Author Topic: How to change your emotional experience of saving  (Read 2750 times)

meadow lark

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How to change your emotional experience of saving
« on: December 11, 2015, 07:34:48 AM »
This started off as a response to the thread about The Latte Factor, but then it grew in my head.  I like the little luxuries, but the way I keep them from getting out of control is by manipulating my experience of my finances.  We have settled in at about a 50% savings rate.  We are content with this amount.  Like most people we pay our obligations first, but our "bills" include our investments and savings.  When you do that off the top, you change your emotional experience of how much money you have.  Now, instead of feeling like I (individually, not including my DW) make $60k a year, I feel like I make $30k.  Emotionally, this changes your expectation on what a luxury looks like.  I experience my financial situation as frictionless.  No deprivation.  No stress.  I very rarely want something I don't have.  When I want a latte, I have a latte.  Yes, you can spend $2k a year on lattes.  I don't, but I spend a lot more on other luxuries.  But we are still hitting our goals and our timeline.

For FI we will get down to a yearly budget of $40k for the 2 of us.  (We are close, but not quite there.). And it isn't worth it to me at this time (marital harmony, money spent to work, and money going to help our kid.). But I have no doubt My mind will see the $20k as the new normal, and will find away to be frictionless at that amount, also.

matchewed

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Re: How to change your emotional experience of saving
« Reply #1 on: December 11, 2015, 07:39:19 AM »
A person's daily actions have an affect on their outlook. In fact it may very well be true that it is one of the most deciding factors in perspective change. Changing your actions generated a change in perspective. It's an actual tool, it reminds me of the thread with the person who is trying to stop shopping but thought up a plan to keep shopping while tackling debt. That really doesn't change the action all that much, or at least it changes only one half of it. When the debt is gone the person still has a shopping habit to support or get rid of.

NoStacheOhio

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Re: How to change your emotional experience of saving
« Reply #2 on: December 11, 2015, 07:46:30 AM »
Speaking from absolutely no experience here.

You kind of need to figure out what works best for your situation. Figure out where a little bit of spending can make you truly happy. For us, our zoo membership is perfect. It's also an annual gift, but we would spend the ~$125 if it wasn't. We use it a lot, and we truly appreciate going as a family all year round (indoor Rainforest FTW!).

Lately, I've started getting jazzed about structuring our regular spending in ways that gets us rebates/rewards/whatever, and basically won't spend money if it's not on sale AND I'm not getting something back on top of that.

dude

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Re: How to change your emotional experience of saving
« Reply #3 on: December 11, 2015, 08:00:12 AM »
I think I beat myself up on this score a little too much sometimes.  The wife and I eat out a fair amount, because we enjoy the experience, but sometimes I'm like, "damn, I just spent $60!" (that's for a weeknight couple entrees, couple of beers thing -- a weekend restaurant night is usually closer to, or more than $100).  But I console myself with the fact that we're saving close to 50% of our net income (when you include all savings, including 401k + match, savings account, mortgage principle, student loan principle, SS, and retirement contributions).  If I include my employer's contribution to my pension -- which is significant -- it shoots up to @70%.  Increasing my savings will not affect my FIRE date, which is a function of my retirement/pension eligibility date (and is only 3.5 yrs away), though it would influence my wife's retirement date -- except that she doesn't seem interested in retiring early(ier).  She actually likes her job and going to work!  :-o  She is on track, with no lifestyle changes, to retire at 55 (12 years from now), though we could pretty easily bump that up a few years with some lifestyle changes/more savings on her part, but she just doesn't value the early retire over current lifestyle spending (oh well).

So I do pretty much the same thing -- knowing my goals are met with current savings rate, I consider the rest disposable, and believe me, it's still a ridiculous (non-MMM) amount of money.  But the saver/anti-consumer in the back of my mind still thinks I should be cutting expenses/saving even more, though I TRY not to obsess over it, because I don't want it stealing my joy!

Bertram

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Re: How to change your emotional experience of saving
« Reply #4 on: December 11, 2015, 08:55:19 AM »
Like most people we pay our obligations first, but our "bills" include our investments and savings.  When you do that off the top, you change your emotional experience of how much money you have. 

Interesting perspective. This idea of "pay yourself first" to save works for some people and doesn't for others. If you're interested in the counter arguments we recently discussed here:

http://forum.mrmoneymustache.com/welcome-to-the-forum/pay-present-self-vs-future-self/

 

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