I first discovered MMM in late 2013 when I was a senior in college. I immediately loved all his advice and looked forward to using it when I got a job. I'm now 23 and have been working as a Software Engineer since October. Financially I'm in a really good situation; I have no debt, a fully paid off fuel-efficient car, and am still living for free with my parents (for now). Because my expenses are so low I'm able to easily save 2/3s of my 55k salary.
My problem is I sometimes feel like I'm too obsessed with all this stuff. I find myself looking up compound interest calculators trying to figure out how much I'll be able to save by a specific time in my life (which I realize is pretty dumb since it's impossible to completely map out your future..). I worry about whether I should give up on getting a motorcycle and just put the money towards retirement. I've also always wanted to spend some time traveling while I'm in my 20's but now find myself thinking maybe I should put that off. And I've also been fretting about whether it's more economical to buy a house or just rent an apartment when I move out.
Any advice on how to balance being frugal while still living in the present? I feel dumb worrying about these things so much even though I'm doing better than many people my age.
I play around with calculators, looking at investments, etc, probably a bit too much as well. Fortunately, I don't buy/sell in and out a lot so it's really just a habit now.
When I first started working in 2012, I very carefully tracked my budget each month and would look ahead often when I started spending more. Three years later, today, I can honestly say I could have spent some more on some things during the past few years, but it was all part of the experience of growing into the person and spending/investing style that I have today.
If you catch yourself being "cheap", like avoiding being out with friends all the time because you're too cheap to pay for a drink or dinner, then you're probably overdoing the frugal thing. Especially at your income level, you don't need to live like a hermit. Take advantage of your freedoms now because things like friends, travel, trying new activities, etc, won't always be as easy in the future.
Obviously, keep your spending in check and make sure you are broadly on track to meet your saving/investing goals, but don't fall into the habit of equating everything with money. Just this weekend, I spent ~$100 on a night out with a couple buddies. Even now I have to remind myself that it's perfectly fine to do so once in a while. By being mostly responsible, and perhaps a little obsessive early on, I have the privilege of having my investments work very hard for me and I can leave most of it on auto pilot and just live my life.
If I could go back, I would have probably gone on 1-2 more trips with friends. Those trips may have cost me 1-2k each, but today that's really just not that big of a deal for an occasional/infrequent expense. Don't get caught up in the details when you really just need to make sure that you take care of the big things:
- contribute to 401k/trad. ira/Roth... depending on your situation
- keep up a cash backup fund
- start investing in a taxable account with remainder
- be mindful of the big 3 expenses (housing, transportation, food/entertainment)
Watch the accounts fill up and grow and live your life!