In economics class, I learned about how consumers make tradeoffs based on the amount of money they have to spend and what mix of "stuff" would make them the happiest. We all have a different mix of stuff, but we can figure out based on what we can afford what we'd like to buy and how much of it.

I understand this in class, but I can't seem to get a grasp on this in my own life. I do have a budget of sorts; it's not like I can just go out and buy whatever I want, but at the same time I'm not making conscious tradeoffs when I do buy more of something or a more expensive product than I think I can afford. How can I justify, for example, my $78 shoes, or my $100 computer bag? At the time I buy it, I definitely tell myself that I won't buy any new clothes this month, or I'll buy less frivolous stuff at the grocery store. But two weeks later, when I'm actually at the grocery store, I never think about that promise to myself. I never factor that into my shopping. The only time I know if I've over- or under-spent is at the end of the month when I'm totalling everything up.

I feel like I've tried a number of tricks to try to keep me conscious of this. I've tried writing out a budget, complete with amounts of money I can spend in different categories. But this is difficult for me to keep track of on a daily basis; for instance when I'm out to a restaurant or bar with friends, it's hard to think, "Ok, now how much money to I have to spend on this meal? I allocated $100 for eating out this month, divided by how many meals there are in a month, but then again I ate lunch at home last week, and I only spent $5 at dinner yesterday..." Some readers with very good long-term memories might even recall past references to such a budget. Yeah, I was making it all up.

I've tried different ways of budgeting my money through a combination of cash, debit, and credit. For awhile I only used cash for lunch and little things I had to buy, debit for biggish purchases (such as groceries and clothes), and credit for monthly bills like gas and electric. But inevitably, I'd find myself at a convenience store with only $1, or at a quandry about where to put semi-regular things like magazine subscriptions.

Miraculously, I'm managing to save a little money, even in graduate school. But I still wish I could figure out how to go about my everyday life without wondering if I'm putting myself in the hole. Can I afford those $78 shoes? Sure, I have the cash in my account, but does that mean I should be using it? I don't know.