Author Topic: 30 - Looking to improve, but also learn how to enjoy life throughout the journey  (Read 1625 times)

igooglesearchthings

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Hey all,

All of my life my family was poor. We're talking less than 30k a year, in a VHCOL city.

I always worried about money, and I'm trying to make it so that I don't need to.

After following the advice of MMM and other personal finance books, I've finally reached a milestone that I'm excited about - I just turned 30 recently and I passed the 200k NW mark!

Weird enough, I haven't felt happy about my situation in a long time. I just try to be as frugal as I can, and I don't feel financial security.

I've started using YNAB to try to bucket my money so that I can spend more freely, but I'm still missing some pieces - I still feel like any curve ball can take me out.

Here's my current situation:

401k - 124k
tIRA - 11.1k
rIRA - 47k
HSA - 19.8k
Emergency fund - 6.5k

I earn about 110k/yr, and contribute about 20% to 401k per year, max HSA, and currently holding back on maxing rIRA (health problems have me wanting to splurge a bit this year).

rent: $1300
student loans: $10,000 at 3% or below
phone bill: $135 for 3 people. Unlimited data (which is important to me), 5gb of hotspot
gym: $65/month


Those who have started budgeting, how did you find the line for you to spend guilt-free?


Ramit talks about thinking what a rich life looks like, and to be honest I never thought I'd get this far. I want kids, and I am in a long term relationship. In a VHCOL, renting makes more sense than buying unless we really want a lot more space.

The next purchase I'd like to get is a car, but the car market is really bad at the moment, and I'd need to pay +$330 per month for parking alone, which makes car ownership a really hard idea.

I've taken public transportation my whole life, and I feel like I don't get the independence to go as far as I want, when I want.

My goals for the year is to jump to a higher paying job with better benefits, so that I can max all of the retirement vehicles, and possibly even take advantage of the backdoor roth.

TimCFJ40

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You have a lot of other spending not shown in your case study, (Food, transportation, etc at a minimum).  These may or may not be areas for improvement.

You make a good salary, and your rent is reasonable for a VHCOL city. 

My main takeaways are regarding your debt:

1) You have to include your debt your NW calculation.  So, if you have $100k of student debt, your true NW is really closer to $100k, not $200k. 

2) Go ahead and knock the debt out.  As MMM would say, treat this as a hair on fire emergency.  You have basically already spent tomorrow's dollars until it's gone.  If you make the change in your NW calculation shown above, this also means that dollars spent on debt payment also have a positive impact to your net worth. 

Finally, when you look at the impact to your ability to pay down the debt aggressively, I'd pass on the car for now.  Just insurance and parking on a cheap car will add a significant drag on your ability to kill the debt.  Even renting a car once a month if you have to will be cheaper than buying, parking, and insuring one in your case. 

Laura33

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First, congratulations on how far you've come!!

Second, this isn't a money issue -- it's about how poverty affects your worldview.  IME, being poor trains you in a pessimistic, scarcity mentality.  You want to feel safe and have the things you couldn't growing up, which is a tradeoff in and of itself, because being safe = having lots of money in the bank, but having all the nice things means taking money out of the bank.  And the real underlying secret is that you never actually feel safe, because it always feels like it could be taken away at any moment.  You've had an up-close-and-personal view of exactly how mean and unfair the world can be, and once you see that, you can't really un-see it. 

It also sounds like you've gotten to the point of realizing that there isn't really some "safe" level of income or savings.  There are really two reaons for this.  First, you realize that making $X/saving $Y doesn't make you safe, because you're still subject to the whims of others, like losing a job.  And second, because that desire to have the nice things you couldn't even dream of before means that your wants always exceed your means.  I remember when I got married, thinking we'd be rich with basically double the income.  But by the time we bought a townhouse, took some vacations, and he then wrecked and needed a new car, I was wondering where all the money went -- and then I'm also looking out the back yard at all the nice houses across the way and wondering how anyone actually affords that.  When you have no money, it's easy to fantasize that if you only had $X, you'd be safe and able to afford what you want.  But when you get to $X, you realize how wrong that perception was -- particularly in the US, where we have to worry about big things like paying for daycare, college education, medical insurance, etc. etc. etc.

Also recognize that a lot of what you want likely comes from wanting to prove to yourself (and the rest of the world) that you're not poor anymore.  Seems to me that the current desire for a car likely comes from that, more than any actual need for one.  IMO and IME, when you live in a VHCOL area, the last thing you want is to be driving everywhere, because the traffic is just fucking miserable.  I was thrilled when I lived in an area where I could take the subway to work and avoid driving altogether.  But when you take public transport because that's all you can possibly afford, and you've done that your whole life, having a car feels like a marker of success -- like you're reached a milestone that no one can dispute means you're not poor. 

I'm going to offer two suggestions, one long-term and psychological, and the other short-term and practical.

First, read MMM, particularly the articles about stoicism.  He has a particularly optimistic mindset and somehow magically knows that whatever happens, he will be ok.  Honestly, for someone with a more pessimistic bent, it can get quite annoying once in a while.  ;-)  But there's also truth to it.  You have agency here -- you have the power to change your life for the better; hell, you've already done so given your current financial status and where you came from.  The same attitudes and habits that got you where you are now also equip you to handle whatever crap life throws your way.  You may not feel like it, but you are strong and resilient.  MMM can help shore up those feelings.  This is also why I mentioned stoicism:  the real value to stoicism is that it reminds you that you don't actually need all the "stuff" to be happy.  You don't ever want to be poor again -- ITA, that has been a driving force in my own life.  But if the worst happens, and the shit hits the fan, your history has already given you the skills to navigate that successfully and get yourself back on track.  People who didn't grow up poor can really struggle when bad shit hits, because they don't know how to grocery shop and eat frugally, or how to figure out bus routes and navigate the logistics of not having a car, or how to live successfully in a small, crowded, uncomfortable place.  You know that shit, you can deal, and that makes you strong.  You just need to see it within yourself.

The more practical advice is:  spend some time focusing on your competing priorities.  What do you need to feel "safe"?  I don't mean set a new savings target, because again, there is no magical savings level that guarantees bad shit can never touch you.  I mean what is that underlying thing you're afraid of?  If you identify it, you can take steps to keep it from sending you off-course if it happens.  For ex., if you are fretting because you rely on your job to support your lifestyle, then you can (1) save up a larger EF, so if the SHTF, your needs are covered for 6 months, or a year, or whatever timeframe makes you feel better, and (2) research the job market, get new training/certification, and generally do stuff to beef up your resume, so that if this job does go away, you are primed and ready to go get another one.

Same thing on the "want nice stuff" side.  What are the various things you want to be able to afford?  Which of those are most important and would make you feel best to have covered -- and do those feelings accurately reflect reality?  For ex., the car is a huge financial suck, and it would likely not actually make you feel better on a daily basis, because really, who wants to sit in traffic for hours?  So is that really the best way to make yourself happy?  Or can you look at other options, like renting a car for a day or weekend when you want to go somewhere, and devote the money you save on owning a car to other things, like regular date nights with your SO, or putting $$ aside for a more important goal (like kids).   

I can't tell you what those priorities are, either on the "fears" or "wants" side.  But if you acknowledge your top priorities, figure out why they are priorities and if it actually makes sense to prioritize them, and you take concrete steps to address them, you will be happier.  Hint:  anything that you want to do to prove to yourself or anyone else that you're not poor any more will not ever actually make you happy long-term, because once you get there, you'll discover there's always something beyond that.  The value of this exercise is to help you identify those unspoken fears/desires, so that you can take them out into the light and evaluate whether they are actually true and whether they will in fact make you happy day-to-day.  And over time, the real value of this exercise is that it retrains your brain to see how much power you do actually have to affect your own life. 

igooglesearchthings

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First, congratulations on how far you've come!!

Second, this isn't a money issue -- it's about how poverty affects your worldview.  IME, being poor trains you in a pessimistic, scarcity mentality.  You want to feel safe and have the things you couldn't growing up, which is a tradeoff in and of itself, because being safe = having lots of money in the bank, but having all the nice things means taking money out of the bank.  And the real underlying secret is that you never actually feel safe, because it always feels like it could be taken away at any moment.  You've had an up-close-and-personal view of exactly how mean and unfair the world can be, and once you see that, you can't really un-see it. 

It also sounds like you've gotten to the point of realizing that there isn't really some "safe" level of income or savings.  There are really two reaons for this.  First, you realize that making $X/saving $Y doesn't make you safe, because you're still subject to the whims of others, like losing a job.  And second, because that desire to have the nice things you couldn't even dream of before means that your wants always exceed your means.  I remember when I got married, thinking we'd be rich with basically double the income.  But by the time we bought a townhouse, took some vacations, and he then wrecked and needed a new car, I was wondering where all the money went -- and then I'm also looking out the back yard at all the nice houses across the way and wondering how anyone actually affords that.  When you have no money, it's easy to fantasize that if you only had $X, you'd be safe and able to afford what you want.  But when you get to $X, you realize how wrong that perception was -- particularly in the US, where we have to worry about big things like paying for daycare, college education, medical insurance, etc. etc. etc.

Also recognize that a lot of what you want likely comes from wanting to prove to yourself (and the rest of the world) that you're not poor anymore.  Seems to me that the current desire for a car likely comes from that, more than any actual need for one.  IMO and IME, when you live in a VHCOL area, the last thing you want is to be driving everywhere, because the traffic is just fucking miserable.  I was thrilled when I lived in an area where I could take the subway to work and avoid driving altogether.  But when you take public transport because that's all you can possibly afford, and you've done that your whole life, having a car feels like a marker of success -- like you're reached a milestone that no one can dispute means you're not poor. 

I'm going to offer two suggestions, one long-term and psychological, and the other short-term and practical.

First, read MMM, particularly the articles about stoicism.  He has a particularly optimistic mindset and somehow magically knows that whatever happens, he will be ok.  Honestly, for someone with a more pessimistic bent, it can get quite annoying once in a while.  ;-)  But there's also truth to it.  You have agency here -- you have the power to change your life for the better; hell, you've already done so given your current financial status and where you came from.  The same attitudes and habits that got you where you are now also equip you to handle whatever crap life throws your way.  You may not feel like it, but you are strong and resilient.  MMM can help shore up those feelings.  This is also why I mentioned stoicism:  the real value to stoicism is that it reminds you that you don't actually need all the "stuff" to be happy.  You don't ever want to be poor again -- ITA, that has been a driving force in my own life.  But if the worst happens, and the shit hits the fan, your history has already given you the skills to navigate that successfully and get yourself back on track.  People who didn't grow up poor can really struggle when bad shit hits, because they don't know how to grocery shop and eat frugally, or how to figure out bus routes and navigate the logistics of not having a car, or how to live successfully in a small, crowded, uncomfortable place.  You know that shit, you can deal, and that makes you strong.  You just need to see it within yourself.

The more practical advice is:  spend some time focusing on your competing priorities.  What do you need to feel "safe"?  I don't mean set a new savings target, because again, there is no magical savings level that guarantees bad shit can never touch you.  I mean what is that underlying thing you're afraid of?  If you identify it, you can take steps to keep it from sending you off-course if it happens.  For ex., if you are fretting because you rely on your job to support your lifestyle, then you can (1) save up a larger EF, so if the SHTF, your needs are covered for 6 months, or a year, or whatever timeframe makes you feel better, and (2) research the job market, get new training/certification, and generally do stuff to beef up your resume, so that if this job does go away, you are primed and ready to go get another one.

Same thing on the "want nice stuff" side.  What are the various things you want to be able to afford?  Which of those are most important and would make you feel best to have covered -- and do those feelings accurately reflect reality?  For ex., the car is a huge financial suck, and it would likely not actually make you feel better on a daily basis, because really, who wants to sit in traffic for hours?  So is that really the best way to make yourself happy?  Or can you look at other options, like renting a car for a day or weekend when you want to go somewhere, and devote the money you save on owning a car to other things, like regular date nights with your SO, or putting $$ aside for a more important goal (like kids).   

I can't tell you what those priorities are, either on the "fears" or "wants" side.  But if you acknowledge your top priorities, figure out why they are priorities and if it actually makes sense to prioritize them, and you take concrete steps to address them, you will be happier.  Hint:  anything that you want to do to prove to yourself or anyone else that you're not poor any more will not ever actually make you happy long-term, because once you get there, you'll discover there's always something beyond that.  The value of this exercise is to help you identify those unspoken fears/desires, so that you can take them out into the light and evaluate whether they are actually true and whether they will in fact make you happy day-to-day.  And over time, the real value of this exercise is that it retrains your brain to see how much power you do actually have to affect your own life.

Thank you thank you thank you thank you. I would hug you if I could.

Thank you for your advice and also making me feel seen. I have not felt that in a long time. I'm tearing as I read this.

I think I need to reread this at least 3 times. Thank you so much.

You hit home completely with how being poor trained me. It definitely didn't help that I got laid off last year. I'm not close with my family (abusive, toxic) and so I don't really have many people to guide me. I was so scared. I started doing math to understand when I'd need to move to a relative's place. Didn't realize (until a few months after being laid off) that in my state, I can get unemployment. That definitely covered my base essentials, and I didn't have to go into my EF so long as I kept my non essential spending low. Thankfully, I found a new job. It took months and months to unravel this fear, and now I feel somewhat "recovered".

Today I still am confused how other folks afford what they do. The nice house, nice car, nice lawn. I think they make relatively comparable to me, but the one answer I always consider is that they're not contributing to retirement as much as I am perhaps. Either that, or their family sits on a nice fund either from family business, or some other means I can never attain (external help).

You are absolutely right - I want to prove to myself that I'm not poor anymore. Despite living in a luxury building, and making more than some others (although 110k doesn't go too far in VHCOL city), I still feel like I'm making <70k. Since a lot is going into retirement, I can't feel that safety yet. But I know I'm doing the right things for my future, and that alone is enough of a reason to continue with these decisions. There's a fear that I built from growing up that "I cannot return to this". "I need to get out". By doing what I believe is the right thing,  I can "suffer" and not increase my means. However like you've pointed out, there's this irrational desire to get something that I can't due to my experience growing up.

I agree that the car is not a great idea - we've decided that we'd rather start taking cabs instead, and rent cars when we need it. This alone is a step forward, but I think the next step is for us to actively contribute $X to a bucket that allows us to take these cabs  + rent cars guilt free.

I'm slowly getting around to the idea that if I can draw a line that I know is "safe", if we spend below those means, we can do that guilt free. It's a work in progress, but YNAB is helping with this.

I want to be able to afford eating out (started contributing $Y to a bucket to date nights), going to events in our city, and lastly (this is the irrational one) have what others have. This last point is so damaging to my psyche because comparison is the thief of joy, but also because I always feel like I have less. I have less support around me, I have less resources to tap into (others have family members they can borrow cars from, get advice from). I yearn for support, and part of it is that I need to allow my friends to provide that for me. I rarely ask for help. I almost never complain.

Responding to this post is an opportunity for me to reflect deeper on what's holding me back. Not accepting help, irrational desire for "more" despite it not being a great idea (like a car). But also not having clear priorities on what I want.

I think rational and positive things to aim for are date nights, events in our city, and making cabs/renting cars a guilt free experience would be massive to how I feel about life.




Quote
First, read MMM, particularly the articles about stoicism

Are there any in particular that really moved you? I used to read MMM daily in 2017, but unfortunately stopped. Will look back and see what articles I've missed

Laura33

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SO glad to be helpful.

My primary next-step advice is to take concrete action on at least one of those things that makes you happy.  Want to go out and enjoy date night?  Set up that YNAB category now and adjust your other categories to account for that.  Then actually use that money and see how that feels.

I can tell you to stop focusing on what others have and wondering how they afford it, but that's basically useless, because that feeling of lacking something/jealousy/inferiority is deep-rooted.  Yes, most of the people around you are not saving like you are.  But some of them do have it better -- they make more money, they had wealthier parents, they have a spouse with a high-paying job, etc.  You will never, ever be happy thinking about what others have; I mean, this is why billionaires have competitions over who has the biggest yacht, right? 

The only way I have found to combat this natural feeling is to create for myself an environment where I am not always surrounded by more/better.  Probably the best decision we made was buying a house in a neighborhood that suited our lifestyle, not our actual income.  Our home is perfectly lovely and fine for us, but we are now surrounded by (1) people who make about as much as we do and have the same savings habits, and (2) people who make less than we do, so when they spend all their money, they have just about the same kind of "stuff" we do.  Note:  that's not at all why I chose this house, but boy has that been one of the most significant ongoing contributors to my happiness. 

And then opt out of the commercial stuff.  Watch little to no TV.  Don't go to the mall unless you really really need to.  Avoid falling into the "weekly Target run" habit.  Cancel magazines and subscriptions that push nice things (I literally canceled my Conde Nast Traveler subscription years back, because I realized that reading about all those super-luxe vacations was making me jealous and resentful; I mean, I work hard and make good money, and I still can't afford all that kind of stuff!).  Get the fuck off social media.  Enjoy yourself with as many free, low-setup-cost things as possible (hiking can be a ton cheaper than golf, plus you're more likely to run into people who don't look uber-rich hiking than you are at a golf resort).  The idea is to put yourself in an environment where what you have and do is both fulfilling and on the same level as everyone/everything you are surrounded by. 

(Sure, you can tell yourself you're a bad person, and that if you were a better person you wouldn't care so much what other people had, wouldn't resent the silver spoons, shouldn't like the fancy BrightShiny your neighbor just brought home.  But you're completely normal.  We're all Sneetches.  Better to acknowledge that and figure out how to manage it vs. beating yourself up for being human and imperfect.)

Next, focus on how you talk to yourself.  Do you use language of deprivation, of not deserving?  Change that.  It is not true, and it is hurtful.  Instead of "I can't afford it," say "that's not how I choose to spend my money" (I had to do this when I had DD, because I realized when she asked for a treat at the grocery store, my knee-jerk "I can't afford it" was a lie in a way it was not for my mother).  Tell yourself that you can have anything you want, if you are willing to make the tradeoffs.  The example I always use is a yacht (because it sounds totally luxe and I really don't want one). I'm a lawyer.  If I want a yacht, first, I have to start working at least 60-hr weeks.  I have to spend my spare time marketing and making connections, so that I can in a couple of years jump to a firm that pays a lot more.  Then I have to keep doing all of that for years to make it to equity partner, and then up the equity partner ranks.  Then, in maybe 15 years, I can buy a yacht.  And when I do that exercise, I think:  WTF????  I don't want to do all that.  Who needs an effing yacht?  I'd rather enjoy my nights and weekends, thanks very much.  And then that jealousy/desire for super-fancy stuff goes away.  (And for the stuff you really really really want, start saving for it now, in a dedicated account, even if it's just a little bit -- put bonuses and gifts and stuff in there.  By the time you're my age, you'll be able to buy it, in cash.  Assuming you even still want it -- the point isn't to have the thing, it's to constantly remind yourself that you can have the thing if you really really want it and are willing to work for it and accept the tradeoffs.)

Finally (for now), focus on the smaller/cheaper things that make you feel successful.  You know what one of my fondest memories is?  The first time I went grocery shopping without a list.  30 years later, I still remember the visceral feeling of joy that went through me walking down the aisle, knowing I could buy whatever I felt like.  You're current fixated on the car idea, so set a date, rent a car, and take a day trip somewhere.  When you're fighting those mental habits built on scarcity, you can get a lot of happiness out of repeatedly doing small things that remind you of how far you've come. 

If it helps at all, success is a slow process.  You build it by repeatedly exercising good habits, day-in, day-out, for years.  There will be many, many times when it feels like you're not getting anywhere and you will never get to a point where you feel safe.  But I can tell you from personal experience that you do get there.  The day I realized that even if we never worked again, we wouldn't lose the house was an unbelievable feeling.  There are days I still cannot believe that someone like me, who was on Food Stamps as a kid, has managed to build this life.  All of the work and planning and decisions that I did not really need BrightShinyX paid off, and I now feel "safe" in a way I never thought possible.

lucenzo11

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The more practical advice is:  spend some time focusing on your competing priorities.  What do you need to feel "safe"?  I don't mean set a new savings target, because again, there is no magical savings level that guarantees bad shit can never touch you.  I mean what is that underlying thing you're afraid of?  If you identify it, you can take steps to keep it from sending you off-course if it happens.  For ex., if you are fretting because you rely on your job to support your lifestyle, then you can (1) save up a larger EF, so if the SHTF, your needs are covered for 6 months, or a year, or whatever timeframe makes you feel better, and (2) research the job market, get new training/certification, and generally do stuff to beef up your resume, so that if this job does go away, you are primed and ready to go get another one.

It's a hard task to follow up Laura33 as both responses are just so perfect, but I'll try to build on the practical advice a bit. Thinking about worse case scenarios is a great thing to start with. Losing job is probably the biggest one, but then what about some kind of medical issue that either is expensive to treat or prevents you from working, what if you lost your apartment? The first part in each of these is what is the cost, then it's what is the likelihood it happens. Then you balance those two with your tolerance for risk to develop a emergency fund goal. For example, you could lose your apartment but what protections are there in place to prevent that. How would that even happen or could that even happen? What is the next alternative and how much would that cost? This fund should be a top priority until you fill it up. Try not to extrapolate too much though as our risks need to be somewhat reasonable. They also need to be solvable with money.
For reference I think most people have about 6 months of expenses for their E fund. Some go up to a whole year and others go to 3 months or even less.

I also think you can totally build in whatever amount you feel comfortable with as guilt free spending each month as long as your necessities are covered. Seems like you already have some areas that you want to try out such as taxis and eating at restaurants. These are perfect items to start with because they are relatively low cost at each instance and they are non-committal. Meaning, you can try them out and maybe you love it and say "wow, I want to do this all the time" in which case you add that to the budget. Or maybe you take a few taxis and go "wow, I thought this would be nice, but it's not as fast as I thought and I'd be fine taking public transportation" and this is great too because you tried something that you thought would be nice but it wasn't as great as all the movies make it seem and you can instead try out something else. I like Ramit Sethi overall (disagree on some things), but this is one area that I really like is that he encourages you to dive into areas on interest with money to find the things that truly matter. It's not about showing off status, it's about finding joy in those things. And if it's not enjoyable, then cut it. He loves to talk about how he drives an old Honda sedan because he doesn't care about cars, but he completely understands that a lot of people love cars and encourages them to set goals to be able to enjoy driving or whatever other hobbies they like. It's not about spending just to spend, it's about gaining satisfaction from that spending.

On the car topic, I also agree not to get a car, especially if you have to pay for parking. Renting for a day or taking ubers, etc are going to be way less expensive for the frequency of use. But if you really love driving, then maybe this is something to reconsider.

igooglesearchthings

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The more practical advice is:  spend some time focusing on your competing priorities.  What do you need to feel "safe"?  I don't mean set a new savings target, because again, there is no magical savings level that guarantees bad shit can never touch you.  I mean what is that underlying thing you're afraid of?  If you identify it, you can take steps to keep it from sending you off-course if it happens.  For ex., if you are fretting because you rely on your job to support your lifestyle, then you can (1) save up a larger EF, so if the SHTF, your needs are covered for 6 months, or a year, or whatever timeframe makes you feel better, and (2) research the job market, get new training/certification, and generally do stuff to beef up your resume, so that if this job does go away, you are primed and ready to go get another one.

It's a hard task to follow up Laura33 as both responses are just so perfect, but I'll try to build on the practical advice a bit. Thinking about worse case scenarios is a great thing to start with. Losing job is probably the biggest one, but then what about some kind of medical issue that either is expensive to treat or prevents you from working, what if you lost your apartment? The first part in each of these is what is the cost, then it's what is the likelihood it happens. Then you balance those two with your tolerance for risk to develop a emergency fund goal. For example, you could lose your apartment but what protections are there in place to prevent that. How would that even happen or could that even happen? What is the next alternative and how much would that cost? This fund should be a top priority until you fill it up. Try not to extrapolate too much though as our risks need to be somewhat reasonable. They also need to be solvable with money.
For reference I think most people have about 6 months of expenses for their E fund. Some go up to a whole year and others go to 3 months or even less.

I also think you can totally build in whatever amount you feel comfortable with as guilt free spending each month as long as your necessities are covered. Seems like you already have some areas that you want to try out such as taxis and eating at restaurants. These are perfect items to start with because they are relatively low cost at each instance and they are non-committal. Meaning, you can try them out and maybe you love it and say "wow, I want to do this all the time" in which case you add that to the budget. Or maybe you take a few taxis and go "wow, I thought this would be nice, but it's not as fast as I thought and I'd be fine taking public transportation" and this is great too because you tried something that you thought would be nice but it wasn't as great as all the movies make it seem and you can instead try out something else. I like Ramit Sethi overall (disagree on some things), but this is one area that I really like is that he encourages you to dive into areas on interest with money to find the things that truly matter. It's not about showing off status, it's about finding joy in those things. And if it's not enjoyable, then cut it. He loves to talk about how he drives an old Honda sedan because he doesn't care about cars, but he completely understands that a lot of people love cars and encourages them to set goals to be able to enjoy driving or whatever other hobbies they like. It's not about spending just to spend, it's about gaining satisfaction from that spending.

On the car topic, I also agree not to get a car, especially if you have to pay for parking. Renting for a day or taking ubers, etc are going to be way less expensive for the frequency of use. But if you really love driving, then maybe this is something to reconsider.




Thinking about worse case scenarios is a great thing to start with - I believe this is called fear setting, definitely something I haven't done honestly with myself.

If I'm to use this as an opportunity for just a minute,

1. I'm scared of returning to being worried about not being able to pay for food, rent, trips (I never let my friends lend me money when I couldn't afford something, like $25 to go on a weekend trip).
2. I'm scared of owing people, and that leading to an unreasonable expectation - I value my freedom, and owing people feels like I am sacrificing that (although my friends would never do this).
3. I'm scared of needing to rely on people (probably something I need to think about more..)  - I tried my best growing up to reduce or eliminate my footprint for my parents who would complain to us about how hard life was

Now for more reasonable/tangible fears..
4. I'm scared of being unemployed, and unless I resign I get 90 days of notice and unemployment for a year.
5. I'm scared of having a medical emergency that would leave me unable to work (have 20k in HSA which makes the financial fear not as big)


Great point on considering protections, I think 6k in my emergency fund is not enough for 6 months.

What don't you agree with for Ramit?

Yeah we're pretty set on not getting a car. I think the only case in which we would get one is if my partner's parents gift us their car. 




 
SO glad to be helpful.

My primary next-step advice is to take concrete action on at least one of those things that makes you happy.  Want to go out and enjoy date night?  Set up that YNAB category now and adjust your other categories to account for that.  Then actually use that money and see how that feels.

I can tell you to stop focusing on what others have and wondering how they afford it, but that's basically useless, because that feeling of lacking something/jealousy/inferiority is deep-rooted.  Yes, most of the people around you are not saving like you are.  But some of them do have it better -- they make more money, they had wealthier parents, they have a spouse with a high-paying job, etc.  You will never, ever be happy thinking about what others have; I mean, this is why billionaires have competitions over who has the biggest yacht, right? 

The only way I have found to combat this natural feeling is to create for myself an environment where I am not always surrounded by more/better.  Probably the best decision we made was buying a house in a neighborhood that suited our lifestyle, not our actual income.  Our home is perfectly lovely and fine for us, but we are now surrounded by (1) people who make about as much as we do and have the same savings habits, and (2) people who make less than we do, so when they spend all their money, they have just about the same kind of "stuff" we do.  Note:  that's not at all why I chose this house, but boy has that been one of the most significant ongoing contributors to my happiness. 

And then opt out of the commercial stuff.  Watch little to no TV.  Don't go to the mall unless you really really need to.  Avoid falling into the "weekly Target run" habit.  Cancel magazines and subscriptions that push nice things (I literally canceled my Conde Nast Traveler subscription years back, because I realized that reading about all those super-luxe vacations was making me jealous and resentful; I mean, I work hard and make good money, and I still can't afford all that kind of stuff!).  Get the fuck off social media.  Enjoy yourself with as many free, low-setup-cost things as possible (hiking can be a ton cheaper than golf, plus you're more likely to run into people who don't look uber-rich hiking than you are at a golf resort).  The idea is to put yourself in an environment where what you have and do is both fulfilling and on the same level as everyone/everything you are surrounded by. 

(Sure, you can tell yourself you're a bad person, and that if you were a better person you wouldn't care so much what other people had, wouldn't resent the silver spoons, shouldn't like the fancy BrightShiny your neighbor just brought home.  But you're completely normal.  We're all Sneetches.  Better to acknowledge that and figure out how to manage it vs. beating yourself up for being human and imperfect.)

Next, focus on how you talk to yourself.  Do you use language of deprivation, of not deserving?  Change that.  It is not true, and it is hurtful.  Instead of "I can't afford it," say "that's not how I choose to spend my money" (I had to do this when I had DD, because I realized when she asked for a treat at the grocery store, my knee-jerk "I can't afford it" was a lie in a way it was not for my mother).  Tell yourself that you can have anything you want, if you are willing to make the tradeoffs.  The example I always use is a yacht (because it sounds totally luxe and I really don't want one). I'm a lawyer.  If I want a yacht, first, I have to start working at least 60-hr weeks.  I have to spend my spare time marketing and making connections, so that I can in a couple of years jump to a firm that pays a lot more.  Then I have to keep doing all of that for years to make it to equity partner, and then up the equity partner ranks.  Then, in maybe 15 years, I can buy a yacht.  And when I do that exercise, I think:  WTF????  I don't want to do all that.  Who needs an effing yacht?  I'd rather enjoy my nights and weekends, thanks very much.  And then that jealousy/desire for super-fancy stuff goes away.  (And for the stuff you really really really want, start saving for it now, in a dedicated account, even if it's just a little bit -- put bonuses and gifts and stuff in there.  By the time you're my age, you'll be able to buy it, in cash.  Assuming you even still want it -- the point isn't to have the thing, it's to constantly remind yourself that you can have the thing if you really really want it and are willing to work for it and accept the tradeoffs.)

Finally (for now), focus on the smaller/cheaper things that make you feel successful.  You know what one of my fondest memories is?  The first time I went grocery shopping without a list.  30 years later, I still remember the visceral feeling of joy that went through me walking down the aisle, knowing I could buy whatever I felt like.  You're current fixated on the car idea, so set a date, rent a car, and take a day trip somewhere.  When you're fighting those mental habits built on scarcity, you can get a lot of happiness out of repeatedly doing small things that remind you of how far you've come. 

If it helps at all, success is a slow process.  You build it by repeatedly exercising good habits, day-in, day-out, for years.  There will be many, many times when it feels like you're not getting anywhere and you will never get to a point where you feel safe.  But I can tell you from personal experience that you do get there.  The day I realized that even if we never worked again, we wouldn't lose the house was an unbelievable feeling.  There are days I still cannot believe that someone like me, who was on Food Stamps as a kid, has managed to build this life.  All of the work and planning and decisions that I did not really need BrightShinyX paid off, and I now feel "safe" in a way I never thought possible.

Thank you all for sharing and providing advice, I cannot stop thinking about how grateful I am.

I have created the YNAB category a few months ago but never spent the money (we seem to always be busy, and never prioritize our quality time. This has to change!!). Looking forward to this really, will cut through the monotony of just following people's plans

Thankfully I've been pretty commercial free since maybe 2012. Adblock on YouTube, stream TV and Movies, only commercials I see are from live sports events and probably instagram. This has definitely impacted me positively, but I think I'm "immune" only because I'm so shy about spending. Conversely, I usually hate spending money on retail priced items - I feel like I ALWAYS have to get a deal. Otherwise it's not worth it. Do y'all ever feel similar?

Positive talk to myselef will be really hard :( but definitely noted. I will work on being more compassionate to myself and be the nice voice that I so eagerly yearn for.

>The day I realized that even if we never worked again, we wouldn't lose the house was an unbelievable feeling

This will be my long term goal here! Getting a house will be the next step, but FI is definitely the ultimate goal.


weebs

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As others have pointed out, you're off to a great start.  Couple thoughts:


Great point on considering protections, I think 6k in my emergency fund is not enough for 6 months.

Yep, that emergency fund should be larger.  I'd start with a minimum of 6 months expenses with the end goal of having at least 12 months in the bank (or MM or whatever).

Yeah we're pretty set on not getting a car. I think the only case in which we would get one is if my partner's parents gift us their car.

It's good to see you come to this conclusion.  You have much bigger fish to fry in the form of paying off your student loan debt and padding your emergency fund.  Even if the car is free, parking, insurance and maintenance will significantly decrease how much you can put towards paying down your debt and increasing your emergency fund.  I say this as an unaplogetic car guy.  :-)

Conversely, I usually hate spending money on retail priced items - I feel like I ALWAYS have to get a deal. Otherwise it's not worth it. Do y'all ever feel similar?

I grew up poor and used to be like this.  Getting a good deal somewhat assuaged the guilt of spending the money.  Like the dopamine hit from making the purchase, the effect was temporary. Fast forward to the present and I avoid paying full price if I can, but focus more on the intrinsic value of the purchase (to me) instead of the discount.  Doing so has caused me to buy less stuff.  Buying less stuff has enabled my "fun money" fund to grow to the point where I don't sweat every penny spent.

>The day I realized that even if we never worked again, we wouldn't lose the house was an unbelievable feeling

This will be my long term goal here! Getting a house will be the next step, but FI is definitely the ultimate goal.

I will never forget the day DW and I paid off our home.  It was incredibly freeing to know that the house is ours and that we could both walk away from our high stress jobs and stay in a place we love (as long as we keep paying the taxes).

lucenzo11

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What don't you agree with for Ramit?

Overall I like Ramit Sethi, I think his overall advice is good, and I have his book. Specifically the following I like:
-His ideas of cutting everything that doesn't matter and only focusing on the stuff that really matters/makes you happy.
-Focusing on the big wins.
-Allowing for some spending to enjoy life and fuel hobbies. (I think MMM followers sometimes get too sucked into saving and then don't know how to do anything but save and don't always enjoy the freedom they've built, so this can help break out of that a little.)
-His psychological approach to money.
-His push for earning more in addition to cutting spending.

What I don't like so much, most of which is nuance:
-His focus on increasing earning is a little too heavy at times. This isn't always easy or possible for everyone to do, while cutting spending is fairly universal.
-He tailors to a more affluent follower and his advice isn't always applicable to those with less money and lower salaries.
-He pushes a lot of products like courses and guides which probably have been helpful to some people, but at times it can come off as he's just creating content to push purchases. I think he means well but I prefer free/ad revenue based content especially when a lot of what he talks about is already scattered throughout his other content like Youtube videos and podcast.

Here's a good thread from a while ago with a bunch of other opinions including some quotes from MMM himself on the Ramit's book.
https://forum.mrmoneymustache.com/welcome-to-the-forum/ramit-sheti-a-mustachian-or-a-fraud/msg2387878/#msg2387878

halfling

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2) Go ahead and knock the debt out.  As MMM would say, treat this as a hair on fire emergency.  You have basically already spent tomorrow's dollars until it's gone.  If you make the change in your NW calculation shown above, this also means that dollars spent on debt payment also have a positive impact to your net worth. 

I disagree, itís below 3%. You can get more just letting the cash sit. I would recommend minimum payments while stashing the cash in HYSA for other uses. Pretty similar to the donít pay off your mortgage argument IMO.

Laura33

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I usually hate spending money on retail priced items - I feel like I ALWAYS have to get a deal. Otherwise it's not worth it. Do y'all ever feel similar?

Hahahahahahahahahahahahahahahaha.

This is, truly, the story of my life with my mother.  Favorite phrase was always "it's just as good" -- I have told her that when she dies, I am going to buy her an imitation granite tombstone, because it's just as good.  Of course things never were just as good -- I still recall the table-top pool table that was so bowed you literally could not make a straight shot. 

And then of course we had to pay the price game -- she'd bring home clothes or something else we needed, we'd have to guess how much she paid.  The trick was to guess high enough that it was believable, but still well more than the actual price, so she could be proud and brag about what a deal she got. 

Really, this is a problem only if it is a problem for you.*  I mean, your worst-case scenario is that you don't spend money you don't need to spend, right?  Boo-hoo.  OTOH, if you feel like it is getting in the way of your ability to enjoy life, then you are doing the right thing to force some change.  So go out already!  ;-)

 
*FWIW, my mom is still a miser and takes tremendous joy out of knowing how much she has saved.  She has more money than Croesus, but is truly happy thinking of how much she will be able to give to the grandkids for college and stuff.  I, OTOH, married a guy who thought that level of frugality was stupid and so learned to spend money on things.  I didn't hit the right balance right away -- there was a period of significant commercialism that was sort of the rebound from never having had the "right" stuff as a kid -- but eventually I learned a decent combination of saving first, but also letting myself spend on extras that made me happy. 

igooglesearchthings

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I usually hate spending money on retail priced items - I feel like I ALWAYS have to get a deal. Otherwise it's not worth it. Do y'all ever feel similar?

Hahahahahahahahahahahahahahahaha.

This is, truly, the story of my life with my mother.  Favorite phrase was always "it's just as good" -- I have told her that when she dies, I am going to buy her an imitation granite tombstone, because it's just as good.  Of course things never were just as good -- I still recall the table-top pool table that was so bowed you literally could not make a straight shot. 

And then of course we had to pay the price game -- she'd bring home clothes or something else we needed, we'd have to guess how much she paid.  The trick was to guess high enough that it was believable, but still well more than the actual price, so she could be proud and brag about what a deal she got. 

Really, this is a problem only if it is a problem for you.*  I mean, your worst-case scenario is that you don't spend money you don't need to spend, right?  Boo-hoo.  OTOH, if you feel like it is getting in the way of your ability to enjoy life, then you are doing the right thing to force some change.  So go out already!  ;-)

 
*FWIW, my mom is still a miser and takes tremendous joy out of knowing how much she has saved.  She has more money than Croesus, but is truly happy thinking of how much she will be able to give to the grandkids for college and stuff.  I, OTOH, married a guy who thought that level of frugality was stupid and so learned to spend money on things.  I didn't hit the right balance right away -- there was a period of significant commercialism that was sort of the rebound from never having had the "right" stuff as a kid -- but eventually I learned a decent combination of saving first, but also letting myself spend on extras that made me happy. 


>there was a period of significant commercialism that was sort of the rebound from never having had the "right" stuff as a kid

This is what I'm going through as we speak.. starting a new hobby? Happy to treat myself for the best "budget" option.

Since the last time I've posted, I've become more open to buying things from the bodega ($7 sandwiches hurt my soul but it's nice to save on time and effort here). Taking cabs when I want to (made a cabs/transportation budget on YNAB). How are you with being generous with friends? I'm more than happy to buy a box of ice cream and share it with everyone, but sometimes I feel like it's hard to identify the line of being a generous friend and an overthinking anxious friend who wants to make sure their friends feel taken care of

My partner is definitely on the side of being too frugal is kinda stupid and it has definitely helped me be more open to spending, but they also buy a ton of stuff from amazon which is concerning. Something we're working on as our apartment is only so big and can only hold so many items

Laura33

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>there was a period of significant commercialism that was sort of the rebound from never having had the "right" stuff as a kid

This is what I'm going through as we speak.. starting a new hobby? Happy to treat myself for the best "budget" option.

Since the last time I've posted, I've become more open to buying things from the bodega ($7 sandwiches hurt my soul but it's nice to save on time and effort here). Taking cabs when I want to (made a cabs/transportation budget on YNAB). How are you with being generous with friends? I'm more than happy to buy a box of ice cream and share it with everyone, but sometimes I feel like it's hard to identify the line of being a generous friend and an overthinking anxious friend who wants to make sure their friends feel taken care of

My partner is definitely on the side of being too frugal is kinda stupid and it has definitely helped me be more open to spending, but they also buy a ton of stuff from amazon which is concerning. Something we're working on as our apartment is only so big and can only hold so many items

I'm going to say something that will likely get me booted from the board here, but I'm going to say it anyway:  you may need to just go through that commercialism phase to see for yourself what does and doesn't make you happy.  When you have grown up in a very restricted way, it can give you a desperate desire to have everything that you couldn't as a kid.  How many times when you were younger did you say something like, "when I'm older, I'm going to buy myself all the name-brand clothes that I want"?  I developed this really weird thing where I desperately wanted All The Things, but couldn't have them, and somehow converted that into "I am not worthy of having All The Things" -- so I made having Stuff basically a signal of my own worth.  WTF?  Totally warped.  And yet I didn't even realize how warped it was, because it was just my reality.  So I had to actually go surround myself with lots of Stuff that had been denied me to realize that, hey, WTF, this doesn't magically make me somehow worthy or better. 

There are two fundamental types of frugality.  Once is the kind you're talking about, where it's driven by fear and a feeling of scarcity.  This version can ultimately make you wealthy, but it doesn't lead to a happy life, because you're always acting out of fear, which means you're always looking for the next "gotcha." 

The other kind is driven by experience and maturity and balance.  That's the kind that realizes that most material goods don't actually bring happiness (and that certainly the drive to possess more stuff doesn't).  This is where you want to be.  In this world, you say no to buying some things because you know you have higher priorities for your money -- you're not saying "I can't afford it," you're saying "that's not how I choose to spend my money."  For some people, this comes very naturally; they don't really care about Stuff, or they have a drive to not work for "the Man," or whatever.  For the rest of us, we usually have to figure it out the hard way -- i.e., by making a number of bad decisions before we can use that experience to make good ones.

Your job right now is two-fold.  First is to set youself on a path to financial security -- enough savings, low-enough expenses, etc.  You've done this, so congratulations!  The next step is to start spending money on Stuff to figure out what does make you happy and what doesn't.  You may decide that those sandwiches from the bodega aren't really worth the $7, but feeding all your friends is.  Or vice-versa. 

My example:  when I was a kid, I took my calculator with me to the store to ensure that we didn't exceed our Food Stamps.  I loved these cookies the store made, and my mom let me get them as a treat when we had enough money left, and I still have powerful memories of having to put them back when we didn't.  When I grew up, I still cooked instead of eating out, I still bought generic brands and generally planned out my menu, so I still retained many of those good habits.  But I also remember the pure joy of going to a store in my late 20s and realizing I could buy whatever the fuck I wanted -- and then buying a couple of things I absolutely did not need just because I could!  Spending maybe an extra $10 really did make me happy, because it reminded me of how far I'd come.

Also, the partner thing:  FWIW, I married a spendypants myself.  It is a likely source of friction, because you guys just have fundamentally different worldviews, so be conscious of that and develop a plan together.  He grew up UMC, dad paid for college, when he needed something his parents provided it, etc.  So his world view was literally, "if I want to buy something, I'll just make more money to pay for it" -- like, seriously, the universe was just filled with cash floating around, and all he needed to do was reach out a hand and it would appear.  When we married, we had comparable incomes; I had bought a condo, paid off my student loans, and had savings and an IRA; he had every toy known to man and $3K in CC debt (he made plenty of money to pay it off, just hadn't paid attention). 

Honestly, the thing that saved us was setting up separate "fun money" accounts.  We both agreed on a budget, including not just rent and stuff but things like vacations, gee-we-need-a-new-couch, hobbies, etc.  And then we both each got $200/mo. that we could spend on whatever we want.  That way I could save mine, and he could spend his, and we'd both be happy.  Note:  I did this recognizing that I was actually the problem.  I lost my shit one day when he said he needed sunglasses, I was assuming he meant $10 at the drugstore, and he came home with $120 Oakleys (and they weren't even polarized!!).  But then I realized:  we made enough money that he could buy $120 sunglasses if he wanted to.  Yeah, it was stupid and unnecessary, but it didn't affect our ability to meet the financial goals we'd agreed to -- and who ever said I get to decide what spending is "right" and what is "wrong"?  I suggested the "fun money" budget item specifically to prevent myself from becoming the shrewish, bitchy wife who was constantly criticizing him -- if it came out of his fun money, I knew I had no right to criticize him, so I was able to back off and stop being so judgy.

You can actually use your partner's attitude to help you in your quest to find the right balance.  The goal is to save enough to meet your priorities, while spending on things that make you happy, right?  So first, sit down and figure out those joint goals and priorities, and how much you need to be saving for those.  That will include some things that he wants that you agree are reasonable, like, say, taking vacations, date night, etc.  Then talk about which of those extra things are worth spending your leftover money on.  Shopping blindly on Amazon?  Probably not.  But putting the money toward an upgraded couch that doesn't sag in the middle when you sit on it?  Maybe.  Or creating a savings fund for a special vacation?  I don't know what the specific Thing is, because I don't know you or him.  But if you can spend that extra money on things that make him happy, it's a win-win, because you're practicing spending money to figure out what makes you happy, and he's getting what he wants, too.

The real key to this is to do it all consciously -- and then, when it's done, figure out if it actually made you happy.  Maybe a fancy restaurant wasn't worth it, but having date night was, so then you guys can figure out more interesting date night options.  Or maybe you take a vacation to a resort and decide that the vacation was worth it but the high-priced resort wasn't; you can take that knowledge and research more interesting vacation options for next time.  Etc.  It's really that assessment process that makes the difference over time, as it helps you zero in on the kind of spending that does make you happy.   

roomtempmayo

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Today I still am confused how other folks afford what they do. The nice house, nice car, nice lawn. I think they make relatively comparable to me, but the one answer I always consider is that they're not contributing to retirement as much as I am perhaps. Either that, or their family sits on a nice fund either from family business, or some other means I can never attain (external help).


One thing you're likely going to have to reckon with eventually is that our starting lines in life are vastly unequal, and that inequality continues well into adulthood.  People don't talk about it, but it's real.  According to a recent Pew poll, 59% of parents are providing direct financial support to their adult children under 35.*  That's often on top of not having the student debt you're carrying.  People have all sorts of advantages that you don't.

Your only real choice is whether you let that inequality eat at you and make you bitter, or whether you make deliberate choices to stop comparing yourself to other people.  Life actually isn't a competition unless you choose to make it one.

*https://www.pewresearch.org/social-trends/2024/01/25/parents-young-adult-children-and-the-transition-to-adulthood/