Low morale

[cerberusss]

In the last three months, I took the MMM thing seriously and made quite a few nice steps.
- We started budgeting the groceries, and save an est. €100 monthly
- I also started looking at the mortgage, and shoved a cool €3000 towards the principal
- I opened a stock account and bought €1000 worth of Vanguard total market shares, and set up a monthly €100 transfer

It feels quite amazing when I list these. But now I'm looking at a few things which make me doubt the whole thing.

First of all, although the killing of the principal is really enjoyable, plain saving is not doing it for me. The money is sitting there, giving me 2% interest in my savings account. Especially now there's two really cool things I'm eyeing:
- these awesome new Apple MacBooks with their retina screens
- a friend who asked me to come and join him for a holiday to Thailand

Both cost up to 2K. And I have a hard time telling myself that yes, the money in my savings account REALLY needs to be there.

Anybody been in the same situation?

[dragoncar]

Is this money your emergency fund?  If so, don't spend it on non-emergencies.  If not, why aren't you investing it for a higher return?

If it helps, look at everything in USD.  Makes it seem like more money :-P

[swick]

I think everyone is tempted at one point or another, you have made some great changes! My partner has a hard time with just saving. It only became real and important once we sat down and figured out our goals and what we are saving for.

If it is your emergency fund that you are talking about, it is a matter of asking if that trip or fancy Macbook is worth possibly not having the money if something really bad happen to you. Sometimes it is good to imagine the worst.

If it is non-emergency savings, dragoncar is right, it might be better off working for you somewhere else. Again though, it helps to have a goal to weigh all your decisions against.  This definitely helps with the small frivolous purchases, takes a little more soul searching for the big ones but is still a good exercise.

If knocking down your principal is a goal, you might want to see what the extra payments actually equals out to in interest saved over the course of the loan. If you have a higher interest rate and put extra towards the loan, especially at the start, the extra money can give you a major return. If not sure what interest rates are over there, but if it excites you, and your interest is more then the 2% you get in a savings account that might be the way to go - unless your Vanguard accounts bring in an even higher %

[AugsburgMustache]

I am there right now, kind of at least.

I discovered the way of the mustache about 1 1/2 months ago and since then transformed my life quite a bit. Sold the expensive sports car, cut down eating out almost completely, tracked all my expenses and right now I am setting up an investment plan. As you described it feels damn good to be more in control of your spending and I am finally working towards a goal I can relate to: working for a maximum of 15 more years instead of the 40 years a “regular” career would offer me.

But the last two weeks have been tough on me. We are selling those great Sonos speaker systems at my company and I asked if I could try them out at home for a week. I immediately knew this was a dumb thing to do and regretted it a few days later. Damn those things sound good and the room by room control is a neat feature for a gadget head like me. I was damn close to buying two of those speakers but I forced myself to let the decision rest for a week. Right now I still think that those speakers are a cool thing to have, but this urgent need to buy is gone. Yes, they are great but not great for me.

I have the feeling that I am fighting an addiction here. Gadget shopping apparently is my heroin. Same thing with a Kindle the other day. Suddenly I had the urge to buy this cool gadget, rationalizing it to myself with the stupid argument that books are cheaper in Kindle format on Amazon. I forced myself to wait and on the next day I felt incredibly stupid. My head was using my newly discovered frugality to trick me into an unnecessary expense. I guess that’s another sign of an addiction.

Stay strong, I understand the urge for the Macbook. It will give you a short high when you click “Buy now” and a little bit longer high when you first open it. But about two hours into your set up of the Macbook, the high will be gone and it will just be another piece of electronic that fills up your home and keeps you back on your track to FI.

In the case of the vacation think of it this way: How many months do you have to work to save up 2K? And I don’t mean take home pay but your monthly savings rate. 2-3 months maybe (just a guess, I have no idea of your income/savings rate)? Are two weeks of Thailand worth working 3 months at your current job? If you say yes, then go for it. If you doubt it, wait until FI and then go to Thailand.

Hope that helped. Greetings from Germany.
Andi

[MsSindy]

It sounds like you're in the "mental" part of still exercising your frugality muscles.  Go back and read this article: 
http://www.mrmoneymustache.com/2012/09/18/is-it-convenient-would-i-enjoy-it-wrong-question/

Stay strong and keep your eye on the prize!

[olivia]

Why not go on the trip?  Are you in a lot of debt beyond the mortgage?  If so, skip it, but if not, I'd go.  I really value travel and am not planning to stop or slow down my travel even as I'm tightening up my finances in every other category.  That's probably the one thing I'll continue to spend the same amount on.  I always either stay at a relatively inexpensive hotel or stay with family/friends where possible, I'll get groceries and have sandwiches or yogurt or whatever the local quick meal is instead of going out for every meal, etc.  Plus I would imagine that things in Thailand are pretty inexpensive once you get there.

I'd skip the computer though, unless you're a photographer or designer and need a super detailed screen for work.  And even then, the old one was probably working just fine, so don't! 

[nktokyo]

I never went on a holiday to Thailand and I don't have anything with a retina display. I did however retire at 30 and go on random bike rides and beach adventures mid week dispersed around the odd bout of freelancing to keep the brain ticking over. It's totally worth the "sacrifice", let me know if you need more motivation.

[AugsburgMustache]

I never went on a holiday to Thailand and I don't have anything with a retina display. I did however retire at 30 and go on random bike rides and beach adventures mid week dispersed around the odd bout of freelancing to keep the brain ticking over. It's totally worth the "sacrifice", let me know if you need more motivation.

A simple yet powerful motivator!

[cerberusss]

It's true that I'd be breaking into my emergency stash. Since I don't want that, I'd thus have to pause breaking down the principal of the mortgage for a couple of months.

Thing is, everything feels a bit distant currently. My calculations show that the interest-only part of the principal could be killed in 13 years. So when I started three months ago, I was in this zone where I was doing the calculations, changing its parameters, etc. and I really felt on top of it. Now that 13 years seems awfully far away.

The trip will be done on the cheap, I've got a friend there and we can stay over at his place. As Olivia says, the land is cheap, too. The laptop will easily provide months of fun. Knowing me, I'd probably spend lots of time looking for a sticker to put on it, getting to know the ins and outs, talk with people on the Apple forums about it, etc. It'll be child-like fun.

I read and re-read the article MsSindy points to -- apparently I'm mentally not in the place which MMM mentions. Where I'm able to reprogram myself off of the laptop.

I checked out the difference between spending and not spending. If I spend that 2,000 now, it'll cost me an additional 1800!! euros in extra interest. Oh my... that's a lot of money. That did make me think twice about diverting funds for the laptop, that was actually meant for the principal. Here's hoping that future price tag will seem high enough to not do mindless spending.

The trip, I might be able to make it cheaper. But realistically, it'll still cost 1000. Meeting my old friends there will be absolutely awesome. Perhaps I could pay that by selling some old stuff, saving a bit extra, etc.

[swick]

My hubby is really into building electronics, so I get it. He spends tons of time on forums and sourcing parts for a new machine, tinkering and building and optimizing. Once we started to look at what parts of it he likes (the forums, the building etc) he discovered he can  do those things without it costing US a large chunk of money.

He builds computers for other people and makes some money at it and also gets the bonus of making other people happy, they spend less for what they exactly want and he still makes enough to support his hobby. Sharing this story because it seems like you could still do many of the things you mention doing with your apple the forums and connecting with others over something else. Good job on finding out what the extra interest would cost, it is really eye opening, isn't it?

We are in the process of trying to pay down the principal as fast as we can. It can be discouraging to find out how far away we are, on the other hand we look at as for the big things we do want, especially travel, once the mortgage is paid off will be very easy to afford.

At lot of us understand the need for travel and that it is a priority. The idea of saving up, selling some things is a good one. You might also be able to save quite a bit if you shop around for airfares. I have traveled with people who didn't really have any interest in doing it cheaply, so I made them a deal I would find them the best airfare possible and we could travel together and split the difference of what was saved vs the price they were originally going to buy tickets at. I had to do all this research anyways, and it made things much simpler instead of coming in on different flights, trying to meet up etc.

Now you might not be comfortable doing this with your friends, but you could always phrase it like, let me find the best deals on X and you can buy us a few meals (or drinks) or take you to that expensive attraction you want to see.

[KS]

I agree with some of the other posts, if you can find a few other places to save to pay for the trip, it sounds worthwhile. Travel and time with friends/family are (in my opinion) generally worth the money and effort to sacrifice in other areas.

The laptop on the other hand- if you have a working computer you should skip it. Soon enough they will come out with some new iProduct that you'll also "have" to have because their marketing team will make sure everyone believes it's even cooler than this one you're wanting to buy now, and you'll just be back in this position again.

[aclarridge]

If you're comfortable with how these luxury expenses would affect your FI date, then go for it.

It sounds like you aren't comfortable with it, but are looking for help with the self-control required to make the decision to give up the luxury. You're thinking about it the wrong way - money is only good for spending, and in this case you can either spend it on these luxury goods or a quicker path to financial independence. Don't think of it as giving up one or the other (negative), instead think of it as obtaining one or the other (positive) and do it consciously and with good math.

For what it's worth, Thailand sounds cool and if you haven't travelled much in a while and need a vacation anyway, you have my seal of approval.

[forward]

I never went on a holiday to Thailand and I don't have anything with a retina display. I did however retire at 30 and go on random bike rides and beach adventures mid week dispersed around the odd bout of freelancing to keep the brain ticking over. It's totally worth the "sacrifice", let me know if you need more motivation.

I like this a lot.  Thank you!

[Albert]

I'll join the majority here and recommend taking a trip, but not buying a computer unless your old one really is on it's last legs.


By the way I'm typing this message on one of those McBooks with a retina screen. They really are cool and it was a huge upgrade from my previous laptop which died after 5 years of dutiful service. Hope this one last just as long!

[Eric]

By the way I'm typing this message on one of those McBooks with a retina screen. They really are cool and it was a huge upgrade from my previous laptop which died after 5 years of dutiful service.

I don't think you're helping!  :)

[cerberusss]

Wow, very insightful answers. OK, so the laptop idea is off, I made up my mind about that. I might upgrade in the future, but then the side business must completely cover this cost.

As most people guessed, I'm not comfortable with moving my FI date, and the extra interest was really eye-opening. It's funny though, because I set these goals (of amortizing at least €7,500 yearly) myself. I could easily change the goal. But that would feel like a failure, somehow. I'm actually a bit pissed off at myself that I'm not able to get the laptop :-) and at the same time, sticking to my guns.

I liked the comment about spending, and how the money is spent either way -- on a laptop or on earlier FI. Quite insightful, somehow it feels different: now it no longer feels like withholding something but rather feels like I spend it on myself. It's like treating myself to earlier FI.

As for the trip, I'll set a budget and see if I can cover it. Concerning the ticket price, I already found something amazingly cheap and might just put that on FlightFox or similar, see if it can be done even cheaper. I might have to sleep over in some Arabian airport but hey -- I never did that before.

[nktokyo]

Are there any opportunities to earn a bit extra on the side and speed the whole process up? What if you had a second income also contributing to your FI date - that would be exciting, right?

[cerberusss]

Yeah, that's entirely possible. My side business earns me about 200 per month, and I'm focusing on marketing to raise that. Every 100 of that has to be saved, though (paying back my dad, who chipped in on the initial investment).

[nktokyo]

Sweet! Keep going and good luck.