Personal Money Management Ideology

[darklord700]

http://www.coachcarson.com/retire-ri...s-ugly-houses/
"How to Retire Rich With Embarrassing Old Cars and Ugly Houses"

If you don't want to read the article, it's just another one preaching frugality.

- "regular spending of $100 per month, for example on a cable bill, would equal a loss of $17,300 after ten years or $52,000 after twenty years."

The numbers cannot be debated and I think many of us knew this already.

However, the question is then to what end are we saving for. If you are saving money now so that you don't live on the streets when you are 70s, that's admirable.

Yes, if I don't have cable, internet, cell phone, among other things, I could save hundreds of thousands of dollars. And if I don't go golfing, skiing, vacation, I could save even more. If I don't have kids, I could have been a millionaire already.

But aren't you just wasting your life if you don't do any of the above just so that you can leave a big inheritance to you kids or your favourite charity?


I am afraid an article like this preaching frugality for not reason other than being frugal is just a futile mathematical exercise.

I'm not against saving money or questioning the math but the better approach I think is to save money for a reason.

[Slava]

I love some of these bloggers and "experts". They talk about how being incredibly frugal is the way to go, and then want you to pay them a chunk of money to have them coach you or take their program.

[troutman]

I'd rather enjoy things now (within reason) than save for a future where I might not be healthy enough to enjoy it.

[Ozy_Flame]

Here's the funny thing about living frugal until retirement - you're likely not going to stop living frugal when it's time. It's hard-baked into your daily routine and life mantra.

The way I see it is, spend enough money where you can manage your finances properly, but still have awesome anecdotes and stories about your life to tell your grandchildren before it all ends.

[Northendzone]

so how do you tell your kids when they are 10/12 yrs old that they can't do most of the stuff the other kids are doing because you want to be a millionaire in the next 5 yrs and them playing hockey is not in your plan?

i think you need balance in your life - but i will never be a millionaire unless you come to my seminar on how to live an average life

[heep223]

It really depends on your personal situation.

But generally speaking it's about balance, and knowing when to be frugal and when it's ok to spend. Obviously the big ticket items are the most important - how you're managing your portfolio, your primary residence, vehicles, and of course minimizing your debt load.

If you start fretting over your cable bill and how much that would grow if you saved it, you're going to drive yourself absolutely crazy. Also you will drive everyone else crazy. And you won't have any fun. And then you'll be old balls, and you'll regret not living your life fully.

[Regorium]

This is the only money blog I've found that actually makes any sense, and doesn't give you garbage ideas like "save a latte a day!"

http://www.moneyaftergraduation.com/

[Displaced Flames fan]

Originally Posted by heep223

It really depends on your personal situation.

But generally speaking it's about balance, and knowing when to be frugal and when it's ok to spend. Obviously the big ticket items are the most important - how you're managing your portfolio, your primary residence, vehicles, and of course minimizing your debt load.

If you start fretting over your cable bill and how much that would grow if you saved it, you're going to drive yourself absolutely crazy. Also you will drive everyone else crazy. And you won't have any fun. And then you'll be old balls, and you'll regret not living your life fully.

I may be way off base here, but if a person has a investment portfolio and a secondary residence, it would seem to me they are doing ok and the need to save for retirement isn't as dire as the rest of us.

[Locke]

The last cheque I ever write is going to bounce.

[CroFlames]

Originally Posted by Locke

The last cheque I ever write is going to bounce.

Who writes cheques anymore?!

... Is what I always want to say to Saul at that part in the movie.

The key is balance. It doesn't take an expert to know that. However, I think articles like these are important for everyday folk because I see it day in and day out - people can't control their spending. They need to be told to be frugal, otherwise they spend until the credit is maxed. They are always chasing to pay down cards each month instead of padding the savings account.

I think it's extremely important to have a personal budget. Know exactly how much money is coming in, how much is going out at all times. Adjust spending as necessary. Most personal budgets have room to trim some fat, that is for sure.

[Matata]

Money = Energy = Freedom. I try to use these three concepts interchangeably when making financial decisions.

For example: I recently bought a car, I made the decision to get a car far below what I was capable of affording. Buying a vehicle towards the my upper end of price range would have forced me into long term financing (which I saw as an impingement on my freedom) and the extra tens of thousands of dollars that I would have spent would have only gotten me a bit less mileage, a bit better mechanical/electrical and a bit better style. Why should I spend months of my life working for what I saw as only marginal improvements to my quality of life?

I still live frugally even though I'm financially healthy for the first time in my life. I think there is a certain beauty to living simply and I feel like I have more options in life and my future. A quote I've always liked is "To have more, want less."

[Slava]

Originally Posted by Regorium

This is the only money blog I've found that actually makes any sense, and doesn't give you garbage ideas like "save a latte a day!"

http://www.moneyaftergraduation.com/

That girl is hilarious. She's one of the people I thought of when I said its amusing that people are worried about fees for things, but we should buy their course on investing.

I will give her credit though because she does focus on the bigger issues. I like that. I just think that some of the advice she gives is questionable, and very self serving. I guess that is par for the course and no one is doing things for free or without a benefit to them, so its not exactly unexpected.

And the other thing that is good about her is that she actually has some education to back up her thoughts. There are a bunch out there with literally no qualifications to tell you this stuff, except that they're frugal.

[Huntingwhale]

Originally Posted by troutman

I'd rather enjoy things now (within reason) than save for a future where I might not be healthy enough to enjoy it.

That's how I feel as well. Saving money is a smart thing to do, but living your life how you want is even smarter. As much as we'd all like, there is no guarantee that we all live to the ripe age of 80+ years. If a car nails you and you die, what good are your savings then? A good balance is key.

[Locke]

If my kids are expecting an inheritance from me then they havent been paying attention.

[OMG!WTF!]

I just want to shake the young people I know. My niece wants a hot tub and will finance all 12k of it. I asked her if she wants to work until the day she dies to pay for it (and all the other crap they buy on credit). Without a doubt the answer is yes. They will work thier crappy jobs forever to pay for the stuff they want to own now probably because it makes the crappy job seem worthwhile.

[Regorium]

Originally Posted by Slava

That girl is hilarious. She's one of the people I thought of when I said its amusing that people are worried about fees for things, but we should buy their course on investing.

I will give her credit though because she does focus on the bigger issues. I like that. I just think that some of the advice she gives is questionable, and very self serving. I guess that is par for the course and no one is doing things for free or without a benefit to them, so its not exactly unexpected.

And the other thing that is good about her is that she actually has some education to back up her thoughts. There are a bunch out there with literally no qualifications to tell you this stuff, except that they're frugal.

Yeah they're all the same, but she does focus a lot more on the bigger issues than just being frugal. The focus is growing wealth rather than saving $100 a month.

She frames it more like "buy my stuff to grow your wealth" not "buy my stuff to learn how to be more frugal."

Either way, I found her stuff refreshing (even though I don't really need it), because she suggests gym memberships, travels and things that every 20-something should have/use.

[peter12]

I think frugality works. I make the occasional large purchase, but my day-to-day is very light on the spending side. I save about 30% of my income right now. I don't own a house or a car. Is it worth it? Honestly, very hard to say. I went through a period of money where I was making a lot of money for someone in their twenties, and lived pretty impulsively. None of that pleasure stays around, although I am pretty glad for the experiences. Now, I really only try to spend money on things that will actually last - experiences and objects that are central to my life outlook. I spend a lot less time sampling things.

[Locke]

Originally Posted by OMG!WTF!

I just want to shake the young people I know. My niece wants a hot tub and will finance all 12k of it. I asked her if she wants to work until the day she dies to pay for it (and all the other crap they buy on credit). Without a doubt the answer is yes. They will work thier crappy jobs forever to pay for the stuff they want to own now probably because it makes the crappy job seem worthwhile.

Good God man, I have a hot tub, a pretty nice one, and it didnt cost anywhere near that, what the hell is she buying? A hot tub for Godzilla?

[Sliver]

Originally Posted by Huntingwhale

That's how I feel as well. Saving money is a smart thing to do, but living your life how you want is even smarter. As much as we'd all like, there is no guarantee that we all live to the ripe age of 80+ years. If a car nails you and you die, what good are your savings then? A good balance is key.

The problem is you have to plan for how long you might live. I basically have to be financially set to live until I'm 87 or whatever. Sure I might die at 67 and will my kids a good chunk of change, but I certainly don't want to plan to live until 67 and end up eking by until I'm 87. That would be truly miserable.

Have you seen those guys living in some ####hole apartment wearing only a wife beater and just Maury Poviching the last couple of decades away eating canned soup? Eff that. I'd much rather eschew Hawaii in favour of Osoyoos for 1/10th the price while I'm 30-something to not have to live like a welfare case for the last 20 years of my life.

[Sliver]

I think frugality can be defined in so many different ways, but in general it is a better philosophy than one that leads to conspicuous consumption. I know nobody is advocating spending/living like Paris Hilton, but I think there's value in leaning more toward the frugal side of things than the other direction.

Good examples of things that - I believe - people waste their money on, thereby setting themselves and their family in a worse position in life, are: expensive clothes, large homes with unnecessarily high operating costs, expensive new cars, too-expensive vacations, expensive weddings, etc.

Unless you come from wealthy families, and/or unless you are topped off on all of your retirement savings relative to your age and are living debt free, you shouldn't spend more than modest amounts on any of the above. This is because upgrading from a basic-ish level on any of the above to a deluxe version does not lead to any more happiness. It will absolutely lead to a longer working career, though, out of necessity. I want to have the option to retire when I want; not be forced to work longer because I wanted to wear $150 jeans when I was 25 instead of $35 jeans, or because I spent $200K more on a house in my 30s than I needed (with more interest charges, higher taxes, higher insurance, higher heating bills, etc.), or because I didn't want a three-year old car so bought new, or because I thought throwing a $20,000 party was important when my net worth was half that (people are adding years to the length of time they have to work with some of these expensive weddings).

Thankfully, my wife is on the same page is me, which is also important. The last thing you want is some dumb chick blowing through your monthly income on expensive clothes and new hairdos. You'll never get ahead in life on average incomes if that's going on.