There’s been a smarty pants leaving comments on this blog lately, and I thought I’d highlight one of them because the guy knows what he’s talking about :) And he’s also pretty damn good at conveying his message. (If you’re reading this sir, might I suggest you take up blogging?)
He was wrong in assuming I was about to lead a pauper’ish lifestyle — this comment below was a response to me mentioning I’m about to go on a mortgage pay-off binge, which I’ll be blogging about soon — but I think this guy nails the “balanced life” concept on the head. Any extreme in personal finance is usually NOT a good thing!
Here’s what my new friend Gene Roberts from Chandler, AZ wrote:
I can’t argue with the desire to get debt free as quickly as possible. After all, if I didn’t have to pay my mortgage right now, I’d have another $1100 a month to play with.
However, I would caution against going “hardcore.” That really makes it sound like you are thinking about living like a pauper to put every penny towards your mortgage.
I have read many comments about people that live this way (what I would call excessively beneath their means). And not to discourage fiscal responsibility, but I believe that you should seek balance in life.
I attempt to find a balance between planning for the future and enjoying my life in the here and now. I don’t have any debt except my mortgage. And I put 16% of my pay into my 401k (plus employer’s 6%). I have a significant EF if you include my gold and silver investments. And I’m starting to accelerate payments on my mortgage. But however much I love my future self and don’t want him to eat cat food when he retires, I also want my present self to live a full and enjoyable life. I mean otherwise what’s the point?
My major outlet for recreation is my motorcycle. I take several trips a year with multiple groups. I try to minimize the cost so I can take as many trips as I can and I don’t go into debt to go on a trip. But I probably spend $5,000 – $7,000 per year on this “hobby.”
If I sold my bike, put that money and the majority of my discretionary income towards my mortgage, I could have it paid off in about 8 years (versus the 14 years I have planned). But that would be 8 years of missing out on an activity that I derive a great deal of enjoyment from and share with many friends. And back of the envelope calculations show that I’d only save about $20,000 – $25,000 in interest over that period.
Overall, I do take the long view of my finances. But I don’t sacrifice everything now just to be richer in the future. Also, where does it stop? Once you pay off the morgage, you could put all that extra money right back into investments. After all, you are already used to living like a poor person now. At some point you have to find your balance. Otherwise you are just accumulating wealth for your beneficiaries. (Cue the family fighting over your estate)
My ex’s father is that guy. He had a 6 figure income while she was growing up (back in the 70’s and 80’s when it really meant something). Their house was paid off when she was a toddler. If he’s not worth at least two mil by now, I’m a chinchilla. They had a lot of money but you wouldn’t know it by his behavior.
He forced them to walk on the sides of the steps to make the carpet last longer in the middle! (she dislocated her finger when she fell once because of this). He bought all generic food and would actually sew the elastic band back into his tighty-whities when they fell apart (multiple times — I don’t know what his criteria was for finally ditching his old underwear, but DAMN! (Editor’s note – HAHAHA…)). From the way he treated money you would think that he was raised during the Great Depression. Why treat yourself that way? And especially why treat your family that way? It goes way beyond being responsible financially. (And who wants peanut butter you can pour out of the container?- Yuck!)
I look at it this way, how would I feel if right after I sacrificed everything, and reached whatever arbitrary goal I set, I got into an accident and was lying there dying. I know that I wouldn’t be thinking “Gee, I’m sure glad I got my mortgage paid off early” or “Glad I’ve got that $1,000,000 in the bank.” I would be sad that I didn’t enjoy the fruits of my labor more.
Given (what I consider) my balanced lifestyle, I of course would not be thrilled to be shuffling off my mortal coil. But if I died tomorrow, I wouldn’t feel like I cheated myself out of having a full and rich life either.
James Dean sums it up nicely:
“Dream as if you’ll live forever, live as if you’ll die today.”After all, our financial planning is just a dream that we make happen.
BAM! Funny, well-written (especially for a comment, my goodness!), and a nice ol’ point in the end ;) The guy knows his stuff, eh? I know it’s easier said than done – especially when you have bills up the wazoo and everyone telling you to save-save-save or you’re gonna turn into a donkey – BUT these are good good words to live by. Or at least, think about every now and then.
I get into the habit of going hardcore a lot, but usually in little spurts here and there (you know those people who get crazy passionate about something for like, 2 months, and then stops on the dot and moves to another shiny thing? That’s me. Only with finance, I tend to hold onto things a lot longer than normal…) But, after alllll the money I’ve saved or spent, or invested over the years, etc etc — I have never given up my passions in life. I always need adventure spilling in and giving me breaths of air. Plus, I can’t ever get away with anything too crazy anyways due to Mrs. BudgetsAreSexy putting me in my place, haha…
I think it’s very important to have a little fun every now and then, or you’ll drive yourself bonkers. And worse, you may just GIVE UP on your goals altogether! (That’s the worst) The people that usually last are the people who take their time, and gradually reach their dreams with bits of breaks and revisions throughout their lives. We’re not robots, and we’re certainly not meant to focus all our energy on just ONE thing. Especially with finance. Without balance, we’re just asking for trouble.
Would you agree? What are some of the things YOU do to keep things evened out in your life?
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(Photo by wolfsavard))
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I agree with this comment and attitude 100%. I saw my grandparents pinch pennies to the point of not enjoying life. When my grandma was dying she straight up said that I had to enjoy life, travel the world, have fun. She was happy, yes, but she had regrets. One can be responsible and save for the future, but still live life with joy. This doesn’t mean buying a huge house for me. This means travel and good food. :) I have some student loan debt, I have investments and a Roth IRA, I stick to my budget, I pay my card off each month, but I don’t pinch pennies in my daily life because I choose what’s important to my health and happiness, and cut out what’s not. We only live once. If/when I get married and have kids, it will change and I will cut out more things and my priorities will change. That is exciting and worthwhile, too. For now, it’s just me.
I enjoyed reading that piece of advice the gentleman gave you, but to defend J. Money a bit I must say that guy takes more trips than the traveling circus. Since reading this blog I cant keep count wih how many trips he’s taken, lol. Also I agree that a balanced life is a necessity if your income allows it to be, theres so many people right now that can only get by due to prices going up and average income going down. So yes live by James Dean’s quote in life, but also recognize that without the passion for financial rightness/frugality all of you would be in a not so favorable situation financially.
I agree that you have to live a balanced life. It’s pointless when you are HOARDING you money and never spend it. Yes, crazy penny pinching is HOARDING if you don’t ever spend any on anything you might enjoy. Think about it: hoarders have junk in the house they never get rid of. Money in the bank that has no purpose is just that. What is the point of having money if you don’t use it once in a while. Being responsible financially means you use the money WISELY, not hoarding it.
We have kids, but we don’t cut out going out to eat or go to fancy places. We just don’t do it as often or get take out and save on the tip.
Totally agree. Traveling is my big thing. Like the original poster put 15% away for retirement, I am paying a little extra on my mortgage, and have no other debt. But certain financial gurus (yes Suzi Orman I am talking about you) would say even though I have the cash to pay for going to France and Belgium this fall I really cannot afford it because I don’t have eight months of an emergency fund. I disagree. I have saved around 4 months and I have a fairly stable government job that will not be downsized.
I worked with a woman during a college summer job and she was retiring after 35 or 40 years with the phone company. She and her husband had saved and planned to travel when they retired. She retired to stay with him after he had a stroke from which he died about 15 months later. They never got to travel and this has stayed with me for 20 yrs. Yes I am making plans to travel in my retirement but I am going to enjoy the now also.
My dad used to say a variation of this…’Plan as though you will live forever, live as though you will die tomorrow.”
I believe in this wholeheartedly. You must plan responsibly for your future, but at the same time, life is short…you must live in the now. When you are young, it is easy to accomplish the planning part without much sacrifice. When I was 21, I was somehow wise enough to heed my father’s advice and start investing in my 401(k). At times, I was putting 20-25% of my income in every year. I am now 35, and with a child, and two mortgages, I have cut it back to 10%, but by starting it so young and having time on my side, I have a nice chunk of change already, and I never missed the money going in.
My greatest motivation for living as though you will die tomorrow is that unfortunately, that is possible. I remember people telling me I was silly to take my son to Disney World at 2 1/2. “He won’t remember it, wait until he is 5, etc,etc”. Well, I have one friend who’s 3 year old son died unexpectedly, and I have a sisterinlaw who died before her son turned 5. You arent guaranteed another opportunity. You need to take advantage of the now. Sure, my son may not remember that trip, but I will, and he had the time of his life while we were there. I have gotten clowns to entertain for his birthday parties, I had a pony come give rides at this years party. Some may say that is extravagant, but they each cost $150/hour. To me, that is a small price to pay for the memories that my son will have of his childhood birthday parties. My philosophy on motherhood, which I think goes along with this James Dean quote, is “I only get one shot at making my son’s childhood awesome, I am not going to waste it”.
At the same time, every check he has ever been given (baptism, birthdays, Christmas), has gone in his 529 plan for college. I usually match any gift he is given also. So, tho I am planning for his future, I am not taking for granted the sweet moments and experiences we can have now.
My dad is like Gene’s ex’s father (that’s a mouthful!) but his life is not filled with regrets or misery in the least. My dad has pursued utlra-frugality for decades, but is a pretty happy person. The difference is that he lives for his family instead of living for stuff or experiences for their own sake.
My dad has been able to save to put all of his children through undergrad and one (not me) through graduate school on top of beefy liquid and retirement savings. He has always been able to provide us with everything we need to succeed. His frugality enables him to provide security for not only himself and my mom but also all of the kids and his extended family. For him, just sitting and talking with his kids or siblings is a huge source of happiness and joy. When my grandmother needed a major medical procedure cost was not an issue for my dad. He flew her to our area where there were top specialists and paid for anything that wasn’t covered out of pocket. Being able to do that is incredibly important to my father.
He also enjoys playing the game of saving money and getting deals. He’s been couponing since long before it made it into the media and is a yard sale fiend. He loves bragging about how he negotiated down the price of a (used) car by paying cash and threatening to walk away repeatedly. Sure, his habits sometimes drive my mom and the rest of us nuts (like reusing floss, disgusting!) but this is what makes him really, truly happy. It’s what’s important to him. So someday, when he’s near the end of his life, he won’t think back saying he wished he’d traveled to Thailand or had more new clothes because those things aren’t important to him. He’ll have family around him and he’ll be happy that he’s lived a long and productive live with us.
So I think what Gene’s point misses (though in most cases it’s totally correct) is that sometimes frugality isn’t about delaying or avoiding happiness, sometimes it is happiness or an important component of it. For some people spending money doesn’t bring as much happiness as saving it would.
I LOVE this post. I think it also reflects a lot of what Ramit always talks about too. Spend on what you love…. but be merciless on what you don’t care about and that in effect is basically post.
Some things I do to keep everything evened out.. I love going on a yearly snowboard trip to somewhere I’ve never been, and I love partying every other weekend with my friends!
@No DebtMBA
I must politely disagree From my viewpoint, I would say that your father isn’t hoarding money just for the sake of generating wealth. Indeed he appears to spend it freely on those things that bring him happiness as the opportunity arises.
He saves his money to spend it on the things that are important to him such as his children’s advanced degrees, your grandmother’s surgery, and the security of extended family.
My point is that he spends it where he feels it’s appropriate. He doesn’t just hang onto it to watch the balance grow. Additionally, when he does spend it it sounds as if that act makes him happy.
By way of comparison, I never saw my ex father-in-law pay for anything that wasn’t a “need” such as food/clothing or undergrad college tuition. He never came across as “happy”, just miserly. I feel pretty safe in saying that there was little to no likelihood of him ever helping out his extended family.
Although you definitely win for re-using floss. That’s got quite the Eeeewwww factor going for it. That would make it pretty easy to re-infect himself with a cold and affect his health. You know, if he isn’t offended by others spending money on him I would go to Costco and buy him more dental floss than he could use in a lifetime. Take it all out of the outer package so it couldn’t be returned and just give him the dispensers. If he has more than he could ever use maybe he would just use it once? Just a thought.
I don’t feel like there is much balance in my life currently. Every time I buy new clothes or go out to eat with friends I feel insanely guilty because I know the money isn’t exactly in my budget. I tell myself I should be allowed to have fun every now and again but with my heaps of debt I still feel guilty spending money that could be going to pay off the debts I also realize that I have a very low income (~10k/year) and these habits/way of life will pay off in the future when I’m making real money. Then I can start to find some balance (without guilt) in my life!!
Dear Jenny~Z, Define “Fun”.
There are a ton of ways to have fun that don’t require buying new clothes and eating out. Go for walks, have a game night, potluck/bbq, movie night at home…. to name a few alternatives. Personally, I prefer home cooked food over restaurants as I know exactly what is in it and how it has been cooked. Get a hobby. Being busy doing something you enjoy will keep you away from the mall. And you don’t have to accept every invitation. Be selective.
I know not everyone enjoys thrifting but I have found some awesome dresses in Goodwill from Calvin Klein, H&M, etc. for $5-$8. I also started sewing and have made skirts and dresses for less than $20 (unique and they fit me better than store bought). If you that’s not your thing then create a ‘basics’ wardrobe and you can add accessories to style it and keep it fresh.
Don’t put yourself into debt over clothes and restaurant dinners! Esepcially if those choices are affecting you emotionally. Do what is right for you, not what society deems is ‘right’. Having money or not does not make you a good or bad friend. Being there for people, supporting them and encouraging them to follow their dreams, none of which takes money. Your real friends will be around no matter what you wear or whether you eat out all the time!
I make sure to take time to hang with friends and family at least twice a week so I don’t go bonkers and meld into a laptop creature.
With money, we make sure to put about 15% away for vacations and fun money so we never feel like we can’t have a good time. We make sure to save 35% or more and live on 50% or less. That’s our balance. It actually has helped us create a very nice and fun life together. :-)
@Gene
Costco floss! Awesome post, I’ve been looking for a comment like that for a long time. Although I still have trouble balancing. I grew up fairly poor so I do have those fears of being destitute. When I do splurge it does seem outrageous and frivolous at times.
I enjoy car audio and have spent a good chunk of change on it, but at least it lasts for several years. Eating out is my outrageous and frivolous expenditure :( Ever since a friend of mine introduced me to the world of fine dining when I was 18, I was HOOKED. I’m not the biggest fan of traveling but the wife is so we spend quite a bit of change on that too. Thank goodness we make more than we spend…not by much, however.
I totally agree with him, though I do think he’s being a little hard on you ;). That said, I think this balance concept is a LOT harder said than done. I know people like the guy he described, who just squirrel money away for years and never enjoy it, which isn’t a great way to live, in my opinion. But then I also know people like my parents, who are living with a huge mortgage and credit card debt, and are taking the “We might die tomorrow, so we should enjoy our money!” stance. To which I reply: “Yeah, true, but you might live until you’re 100—and I expect you to!—so what are you going to do if your retirement savings aren’t up to scratch?”
It’s all well and good to pass judgement on either type of people, but I feel like there are way fewer people out there that are truly living a balanced lifestyle in that regard.
I read Your Money or Your Life back in the 90’s and it irrevocably changed my money outlook. I bought a tiny (805 sq. ft) condo and paid it off in 7 years. We have a paid for car (one) and no debt at all. We save 15% in retirement accounts, fully fund two HSAs (we have HDHPs), save 40% of our take home pay and have about a 45 month emergency fund (I hoard cash) We are long time frugal people but we love traveling to the UK and Europe once a year. We spend money on things that are truly important to us and penny pinch the rest of time and I think I’ve finally achieved balance, but it’s taken a long time. For a super saver like me, it was very very hard to let go and actually spend money.
This is one of the best posts in a while! Funny that it stems from a comment! I feel pretty balanced for the most part, but I still feel like there are areas where discipline is needed. For example, having a budget helps me remember to be disciplined and pack a lunch in the mornings. Can’t tell you how easy it would be to just buy lunch! Overall I feel pretty happy about my financial situation right now! I may not have much, but I have everything I need and then some!
I agree. My mother always wanted a Cadillac, but delayed getting it longer than she had to. She could have bought it some years earlier, and had more enjoyment out of life. When I can have something I want very much, I try not to put it off too long. On the other hand, I don’t buy what I can’t afford buy pledging future fantasy money to do so.
“…walk on the sides of the steps to make the carpet last longer in the middle!”. I totally do this! I don’t make my family do it, but when I go up the stairs I walk on the sides so it will wear more evenly. hahaha… I’ll stop.
@Gene
You’re right. He’s not hoarding. He’s saving with a purpose but to some extent that purpose is to have savings for security and the unknown like a really big emergency fund. I guess my point was that the guy you knew might have been the same way and that super frugal doesn’t necessarily mean miserable.
PS – I’d buy the floss and he’d just hoard it and continue his habits. Been tried with floss and socks :(
My husband and I would be the types that this fellow may believe live drastically below their means. My husband makes a six figure salary but we still don’t have cable, drive used cars, wear second-hand clothes, etc.
The one thing that we don’t skimp on is food. It’s our second largest expense, after our mortgage. We love food and eat lots of locally grown produce, grass-fed beef, and organic pantry staples. We love trying new things and our latest favorite is local, raw sauerkraut that costs $7/jar and doesn’t last a week in this house. On the rare occasion that we get to go out to eat alone together, we’re not afraid to go to a nice restaurant and drop $100 on a nice meal.
I know that there are lots of other frugal homemakers who feed their family on something crazy like $50/week. But we love food and it’s such a big part of our lives, I don’t want to eat hamburger helper or oscar mayer bologna just because you can get it free with a coupon.
One of the things I try to do to keep things evened is to get away on trips whenever I can. Even if that means going away to my parents house out in the suburbs for the weekend. It allows me to focus my mind a bit and keep balanced. I like that commenter’s points about being waaaay too frugal. If it’s too hard to maintain then you’re probably not going to maintain. Or you’re going to be unhappy doing so. Maybe some people have fun with it though. It’s not for me!
All i have to say is that i would rather see someone spend all their money on their mortgage, rather than blow it all away on something pointless. Yes, everyone needs a balance in life.. However, not too many people are able to achieve that. If someone would ask me what to do with their money? I would say invest your entire paycheck before someone else takes it. Don’t you guys know this world is about money? If you don’t invest it, you’ll spend it…
Yep I agree. You need to save yes, but also enjoy life. I’ve tried to find ways to save without sacrificing my way of life. It’s like losing weight, you’re bound to be successful if you find balance. I try to look at my habits and what is important to me.
I live with my BF and we’ve found out that cable isn’t important to us. My bf really likes movies, and I like watching series and movies. So we don’t have cable, but we did buy a 40″ inch tv (that was bought at Wal-Mart for $1,000) and yes we paid with cash.
We use Netflix and itunes for our movie & series. We love our tv, and we love watching movies whenever we want. Everyone needs their toys. But anyway we have gained a lot of enjoyment from our tv. We also use it for gaming. I pop in movies and get on our stationary bike while they’re playing. It makes exercise much more fun. No our tv hasn’t taken over our lives.
This is just one example of how we save but still have fun. I really like what Ramit wrote on his book, he rephrases frugality in an interesting way. He says to be a conscious spender.
I love that. I also think saving money is different to each person. Everyone has an idea of how far they’re willing to go to save money.
I could never go to extremes. I just try to work with my habits.
btw I just want to add that we enjoy far many things than our grandparents have. Like when they were young in their 20s and 30s. I know our grandparents didn’t have 500 channels. They didn’t have a choice between Cox, Dish Network, Direct TV, etc. There’s Netflix and Redbox. That’s more access to movies & tv shows, than our grandparents ever had.
They didn’t have the internet where they could compare and look up reviews. Now we even have websites like freecycle where people exchange things for free. There are also companies that market to just about every level of income. Stores are also super competitive where they will match prices, we also have coupons, sales, warehouses, discount stores, dollar stores, online stores like Amazon.
I know people say the COL has gone up and it has, but at the same time there are so many things that are affordable to us than they were in our grandparents days. We live better than kings in the 15th century did. It’s common for most Americans even at the lowest income level to have an A/C, fridge, tv, a computer, etc. Clothes are much cheaper now than they were in my gran’s day.
Even if you can’t afford college, if you can afford internet access and go to the library then you can educate yourself. Well as long as you have the self-discipline. Internet access can even be free if your library has it. I know that my grandmother didn’t have access to inter library loans.
Most people around the world have gone away from the farms and most of us around the world now live in cities and towns. Companies make sure that they have brand recognition so if you go to Target in the east or west it’ll most likely be the same. Everything has gotten a lot more convenient. I really do think from what I’ve seen that we have more access to things than our parents and grandparents ever have.
But college, housing, and health care were much more affordable during their day. Those industries seem to have had the worst inflation.
Anyway sorry to ramble but I do from time to time do hear how people say we live worse than our parents and grandparents and the truth is that we don’t. And some people complain the middle class is shrinking, but I really think its peoples debt and spending habits that do them in. Anyway I’ll shut up now. lol.
=)
I enjoyed reading this post. Intellectually I fully agree with the spirit of Gene’s comment (and, of course with James Dean; the guy was so cool after all who will dare not to). ‘Moderation in all things’ was a cornerstone in Socrate’s philosophy. So intellectually, hell yes! Balance between our present and our future is what does it.
Practically, I have always, always had problem to achieve balance (and moderation) and not only in relation to money and all matters financial. I am very impatient so I want it, and I want it now! ‘Want it’ is rarely possessions – I want experience, I want our debt paid off, I want adventure. The art of living is to manage to have ‘enough’ of all and not too much of any.
@Jenny~Z
The most difficult thing about living within a budget is the discipline to get started if you’ve been one to spend more than you make in the past. I’ve been there and know what you are going through. But to get anywhere financially you have to find a way to live within your means. Maria had a lot of good suggestions.
I know that there were times when I was changing my behavior that I realized that I was buying something just to make myself feel better. Until I got into a much better position financially, I had to scrutinize my purchases to make sure it was something I needed and wasn’t just for the emotional bandaid.
@Maria
Great suggestions saving $$ while still having a full life.
@StackingCash
Thanks for the complement. :) I’m glad I never got addicted to the fine dining thing. I eat like that maybe twice a year and it makes those meals all the more special. Lunch in the rotating restaurant on the Seattle Space Needle was well worth it for the experience!
@Melissa
I know where you are coming from with your parents. My dad died when I was 4 and my mom didn’t know anything about finance. We lived hand-to mouth accruing credit card debt my entire childhood. Thankfully I was exposed to my in-laws while I was still young enough to change my habits (early 20’s).
I think that as long as you are somewhere in the gray area in-between total financial ruin and never spending anything you squirrel away you’re not doing too bad.
@Amy
I love my HSA! Best thing to come around. I did the Lumenos thing before the HSA came out (you had a pool of $$ to spend that rolled over, but there were limits and you didn’t take it with you if you left your job). When I saw the HSA with the HDHP I knew that was the way to go for me. It’s like an IRA that you never get taxed on (as long as you spend it on healthcare). Without kids and in relatively good health it was a no-brainer! I mean I’m gonna need the money for healthcare someday. In my opinion, I think it’s more important to fund an HSA than an IRA.
I do hope that if you hoard the actual cash that you have a safe that is bolted to the floor. :)
And I think that one of the dangers of living super-frugally for a long time is that you become accustomed to it. You can get yourself to a point where you can’t enjoy spending the money at all. I think that’s almost as sad as seeing someone bankrupt themselves (almost).
@CityFlips
I’m glad you appreciated the content. Thankyou.
J.$ has graciously invited me to submit a post or two on my own on material I am interested in. So you might see that in the coming weeks.
Realizing that the vast majority of us really do have everything we truly need helps me put off getting some of my wants. Delayed gratification is a good thing. Half the time, I end up realizing that I wouldn’t even use what I wanted enough to warrant buying it in the first place.
@Yana
That really reminds me of that movie “Up”. I love Pixar, but I had a hard time enjoying it because I kept thinking about the old couple not ever doing anything before it was too late.
And it’s a good idea not to pledge too much of that future fantasy money. (only the government seems to get away with that consistently :) )
@Ashley
No need to stop. As long as you’re not endangering the less coordinated members of your family, we can let it slide. Of course if you can skip steps you could alternate odd and even every other day. :)
@Jennifer Lissette
Not really. You enjoy spending your money on what gives you pleasure as opposed to resenting every expense you have to outlay for.
@kody
If I had to choose between one extreme or the other, I too would suggest being a skin-flint just because it would leave the person with options if the fecal matter hits the fan. But neither extreme strikes me as reflecting a healthy attitude about money and possessions.
If your investments are on track to allow you to retire at a higher standard of living than you enjoy now, you have a six-month emergency fund saved up, and your mortgage will be paid off before you plan to retire, I think that you should be comfortable with beginning to enjoy spending some of the extra income you have on things that give you pleasure. It’s a matter of discipline not to go overboard and threaten your future success.
@Jamie
The weight analogy is perfect! I love it. Credit cards purchases are like junk food – empty calories that make your waistline expand (unsecured debt). And a lot of work is required to correct either one. :)
I agree about things being more accessible to the majority of the population compared to yester-year. About the only thing I see as being worse is the way access to information can increase our stress levels. But I’d never trade that in for all the positive changes technology has bestowed upon us.
@Maria Nedeva
I understand the ‘iWant’ mindset (about whatever, be it paying off debt or buying stuff). The only thing that helps me not to blow all my discretionary dough on the first shiny gadget I see is the horrific thought that I will see something even shinier before I get more discretionary income again. So as the cost of what I am currently drooling over goes up, so does the amount of time I wait to make my decision.
I like this post. It’s almost exactly on the same topic of my last blog post.
The only thing I disagree with is that I feel Consumer Debt MUST be paid off as fast as possible. I feel that accumulating it in the first place was wrong, so if you have to live like a “pauper” for two years just to pay it all off, you should. It’s kind of like working to correct a bad behavior. Some people would rather quit smoking cold turkey, while others would rather gradually stop. On the other hand, I never hear of alcoholics or drug addicts gradually gaining sobriety. In fact, when they use again, it’s called relapsing. If people got into debt by living beyond their means, some may very well have been addicted to spending (on credit). They probably need to quit cold turkey and cut up the cards.
And what about Student Loans? Are they considered a consumer debt or something more like a mortgage?
I guess my idea is that we should try to save up more before we make a purchase. Whether it’s a car or a motorcycle or a boat, or house. Maybe these things should take time and work to acquire the savings for. Not necessarily, “I need a car, so let me take out a loan to buy more car than I can afford right now and pay the rest over time, instead of buying a cheaper used car or even taking more time or getting another job to save up more for it.” I know this is the way most people operate (old me included), but wouldn’t life be so much simpler if we didn’t take on car payments, credit card payments, loan payments, mortgage payments?
Mortgages I guess are different, because it would take quite a while to pay off a whole house and the alternative is renting, which is a money-pit and shelter is a basic necessity. But making your best effort to accelerate the payments while you have a steady income might help in times of trouble when you can’t pay it off as fast.
One last thing: I consider working hard to build my career and obtain things part of “living in the now.” I understand having hobbies (traveling is one of mine), but it’s something I don’t think we should REALLY be able to indulge in until all of our financial obligations are taken care of. In the meantime, we save up for week-long-or-less-trips on the side and go maybe once or twice a year. I’m working toward a time in my life when we can go on month-long trips anywhere in the world… which I think takes financial sacrifice now.
I don’t know…it’s just an alternative view on things.
I spent about 30 years of my life being the good, self-sacrificing, “I don’t need anything” person. Starting at age 16, when my parents split up and I ran the house for my father and brother, I put everyone else’s needs first. Was always twisting myself into knots fixing other people’s problems. Took more than my share of s–t and kept murmuring “thank you, mistress, may I have another?”
In my 40s I finally ended an awful marriage and struck out on my own, terrified but knowing that I had to do this. Frugality kept me going while I got the divorce, entered college, helped support my daughter while she waited for her disability case to be heard. Heck, frugality changed my life in that it resulted in my gig at MSN Money (and now at Get Rich Slowly and my own site).
Now I’ve got the divorce and the degree, and am making enough freelancing to support myself. Yet I’m still frugal. Why? Because my new mantra is “I save where I can so I can spend where I want.” I look out for my needs (retirement, EF, health insurance, zero debt) before I see to my wants. But since my day-to-day expenses are so low, I can afford most of what I want — and because even my wants are done frugally, I can satisfy more of them.
Example: I’m going to the Affiliate Marketing Summit in August, to write about it for Get Rich Slowly. I’ll fly into Philadelphia and staying in a hostel for a couple of days, to poke around the city (I used to live there) and meet up with a couple of bloggers. Next: The Megabus up to New York, where I’ll stay in another hostel, attend the conference and then stick around a few extra days to see some more of NYC. After that: The Megabus to Washington, staying in a hostel two blocks from the White House, and revisiting the Smithsonian museums and as many other free/cheap attractions as possible. And: The Megabus back up to Philly, then a NJ Transit bus to where my dad and brother live so I can visit with them for a couple of weeks. I’ll hang out with family and friends, maybe take a trip to the Jersey shore (NOT the one on television!), help my dad on his little Christmas-tree farm, can a few peaches with my stepmom and of course eat a LOT of tomatoes.
My plane ticket from Seattle to Philly was $264. The most I’m paying for lodgings is $29 a night. (And nothing at all while I stay with my dad and stepmom.) I trade farmwork for the use of my dad’s vehicle. Total cost of all three Megabus tickets was $3.50 (yes, really — three $1 tickets and 50 cents in fees). I’ll eat lightly (it’s gonna be stinking hot, after all), look around for interesting stuff to do that’s free or cheap, visit a community garden in The Bronx (shown around by someone I “met” researching an MSN column), have lunch with a magazine editor for whom I’ve written for years but never met, hang out with other bloggers, maybe help J$ pack up stuff for Love Drop, see if I can score a half-price theater ticket in New York, wander through free museums and historical attractions, people-watch like mad — and most important, I won’t have to do anything that I don’t want to do. I have that freedom (for now, anyway) because I am intentional with my spending.
In other words, I live as though I’ll be hit by the crosstown bus in August — but plan as though I’ll make it into my 90s, like my grandmother did. My goal is to get old enough and weird enough (some say I’m already there) to do whatever I please, while family members shrug and sigh, “It’s just her way. We can’t do a thing with her.”
And for those who think hostels and Megabuses are too declasse, well, to each his own. As a writer I couldn’t do better. On the first day of my hostel stay in London, I discovered that one of my roommates had been arrested for importing machetes from the Congo during a Seventh Day Adventist mission trip. You couldn’t make this stuff up. Cheap travel = great material.
Donna, I love your new mantra and you make a lot of sense to me.
Thanks for replying to all the comments Gene! Very cool of you :) And awesome since you’ll be guest posting down the road! Haha…
Here are some of my own thoughts:
@Alex – Awww I like your grandma :) Very very good words to live by.
@Uncle El – Haha, I’m totally using your comment about my circus travels on Friday – watch for it ;) But to my defense, I also hardly pay for those trip! Perks to running an orginzation that requires you to travel every month – woop!
@LLF – Yep! Hoarding is hoarding!
@Lynn – Oh no! That is soooo sad! :( But what a perfect way to keep things in perspective, wow. Thanks for sharing that with us today!
@Nicole – I love that :) You’re a great mom.
@No Debt MBA – I can dig that… very well said, my friend :)
@Brian – Yup! Ramit is the MAN when it comes to this stuff. All about prioritizing your expenses and using your money toward what’s important to you, rather than what everyone tells you to.
@Jenny~Z – Awww, I’m sorry :( That’s not a good way to feel for sure. And I think Maria down below offers up some great ideas as alternatives! At least you’re reading blogs and learning about money now – that’s great!
@Maria – All great ideas, Maria – thanks for sharing and helping Jenny-Z out! Very thoughtful of you.
@Crystal – WOW that’s incredible! Living off 50% is hot yo!! (says the guy who IS turning into a laptop creature, haha…)
@StackingCash – Food and traveling – that def. adds up! But good for you guys on enjoying it :) I don’t know what it’s like to have grown up poor, but it seems you have a good head on your shoulders. And not just from this comment either, but from all the ones you leave, and which I appreciate :)
@Melissa – Well, he hasn’t gotten to know me yet so all is good in the world ;) It brought out a good comment & post too! Gotta love that. Working on having him write up a special guest post for us soon, so stay tuned…
@Amy – Wowwwww that is amazing! You are GOOD at this saving game! I am impressed! :)
@CityFlips – Most of the best posts here ARE from other people, haha… but it’s all good, as long as people enjoy the blog it’s a-okay with me!
@Yana – I have a cadillac your mother probably would have wanted ;) But it’s 20 years old now, haha…
@Ashley @ Money Talks – Hah! I’ve never heard of that before until now :)
@Jennifer Lissette – Haha… you guys are doing it right though. Skimping on the stuff that’s not important to you, and splurging on the stuff that IS. That’s awesome. And something I’m trying to get better at myself :)
@Gary – Yup! I’m always trying to sneak off to my parents – and the best part is it’s entirely free! (well, gas ofcourse, but for the most part)
@kody – Not sure I’d agree w/ that all the way, but I do like the idea personally of paying down the mortgage over other stuff… which is exactly what I’m working on now as soon as I can figure out the best way to work it :)
@jamie – “You need to save yes, but also enjoy life… It’s like losing weight, you’re bound to be successful if you find balance” I just put that on my Twitter and Facebook – love it! And agree w/ “conscious spending” too – I use that phrase all the time since reading Ramit’s book :) Keep on commenting away your thoughts too! Totally cool if they’re long and wordy, ya never know who will get inspired by them!
@Maria Nedeva – :) I tend to go hardcore myself at times, but as long as we’re all aware of our actions/thoughts it’ll at least keep us somewhat sane.
@C.M.C. – That’s not a bad way to think about things either, esp if it’s working for you and helping :) For me at least, I find going between extremes and balances help out depending on what I’m working on. If I have $5,000 on my credit cards for example, I’ll go extreme for 5-6 months until they’re paid off, and then get back to a more normal financial routine. With other things, such as car payments, big toys, etc etc, I tend to go the slower and more average-payment route. So I think it really depends on all of our personalities and what we deem is “successful” when we’re trying to hit financial goals. And for me right now, since I’ve knocked off everything BUT my mortgages, it’s time to get my ass in gear and find out how to go extreme enough to pay it off much much sooner, but still travel and do everything else I want to throughout the process… we’ll know shortly!
@Donna Freedman – Haha, I remember that story!!! And wouldn’t change the drama for anything ;) I’d be priveledged if you helped pack some stuff up with us for Love Drop – don’t forget to call/email/tweet/facebook me when the time gets closer!
@Yana – Isn’t she great?