The Money Mustache Community

Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: mandelbrot on October 24, 2017, 11:26:18 PM

Title: Please provide inspiration / face-punch
Post by: mandelbrot on October 24, 2017, 11:26:18 PM
Hi folks, I'm using this thread to solicit some reinforcement and/or reminders about how the mustache way is the better way.

First, a little background ...
When my wife and I got married in 2013, I had just discovered mustachianism and it was our lifeline. I made $35k a year doing tech support, and she made something near-zero due to running a small business that was (by then) near the end of its short life. So in those days, with the necessity induced by low incomes, we got on board with the mustachian ideals of constructive thriftiness, without too much fuss.

But then over the next few years, our financial picture changed. We became "successful" far quicker than I expected.
I mean, that term is very relative, but we are a lot richer nowadays:
As our fortunes have grown, we've taken our eye off the mustachian ball in a very gradual way -- something I expect many of you are quite familiar with.
Basically, we could be saving about 70% of our income, say $5000 a month or so. But instead, over the past 4.5 years since the start of this story, we gradually shifted to saving maybe 60% of our income, and then 50%, and hey wow, 50% is still pretty incredible so let's not worry too much about it. Know what I mean? And then 40%, and 35%. And hey, saving 35% of our income still puts us into the top 5% (or better?) of savers in this country, right? I have a buddy who makes six figures all by himself, but he only saves about 10% of it. I'm doing much better than him, so I should feel good, right?

You get the idea! I think we need to recommit.
Well OK, we especially need to recommit in the near future, because I'm going to quit my job to go to an immersive code school for 6 months, and switch over to the software development side of the industry. So for 6 months the tables will be turned from where we started, we'll be living off my wife's income alone, and we can't play around anymore with this casually-spending-$5500-a-month-on-whatever-interests-us.

*Okay so the scene is set, but now let me give you a little more, so that you can give me some brilliant advice.*

The question you should be asking is ... what on earth are we spending our money on??
For me, the problem is that the answer to this question is "mostly pretty good things".

Here is a sampling of where the extra spending has gone:

Now that I've done a bit of verbal processing, it seems to me that we are victims of our own aspirations, particularly in the areas of #2 and #3 (but perhaps all three). There seems to be a constant sense of "how could this be *even better*??" that we can never quite move past. Perhaps it's a lack of satisfaction. Perhaps it's a need for constant stimulation, which the urban / yuppie lifestyle has baked into our neurology?

Well, it's late here, and I'm waxing silly, but I think you all get the idea.

Essentially, in my judgment we seem to want things that are basically decent, but we want way too much of those things -- to the point that we are always jumping between projects, always feel short on time due to our many conflicting interests, and (lately) realizing that we have massively blown our previously-thrifty budget.
Do you agree?

And anyhow ... who has run into such issues before? What did it take for you to get your boat righted?
You may issue any inspiring words or face-punches that you deem useful for the moment.

Thanks for reading!
Title: Re: Please provide inspiration / face-punch
Post by: marty998 on October 25, 2017, 05:55:16 AM
So what you're saying is, you don't have mortgage costs, or kids, or spend on entertainment, but you're still managing to blow through $66 thousand a year?

Dude. Post a breakdown of spending and we'll tear this to shreds soon enough.
Title: Re: Please provide inspiration / face-punch
Post by: 2Birds1Stone on October 25, 2017, 06:38:00 AM
I can relate, big time.

My fiance and my combined gross income averaged $63k/yr for the first three years we lived together. In HCOL Long Island NY that equals a ~$3.5k take home, which doesn't get you much. We got really used to living on $40k a year very happily, then we both ramped our careers similarly to your wife and yourself.

Income the past three years has averaged combined gross of $150k/yr, and over time the creep has happened. We increased our spending about 5-10% a year, and will come in around $50k for 2017.  Even with the 25% higher spending I still question whether we can be enjoying more of it now vs saving for later. The temptation to splurge on vacations, experiences, etc is real and in my face quite often.

The biggest thing we focus on is getting the biggest bang for our buck in terms of happiness per $. The second largest is "hacking" a large cost of these experiences.

Travel hacking, buying tools/materials for projects second hand, groupon, churning bank account bonuses for hobby money. Etc etc.

If your take home is $8,000/ month and you live in a state with no income tax and you have no mortgage, I would reevaluate your priorities, automate saving so the money is simply not there for you to spend, and enjoy the remaining money more thoughtfully.

If we can live a kick ass lifestyle full of travel and expensive hobbies (triathlon, huge foodies/craft beer people), as well as $1100/month on rent/utilities, in New York on $50k.....You can certainly do better in TX.

Best of luck on the coding camp! I'm on the sales side of software and have a fascination for that stuff too.
Title: Re: Please provide inspiration / face-punch
Post by: kaypinkHH on October 25, 2017, 07:07:15 AM
We were in a similar situation...went from a take home of under 3000 a month (for a couple) in HCOL downtown toronto in 2011-2013...To somehow taking home ~15000k per month last year (Site work with uplift for me, Mr.HH good job, side hustles). Our spending increased as well...on stupid stuff like fast food and coffee shop sandwiches. We got lazy. We splurged on a few big things like trips (without travel hacking), and entertainment, and small things like taking ubers instead of transit. Mr.HH bought a lot of stuff for projects on amazon....

Now, we are back to ~$3500 (Moved to a Lower COL area for my job, Mr.HH still needs a job). Nothing like decreasing your income by 80% to make you take a good hard look at spending. We are currently in transition mode (living with inlaws until our house sells, buying a house soon), and have no idea where our spending will land for the next few months. But I do know we need to be smart about it until Mr.HH finds a job. Luckily for us (and it sounds like for you), we have set ourselves up well:
1. We don't have car payments to worry about- 2 older low maintenance cars paid off
2. We have no BIG reoccuring costs (other than mortgage, which you don't have to deal with).
3. No Latte a Day habit to cut.

For us our Plan of ATTACK is to track our expenses very closely during this "transition time", avoid unnecessary renovations/projects/spending (hold off on gym memberships etc). Flex our frugality muscles. Then when Mr.HH gets a job we will start looking at strategic spending (house renovations), but still from a frugal/hacking perspective when possible.

If I think about where we are now vs 2011, I know we are in a much better financial place, we just need to flex those muscles again!
Title: Re: Please provide inspiration / face-punch
Post by: Laura33 on October 25, 2017, 11:33:02 AM
Honestly, my first thought is to take that question to your awesome therapist, because this is an emotional issue, not a financial one.  When you are chasing new "fun" so exhaustively that you don't even have time to enjoy the fun that is already surrounding you, it's about the chase, not the fun.  What is driving you to constantly seek new/different/better?  What leads you to think that right here, right now, is not enough to make you [what -- happy? successful?  Note that your choice of adjective is itself telling].

I can say this because I have been there myself.  For me, it was growing up poor.  That led, for many years, to a compulsion to save as much as I could, so I could feel safe.  Later, when I married someone who is far spendier than I was, that same history led me into the temptation of spending more because I could, and that felt freeing, like I had finally escaped, succeeded, made it.  It has taken a long time, and actually getting many things that I never dreamed possible as a kid, to realize that the "getting" doesn't actually lead to happiness; there is a part of me that is a black hole of want, and you can never fill a hole like that with stuff -- no matter how much "stuff" you throw at it.  So I guess I'd better deal with that giant sucking sound directly.

When you figure out what is driving you, it becomes much easier to find ways to work with that.  E.g., I am competitive (in the "boy I *hate* to lose" way, not the "joy of competition" way).  So when I was in full-on savings mode, I made a game of it:  I set a monthly budget, and then my goal was to come in under budget every month.  That game truly made me happier not spending money.  Now, OTOH, because I have recognized the emotional nature of the need that was driving me, I spend a lot of time forcing myself to really think about how much better my life has turned out than I ever hoped.  I say things like "I can't believe that this is my house, I can't believe this is my husband, I can't believe these are my kids, I can't believe I never have to worry about being poor ever again," until this feeling of gratitude washes over me that is so powerful that I sometimes want to cry.  That, in turn, makes me feel, at a very deep level, that what I already have is more than enough, and all those thoughts about how I can improve on what I have with just a *little* more money fade away.

To the extent that you have just fallen into bad habits, pick one or two activities that you wish you had more time to do, and throw all your energy into that one for a month.  If you want to try new/different, challenge yourself to identify fun things that are totally free*, like hiking or running or whatever -- there are many, many fun things in life that require little to no capital investment, so why not choose one of those to try instead of something that requires a lot of equipment? 

*I hereby give you permission to buy a Frisbee if needed.  Or maybe a kite.
Title: Re: Please provide inspiration / face-punch
Post by: Noodle on October 25, 2017, 12:03:02 PM
You know, one of the advantages of being spendy about things is that even after you've decided not to be spendy any more, you still get to enjoy the things. (As opposed to, say, being spendy about restaurants or travel). (Not that I advocate any kind of spendiness, of course.) So why not make a commitment with your spouse to enjoy your current house and hobbies for awhile? All new house projects and hobby purchases require a 60-day waiting period before you commit. From time to time I have made commitments to read the books on my bookshelves/play the computer games I've already bought/cook with the ingredients in my pantry/use the online recipes I've bookmarked and I always get this nice buzz of satisfaction of using things up and checking things off. This fall I have a project of watching a lot of the movies I have put in my various queues over the years and I am having a good time with it.

One way to ease the "itch of the new" is to have a designated list or place to put online bookmarks of the things you want. That  usually pushes the "must acquire" button for me and by the time I get back to it I find I want X much less than I originally did. In his book "Getting Things Done" David Allen talks about how unfinished tasks and unclosed loops keep nibbling away at our attention even when we aren't really thinking about them. For me, I find that happens with shopping, and putting the item on the list "closes the loop" for me almost as well as actually buying the thing.
Title: Re: Please provide inspiration / face-punch
Post by: mandelbrot on October 25, 2017, 12:55:01 PM
Really great feedback, people. Thanks for the thoughts!

I think Laura hit it on the nose -- on the surface, this issue concerns the mechanics of saving and spending, but I think what I really was looking for was more of a bit of philosophical / emotional motivation. It's good to call out the basic motivators ... I used to be better about interrogating my motives but I think with all this frantic "success" in our lives in the last couple of years, I have become less reflective than I used to be.

For my basic motivator ... heh, speaking of therapy, I think this may have something to do with my not being allowed to play and explore freely, when I was a kid -- things felt kind of limited and restricting since my parents basically wanted me to contain myself and such. So now, as an adult, and with monetary resources, I have unfettered access to anything at all that catches my eye. Perhaps as a kid I never had a chance to develop the skills of regulating such obsessions (because I was never allowed to explore them) and so I'm poorly equipped as an adult to inhibit all this lust for new hobbies and projects.

^^ Anyway, that's the first thing that comes to mind -- a shot in the dark, but hey I've got plenty of time to figure it out.

As for the mechanics ... I started looking back over the year's finances in more detail, and have determined that the monetary scene is not as bad as I originally described. Some months we'll blow through $6000 because we bought a new back yard appliance and took a camping trip and also bought another round of personal training sessions, BUT other months we'll spend about $3000 without even putting forth any effort at saving, and that latter number is starting to get close to what I would call "reasonable". So it seems like, we're not consistently dumping money into these new projects, but we certainly need to restrain those spending peaks, and deepen the valleys.

Anyway ... thanks everyone. Superbly useful. I came to the right place.
Title: Re: Please provide inspiration / face-punch
Post by: KittenJoe on October 25, 2017, 03:44:24 PM
Well, to me it sounds like a pretty good problem to have. I think you've had some fun, but it's getting to be too much and you're recommitting to the cause. I think that's awesome, and I also think that it's OK to have a little fun once in a while. After this re commitment, those 4.5 years won't seem like much. But I really don't know much, I'm just guessing but to me it sounds like you're very smart and you'll do just fine even with all your hobbies!
Title: Re: Please provide inspiration / face-punch
Post by: Laura33 on October 25, 2017, 04:06:22 PM
ALLW: Really good insight; I can totally see how the liberation of All The Things can be overwhelming when you didn't get the opportunity to learn how to make those kinds of choices yourself growing up.  I don't think you need to spend much more time wondering about it -- sounds like you got it in one.  :-)

So the thing to focus on now is figuring out mechanisms to combat that tendency.  That's something that you can reasonably talk about with your therapist.  Or you can just figure out what kinds of artificial constraints you can impose yourself.  For ex., one way I rein in my spendy DH (and my own tendencies in that direction) is to create artificial scarcity -- I have all of my savings taken automatically out of my account as soon as the money goes in, I have the savings for periodic things (vacations, property taxes, etc.) also diverted to a separate account, I refinanced to a 15-yr mortgage so we have less discretionary income to fritter, etc.  In fact, since we get a lot of our pay at the end of the year, I actually have things set up so that our checking account balance trends slightly down over the course of the year.  That creates a sense of scarcity, of being tight with money, that helps offset the "we make how much? let's go play!" tendencies.

YMMV, of course -- you could also use a "play money" budget, or a rule of one thing a month, or whatever.  Just figure out what works for you.
Title: Re: Please provide inspiration / face-punch
Post by: AccidentialMustache on October 25, 2017, 05:35:13 PM
Track it. Commit to tracking your spending in a spreadsheet (google sheets + a form you bookmark on your phone/computer(s)). See if you are motivated to not spend because you don't want to have to input it. Mint/YNAB isn't the same experience, automation takes some of the pain away.

Note if you do that you should also track a few other things (bank accounts at the start and end of the year, as well as yearly take home pay) so you can use those to validate you're actually capturing your spending. You won't get it all (we don't), but you want to get most of it. Shoot for 90% minimum. Higher %s are better -- if you spend 50k/year, 5% is 2,500 unaccounted for.

Will it work for you? I dunno, but its free other than a bit of time to set it up to try it.