DINK - Double Income No Kids

Posted by HIM on Sunday November 21st, 2010

Apparently it is something we should aspire to, Double Income No Kids that is.  It seems to be the living arrangement that would suggest a certain degree of affluence which heterosexual couples may pass by on their way to family-dom.  It may seem like it would provide a distinct advantage to gays for a change, but it hinges upon a certain something which is illusive to so many. The second income.

While it would be fine if you could just tread water in the world, until your prince comes in and assures you financial stability; but really who wants to wait?  In fact it would probably be prudent to have enough autonomy that if, heaven forbid, prince charming turns out to be a bit of a toad; you could manage just fine.  It's all well and good to set out on a quest of financial security, but actually it's kind of tough.

It’s especially tough, if you happen to be so fortunate as to live in Vancouver.  A place where the disparity between cost of living and salary is often so pronounced, even without the obligatory trips to State of Mind to keep your wardrobe up-to-date.  So then, what to do?  Abandon the downtown lifestyle and move to the suburbs?  Stop spending inordinate amount of money on things you REALLY don't need?  Those are good places to start, but only if you can stand going to karaoke bars where plaid is worn proudly rather than ironically.

Instead focus on how you spend your money.  Rather than funding lunch with Visa, try withdrawing enough money at the beginning of each week.  This kind of conscious switch will not only reduce the interest you pay on those Rock and Republic jeans, but makes you cognizant of how much you're spending.  Go to the Happy Rock or read their articles below which outlines the benefits and drawbacks of such a strategy.  It may be too much for some however, and the sudden switch to cash may lead some to become frustrated.  Instead, try keeping a diary of how you're spending. Try looking at your Statements and not just your balances (or in my case the minimum payment due).

There are many areas where you can afford to simply live thriftier in order to keep your bank account healthy, rather than exercising your debt.  Things like skipping the club every once in awhile in favour of a good $15 bottle of wine or drinking the coffee at work can quickly add up in your favour for a change.

Budgeting skills may even move you into a situation where you can start saving.  Don't just put a little bit away for that trip to Sydney for Mardis Gras, instead make sure to have a contingency fund.  It'll come in handy when you make your grand exit from your job as a flight attendant or when you need some emergency botox.  If you're lucky enough to be able to, put a little bit away each month automatically, as a little bit here and there adds up.  Talk to your bank about starting up an RRSP, they'll be able to provide some degree of guidance in the matter.

Now if you'll excuse me, I'm going to go find a sugar daddy to help pay off my student loan...

Benefits and Drawbacks of Spending Cash

In honor of the upcoming cash spending experiment I wanted address the benefits and drawbacks of spending cash. I will revisit this list after the cash experiment to see if I have anything to add or critique.

Benefits of Spending Cash

1. First and foremost, spending cash makes it impossible to spend more than you have. Going into debt is impossible with cash.
2. Forces us to face the consequences of a purchase up front rather then delaying it until after it is too late. Thinking through the consequences of a purchase may change your decision. By consequences, I am talking about making needless purchases, over-priced purchases, impulse buys, and even spending money that should have been designated to other areas. With plastic a lot of this information is gathered well after the purchase, and by that time it is usually too late.
3. Spending cash constantly reminds us of the value of a dollar. Buying a fancy $4 Starbuck’s coffee on plastic can become so much of a habit that we become oblivious to the fact that real money is changing hands. The consumer industry would love to make consumption as much like a video game as possible, they benefit when you forget what your money is worth. In this day and age with direct deposit, automated payments, and credit cards it is possible to earn and spend money without ever physically seeing any of it. It even kind of sounds surreal when you describe that way.
4. Spending cash hurts. This may not hold true when buying a pack of Wrigley’s Juicy Fruit, but it sure does when filling up an SUV at Sunoco. Psychologically, parting with cash is much tougher than swiping a card.
5. Paying with cash is faster. No waiting for signatures or authentication. Hand over the cash, get some change, and you are done. Stores have ‘Cash Only’ lines for this reason.
6. A fringe benefit is that paying with cash can put more profit per purchase in the store owners pocket by avoiding the credit card company fees. For me I would rather give a little mom and pop shop some extra profit than line the pockets of the credit industry. This point maybe nullified if spending cash significantly lowers the overall spending in a given store.

Drawbacks of Spending Cash

1. Convenience, Convenience, Convenience. The hassle of finding proper ATMs, making sure you have enough for large purchases, and saving receipts to track your purchases makes using plastic make more convenient. Spending cash seems annoying, but I will see how annoying it is during the cash only experiment.
2. Security. Lost your wallet? You can probably kiss your cash goodbye. Plastic affords you extra security measures that cash just can not offer.
3. Credit card rewards. If spending cash proves to cut my spending by more than 1%, rewards won’t matter. I included it because rewards are where the credit card users get all worked up. They get quite passionate about their rewards. Free money, right? I suspect the credit cards companies are armed with more information than the consumer. We will see if credit card companies have done a good job blinding us with rewards.

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