Author Topic: Personal Finance - Hobby or Disorder?  (Read 4302 times)

calamityb

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Personal Finance - Hobby or Disorder?
« on: February 18, 2015, 07:44:52 PM »
I have recently been in conversations with my SO regarding personal finance due to my recent self-education on the subject. We have discussed enacting a stricter budget that prioritizes debt payoff, putting off small pleasures for future goals, etc. For the most part, I can stay level-headed about the subject, and we discuss the facts of our lives.

However, at times, I feel myself feeling very emotional about this whole world and feel the need to explain why I am nervous about money. I think back to my parents who never discussed money, except that we didn't have enough of it. I grew up in a household that just survived. When I opened a joint bank account at 13 with my mom to put away savings from my after-school job, she started taking money from me to pay her bills. My Dad was convinced he could outsmart the stock market and started day trading and lost thousands of dollars at a time. In short, my parents were not responsible financial stewards. I felt guilty every time I spent money growing up, and didn't want other people to spend on me either - i remember always ordering the cheapest thing on the menu when I was out on someone else's dime. I was super thankful that vintage clothes became acceptable in high school because we only shopped at Goodwill.

So when I went to college, I wasn't sure how to spend money responsibly. I remember going to Target with $ from my financial aid check to buy necessary items for living - and once I started spending I felt like I just closed my eyes and spent money and waited for it to be over. This spending never go out wildly out of hand (I've never had credit card debt) - but I started to notice a pattern of being on one end of a spectrum or the other: very very restrictive or wildly carefree.

Fast forward six or seven years, and I have learned to live within my means, pay myself first, and prioritize paying off debt (working on last $7,000 of student loan and small car note). I'm happy to have found MMM blog which reinforces this lifestyle and provides community and further education. But I still feel like I'm teetering sometimes - like MMM lifestyle is a restrictive diet I put myself on because I know the alternative is bad. And when I break - sometimes I binge spend and feel shameful afterward. I don't think the word "Shopaholic" necessarily applies to me, but the restrict/binge/purge analogy of an eating disorder seems to make sense for my feelings and behavior.

Another way to say this - I feel like I am in a mostly healthy place re: financial habits. I'm not looking for diagnoses or sympathy for anything. I'm just wondering - are there other Mustachians who feel like their personal finance habits are a way to re-establish control in a world that has felt too scary and free-falling?
 
Just looking to chat about the framework and idea!

10YearGoal

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Re: Personal Finance - Hobby or Disorder?
« Reply #1 on: February 18, 2015, 08:00:09 PM »
Hi, it sounds like you are doing well with money, congrats! At the risk of diagnosing I am wondering if some unprocessed issues are manifesting themselves through money as it is a priority to you and you want to be good at it.

I tend not to have doubts so much about spending more like obsessively wondering about how I am doing with saving, investing etc.

Just out of curiosity, do you have a decent adult relationship with your parents and do they still struggle with money?

DeltaBond

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Re: Personal Finance - Hobby or Disorder?
« Reply #2 on: February 19, 2015, 07:35:56 AM »
I grew up with one parent who worked and saved, who was very Swiss (extreme mustacian) and a mom who was Irish and loved to be open and enjoy life.  It was a very difficult issue between them about spending and saving, and I thought for a long time that my dad felt actual physical pain when he spent money that he didn't feel like spending.  He does have an expensive hobby and doesn't seem to have a problem spending on that, but he'd take his clothes to the gym in a trash bag.  There was a serious level of embarrassment there, and he was a wee bit too hard on my mom for use of the measely $300 he gave her every two weeks (in the 90's, and that money was supposed to cover anything the family or home needed, which simply was not possible).  He is retired now, paid cash for their house, cash for his regular truck and cash for his hobby truck... and granted, he met his goal of not being a burden on anyone in his old age and not having to sacrifice his way of living.  But with this in mind, he has OVER a million dollars in investments and doesn't even have to live on the interest, he lives on the social security checks they both get.  Sure, he met his goal, but he was a shit head while he was reaching it.

For me, I'm glad I can see both sides of this coin.  I too feel physical pain, funny, but no joke, spending money on certain things, but I try hard to keep the emotion out of it.  I'm remarried to a man who is not only frugal but he can fix ANYTHING.  What I do to keep my sanity about money, I give myself $200 a month to wipe my butt with, and if I don't wipe my butt with it, I'm wrong.  I make $4000 monthly after taxes and easily put away $1000 monthly into savings.  My only debt is my car and that's about to be sold.  So, in order to keep my mental health in check and not end up a stingy jackass like my dad, I make myself spend $200 on fun stuff monthly.  I could waste more, but for now, this is what I do.

I'll say this, too, one of my hobbies is charity work, and I have a secret goal (sure I'll share here, since this is kind of a full disclaimer) but I am happy to keep my bills down and stay at an overpaying job just so I can give more money to people who need it.  Strange reason to want to keep working, maybe, but I feel mustacianism can lead to OCD and greed, so I am sure to keep an eye on myself there.  I know someone who wants to stop working very early in life, very frugal to the point of being stingy and cheap, and I do not believe that human has ever helped another soul in their life - what is the point of that?? 

So yes, its emotional, but its worth keeping an eye on so you don't alienate yourself or cause marrital problems.  Its a very fine line, definitely.

DeltaBond

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Re: Personal Finance - Hobby or Disorder?
« Reply #3 on: February 19, 2015, 07:38:23 AM »
Oh, another aspect I meant to share - I seem to feel more stressed when I don't have any savings.  If I found myself feeling stressed even when I was making great progress reaching a financial goal and already had a good savings, I'd feel I had serious issues there.  Life is gonna happen, and stress will keep you from enjoying it in old age - in face, it will prevent old age from happening.

Lis

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Re: Personal Finance - Hobby or Disorder?
« Reply #4 on: February 19, 2015, 09:33:19 AM »
Nobody who makes a decent living should be stressing out when buying toilet paper or basic necessities. It's one thing to create a budget and stick to it, and look to continue how to improve it, but it's another thing to make yourself sick over not having a high savings rate. I think most people here are treating personal finance in a healthy way, but I've read a handful of posts where the poster, or sometimes the responders, seem to push it a little too far, and I wonder if they've crossed the habit/lifestyle line into an obsession or disorder.

I fully admit, and I know I'll get some face punches here, that I'm not working towards FIRE right now. I'm 24, single, renting, and still at the beginnings of my career. For me personally, there's so much that I want to do... get married, buy a place, get a few promotions. I spent some time in counseling in college because I needed to know what was going to happen next year, five years from now, 20 years from now, and it was driving me crazy not knowing. It took a long time for me to be ok with unexpected changes, and that it was ok if the plan I had for myself didn't work out.

I utilize the boards and the articles for goal planning, and I've learned a lot. I'm working on a down payment for a place of my own, rapidly paying off my student loans a few years ahead of time, and I budget my money accordingly. I say no to many dinners out with my friends, opting to host potlucks or other cheaper social gatherings. But I do go out to dinner occasionally, or see a movie, or do something fun that costs money. My savings rate is right for me, and that's what matters.

I've noticed that there's a lot of competition on this board sometimes... 'oh, your savings rate is 40%? Well mine is 50%!' 'Oh yeah? Mine's 70%!' That too can spark a lot of stress and headache. This is true for a lot of things, but it's something I keep reminding myself - you're only in competition with yourself. Can you do better than you're already doing now? Sometimes the answer is no, I'm doing the best I can in the position I'm currently in, and that's okay. In fact, good for you!

My biggest fear was, and still partially is, hitting old age and looking back at a life full of regrets. MMM has taught me to make the best decisions I can now while looking towards the future, and I do take a lot of his lessons to heart. I appreciate his lessons and everything I've learned from these boards. But I honestly can't call myself mustachian, because I think if I do I'd easily fall into the disorder category.

That got a bit ranty and preachy, sorry about that. Personal finance is a lot like dieting. There are many healthy ways to do it, usually through lifestyle changes. There are people who have great success stories and can keep up the habits over the years. But there are some people who have certain tendencies who need to be more cautious. I'm one of those people, and there's nothing wrong with that.

MrsPete

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Re: Personal Finance - Hobby or Disorder?
« Reply #5 on: February 19, 2015, 10:29:33 AM »
My childhood experiences /college experiences with money were strikingly similar to yours. 

In my college years, I realized a couple things:  While I had learned the basic finance lessons from high school, they were vague and general -- I understood compound interest, and I knew that a person earning 50K had more money than a person who earned 20K, but I didn't know whether the 20K person could expect to live in an apartment or buy a nice house, etc.  So I started reading.  In between classes, I'd pop into the library to read.  The topics:  Frugal living, cheap cooking, investments, real estate, retirement.  And I developed some ideas about how I wanted to handle my money -- once I got some.  I did have trouble spending money on necessities, but experience fixed that; when I experienced buying the things I needed, while sticking to my budget, I lost that fear of spending. 

When I finished college and started working -- and I think you're still in those first years -- it was sometimes frustrating because I was following my plan, yet most other people were living it up:  Buying new cars and clothes and traveling, while my lifestyle was somewhat worse than it had been in college.  Also, I was frustrated because the dollars I was putting away seemed to add up so slowly.  That didn't last, of course.  Once I accumulated a decent amount in my investments, it started to increase exponentially. 

I didn't originally consider early retirement at all.  Having grown up with "never enough", I was actually quite surprised to be able to be comfortable financially.  Somehow it didn't really occur to me that that was possible.  However, around 30 or so I realized that we were far beyond what I had considered possible, and I started to think about the end game. 

The important thing at your age is, Make a plan and stick to it.  It will take a while for results to show.

Is this a hobby or a disorder?  Neither.  It's a chore.  Just like washing clothes or vaccuuming, managing your money is something adults just have to do.  If we ignore it -- just like the laundry -- problems will pile up, and then it's more difficult to deal with it later. 

Trudie

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Re: Personal Finance - Hobby or Disorder?
« Reply #6 on: February 20, 2015, 08:42:38 AM »
Any interest or passion can become a disorder -- cooking, running, personal finance...

I think much of what has been posted upthread about maintaining balance is a good thing.  We all have only so much mental bandwidth for processing decisions and unless we're experts at compartmentalizing our thoughts (most of us are not) thinking about personal finance can be a gradual slide into OCD.  I'm not suggesting for a minute that the small decisions DON'T matter.  They do, but I find it best to set aside certain times of the year to look at our insurances, negotiate with our internet company, etcetera.  I just don't want every daily decision to be governed by guilt over spending a buck.

When it comes to consumption I suppose I have a rough decision tree that I follow that goes something like:
(1)  Do I have something else that will work?  Are there other alternatives?
(2)  Can I easily by it used and in good condition?
(3)  Do I really need it?

But, I don't totally deprive myself.  I still eat out (but drink at home).  I check out most of my movies and books at the public library.  I've seen many posts at MMM where people pose questions about what sort of $10 gadget they should buy.  That's just not me.  I can't imagine devoting that much energy to it.  If I need it, I'll get it.