduce your spending without cheapening your life is the biggest obstacle people fear when they just don’t save. It prevents too many from living Beyond Paycheck to Paycheck. They can’t imagine reducing their outflow without becoming so cheap they will be miserable. But you can and this is just one example.

Still, it won’t work for everyone. Heck, it might not even work for me every time. Had it been pouring rain, I might not have liked the idea of carrying my luggage three blocks in a downpour. But then I would have valued the parking much higher. On a decent-weather day like last Saturday in Boston, I’d much prefer to use my $33.50 elsewhere, like on a Red Sox ticket.

You: The Red Sox? In December?

You just can’t plan everything.

Happy holidays. Feel free to say hello if you’re here!

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