The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Ricky on May 28, 2015, 10:48:21 AM
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I think about this from time to time.
Do you think being focused on saving money all of the time and making conscious choices about going out and meeting up with friends ultimately makes you poorer in the long term? And I'm not even talking about being cheap. I think everyone should avoid being cheap. Frugality is usually always a means to an end: savings in favor of efficiency and less wastefulness.
I can obviously think of situations in which someone makes $200k/yr and still is in debt - we hear it all the time. Or even $500k. Even if they aren't in debt, they spend up to their eyeballs. For them, frugality would probably be a blessing. I am just wondering if they would have got to the position they are in if they had been a frugal person all along. Does that make sense? And then I can think of situations where people would like a lot of money but they don't see the point so they don't push their theirselves to their potential.
Of course there's Warren Buffett who set out to be extremely rich and made it, yet has zero use for the money (doesn't really make a lot of sense to me). Then MMM can't seem to stop the money from coming in - he's much more wealthy than from when he "retired".
I guess what I'm getting at is - do your feel to some extent that frugality has got in the way of your earning potential? Do you think you would be where you are regardless of your frugality or fear that you may be farther along?
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So you're proposing that surrounding yourself with the trappings of big time consumerist society would somehow make you more money over your lifetime even if you spent it all...
Meh... don't much cater to the woulda shoulda coulda's.
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No. I'm just saying some people might obsess over not spending $5 every work morning at their favorite breakfast joint yet could be making $10k more in salary through negotiating and focusing on income, which would MORE than cover the expense. Ideally, one would do both: negotiate for more pay and then drop the habits. I'm just wondering if you have less motivation for more pay when you realize you're never going to spend it anyway.
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No.
Optimizing my spending has nothing to do with my earning.
And doing so makes me much happier than wasting.
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Of course there's Warren Buffett who set out to be extremely rich and made it, yet has zero use for the money (doesn't really make a lot of sense to me). Then MMM can't seem to stop the money from coming in - he's much more wealthy than from when he "retired".
Warren Buffett got to be where he is in part because he intrinsically enjoys investing. He doesn't need to work anymore, and he isn't doing it to leave a fortune to his kids. He still works because it is what he wants to be doing. That's also the reason MMM can't stop making money - he is just doing what he loves and the money keeps coming.
I think the only way frugality would "hold someone back" is if pushing themselves would be unenjoyable for them. If it were enjoyable, they would do it anyway. And if it isn't intrinsically enjoyable, is it really being "held back"? I guess I would see it from the other side - that being a spendthrift forces people to work harder than they would like to make more money to keep up the lifestyle.
No. I'm just saying some people might obsess over not spending $5 every work morning at their favorite breakfast joint yet could be making $10k more in salary through negotiating and focusing on income, which would MORE than cover the expense.
In that case, one would hope that people would be able to accurately asses which task they found more onerous: making their own breakfast or putting in effort and hours to increase their income.
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No. I'm just saying some people might obsess over not spending $5 every work morning at their favorite breakfast joint yet could be making $10k more in salary through negotiating and focusing on income, which would MORE than cover the expense. Ideally, one would do both: negotiate for more pay and then drop the habits. I'm just wondering if you have less motivation for more pay when you realize you're never going to spend it anyway.
Well I will spend it someday. It's not like the money is being put into a vault labeled "DO NOT OPEN". It will be spent. So I'm not sure what you're trying to say. The fact that I save money doesn't make it so I don't seek out opportunities to earn more money. The one thing which would make me stop earning money is having enough for the rest of my life. Frankly it's why I'm part of this board.
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No. I'm just saying some people might obsess over not spending $5 every work morning at their favorite breakfast joint yet could be making $10k more in salary through negotiating and focusing on income, which would MORE than cover the expense.
In that case, one would hope that people would be able to accurately asses which task they found more onerous: making their own breakfast or putting in effort and hours to increase their income.
More $ doesn't always mean more time and effort. One can certainly negotiate pay without any added responsibility. I definitely agree that if it meant working harder/longer to pay for that breakfast, it wouldn't make sense.
I realize not being frugal can most certainly hold you back. I'm just wondering if there's ever an argument for the opposite? I don't personally believe there is. I'm just playing devil's advocate in a way.
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No. I'm just saying some people might obsess over not spending $5 every work morning at their favorite breakfast joint yet could be making $10k more in salary through negotiating and focusing on income, which would MORE than cover the expense.
In that case, one would hope that people would be able to accurately asses which task they found more onerous: making their own breakfast or putting in effort and hours to increase their income.
More $ doesn't always mean more time and effort. One can certainly negotiate pay without any added responsibility. I definitely agree that if it meant working harder/longer to pay for that breakfast, it wouldn't make sense.
I realize not being frugal can most certainly hold you back. I'm just wondering if there's ever an argument for the opposite? I don't personally believe there is. I'm just playing devil's advocate in a way.
Not financially as far as I know. There are downsides to taking anything to an extreme, cheapness and miserliness aren't exactly good qualities.
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I agree with the OP and have had this same thought at times while reading this blog.
Being overly focused on frugality could be detrimental to earnings. Think of it this way. If you focus more on how to cut up the pie and save a larger percentage of the pie you may be missing ways to increase the size of the pie. If you are able to increase the size of the pie with some degradations to the savings rate you may be able to reach FI more quickly. It all depends on your ability to focus on more than 1 task at a time.
If you are missing out on socializing with your friends because of the cost of drinks, that is on you. Have A drink, and tip the server well for bringing you water the rest of the night. Chances are your friends won't even notice.
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I agree with the OP and have had this same thought at times while reading this blog.
Being overly focused on frugality could be detrimental to earnings. Think of it this way. If you focus more on how to cut up the pie and save a larger percentage of the pie you may be missing ways to increase the size of the pie. If you are able to increase the size of the pie with some degradations to the savings rate you may be able to reach FI more quickly. It all depends on your ability to focus on more than 1 task at a time.
If you are missing out on socializing with your friends because of the cost of drinks, that is on you. Have A drink, and tip the server well for bringing you water the rest of the night. Chances are your friends won't even notice.
But they're not mutually exclusive tactics. Painting them as such is kinda silly. It's not a versus scenario.
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I also separate the making from the spending. I am a serious workaholic who has turned a new leaf. It took a major back injury brought on by 80+ hour weeks including alot of physical labor with my side gigs to help me see the light. After three back surgeries I am "reformed" and still make well over 6 figures within my new 50 hour max limit. I still have this urge to bring in as much as I can because I know FIRE is near, so very near, but it cannot be at the expense of my health.
I don't think I miss too much social activity as I've lightened up some on my spending after the back injury. I feel I am more balanced even though, yes, I look at mint on my cell and play with my spreadsheets multiple times a day.
When I spend frugally it makes my day. I just fixed my car key fob for $4.32 and was thrilled. THEN because my car was on my mind, instead of paying what, $59.95 for the annual oil change at the dealer which i am a want to do with this particular vehicle, I found a coupon which I proudly presented at the dealer for $19.95. Those small things put a spring in my step! So right now the total 2 years maintenance expenses for my car add up to... yup $24.27 and that makes me all warm and fuzzy inside. I'm not seeing how those kinds of frugal decisions are holding me back. (note: last year the dealership sent me a FREE oil change coupon, I like that even better!)
Luckily none of my friends drink or socialize in bars so that takes away alot of social stress. Our home tends to be the social place to be so instead our stress is in the form of keeping a clean house. It just needs to be at a certain cleanliness level to be ready for drop in company. Its like always being prepared for a storm. I might have the only close to spotless bathroom of anyone I know(except the neat freaks):) I kind of like it because 1. I don't have to drive anywhere and 2. It forces us to not get sloppy and have a moderately tidy home all the time.
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I agree with what most people here have said. Savings and spending aren't mutually exclusive. You can work on optimizing both, but I think what the original poster was getting at is true. A person only has so much time and energy, and there are diminishing returns the more you focus on either side of the equation. A person that spends all time and money on optimizing spending may reduce net worth because they left money on the table on the income side.
Everyone needs to find their own equilibrium between the two. It will be different for everyone, but I'd say pick the low hanging fruit on both sided and then look at what is best for your situation.
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Not me personally, but I've seen it in others. I live in an EHCOL (Extremely High Cost of Living) area. Housing prices have doubled and doubled again in the last 18 years. Several families that I know did not buy houses/condos during that time, though they could have, because they wanted to avoid debt or wait until housing declined. In the meantime, rents went up 10% every year. Eventually, they were forced out of the area due to housing costs, and now commute 1.5-2 hours each way to their public service jobs that they can't leave, due to pension issues. These were frugal people, that screwed themselves royally due to being too frugal and debt averse. A crappy 1200 square foot 3/2 house went from $300k to $1.2M in that time.
I don't fault these folks for their instincts, but I find it interesting that they don't pull the plug completely on this place, and move to somewhere where the wage/price structure is more affordable. Now they have the worst of all worlds: high taxes, horrible commute, crappy schools, bad air, bad water, and hot as hell in the summertime.
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More $ doesn't always mean more time and effort. One can certainly negotiate pay without any added responsibility.
I guess my assumption would be that if someone could make more money with no additional effort that they will do that, regardless of whether they are frugal or not. I mean, if it is effortless why wouldn't they?
Edit to add: negotiation itself takes work - I pay good money to people to not have to do this myself in various transactions because I find the activity wildly unpleasant.
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My soundbar is making a fuzzy sound and it reminded me of how much better frugality is.
If I would have never bought it, I could have avoided the future troubleshooting, ordering of new optical cable, or contacting the company for replacement.
If I got a camry instead of an audi, I wouldn't be starting to get worried about expensive parts in the future now that I'm at 100k miles. If I didn't buy some of my expensive clothes, I wouldn't be mad when I am training for weight lifting competitions and they don't fit.
As I sell off unused items, and things break and I don't replace them, unnecessary stress has gone down.
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Frugality holds me back from feeling financially insecure. And from making a lot of bad financial decisions. There are probably times were I'm "too frugal" and make a bit more effort for myself than would be optimal given the money/effort tradeoff. But once I have a situation like that I can evaluate how it turned out and whether it was worth it to me, and then I have that perspective going into the next decision.
But the net effect is so overwhelmingly weighted towards making my life better. No one can get every decision right.
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No one can get every decision right.
Unless there are no wrong decisions.
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. . . quietly mentions Hitler and gas chambers.
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Gotta be some sort of record for this forum.
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I had it 50-50 that the next post would mention Nazis versus ignore my post so they could post their own thoughts on if frugality held them back or not. :)
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Godwin is a LAW guys.
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I actually enjoy being frugal.. Its a game to me. I have never sent a car to a mechanic.. for anything ever!
We doubled the size of our own house and only hired two contractors, one to pour the concrete and the other to build the new kitchen cabinets.. everything else we did with own bare hands.
I have built two airplanes, numerous car rebuilds etc etc.
I have more money than I will ever use (as long as remain somewhat frugal)... Held me back?.. Heck no! I have a wonderful life and no boss..:)
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I think about this from time to time.
Do you think being focused on saving money all of the time and making conscious choices about going out and meeting up with friends ultimately makes you poorer in the long term? And I'm not even talking about being cheap. I think everyone should avoid being cheap. Frugality is usually always a means to an end: savings in favor of efficiency and less wastefulness.
I can obviously think of situations in which someone makes $200k/yr and still is in debt - we hear it all the time. Or even $500k. Even if they aren't in debt, they spend up to their eyeballs. For them, frugality would probably be a blessing. I am just wondering if they would have got to the position they are in if they had been a frugal person all along. Does that make sense? And then I can think of situations where people would like a lot of money but they don't see the point so they don't push their theirselves to their potential.
Of course there's Warren Buffett who set out to be extremely rich and made it, yet has zero use for the money (doesn't really make a lot of sense to me). Then MMM can't seem to stop the money from coming in - he's much more wealthy than from when he "retired".
I guess what I'm getting at is - do your feel to some extent that frugality has got in the way of your earning potential? Do you think you would be where you are regardless of your frugality or fear that you may be farther along?
I actually agree with this. But spending money can be seen as an investment even if its not a direct investment. Networking isn't always free and sometimes you have to play the game to get ahead. By being frugal, you can definitely retire early and live a great life and that's what this site is all about really. But I do agree that being frugal, can reduce your earning potential. I think if we were looking at probabilities, then you're best off being frugal.
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I actually agree with this. But spending money can be seen as an investment even if its not a direct investment. Networking isn't always free and sometimes you have to play the game to get ahead. By being frugal, you can definitely retire early and live a great life and that's what this site is all about really. But I do agree that being frugal, can reduce your earning potential. I think if we were looking at probabilities, then you're best off being frugal.
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+1
Also, Frugality has made me happier. Because through my choices, I know I am doing the best I can to get to FIRE. and that is the greatest gift I could give myself. Not an Xbox 1, not a brand new car, not eating out. What would make me happiest is quitting working. So extreme luxuries cease to matter as much, because at the same time I enjoy them, the opportunity cost weighs on me.
If you feel burnt out, I say spend something on a luxury that you will enjoy, wouldn't normally do, but is still relatively inexpensive. It will not be beneficial to make yourself feel completely deprived.
-My $.02
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Well....there's the funny looks when people pass me by in a store as I mutter furiously to myself, "But you don't NEED it you freak! It's a damn THING. You will have to DUST the sob at some point: you're paying money for that????"
I think extreme frugality ( going to a nightclub and drinking only water, going to a restaurant with friends and not eating anything just because it is more expensive than cooking at home) does "hold you back" socially.
Then again...if you were doing those things with anyone from this board....it'd be fine.
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Well....there's the funny looks when people pass me by in a store as I mutter furiously to myself, "But you don't NEED it you freak! It's a damn THING. You will have to DUST the sob at some point: you're paying money for that????"
I think extreme frugality ( going to a nightclub and drinking only water, going to a restaurant with friends and not eating anything just because it is more expensive than cooking at home) does "hold you back" socially.
Then again...if you were doing those things with anyone from this board....it'd be fine.
I think that most times it won't hold you back significantly. Going to a restaurant with friends and not eating anything can be avoided. Make a habit of inviting them over for a home cooked meal. Then they will be more likely to host at their house, rather than a restaurant. Or if they don't like to cook, if they invite you out they would be likely to pay since you have been hosting them.
I advocate also making some new friends who share your financial values! It just makes it easier to find things you are all willing to do!
And I think it is fine to go out once in a while if it contributes to your overall happiness and you can afford it. There is a difference between going to chipotle or something and going out for a four course meal.
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I advocate also making some new friends who share your financial values! It just makes it easier to find things you are all willing to do!
I don't know where you live, but savers and mustachians are very well hidden where I live.
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I advocate also making some new friends who share your financial values! It just makes it easier to find things you are all willing to do!
I don't know where you live, but savers and mustachians are very well hidden where I live.
(https://img1.etsystatic.com/000/0/5509878/il_570xN.140905141.jpg)
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I advocate also making some new friends who share your financial values! It just makes it easier to find things you are all willing to do!
I don't know where you live, but savers and mustachians are very well hidden where I live.
Are you hiding too?
I will openly say "it's not in my budget" or "I feel that place is too expensive". It gets people thinking about if they are wasting money too. Sometimes others will agree who may have not wanted to look like the "cheap" one if I didn't state my opinion. And it can influence groups of coworkers or friends to be more likely to choose a bar with $2 drinks instead of $5. I will go out with coworkers once in a while if it's going to cost me less than $10... because that is part of being smart about advancing your career, making connections with people. Often times people don't talk about finances/opinions about how money should be spent because it is seen as private by many. Break down the barriers and make it a topic you will talk about. You may be surprised who agrees with you or is stimulated by your ideas!
It could be a geographical thing though too. I live in the midwest, so I would bet more people are frugal here than in California or somewhere. Maybe you could meet people in meet-up groups that are geared towards free or low cost activities.
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I advocate also making some new friends who share your financial values! It just makes it easier to find things you are all willing to do!
I don't know where you live, but savers and mustachians are very well hidden where I live.
Are you hiding too?
I will openly say "it's not in my budget" or "I feel that place is too expensive". It gets people thinking about if they are wasting money too. Sometimes others will agree who may have not wanted to look like the "cheap" one if I didn't state my opinion. And it can influence groups of coworkers or friends to be more likely to choose a bar with $2 drinks instead of $5. I will go out with coworkers once in a while if it's going to cost me less than $10... because that is part of being smart about advancing your career, making connections with people. Often times people don't talk about finances/opinions about how money should be spent because it is seen as private by many. Break down the barriers and make it a topic you will talk about. You may be surprised who agrees with you or is stimulated by your ideas!
It could be a geographical thing though too. I live in the midwest, so I would bet more people are frugal here than in California or somewhere. Maybe you could meet people in meet-up groups that are geared towards free or low cost activities.
Nah people already call me cheap simply because I don't buy fast food (I prefer making my own meals) or drive a car. So far, I haven't seen anyone with the same goals as me. Everytime I mention why I don't buy unnecessary stuff (because I want to be FI ASAP), I always get blank stares or they think i'm going crazy or they say "You must not be enjoying life". Once in a while, I do explain why going FI is awesome, but unfortunately no one I know follows that path or is even a regular saver for that matter. Alot of people my age don't even know how to invest and they don't want to because they are scared of losing all their money...yes that's the answer I always get. Occasionnally I will go out with some friends a few times, but I try to avoid making it a weekly thing, because my friends love to party every week and spending their money on booze.
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Maybe it's your age, idk how old you are. Maybe your friends just aren't their mentally yet. Perhaps in 10 years their mindsets will be more like yours. Who knows! I made terrible financial decisions in my 20s, but have become a lot more frugal recently as I start to think long-term. Still paying for it, but know my habits will pay off in the long run. When I was 20, long term was the next year, so I definitely didn't care about saving any money. I was a real dum dum but I think that's a part of being young for some personalities.
The comments about afraid to lose all their money are funny but actually that's sad. I think it just shows the lack of education people have about finances.
And some people like working and it is ingrained in their identity. They don't see the relevance of FIRE. I have a hard time wrapping my head around it, but they say it is true...
I am curious about where you live too
And p.s. fast food is disgusting I wouldn't eat it if it was free
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I am 33, but my friends are in their mid 20's to late 20's....if only they knew how much I wish I could be their age right now and start investing at their age instead of having to start at 30 years old. They have a very good opportunity to make good money and be retired at 40-45, but unfortunately they get tempted too easily by buying fast food almost every work day, bragging about the latest car they bought (and probably financed) and how they have the latest cell phone technology. I even have a couple of friends who went on vacation despite being jobless. They are good people, but they suck at money. Mind you, I was like that at their age and I wouldn't dare stopping being friends with them just because they suck with money, but at the sametime I limit myself when it comes to hanging out with them. My coworkers are just as bad as them....that is why I say it is tough to find people like this community.
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I am 33, but my friends are in their mid 20's to late 20's....if only they knew how much I wish I could be their age right now and start investing at their age instead of having to start at 30 years old.
And people 5-10 years older than you (and older than that) are saying the same thing about your age. ;)
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No one can get every decision right.
Unless there are no wrong decisions.
I'll cop to having made some wrong decisions. I try to learn from them, and appreciate the lessons learned. But some of them were very wrong and costly. Fortunately none of them have had disastrous consequences.
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I am 33, but my friends are in their mid 20's to late 20's....if only they knew how much I wish I could be their age right now and start investing at their age instead of having to start at 30 years old.
And people 5-10 years older than you (and older than that) are saying the same thing about your age. ;)
Definitely! I feel you fb, it is a painful thought, HOWEVER, starting at our age we should be able to retire in our forties, which is super early by the average person's standard! That cuts my career life in half so that's a lot of years most people don't get.
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It depends on the time frame you are dealing with.
Typically frugal living advice focuses on an exponential effect, while traditional spending is linear.
What I mean is, the benefits/happiness you get from spending now are real and exist, but they do not (in most cases) pay off in the distant future.
When you exercise frugality and invest the money you see no immediate utility, but you get a (relatively) permanent monetary return.
Now you might see the person who goes to the bar and spends a bunch of money each week, networks with C level executives and gets a promotion. The statistical likelihood of that is small though. More likely the drinking wont make a difference at all, except to reduce your savings.
The frugal success alternative is extremely likely, just slower. It takes time for percentage gains to compound and steam roll.
So if you don't expect to be around in 10 years then frugality probably isn't worth it - the return wont have time to take effect. Otherwise it becomes extremely worthwhile as exponential returns kick in, without the reliance on your network or alcohol.
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I'm new to this, but so far my money saving activities have added value to my life. I love my new home gym, I'm excited to start biking to work, I took a fun walk to the library the other day instead of fighting traffic, and I removed my gardening stress by deciding not to buy expensive plants this season that will probably just die in the heat.
Since I've started my MMM reading I've noticed that, over and over again, I haven't gotten the enjoyment or value I expected out of the money I've been spending.
For example, against my better judgement I splurged on smoothies at Starbucks for the kids after a walk in hot weather last week, and they didn't even really like them or finish them. I wished that I'd waited and just made them smoothies at home instead. At least I know they like those.
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I've found the opposite...that my frugality mindset is opening up new income increasing opportunities.
-I have MORE motivation to earn. Before my frugality/fire mindset, I spent a lot of my money just because, even though it didn't make me that happy. So making more had little value to me. But knowing now that every dollar gets me closer to FI, I'm more motivated to earn more.
-People notice that you are different. I was talking this winter about FI concepts to friends at dinner, and just my mentality in general about saving vs. spending. Afterwards, one of the guys at dinner with us who owns a local car dealership pulled me aside and said he'd like to work with me at some point, because I don't think the way most people do. I have no interest in working with him at this point, but I found that interesting.
So, I think frugality can even open new doors that wouldn't exist if you are a big spender...it's just that they might be very different doors.
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I think that having a frugal mindset allows you to see it in others, which can lead to developing new frugal friends. In the course of my life I have had one or two super rich friends and I found them to be exhausting. My more frugal friends, way less so. I do draw the line at too cheap, though. They are their own brand of exhausting.
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I think that having a frugal mindset allows you to see it in others, which can lead to developing new frugal friends. In the course of my life I have had one or two super rich friends and I found them to be exhausting. My more frugal friends, way less so. I do draw the line at too cheap, though. They are their own brand of exhausting.
I agree. Our spendthrift parents drive my husband and I crazy, trying to get us to make bad spending decisions to try to keep up with them. They also set a bad example for our kids. We try to spend our time with friends who are more like us, money-wise.
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I'd love to have someone in real life to talk to that is just as excited as I am about being frugal and retiring early. I talk to my husband but even he's not really all that excited about it. He likes that I am, because it benefits him, but he doesn't like having to be frugal himself. It's the main reason I like reading this forum so much, so I know I'm not the only weirdo out there who likes trying to save as much as possible.
To the OP, I can say with absolute certainty that when I was about 23, if I wasn't going to happy hour almost nightly with a certain group of people, I would not have gotten the job that took me from a salaried $25/hour job with no paid overtime to my contracting job of $50/hour with time and a half OT (of which the OT was plentiful, a good thing). Best career decision I ever made. Loved the job, the people and the pay. I paid off about $100k worth of debt (mostly student loans and my scion xA loan) in a little over a year while maxing 401k like a boss. Having said that, I could have certainly spent less at those happy hours and probably wouldn't have had to attend as many for the same result to occur... then again, I did end up dating my husband as a result of those nights out as well. I do not regret that period of my life or any of the decision I made AT ALL.
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I wonder that same question and primarily in terms of social costs. Of course we all think we are frugal and not cheap, but perceptions vary. Someone gave me a set of used office pencils for Xmas when I wanted an art supply set with a rainbow of colors, and when I found out how little he had saved (less than $5 in 2015 dollars) I was offended. Now, used pencils are better than no pencils so my offense has no basis. But I'm sure people see my spending choices the same way. Someone was mad/confused that I didn't attend a destination wedding. Coworkers upset that I didn't donate to a charity or go to a birthday lunch or ask about their weekend. I have an aunt who complains that she puts out fancy nuts when people come over but they only put out cheap stuff in exchange.
The other way frugality holds me back is when I have to hit 3 stores or when I buy more than I should because its on sale. I've been trying to train myself to buy groceries for the month at most, since everything comes on sale that often/ storing has costs/ excess food is harder to manage.
Then there's decision costs, like I will spend time debating expenditures. Right now I waffle about doing social events that are far away or doing an extra grocery store run. I'm also reluctant to pay for lessons - instrument, exercise - which might have benefits but might not. That is, I'm okay with spending money if there is a guarantee of results, but if I will only get results 10% of the time, I might not do it, even though 10% would be enough happiness/ progress to justify cost, the 90% failure rate would be too hard for my frugal brain.
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Yeah, I've kind of stopped participating on this forum because I'm tired of thinking about and feeling guilty about spending money. The difference between "being good" and "being bad" for me is about $200/month. That $200 allows me drinks out with friends, an occasional dinner out, and travel/clothes/other luxuries, and also just not feeling uptight or concerned about things. I'm tired of feeling guilty for saving "only" 50% of my income, always thinking I could be doing better. It's tiresome. I tire myself out thinking about it. And no one understands because culturally, saving 50% is unheard of and I'm doing fine.
In no world am I ever going to be an over-the-top consumer. I bike everywhere. I have a decent job. I make very careful financial decisions when it comes to the big things. I don't buy lots of shit. I try to be conscientious with material purchases. But I'm just done worrying about the small things.
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Yeah, I've kind of stopped participating on this forum because I'm tired of thinking about and feeling guilty about spending money. The difference between "being good" and "being bad" for me is about $200/month. That $200 allows me drinks out with friends, an occasional dinner out, and travel/clothes/other luxuries, and also just not feeling uptight or concerned about things. I'm tired of feeling guilty for saving "only" 50% of my income, always thinking I could be doing better. It's tiresome. I tire myself out thinking about it. And no one understands because culturally, saving 50% is unheard of and I'm doing fine.
In no world am I ever going to be an over-the-top consumer. I bike everywhere. I have a decent job. I make very careful financial decisions when it comes to the big things. I don't buy lots of shit. I try to be conscientious with material purchases. But I'm just done worrying about the small things.
I'm sorry you've been feeling that way. Definitely not something anyone should feel, especially someone who is badass enough to save 50% of their income.
Spend the $200 and don't worry about it.
http://www.mrmoneymustache.com/2014/05/29/give-yourself-the-gift-of-not-worrying-about-money/
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I'm just wondering if you have less motivation for more pay when you realize you're never going to spend it anyway.
I've always been pragmatic and acutely aware of the value of a dollar, both earned and saved. If I don't schmooze as much as I should -- and I definitely acknowledge the power of networking and building social capital -- it probably has as much to do with introversion than frugality.
As for motivation… I used to be way more ambitious, career-wise, but the only reason I'm less interested in work promotions now is because FIRE is within spitting distance. I suppose I'll be "held back" from a lifetime of potential earnings after FIRE, but does that really count?
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Yeah, I've kind of stopped participating on this forum because I'm tired of thinking about and feeling guilty about spending money. The difference between "being good" and "being bad" for me is about $200/month. That $200 allows me drinks out with friends, an occasional dinner out, and travel/clothes/other luxuries, and also just not feeling uptight or concerned about things. I'm tired of feeling guilty for saving "only" 50% of my income, always thinking I could be doing better. It's tiresome. I tire myself out thinking about it. And no one understands because culturally, saving 50% is unheard of and I'm doing fine.
50% savings is amazing. Personally, I am at about 35% or so savings rate and if I was at 50% I would hire a brass band and have them play all day on my roof . Really go and spend the $200 for fun stuff. With your savings rate and early start, you are a for-sure financial winner!
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I'll say yes... If I were more into spending a little more on clothing, I would most likely feel more comfortable putting in for a management position. I hate buying clothes, though.
Small example, though, but it fits.
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Yeah, I've kind of stopped participating on this forum because I'm tired of thinking about and feeling guilty about spending money. The difference between "being good" and "being bad" for me is about $200/month. That $200 allows me drinks out with friends, an occasional dinner out, and travel/clothes/other luxuries, and also just not feeling uptight or concerned about things. I'm tired of feeling guilty for saving "only" 50% of my income, always thinking I could be doing better. It's tiresome. I tire myself out thinking about it. And no one understands because culturally, saving 50% is unheard of and I'm doing fine.
In no world am I ever going to be an over-the-top consumer. I bike everywhere. I have a decent job. I make very careful financial decisions when it comes to the big things. I don't buy lots of shit. I try to be conscientious with material purchases. But I'm just done worrying about the small things.
Shhhhh! Please don't tell anyone, but the most I ever managed to save was about 30% of my income. I just couldn't do more than that in a high COLA. For many years, my mortgage was over 50% of my take-home pay. And that was for an 800 sf apartment conversion condo that I bought on a short sale... Guess what? I still managed to FIRE, just not as early as I would have liked. Allow yourself some grace, windawake, you're doing fine...
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In all honesty, its a struggle for me. My focus on saving has kept me in a job I really don't like. I have a 3 year plan now to change this, but I stick with what I do because it pays the bills and allows me to save up for a downshift in 3 years. Sometimes I wish I was less structured and more willing to take chances like some friends. Even if it cost $ to do it.
I also struggle when I see friends with nice things. Went to a party at a friend's house this past weekend. They had a nice home with a really nice screened porch and backyard. I could afford to move into that neighborhood and have that porch/yard. In a lot of ways I think it would make it easier with kids. I kind of daydream of sitting on the porch while my kids run around in the bigger yard. However, a new home would have to be furnished, painted the way we want, moving expenses, etc. It would draw me away from my 3 year plan.
On top of that, I don't really have anyone to share this 3 year plan with. I'll be 39 years old in 3 years and my friends plan on working until 60 at a minimum. My in-laws/parents don't really get it either. I fear being looked at as lazy or unmotivated by choosing voluntary simplicity.
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Yeah, I've kind of stopped participating on this forum because I'm tired of thinking about and feeling guilty about spending money. The difference between "being good" and "being bad" for me is about $200/month. That $200 allows me drinks out with friends, an occasional dinner out, and travel/clothes/other luxuries, and also just not feeling uptight or concerned about things. I'm tired of feeling guilty for saving "only" 50% of my income, always thinking I could be doing better. It's tiresome. I tire myself out thinking about it. And no one understands because culturally, saving 50% is unheard of and I'm doing fine.
In no world am I ever going to be an over-the-top consumer. I bike everywhere. I have a decent job. I make very careful financial decisions when it comes to the big things. I don't buy lots of shit. I try to be conscientious with material purchases. But I'm just done worrying about the small things.
Bummer, maybe you just ran into a few people who were face-punch happy? I came on the boards to express some guilt over spending big bucks on a vacation. We do save a good bit, but it was still a major unnecessary splurge. I was surprised when everyone told me to enjoy it!
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Not me personally, but I've seen it in others. I live in an EHCOL (Extremely High Cost of Living) area. Housing prices have doubled and doubled again in the last 18 years. Several families that I know did not buy houses/condos during that time, though they could have, because they wanted to avoid debt or wait until housing declined. In the meantime, rents went up 10% every year. Eventually, they were forced out of the area due to housing costs, and now commute 1.5-2 hours each way to their public service jobs that they can't leave, due to pension issues. These were frugal people, that screwed themselves royally due to being too frugal and debt averse. A crappy 1200 square foot 3/2 house went from $300k to $1.2M in that time.
I don't fault these folks for their instincts, but I find it interesting that they don't pull the plug completely on this place, and move to somewhere where the wage/price structure is more affordable. Now they have the worst of all worlds: high taxes, horrible commute, crappy schools, bad air, bad water, and hot as hell in the summertime.
Where is the EHCOL? NYC? I'm in Orange County, CA and am always interested in other high cost of living areas. Thank you.
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I'd love to have someone in real life to talk to that is just as excited as I am about being frugal and retiring early. I talk to my husband but even he's not really all that excited about it. He likes that I am, because it benefits him, but he doesn't like having to be frugal himself. It's the main reason I like reading this forum so much, so I know I'm not the only weirdo out there who likes trying to save as much as possible.
To the OP, I can say with absolute certainty that when I was about 23, if I wasn't going to happy hour almost nightly with a certain group of people, I would not have gotten the job that took me from a salaried $25/hour job with no paid overtime to my contracting job of $50/hour with time and a half OT (of which the OT was plentiful, a good thing). Best career decision I ever made. Loved the job, the people and the pay. I paid off about $100k worth of debt (mostly student loans and my scion xA loan) in a little over a year while maxing 401k like a boss. Having said that, I could have certainly spent less at those happy hours and probably wouldn't have had to attend as many for the same result to occur... then again, I did end up dating my husband as a result of those nights out as well. I do not regret that period of my life or any of the decision I made AT ALL.
^^This.^^
I'm FIRE and thrilled to be so. Now I hang around here from time to time to offer the encouragement I wish I'd had so many years ago, particularly to single women. It's nice to know that I can let my frugal freak flag fly here with little to worry about in the way of repercussion...
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I am 33, but my friends are in their mid 20's to late 20's....if only they knew how much I wish I could be their age right now and start investing at their age instead of having to start at 30 years old.
And people 5-10 years older than you (and older than that) are saying the same thing about your age. ;)
+1, which reminds me of the old gardener's adage. "The best time to plant a tree is twenty years ago. The next best time is today."
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Where is the EHCOL? NYC? I'm in Orange County, CA and am always interested in other high cost of living areas. Thank you.
The Silicon Valley. Housing prices have gone up 33% or more in the past 2.5 years. I just found out that another family I know is likely getting pushed out, though the husband has a very good job as a software development manager at a good company (not a "hot" one). They've been here 15 years....and should have bought a house when they were $400k, instead of $800k to $1.2M.
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Where is the EHCOL? NYC? I'm in Orange County, CA and am always interested in other high cost of living areas. Thank you.
The Silicon Valley. Housing prices have gone up 33% or more in the past 2.5 years. I just found out that another family I know is likely getting pushed out, though the husband has a very good job as a software development manager at a good company (not a "hot" one). They've been here 15 years....and should have bought a house when they were $400k, instead of $800k to $1.2M.
Oh yeah I be that is PRICEY. That's sad that they get pushed out, but I guess that is what the market provides. Now that tech has set up shop there would prices ever return to what might be considered "normal" levels or is it similar to the same effect Microsoft had on Seattle?
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In answer to the OP, these days, yes, I have made the conscious choice to not quit my job because ot pays well and is one of the key factors to my future FI, and I feel this could be holding me back, either on a more successful carrier, or simply being a bit happier for the next few years until retirement.
The right approach is of course to balance things out: would it be better to be happier for the next few years ,and reach FI a little bit later. Probably, but I decided to be "all in" for the next few years, and there is a bad side to that decision.
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Oh yeah I be that is PRICEY. That's sad that they get pushed out, but I guess that is what the market provides. Now that tech has set up shop there would prices ever return to what might be considered "normal" levels or is it similar to the same effect Microsoft had on Seattle?
I would make the reverse comparison....Microsoft has done to Seattle what tech has been doing to the Silicon Valley since HP opened up shop here in 1938. :)
This is one of the global centers of growth, much like New York, London, Shanghai, or Hong Kong. I don't anticipate that abating any time soon.
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Oh yeah I be that is PRICEY. That's sad that they get pushed out, but I guess that is what the market provides. Now that tech has set up shop there would prices ever return to what might be considered "normal" levels or is it similar to the same effect Microsoft had on Seattle?
Or like GM did to Detroit. Early days though.
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To me excessive focus on any one side of the equation means you necessarily can't spend as much time or energy on the other items necessary for FI. You can:
1. Reduce expenses
2. Grow income
3. Learn to get your investments to work harder
Item 1 has a logical floor. You can't reduce expenses past some point and there is a hard constraint here. Having a low item 1 makes your hurdle lower, but time spent focusing here trades off time that could be spent on the other two items.
Item 2, in theory, has unlimited upside. If you can work yourself into a situation where you control more of your time it allows you to focus more on this item instead of item 1. A small business can increase your earning potential many fold and thus reduce your time to FI substantially. I honestly think many people would be better-served focusing energy here instead of hyper focusing on item 1. Many people don't have the necessary arrangement for this though and are stuck focusing on item 1.
Item 3 can have a huge impact on FI as well. Many people think that the market wins in the long run and the only way to FI is to grind things out at a 4% SWR. If you're disciplined and willing to take some educated risks I think many people can increase their yields substantially, but most of this requires some active participation to do. You have to get the skills necessary and even after acquiring said skills you need to invest time to execute.
So yeah, I think frugality holds people back because they focus too much energy on item one above and not enough on the other two items. It's like having a football team with a stellar defense where the special teams and offense are both horrible. Balance is the key to me. It is good to be frugal, but doing so at the expense of doubling your earnings because you're unwilling to have the tools to take risk is biting off your nose to spite your face.
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Poorer in money? Sure. Not the frugality specifically, but the attitude that lends itself to the overall philosophy.
I could have/could still go get a corporate job, work 80 hours a week, and never retire; I'd probably die with tens of millions. Instead I own my own business, I work maybe 35 hours a week, and I get a lot of time to sip coffee and read on my balcony. Frugality helps that remain feasible: by keeping some control on lifestyle inflation, I don't need to grind and grind for more and more money, which, yes, means my lifetime earning potential is vastly lower.
On the other hand, though, forced frugality can be very motivating. My dad had six kids by the time he was 24 (he was Mormon at the time). The great job that supported his wife and the first two kids wasn't nearly enough by the time four, five, and six came, and he's spent decades as a (happy) workaholic, earning vastly more than others in his field who simply didn't need to put all of their time and energy into supporting large families. Even now he supports, to one degree or another, several adult members of the family, and that's always at the back of his head, pushing him to negotiate harder and earn more.
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[quote
"The best time to plant a tree is twenty years ago. The next best time is today."
[/quote]
Love this!