This is one of the reasons I like YNAB (both their app and their method). One of their core principles is to align your spending -- including future spending, aka saving -- with your values. Spending on the wrong things isn't good, but neither is saving without clear purpose.
My wife and I both came from fairly frugal households growing up, so frugality is often our default. It's been a helpful exercise to periodically ask ourselves "what do we actually value, and what tradeoffs should we make", then update our plan to match.
Most people in the US are pulled into living on credit straight out of school. You get a student loan, then a car loan, then a credit card, then a mortgage. You finance vacations, appliances, kitchen remodels, smartphones - mostly to keep up with friends and coworkers who finance their lifestyles too. A lot of people are in non-stop debt from the age of 18 to 55, if not longer. By most estimates, only about 10-20% of US households are debt-free.
Spending and getting into debt are useful tools. But I don't have any friends in tech who need to be told "hey dude, you should be spending more". I have quite a few friends who would be better off spending less.
For sure it's more common for people not to save enough. But for people who are frugal and save diligently for most of their lives, there often comes a point where they cross a threshold where they have met all of their financial goals, and the "problem" is no longer how save money but to enjoy spending it. And this can be a real challenge for people who have built up deeply ingrained saving habits.
My mother, for example, refuses to replace her iPhone SE with something with a larger screen despite 1) having failing vision and difficulty reading the screen, 2) using her iPhone every day, 3) easily being able to afford it. The idea of spending $1,000 on a phone is just something she is unable to bring herself to do, even though I think it would help alleviate a real source of frustration in her life.
My father, when he started shopping for his most recent car (and probably his final car), set out with the intent to buy a luxury car. But again, despite being able to easily afford one, all he was able to bring himself to buy was a well-equipped Toyota. Don't get me wrong - it's a great car and has served him incredibly well. But it makes me a little sad that he wasn't able to bring himself to finally treat himself to a luxury car after a lifetime of hard work and saving. They did a lot of long road trips together in that car in retirement, and I think they would have enjoyed something a bit more luxurious (though on the other hand, the reliability of the Toyota is not to be discounted).
I think what you're attributing to frugality might be a more a matter of age? Many older folks are just wary of change.
I'm not that old, but every time I upgrade my PC or phone, some of my workflows break and I need to pointlessly re-learn things I'd rather not re-learn. UI buttons get moved around, icons change, some settings are removed and others are added... this was exciting the first ten or twenty times, but it's just tiring now.
Basically, I'm at this stage in life where my reaction to systemd wasn't "oh wow, this is progress" but "ugh, I need to learn how to start, stop, or modify services again". In another ten years, I'll probably just say "no, I'm not doing this again, just let me use my old computer for as long as possible".
Possibly there’s an element to this. The iPhone SE still has the home button, which may have been a factor when she bought it. And my father was a bit put off by some of the bells and whistles on luxury cars.
> my reaction to systemd wasn't "oh wow, this is progress" but "ugh, I need to learn how to start, stop, or modify services again"
I must be young at heart while >60 years old; my reaction was "why is everybody whining about it, it's pretty nice, I like it". Same with jj vs git, jj is amazing!
When I started driving my car had vinyl seats that you had to peel yourself out of on a hot day, a plastic steering wheel that you could barely touch when the sun was out, hand wound windows, fixed seat belts and a handbrake that barely worked.
Even the cheapest car on the market feels luxurious now.
In comparison the difference between a Toyota and a Lexus is marginal.
Expensive cars are mostly about status signalling, we are long past good enough.
I'm perhaps pathologically frugal myself. I've found for myself the best compromise is to force yourself to pick at least one feature other than cost. We've got a 17 year old Toyota Yaris that I tell myself is for fuel efficiency, and an old Ford Ranger because I wanted at least one of our vehicles to be able to move sheet goods. Technically I could probably walk onto most any lot and pay cash for whatever I wanted, but I know there's zero chance I'll ever do that.
>Expensive cars are mostly about status signalling
Uhm, only if you are counting the most basic utility, then you're right.
However if you actually enjoy driving (A->A driving), there is a HGUE difference and it's not just signaling. It's that you probably can't tell the difference, or don't care.
There is no comparison between driving a new Porsche or Bentley vs a new Toyota or even a Lexus.
They cannot, because they are wrong. And I say this as a person who has owned no small number of fancy cars (but I got better).
A new base-model Prius is absurdly luxurious compared to a base model car of 1975 or 1985 or even 1995. If you have lived long enough to see this change, then dropping 2x or 3x or 10x the cost of the Prius self-evidently puts you wildly beyond the point of diminishing returns.
The Prius is going to have excellent climate control, and a phenomenal stereo. It's going to have adaptive cruise control, and will warn you when you drift out of your lane, or if you're about to run into an obstacle.
Outside of motorsports-sorts of things, what you get out of more expensive vehicles is of limited utility. Mostly, it's just showing off.
Now, if you want a track weapon, then yeah, you DO get more by spending. But for a regular person who wants to get from point A to point B comfortably and safely? The Prius is fantastic, and it's hard to justify spending more unless you're willing to admit that it's a keeping-up-with-the-Joneses kind of thing.
My own parents are in their late 90’s. Because they grew up in the wake of the Great Depression, I always assumed their extreme frugality was a function of the economic distress in their formative years. They also properly accounted for the fact that old-age care is very expensive. Parenthetically, most do not seem to anticipate that accelerated burn rate near the EOL. It’s also a phase whose duration is hard to predict.
I think he was considering a Lexus RX. I doubt he even looked at BMW, Mercedes, etc (not really his style).
His Toyota was probably under $40k. This was back when cars were quite a bit less expensive than now. Nice car for sure, but the Lexus probably would have been a bit more refined.
But what is 'luxury'? You may have in mind a Rolls Royce. But maybe he doesn't want that.
If they've been frugal their entire life, they aren't as far along the hedonistic treadmill, a new reliable car is a luxury.
If you're used to darning socks, buying new socks is a luxury.
If I buy a PS2 today, why is that not a splurge, if I didn't have one previously? Yes it doesn't have the best graphics but it's a step up from my PS1. Getting the latest and greatest just because, is keeping up with the Joneses. And that's a path to spending money, not happiness.
The knowledge that you have enough in your bank account if things go to pot, itself brings happiness
Having a credit card is like having a video game passive that makes everything permanently 2% cheaper. Everything should be put on a credit card for that discount as well as fraud protection provided you are disciplined enough to never ever ever ever ever ever carry a balance.
I don't get the down voters, it is, or should be a tool.
Although we are talking about it being an issue. Which you have already covered.
Problem is, most people don't spend that much time thinking about it. So I suspect "don't get a credit card" or "only use it in emergencies" are generally good advice. Although perhaps we should just be better at teaching house hold type finance
For years I did this with the thermostat - something I learned from my father who always kept the house under 65F (18C) in Winter. I'm somewhat ashamed to admit it even led to arguments with my spouse early in our marriage when I would enter a room and find the thermostat set to a balmy 70F.
Eventually I just sat down, looked at how much it costs keep the house a few degrees warmer in winter, and realized we could afford to be comfortable. And if I were really hell bent on saving money, there were other lower-priority expenses I could cut back on first. But I don't even think it was even necessarily about the money - it was more that saving energy and toughing it out felt virtuous to me. Which is all fine, but not something that should be imposed on your partner if they don't share the same beliefs (or if they just get cold easier than you).
Funny, I went the other way round in the Bay Area. PG&E bills were so high so it was the choice of putting on a jacket or paying $1k extra over the winter months. And my reasoning was "I can afford a jacket".
I love the winter for this. My thermostat is set to 16C at night. I prefer if the heat never even kicks on, it’s noisy and disruptive to have air blowing through the vents. I wish there was AC that could make my house that cold at night while making no noise!
Going on your Slavic username: as an American who moved to a country without forced-air HVAC, it’s been quite a revelation to discover how backwards forced air really is.
I’m always colder in my mother’s house in Scotland (-5°C on cold days) than I am at my MIL’s house in the frozen Canadian wastelands (-40°C/F on cold days), because my mother will play games with thermostat to save money, where my MIL would simply die of exposure if the heating wasn’t on consistently for 6 months of the year.
There's also a very different type of cold close to the water. -40C will dry out your skin and make it feel like it's burning, but -5C in Scotland or on one of the Gulf Islands near Vancouver will make your bones feel frozen without good insulation.
You know those Christmas cards that show a frosty twinkly white treescape? That climate will kill you even at -5C.
People die on Ben Nevis every few years because they think its not that cold. But Scottish cold in that part of the world is brutal, there's so much moisture in the air that freezes if you get wet and cant quickly get dry you will die fast.
If the relative humidity is 100%, then being wet won't make you colder: the water has to evaporate in order to cool you, and it can't do that at 100% relative humidity. The problem that high humidity cold causes is increased convection, and the problem being wet causes is the dramatic near-complete loss of the insulation value of many garments.
There is a _lot_ of folk science about cold weather that is just plain wrong.
A wife is a useful thing to have in this respect, not because they tend to profligacy, but because this kind of thing is much easier to detect and fix in someone close to you than in yourself. Both my wife and I have lived frugal lives at various times[0] and I feel much happier with the degree of spending we have now.
I'm reminded of the intelligent corvids in Adrian Tchaikovsky's Children of Memory where the sum of the two birds forms a being with intelligence in a way that the individual segments do not. The frugality is a deeply embedded piece of our being and undoing it seems hard, but together we financially operate in a place that leaves us both feeling comfortable.
0: In the US sense of the term, not in the sense of the term as known in Taiwan or India.
My experience has been that it's easy to say, "oh, it's just me", but much harder to subject someone you care about to the same standard that you would yourself. I'm in a similar position with the thermostat, even though something we initially bonded over was that we both kept our thermostats at a low temperature that was outside the window of being socially acceptable.
In the winter, I keep the thermostat at frigid temperatures when I am home alone and jack it up to warm just before any one else gets home. My thinking is that it is wasteful to warm up the entire house when it's just me since I can put on a sweater but I don't want to subject others to my, shall we say, quirks.
I keep meaning to calculate how much I am actually saving by freezing my butt off. My guess is it'll work out to something like $0.75 a day or something equally trivial.
Depending on the kind of heating system you have and the temperature differences you talk about it can be cheaper to heat the house to a constant temperature (because your heating can run more efficiently under lower load).
Correct, or the people doing this for environmental reasons... it's probably not better to do this. It would be better spending money on better insulation (assuming it isn't up to date).
It probably costs more to do that than to maintain a constant temperature. When you turn the setpoint down, everything inside your house and also your house itself starts losing heat. When you turn the setpoint back up, the cooled off house and items inside of it will suck up most of the heat until the stuff is warm again, and then the air warms up.
This is much more noticeable when you go into a freezing cold building and turn on the thermostat, it takes almost an entire day to heat up the stuff and building.
My spouse and I both grew up in this kind of household.
Interesting to see how we & our siblings all responded, some followed suit and others had opposite reaction. I think some people are good at frugality and some are good at income maximizing, and few are good at both.
I turned into an income maximizer.. started working at 14.. post college left home, took a high stakes career and hopped to new opportunities proactively. Response to not wanting anyone to be able to control me via money.
For my spouse & I it was a reaction to
1) having a lot of childhood of consequences/regrets of over-frugality like frozen pipes bursting, parents lamenting not going back home for 10 years during which their own parents died, asking for a single $10 toy for birthday and having them buy a knock-off instead, etc.
2) a reaction to teenage parental control via money like when I was moving to the big city for my job and the housing deposit was due before the hiring company was going to wire me my housing stipend, and my parents refused to float me $1k for a month (and then gifted me more than this as a graduation gift a few months later).
So I think you want to instill a respect for money in your children but not a fear.
In this subject area, I recommend Jacob Lund Fisker[0]'s Early Retirement Extreme book [1]. Don't let the title fool you. The man has a surprisingly level-headed and refreshing approach to spending.
This is very culture-specific. I've seen this in Poland. Under USSR rule frugality has been necessary to survive, but it left a lot of people forever stuck in that mindset, long after things got better. I know people who have a fortune in the bank, but live like they're broke, because they're afraid to spend anything from a "rainy day fund" even on rainy days.
My parents and grandparents lived under scarcity during Soviet (satellite) rule, grandma would can food and store well past best by, save plastic bags and various knickknacks, resisted spending on herself even as she bought us gifts when we came to visit. I think the contrast to US excess stuck with me and I always lived leaner (feeling that possessions own you and your time), though far from her frugality.
Yes! I related a little too much with the blog post. My grandparents were Sindhi and they had to flee from Pakistan to India during the partition. As refugees in India, they had to start their life basically from scratch. Now I get why it's ingrained in me to be frugal, and even take pride in it when there's none. I see the very same behaviour in my Sindhi friends when they feel bad for spending money on essentials like hospital visits.
I do something kinda similar, I guess it counts as maladaptive frugality?
Whenever I have something a little extra in my fridge, most often Italian prosciutto, I refrain from eating it, instead saving it for a "special occasion" even though it is, like, my favourite thing in the whole world. Eventually I have to throw the mouldy prosciutto away because I was too frugal to eat it.
I'm practicing though, learning to eat it. I don't know why it's so hard, I mean it's delicious! Should be easy!
This is a pretty common issue, I have to remind my spouse to just finish stuff. Eat it, and if it was so good.. buy more at the grocery next time.
One could try to reframe it that having it sit in the fridge going bad is a waste of fridge space/electricity/food/mental energy and unnecessary personal suffering.
Exactly the key of mindset that drives me to play through entire RPGs without ever popping a single item. It is essential that I collect 99 potions, and never consume even 1.
For some, I think there’s that satisfaction that comes with saving money (like you’re somehow “cheating the system”, even when it’s just a coupon that gets you to buy something you wouldn’t otherwise). In some cases, that satisfaction grows with the amount of time or effort expended to save the money in the first place, which is ironic because that money-value-of-time probably far exceeds the actual amount saved. Practically every engineer here probably has a story about spending a ton of time or effort to optimize something by a tiny amount; saving money can be like that too. It’s a little joy in life, and so long as it doesn’t outright prevent you from spending money when you should (or impose excessive optimization costs), I think it’s fine.
The maladaptive part is when you start regretting not saving money, because it has two knock-on effects: it makes the decision to spend much more emotional (which negatively impacts rational decision-making) and it can negatively impact the enjoyment of the thing itself. For example, the maladaptive part might take the form of being reminded of the cost every time you look at the repaired phone.
I've always found the "time is money" hourly rate comparisons a bit contrived, because I can't actually trade my every waking hour for an hourly rate.
The reality for most people is that the trade-off is actually between time spent on looking for bargains, or time doing something else that doesn't make any money.
Back when I was younger and earned minimum wage, whenever I thought about buying something I'd run the calculation of how many hours I would need to work to pay for it. That helped me save quite a bit.
My mother still clips coupons in the Sunday newspaper, despite being financially well-off enough to not clip coupons. I considered listing this as an example of maladaptive frugality in another post, but then I figured it’s just something she enjoys doing.
Honestly in current state of world. Which is more enjoyment clipping coupons or looking for bargains or being on social media? Would something actually useful or more enjoyable happen with that time?
Hell. Even other type of media consumption unless you really enjoy it might be balance you can question.
I was so frugal that I didn't refinance my (admittedly already low) interest rate during Covid because "we were planning on selling the house in a year or so". Oh well :)
No that can be a frugality mindset of not wanting to pay the refinancing closing costs (which can be 5 figures) .. I've seen family make similar sorts of short term savings vs long term savings trade-offs.
Spending money sparingly is like reducing weight in an automobile. A car will get better gas mileage, go faster, break less often, and be more responsive with less weight.
So it is with spending. When you spend less, you can retire earlier, your finances are more secure, you feel less pressure and stress, etc. You have more flexibility in the kinds of jobs you can take. Perhaps best of all, you end up accumulating less stuff, and less complicated things, which makes your life simpler.
Frugality doesn’t get the flashy press that consumerism does, but it’s a winning life strategy.
I read this article 10 years ago by a guy named Ricky Yean who went to Stanford as an economically disadvantaged admit and couldn’t shake his poverty mindset and it cost him when he was running a startup.
Why “few successful startup founders grew up desperately poor”
Poverty mindset is maladaptive because it teaches you only money is worth anything, so you hoard it. But in truth time is also worth a lot and sometimes it’s wise to use money to buy time.
> Poverty mindset is maladaptive because it teaches you only money is worth anything, so you hoard it. But in truth time is also worth a lot and sometimes it’s wise to use money to buy time.
This is something I've observed in overly frugal family. Stuff/money is worth too much to them.
You can't gift them anything "nice" because they will put it on the shelf and never open it (don't want to damage it).
Gifting them consumables with an expiration date also doesn't work as they'll "save it" until the expiration date lapses and then eat expired food.
Taking them out is weird because they'll insist on taking leftovers home off every other persons plate at the table, including stuff they don't normally eat.
They'll fill up 2 bedrooms in their home with 40 year old cheap clothes & furniture that is worth so little we'll need to pay someone to haul it away. They won't donate it because they think the people who receive it will waste it. So they'll pay money to ship some of the 40 year old cheap clothing to poorer family back home who it doesn't fit and could just buy cheap clothes there with the money they paid for shipping.
Owning multiple 30+ year old cars until the mechanic literally refuses to work on them anymore telling you they are too rusted out to repair or drive.
This from people who are wealth enough to own multiple properties, have retired early, have government pensions, etc.
Fellow frugalite here, and man, is it hard to break the habit of agonising over every purchase. Took me nearly 20 years in tech before I convinced myself I could justify just buying a new laptop every 5 years, and not sit around waiting for things to compile on the old one - and thats an item that is both essential to my work and also tax deductible. The agonising is even worse with items that are technically non-essential (but would make life better)
The most helpful tool here, I've found, is maintaining a personal finances spreadsheet.
It's one thing, without a spreadsheet, to have the emotion of "I'm not going to have enough and I need to save more to make sure I have enough." I'd argue it's even evolutionary; we want to make sure we have enough to get through the winter we know is coming.
It's quite another when your spreadsheet shows you saved X, your monthly cost of living is Y, and therefore you have enough money saved, even if your income went to zero and you made no changes to your lifestyle, to last you for Z years. Being able to take YouTube University rule-of-thumb advice like "of your take-home pay, use 65% for necessities, 15% for long-term savings, 20% for enjoyment" and seeing how much money that is per month for you in your personal circumstances, along with rules of thumb on things like what ratio you should have achieved by which age on net worth-to-income ratio (1x by 30, 2x by 35, 3x by 40, etc.) and seeing what your personal actual ratio is, to get a sense of benchmarking yourself.
I mean, the influencers could be totally full of shit, but it doesn't matter. Getting actual numbers for where you are, plus getting "generic" advice that you know wasn't directed at you personally, and seeing how those numbers make you feel, can do a lot to either tell you "you don't need to be so frugal anymore" or "yep, your emotions are totally justified, keep saving".
I think in the case of pathological frugality the spreadsheet approach could make things even worse. A whole 20% spent on enjoyment? I bet I could drive it down to 15%, maybe 10%. In fact, do I really need these things? Why not go down to 0%, maybe 5% once every few months. After all, I might need that money in the future.
I need to get into building a PF spreadsheet and getting things in better order, but fwiw the way I sometimes frame the question of whether or not it's "okay" for me to buy something is 1) Will spending the money compromise or help my ability to pursue something else I want to do, based on the price and utility, 2) Could I buy 20 of them? Even better if I could buy 20 without tangibly hurting my wallet.
If you can buy 20, 1 is probably fine, don't stress too much.
That is good if you can count on your cost of living being predictable. It's not for many people, even for relatively well-off ones: you may earn a lot for your area but being an immigrant without a permanent enough status in your current country, and your home country which you always have a right to return to may be unsafe or highly undesirable for whatever reason. So you need to consider the emergency of moving somewhere in a political and legal climate not known in advance.
Thus it becomes a more difficult choice what proportion to bet on stability of the current living situation, and what on long-term savings for emergencies which look quite probable but still unmeasurable. And the latter is complicated by absence of reliable and relatively liquid investment opportunities. All in all, fun to be from a sanctioned country.
I think a spreadsheet is still helpful in this case.
> So you need to consider the emergency of moving somewhere in a political and legal climate not known in advance.
Fair enough. So do the financial planning, and ask yourself, how much does it cost to fly/travel to X place that is far away? Put in a risk premium - what if the cost became 2X or 3X because of a sudden catastrophe affecting everyone? What is the actual number that you need to save? Can you keep the money in a bank account, or are you concerned that banks will be inaccessible, and thus need something more portable? If you need something more portable, how much will it cost to protect it (vault/safe, weapons)?
I sympathize that life isn't fair, and that financial goals for some people need to be concerned first and foremost with personal safety instead of luxurious "nice-to-haves". But my point is that there are still actual numbers involved, and that you can put those numbers into a spreadsheet, and that the spreadsheet can help you understand your progress towards those goals. Financial planning is valuable regardless of what your goals are.
All you are saying is that some people have more volatile earning/spending scenarios. The advice is still the same, the knobs on the spreadsheet are just different.
It's not much different than a sales job where income can be highly variable, or go to 0 because the local market is dead.
Agreed - I find I spend almost the same time on small decisions as large, and let the default (subscriptions, extra cars, storage) ride. That's turning the decision into a drama that befalls you (and avoiding those that don't). Or you find yourself down or up become cheap or profligate.
So, what big spending is adaptive? Better to drive decisions objectively based on future value.
Some scenarios:
- It lasts a long time, and you'll need to do it anyway. Best to get it early and enjoy it longer - for iPhones, cars, houses, marriage...
- It lasts a long time and you use it daily. Always pay for what you'll be glad to have: good socks, a powerful computer, a nice view.
- Your beloveds needs to know if you care more about money or them. Choose them.
- Something expresses your values: you appreciate an artist's work, so you pay good money for it. Some panhandler is stoic, so you give him a hand. (Just be careful about posturing.)
Another mindset is to think of your money as family (writ large) money, and invest in the future of family or friends. It's as much a vote of confidence as an injection of cash, and it helps you detach from the needy instrumentality of the money to consider what's best for their future. That's the weirder phenomenon: trillions held by baby boomers until they die (just in case), while their progeny waste time in terrible jobs and narrow circumstances for lack of investment. That's maladaptive hoarding.
Agree wholeheartedly but I worry some will read this and go all in the opposite. The key point is that humility helps make you free. Couple that with not being a slave to frugality and you can live without as much guilt and without a much restraint.
There is frugality and there is taking inflation into account when deciding on save vs loan. For the last many years it was net profit to take loans, spend and pay them back later because inflation meant you got more goods/services that way. On the other hand keeping cash/savings over some smallish buffer where opportunity costs dominate is/was always net loss. That not touching US-specific stuff like insane student loans, credit card terms or healthcare.
> I plan to have fun spending my money in the future, so it’s time to start practicing now.
The most optimal thing to do in our world is to pick an age, say, 60, and until your 60th birthday, maximize your suffering via frugality to just under the tolerable limit so as to maximize your potential for compound interest. This leaves you with the most freedom and opportunity during the most fun part of your life, when you no longer have to sell your labor and can do whatever you want.
Within our current model, trying to slip in bits of fun through spending money before that age is getting a poor return: you're trading vacation time, which you could instead barter for more money on retirement, and you're carrying with you a bit of suffering because you have to worry about going back to work. The best thing to do is just push it all until retirement.
The limit of human suffering before suicide frequently happens is apparently quite high, so, you can really stretch yourself out here. Live in your car in the Walmart parking lot, eat beans and rice. You maybe trade a bit of the compound earnings to establish certain time constrained things you want to cash in on at 60 like having a partner or kids, but beyond that, maximize that compound interest!
I hope it's obvious that this is a criticism. It's just, the more I think about it, the more this seems the selective pressure and incentives in our society are set up. Mostly I think it's insane that we both have an idea of "retirement" and also that we set it at an age where a significant portion of the population won't make it, and for those that do, a significant portion will get to enjoy five years of it, and for the remainder, health is bad enough that maximum enjoyment isn't possible anyway.
> The most optimal thing to do in our world is to pick an age, say, 60, and until your 60th birthday, maximize your suffering via frugality to just under the tolerable limit so as to maximize your potential for compound interest. This leaves you with the most freedom and opportunity during the most fun part of your life, when you no longer have to sell your labor and can do whatever you want.
This is the most depressing thing I’ve read in a while.
You don't have to act optimally according to the current system, I don't. My concern is many seem to try to act optimally without understanding how depressing the reality of its incentives are.
I think the thing you are missing is that people are quite complex in how they model these things internally. What works for you, may not work for them.
I don't think your advice is good "general advice" but if you treat it as a "this works for me, it might for you", then it might be worth reading.
I'm not sure if you caught that my post was a criticism of the system. I'm just describing what the optimal strategy is as prescribed by how our society is structured, not advocating for it.
Many of my happiest moments in life have been at the park, for free, with friends and family.
You don’t need to be retired or a millionaire to be happy. Nor is being retired or a millionaire any guarantee of happiness.
Saving for retirement is just about making sure your needs are met when your health starts to decline and you may no longer be able to work. If you’ve got a little extra saved to travel around the world or whatever, even better. It’s important, but don’t wait until retirement to be happy. There’s no guarantee you’ll even live that long, for starters.
Even more optimal would be to pick an age, say, 60, and commit to moving to Canada for MAID at that time. This means you don't need to compound nearly as long, because you don't need to insure against a long life unable to work. Then you can start not selling your labor while you're still young enough to enjoy it.
I'm not sure what you think the MAID program is, but (leaving aside your ineligibility for health care in canada until e.g. you gain permanent resident status) if you're not suffering from a grievous and irremediable health condition, you're not eligible for MAID.
>> I have a hard time spending, to the point where I would often procrastinate on buying things that I know I’ll need in the future.
Well, what I noticed is that I go to great efforts to avoid buying me some stuff that would make my life easier (say an electric bike or a better computer). Month starts, I get my paycheck and every day I fend off the desire to buy the stuff I want/need. And then come the bills. Like some surprise "regularization" gas or electricity bill that costs more than the item I didn't buy. If it's not that, some darn thing breaks and needs repairs. And if it's not that, kid has to go in some school trip, there's some birthday or wedding we have to attend, someone asks me to lend them some money (coze they know I save) or some other event happens and requires a ca$h infusion.
By the end of the month, money's gone and I haven't got nothing. At some point working just to pay bills and expenses makes Jack a dull boy. So funk it, I buy that stuff AT THE BEGINNING OF THE MONTH. And when shit arrives demanding money I can truthfully say: "I don't have any money left". But at least I got the thing, opposed to neither money, nor item.
>HN commenters complain about how some TODO app is using 300Mb of memory or has 700 dependencies.
yes because as we've learned this year nothing bad ever happens when you have hundreds of dependencies
we're living in an obese society, metaphorically and literally, we should put everyone through a decade of whatever the equivalent of playing ping pong with a spoon is in every domain of life. Being concerned with too much frugality is like being concerned there's not enough corn sirup in our diets
> we're living in an obese society, metaphorically and literally, we should put everyone through a decade of whatever the equivalent of playing ping pong with a spoon is in every domain of life.
What’s stopping you? Go ahead, live in a trailer and wash once a year.
If a society does not thrive its advice and morals ar obviosly less valueable. So if a society tithers on the brink of civil war or is stuck in a theo cracy. Its advice on frugality is less valueable.
This is one of the reasons I like YNAB (both their app and their method). One of their core principles is to align your spending -- including future spending, aka saving -- with your values. Spending on the wrong things isn't good, but neither is saving without clear purpose.
My wife and I both came from fairly frugal households growing up, so frugality is often our default. It's been a helpful exercise to periodically ask ourselves "what do we actually value, and what tradeoffs should we make", then update our plan to match.
Most people in the US are pulled into living on credit straight out of school. You get a student loan, then a car loan, then a credit card, then a mortgage. You finance vacations, appliances, kitchen remodels, smartphones - mostly to keep up with friends and coworkers who finance their lifestyles too. A lot of people are in non-stop debt from the age of 18 to 55, if not longer. By most estimates, only about 10-20% of US households are debt-free.
Spending and getting into debt are useful tools. But I don't have any friends in tech who need to be told "hey dude, you should be spending more". I have quite a few friends who would be better off spending less.
For sure it's more common for people not to save enough. But for people who are frugal and save diligently for most of their lives, there often comes a point where they cross a threshold where they have met all of their financial goals, and the "problem" is no longer how save money but to enjoy spending it. And this can be a real challenge for people who have built up deeply ingrained saving habits.
My mother, for example, refuses to replace her iPhone SE with something with a larger screen despite 1) having failing vision and difficulty reading the screen, 2) using her iPhone every day, 3) easily being able to afford it. The idea of spending $1,000 on a phone is just something she is unable to bring herself to do, even though I think it would help alleviate a real source of frustration in her life.
My father, when he started shopping for his most recent car (and probably his final car), set out with the intent to buy a luxury car. But again, despite being able to easily afford one, all he was able to bring himself to buy was a well-equipped Toyota. Don't get me wrong - it's a great car and has served him incredibly well. But it makes me a little sad that he wasn't able to bring himself to finally treat himself to a luxury car after a lifetime of hard work and saving. They did a lot of long road trips together in that car in retirement, and I think they would have enjoyed something a bit more luxurious (though on the other hand, the reliability of the Toyota is not to be discounted).
I think what you're attributing to frugality might be a more a matter of age? Many older folks are just wary of change.
I'm not that old, but every time I upgrade my PC or phone, some of my workflows break and I need to pointlessly re-learn things I'd rather not re-learn. UI buttons get moved around, icons change, some settings are removed and others are added... this was exciting the first ten or twenty times, but it's just tiring now.
Basically, I'm at this stage in life where my reaction to systemd wasn't "oh wow, this is progress" but "ugh, I need to learn how to start, stop, or modify services again". In another ten years, I'll probably just say "no, I'm not doing this again, just let me use my old computer for as long as possible".
Possibly there’s an element to this. The iPhone SE still has the home button, which may have been a factor when she bought it. And my father was a bit put off by some of the bells and whistles on luxury cars.
> my reaction to systemd wasn't "oh wow, this is progress" but "ugh, I need to learn how to start, stop, or modify services again"
I must be young at heart while >60 years old; my reaction was "why is everybody whining about it, it's pretty nice, I like it". Same with jj vs git, jj is amazing!
When I started driving my car had vinyl seats that you had to peel yourself out of on a hot day, a plastic steering wheel that you could barely touch when the sun was out, hand wound windows, fixed seat belts and a handbrake that barely worked.
Even the cheapest car on the market feels luxurious now.
In comparison the difference between a Toyota and a Lexus is marginal.
Expensive cars are mostly about status signalling, we are long past good enough.
I'm perhaps pathologically frugal myself. I've found for myself the best compromise is to force yourself to pick at least one feature other than cost. We've got a 17 year old Toyota Yaris that I tell myself is for fuel efficiency, and an old Ford Ranger because I wanted at least one of our vehicles to be able to move sheet goods. Technically I could probably walk onto most any lot and pay cash for whatever I wanted, but I know there's zero chance I'll ever do that.
>Expensive cars are mostly about status signalling
Uhm, only if you are counting the most basic utility, then you're right.
However if you actually enjoy driving (A->A driving), there is a HGUE difference and it's not just signaling. It's that you probably can't tell the difference, or don't care.
There is no comparison between driving a new Porsche or Bentley vs a new Toyota or even a Lexus.
Can you explain why?
They cannot, because they are wrong. And I say this as a person who has owned no small number of fancy cars (but I got better).
A new base-model Prius is absurdly luxurious compared to a base model car of 1975 or 1985 or even 1995. If you have lived long enough to see this change, then dropping 2x or 3x or 10x the cost of the Prius self-evidently puts you wildly beyond the point of diminishing returns.
The Prius is going to have excellent climate control, and a phenomenal stereo. It's going to have adaptive cruise control, and will warn you when you drift out of your lane, or if you're about to run into an obstacle.
Outside of motorsports-sorts of things, what you get out of more expensive vehicles is of limited utility. Mostly, it's just showing off.
Now, if you want a track weapon, then yeah, you DO get more by spending. But for a regular person who wants to get from point A to point B comfortably and safely? The Prius is fantastic, and it's hard to justify spending more unless you're willing to admit that it's a keeping-up-with-the-Joneses kind of thing.
> The idea of spending $1,000 on a phone is just something she is unable to bring herself to do
She wouldn’t need to spend that much. You can get a perfectly fine refurbished iPhone 16e for $400.
My own parents are in their late 90’s. Because they grew up in the wake of the Great Depression, I always assumed their extreme frugality was a function of the economic distress in their formative years. They also properly accounted for the fact that old-age care is very expensive. Parenthetically, most do not seem to anticipate that accelerated burn rate near the EOL. It’s also a phase whose duration is hard to predict.
I agree your mother should get a new phone with a big screen, but what qualifies as a luxury car? There are Toyotas that cost 6 figures USD.
I think he was considering a Lexus RX. I doubt he even looked at BMW, Mercedes, etc (not really his style).
His Toyota was probably under $40k. This was back when cars were quite a bit less expensive than now. Nice car for sure, but the Lexus probably would have been a bit more refined.
How old is your old man?
Or get a previous gen used iPhone, then she can have both a big screen and feel good about the cheap phone.
But what is 'luxury'? You may have in mind a Rolls Royce. But maybe he doesn't want that.
If they've been frugal their entire life, they aren't as far along the hedonistic treadmill, a new reliable car is a luxury.
If you're used to darning socks, buying new socks is a luxury.
If I buy a PS2 today, why is that not a splurge, if I didn't have one previously? Yes it doesn't have the best graphics but it's a step up from my PS1. Getting the latest and greatest just because, is keeping up with the Joneses. And that's a path to spending money, not happiness.
The knowledge that you have enough in your bank account if things go to pot, itself brings happiness
(EDITED)
Otoh, have a few friends in tech (and high finance) who need to be told "dude, we'd be better off if you worked less hard"
(Sorry.. I grew up deprived of data teaching me that "Schlep quickly compounds into Interesting Times")
Having a credit card is like having a video game passive that makes everything permanently 2% cheaper. Everything should be put on a credit card for that discount as well as fraud protection provided you are disciplined enough to never ever ever ever ever ever carry a balance.
This is US-specific advice; EU capped merchant fees, and therefore you don't get a free 2% reward at their expense.
The fraud protection and insurance can be useful though.
The "provided" part is the reason I'm staying away from credit cards.
I don't get the down voters, it is, or should be a tool.
Although we are talking about it being an issue. Which you have already covered.
Problem is, most people don't spend that much time thinking about it. So I suspect "don't get a credit card" or "only use it in emergencies" are generally good advice. Although perhaps we should just be better at teaching house hold type finance
For years I did this with the thermostat - something I learned from my father who always kept the house under 65F (18C) in Winter. I'm somewhat ashamed to admit it even led to arguments with my spouse early in our marriage when I would enter a room and find the thermostat set to a balmy 70F.
Eventually I just sat down, looked at how much it costs keep the house a few degrees warmer in winter, and realized we could afford to be comfortable. And if I were really hell bent on saving money, there were other lower-priority expenses I could cut back on first. But I don't even think it was even necessarily about the money - it was more that saving energy and toughing it out felt virtuous to me. Which is all fine, but not something that should be imposed on your partner if they don't share the same beliefs (or if they just get cold easier than you).
Funny, I went the other way round in the Bay Area. PG&E bills were so high so it was the choice of putting on a jacket or paying $1k extra over the winter months. And my reasoning was "I can afford a jacket".
I love the winter for this. My thermostat is set to 16C at night. I prefer if the heat never even kicks on, it’s noisy and disruptive to have air blowing through the vents. I wish there was AC that could make my house that cold at night while making no noise!
Going on your Slavic username: as an American who moved to a country without forced-air HVAC, it’s been quite a revelation to discover how backwards forced air really is.
Air heat pump? I don’t notice the sound.
I’m always colder in my mother’s house in Scotland (-5°C on cold days) than I am at my MIL’s house in the frozen Canadian wastelands (-40°C/F on cold days), because my mother will play games with thermostat to save money, where my MIL would simply die of exposure if the heating wasn’t on consistently for 6 months of the year.
There's also a very different type of cold close to the water. -40C will dry out your skin and make it feel like it's burning, but -5C in Scotland or on one of the Gulf Islands near Vancouver will make your bones feel frozen without good insulation.
You know those Christmas cards that show a frosty twinkly white treescape? That climate will kill you even at -5C.
People die on Ben Nevis every few years because they think its not that cold. But Scottish cold in that part of the world is brutal, there's so much moisture in the air that freezes if you get wet and cant quickly get dry you will die fast.
Still, it's a beautiful part of the country.
If the relative humidity is 100%, then being wet won't make you colder: the water has to evaporate in order to cool you, and it can't do that at 100% relative humidity. The problem that high humidity cold causes is increased convection, and the problem being wet causes is the dramatic near-complete loss of the insulation value of many garments.
There is a _lot_ of folk science about cold weather that is just plain wrong.
> The problem that high humidity cold causes is increased convection
Can you help me understand? How does higher relative humidity increase convection?
Humid air has higher heat capacity and higher heat conductivity than dry air which both increase convective heat loss.
A wife is a useful thing to have in this respect, not because they tend to profligacy, but because this kind of thing is much easier to detect and fix in someone close to you than in yourself. Both my wife and I have lived frugal lives at various times[0] and I feel much happier with the degree of spending we have now.
I'm reminded of the intelligent corvids in Adrian Tchaikovsky's Children of Memory where the sum of the two birds forms a being with intelligence in a way that the individual segments do not. The frugality is a deeply embedded piece of our being and undoing it seems hard, but together we financially operate in a place that leaves us both feeling comfortable.
0: In the US sense of the term, not in the sense of the term as known in Taiwan or India.
My experience has been that it's easy to say, "oh, it's just me", but much harder to subject someone you care about to the same standard that you would yourself. I'm in a similar position with the thermostat, even though something we initially bonded over was that we both kept our thermostats at a low temperature that was outside the window of being socially acceptable.
In the winter, I keep the thermostat at frigid temperatures when I am home alone and jack it up to warm just before any one else gets home. My thinking is that it is wasteful to warm up the entire house when it's just me since I can put on a sweater but I don't want to subject others to my, shall we say, quirks.
I keep meaning to calculate how much I am actually saving by freezing my butt off. My guess is it'll work out to something like $0.75 a day or something equally trivial.
Depending on the kind of heating system you have and the temperature differences you talk about it can be cheaper to heat the house to a constant temperature (because your heating can run more efficiently under lower load).
Correct, or the people doing this for environmental reasons... it's probably not better to do this. It would be better spending money on better insulation (assuming it isn't up to date).
It probably costs more to do that than to maintain a constant temperature. When you turn the setpoint down, everything inside your house and also your house itself starts losing heat. When you turn the setpoint back up, the cooled off house and items inside of it will suck up most of the heat until the stuff is warm again, and then the air warms up.
This is much more noticeable when you go into a freezing cold building and turn on the thermostat, it takes almost an entire day to heat up the stuff and building.
s/wife/spouse/
My spouse and I both grew up in this kind of household. Interesting to see how we & our siblings all responded, some followed suit and others had opposite reaction. I think some people are good at frugality and some are good at income maximizing, and few are good at both.
I turned into an income maximizer.. started working at 14.. post college left home, took a high stakes career and hopped to new opportunities proactively. Response to not wanting anyone to be able to control me via money.
For my spouse & I it was a reaction to 1) having a lot of childhood of consequences/regrets of over-frugality like frozen pipes bursting, parents lamenting not going back home for 10 years during which their own parents died, asking for a single $10 toy for birthday and having them buy a knock-off instead, etc.
2) a reaction to teenage parental control via money like when I was moving to the big city for my job and the housing deposit was due before the hiring company was going to wire me my housing stipend, and my parents refused to float me $1k for a month (and then gifted me more than this as a graduation gift a few months later).
So I think you want to instill a respect for money in your children but not a fear.
In this subject area, I recommend Jacob Lund Fisker[0]'s Early Retirement Extreme book [1]. Don't let the title fool you. The man has a surprisingly level-headed and refreshing approach to spending.
[0] https://en.wikipedia.org/wiki/Jacob_Lund_Fisker [1] https://archive.org/details/earlyretiremente0000fisk
This is very culture-specific. I've seen this in Poland. Under USSR rule frugality has been necessary to survive, but it left a lot of people forever stuck in that mindset, long after things got better. I know people who have a fortune in the bank, but live like they're broke, because they're afraid to spend anything from a "rainy day fund" even on rainy days.
Yep, I have a rainy day fund that I never look at when calculating surprise expenses, because "I might need it later". It's potions all over again!
My parents and grandparents lived under scarcity during Soviet (satellite) rule, grandma would can food and store well past best by, save plastic bags and various knickknacks, resisted spending on herself even as she bought us gifts when we came to visit. I think the contrast to US excess stuck with me and I always lived leaner (feeling that possessions own you and your time), though far from her frugality.
Yes! I related a little too much with the blog post. My grandparents were Sindhi and they had to flee from Pakistan to India during the partition. As refugees in India, they had to start their life basically from scratch. Now I get why it's ingrained in me to be frugal, and even take pride in it when there's none. I see the very same behaviour in my Sindhi friends when they feel bad for spending money on essentials like hospital visits.
I do something kinda similar, I guess it counts as maladaptive frugality?
Whenever I have something a little extra in my fridge, most often Italian prosciutto, I refrain from eating it, instead saving it for a "special occasion" even though it is, like, my favourite thing in the whole world. Eventually I have to throw the mouldy prosciutto away because I was too frugal to eat it.
I'm practicing though, learning to eat it. I don't know why it's so hard, I mean it's delicious! Should be easy!
This is a pretty common issue, I have to remind my spouse to just finish stuff. Eat it, and if it was so good.. buy more at the grocery next time.
One could try to reframe it that having it sit in the fridge going bad is a waste of fridge space/electricity/food/mental energy and unnecessary personal suffering.
Exactly the key of mindset that drives me to play through entire RPGs without ever popping a single item. It is essential that I collect 99 potions, and never consume even 1.
I have the same :(
For some, I think there’s that satisfaction that comes with saving money (like you’re somehow “cheating the system”, even when it’s just a coupon that gets you to buy something you wouldn’t otherwise). In some cases, that satisfaction grows with the amount of time or effort expended to save the money in the first place, which is ironic because that money-value-of-time probably far exceeds the actual amount saved. Practically every engineer here probably has a story about spending a ton of time or effort to optimize something by a tiny amount; saving money can be like that too. It’s a little joy in life, and so long as it doesn’t outright prevent you from spending money when you should (or impose excessive optimization costs), I think it’s fine.
The maladaptive part is when you start regretting not saving money, because it has two knock-on effects: it makes the decision to spend much more emotional (which negatively impacts rational decision-making) and it can negatively impact the enjoyment of the thing itself. For example, the maladaptive part might take the form of being reminded of the cost every time you look at the repaired phone.
I've always found the "time is money" hourly rate comparisons a bit contrived, because I can't actually trade my every waking hour for an hourly rate.
The reality for most people is that the trade-off is actually between time spent on looking for bargains, or time doing something else that doesn't make any money.
Back when I was younger and earned minimum wage, whenever I thought about buying something I'd run the calculation of how many hours I would need to work to pay for it. That helped me save quite a bit.
It really depends on whether you enjoy looking for bargains or not. If you don’t, then it feels like you are working, only you’re not getting paid.
My mother still clips coupons in the Sunday newspaper, despite being financially well-off enough to not clip coupons. I considered listing this as an example of maladaptive frugality in another post, but then I figured it’s just something she enjoys doing.
Honestly in current state of world. Which is more enjoyment clipping coupons or looking for bargains or being on social media? Would something actually useful or more enjoyable happen with that time?
Hell. Even other type of media consumption unless you really enjoy it might be balance you can question.
> What I took away: eating at a good restaurant was bad, taking out cheap food was good because it saved money.
Any sort of morality like framing around it is likely to lead to issues imo.
The closer you can get to an analytical approach the better I think - can I afford it, is it good value for money, is it useful/furthers my goals etc
A similar term (often found as a reaction to Amazon LPs) is frupidity.
I was so frugal that I didn't refinance my (admittedly already low) interest rate during Covid because "we were planning on selling the house in a year or so". Oh well :)
Thats more of a forecasting thing than frugality.
No that can be a frugality mindset of not wanting to pay the refinancing closing costs (which can be 5 figures) .. I've seen family make similar sorts of short term savings vs long term savings trade-offs.
Spending money sparingly is like reducing weight in an automobile. A car will get better gas mileage, go faster, break less often, and be more responsive with less weight.
So it is with spending. When you spend less, you can retire earlier, your finances are more secure, you feel less pressure and stress, etc. You have more flexibility in the kinds of jobs you can take. Perhaps best of all, you end up accumulating less stuff, and less complicated things, which makes your life simpler.
Frugality doesn’t get the flashy press that consumerism does, but it’s a winning life strategy.
I read this article 10 years ago by a guy named Ricky Yean who went to Stanford as an economically disadvantaged admit and couldn’t shake his poverty mindset and it cost him when he was running a startup.
Why “few successful startup founders grew up desperately poor”
https://rickyyean.com/2016/01/22/privilege-and-inequality-in...
Poverty mindset is maladaptive because it teaches you only money is worth anything, so you hoard it. But in truth time is also worth a lot and sometimes it’s wise to use money to buy time.
> Poverty mindset is maladaptive because it teaches you only money is worth anything, so you hoard it. But in truth time is also worth a lot and sometimes it’s wise to use money to buy time.
This is something I've observed in overly frugal family. Stuff/money is worth too much to them.
You can't gift them anything "nice" because they will put it on the shelf and never open it (don't want to damage it).
Gifting them consumables with an expiration date also doesn't work as they'll "save it" until the expiration date lapses and then eat expired food.
Taking them out is weird because they'll insist on taking leftovers home off every other persons plate at the table, including stuff they don't normally eat.
They'll fill up 2 bedrooms in their home with 40 year old cheap clothes & furniture that is worth so little we'll need to pay someone to haul it away. They won't donate it because they think the people who receive it will waste it. So they'll pay money to ship some of the 40 year old cheap clothing to poorer family back home who it doesn't fit and could just buy cheap clothes there with the money they paid for shipping.
Owning multiple 30+ year old cars until the mechanic literally refuses to work on them anymore telling you they are too rusted out to repair or drive.
This from people who are wealth enough to own multiple properties, have retired early, have government pensions, etc.
A deep and thoughtful piece, thanks for sharing.
I'm wondering at this point what are known methods of overcoming "mindset inequality". Any advice will be appreciated.
Thanks for the article, I really enjoyed it!
Fellow frugalite here, and man, is it hard to break the habit of agonising over every purchase. Took me nearly 20 years in tech before I convinced myself I could justify just buying a new laptop every 5 years, and not sit around waiting for things to compile on the old one - and thats an item that is both essential to my work and also tax deductible. The agonising is even worse with items that are technically non-essential (but would make life better)
The most helpful tool here, I've found, is maintaining a personal finances spreadsheet.
It's one thing, without a spreadsheet, to have the emotion of "I'm not going to have enough and I need to save more to make sure I have enough." I'd argue it's even evolutionary; we want to make sure we have enough to get through the winter we know is coming.
It's quite another when your spreadsheet shows you saved X, your monthly cost of living is Y, and therefore you have enough money saved, even if your income went to zero and you made no changes to your lifestyle, to last you for Z years. Being able to take YouTube University rule-of-thumb advice like "of your take-home pay, use 65% for necessities, 15% for long-term savings, 20% for enjoyment" and seeing how much money that is per month for you in your personal circumstances, along with rules of thumb on things like what ratio you should have achieved by which age on net worth-to-income ratio (1x by 30, 2x by 35, 3x by 40, etc.) and seeing what your personal actual ratio is, to get a sense of benchmarking yourself.
I mean, the influencers could be totally full of shit, but it doesn't matter. Getting actual numbers for where you are, plus getting "generic" advice that you know wasn't directed at you personally, and seeing how those numbers make you feel, can do a lot to either tell you "you don't need to be so frugal anymore" or "yep, your emotions are totally justified, keep saving".
I think in the case of pathological frugality the spreadsheet approach could make things even worse. A whole 20% spent on enjoyment? I bet I could drive it down to 15%, maybe 10%. In fact, do I really need these things? Why not go down to 0%, maybe 5% once every few months. After all, I might need that money in the future.
I need to get into building a PF spreadsheet and getting things in better order, but fwiw the way I sometimes frame the question of whether or not it's "okay" for me to buy something is 1) Will spending the money compromise or help my ability to pursue something else I want to do, based on the price and utility, 2) Could I buy 20 of them? Even better if I could buy 20 without tangibly hurting my wallet.
If you can buy 20, 1 is probably fine, don't stress too much.
That is good if you can count on your cost of living being predictable. It's not for many people, even for relatively well-off ones: you may earn a lot for your area but being an immigrant without a permanent enough status in your current country, and your home country which you always have a right to return to may be unsafe or highly undesirable for whatever reason. So you need to consider the emergency of moving somewhere in a political and legal climate not known in advance.
Thus it becomes a more difficult choice what proportion to bet on stability of the current living situation, and what on long-term savings for emergencies which look quite probable but still unmeasurable. And the latter is complicated by absence of reliable and relatively liquid investment opportunities. All in all, fun to be from a sanctioned country.
I think a spreadsheet is still helpful in this case.
> So you need to consider the emergency of moving somewhere in a political and legal climate not known in advance.
Fair enough. So do the financial planning, and ask yourself, how much does it cost to fly/travel to X place that is far away? Put in a risk premium - what if the cost became 2X or 3X because of a sudden catastrophe affecting everyone? What is the actual number that you need to save? Can you keep the money in a bank account, or are you concerned that banks will be inaccessible, and thus need something more portable? If you need something more portable, how much will it cost to protect it (vault/safe, weapons)?
I sympathize that life isn't fair, and that financial goals for some people need to be concerned first and foremost with personal safety instead of luxurious "nice-to-haves". But my point is that there are still actual numbers involved, and that you can put those numbers into a spreadsheet, and that the spreadsheet can help you understand your progress towards those goals. Financial planning is valuable regardless of what your goals are.
All you are saying is that some people have more volatile earning/spending scenarios. The advice is still the same, the knobs on the spreadsheet are just different.
It's not much different than a sales job where income can be highly variable, or go to 0 because the local market is dead.
Agreed - I find I spend almost the same time on small decisions as large, and let the default (subscriptions, extra cars, storage) ride. That's turning the decision into a drama that befalls you (and avoiding those that don't). Or you find yourself down or up become cheap or profligate.
So, what big spending is adaptive? Better to drive decisions objectively based on future value.
Some scenarios:
- It lasts a long time, and you'll need to do it anyway. Best to get it early and enjoy it longer - for iPhones, cars, houses, marriage...
- It lasts a long time and you use it daily. Always pay for what you'll be glad to have: good socks, a powerful computer, a nice view.
- Your beloveds needs to know if you care more about money or them. Choose them.
- Something expresses your values: you appreciate an artist's work, so you pay good money for it. Some panhandler is stoic, so you give him a hand. (Just be careful about posturing.)
Another mindset is to think of your money as family (writ large) money, and invest in the future of family or friends. It's as much a vote of confidence as an injection of cash, and it helps you detach from the needy instrumentality of the money to consider what's best for their future. That's the weirder phenomenon: trillions held by baby boomers until they die (just in case), while their progeny waste time in terrible jobs and narrow circumstances for lack of investment. That's maladaptive hoarding.
Agree wholeheartedly but I worry some will read this and go all in the opposite. The key point is that humility helps make you free. Couple that with not being a slave to frugality and you can live without as much guilt and without a much restraint.
I see this with devs all the time, devs that want to pitch their startup and use a subdomain like .vercel.app that gets blocked after 2 weeks
There is frugality and there is taking inflation into account when deciding on save vs loan. For the last many years it was net profit to take loans, spend and pay them back later because inflation meant you got more goods/services that way. On the other hand keeping cash/savings over some smallish buffer where opportunity costs dominate is/was always net loss. That not touching US-specific stuff like insane student loans, credit card terms or healthcare.
> I plan to have fun spending my money in the future, so it’s time to start practicing now.
The most optimal thing to do in our world is to pick an age, say, 60, and until your 60th birthday, maximize your suffering via frugality to just under the tolerable limit so as to maximize your potential for compound interest. This leaves you with the most freedom and opportunity during the most fun part of your life, when you no longer have to sell your labor and can do whatever you want.
Within our current model, trying to slip in bits of fun through spending money before that age is getting a poor return: you're trading vacation time, which you could instead barter for more money on retirement, and you're carrying with you a bit of suffering because you have to worry about going back to work. The best thing to do is just push it all until retirement.
The limit of human suffering before suicide frequently happens is apparently quite high, so, you can really stretch yourself out here. Live in your car in the Walmart parking lot, eat beans and rice. You maybe trade a bit of the compound earnings to establish certain time constrained things you want to cash in on at 60 like having a partner or kids, but beyond that, maximize that compound interest!
I hope it's obvious that this is a criticism. It's just, the more I think about it, the more this seems the selective pressure and incentives in our society are set up. Mostly I think it's insane that we both have an idea of "retirement" and also that we set it at an age where a significant portion of the population won't make it, and for those that do, a significant portion will get to enjoy five years of it, and for the remainder, health is bad enough that maximum enjoyment isn't possible anyway.
> The most optimal thing to do in our world is to pick an age, say, 60, and until your 60th birthday, maximize your suffering via frugality to just under the tolerable limit so as to maximize your potential for compound interest. This leaves you with the most freedom and opportunity during the most fun part of your life, when you no longer have to sell your labor and can do whatever you want.
This is the most depressing thing I’ve read in a while.
You don't have to act optimally according to the current system, I don't. My concern is many seem to try to act optimally without understanding how depressing the reality of its incentives are.
I think the thing you are missing is that people are quite complex in how they model these things internally. What works for you, may not work for them.
I don't think your advice is good "general advice" but if you treat it as a "this works for me, it might for you", then it might be worth reading.
I'm not sure if you caught that my post was a criticism of the system. I'm just describing what the optimal strategy is as prescribed by how our society is structured, not advocating for it.
Many of my happiest moments in life have been at the park, for free, with friends and family.
You don’t need to be retired or a millionaire to be happy. Nor is being retired or a millionaire any guarantee of happiness.
Saving for retirement is just about making sure your needs are met when your health starts to decline and you may no longer be able to work. If you’ve got a little extra saved to travel around the world or whatever, even better. It’s important, but don’t wait until retirement to be happy. There’s no guarantee you’ll even live that long, for starters.
Even more optimal would be to pick an age, say, 60, and commit to moving to Canada for MAID at that time. This means you don't need to compound nearly as long, because you don't need to insure against a long life unable to work. Then you can start not selling your labor while you're still young enough to enjoy it.
I'm not sure what you think the MAID program is, but (leaving aside your ineligibility for health care in canada until e.g. you gain permanent resident status) if you're not suffering from a grievous and irremediable health condition, you're not eligible for MAID.
Jesus no, you could be dead or decrepit by 60. What’s wrong with finding happiness within your limits all the time?
“I hope it's obvious that this is a criticism.”
>> I have a hard time spending, to the point where I would often procrastinate on buying things that I know I’ll need in the future.
Well, what I noticed is that I go to great efforts to avoid buying me some stuff that would make my life easier (say an electric bike or a better computer). Month starts, I get my paycheck and every day I fend off the desire to buy the stuff I want/need. And then come the bills. Like some surprise "regularization" gas or electricity bill that costs more than the item I didn't buy. If it's not that, some darn thing breaks and needs repairs. And if it's not that, kid has to go in some school trip, there's some birthday or wedding we have to attend, someone asks me to lend them some money (coze they know I save) or some other event happens and requires a ca$h infusion.
By the end of the month, money's gone and I haven't got nothing. At some point working just to pay bills and expenses makes Jack a dull boy. So funk it, I buy that stuff AT THE BEGINNING OF THE MONTH. And when shit arrives demanding money I can truthfully say: "I don't have any money left". But at least I got the thing, opposed to neither money, nor item.
I think of this kind of thing whenever HN commenters complain about how some TODO app is using 300Mb of memory or has 700 dependencies.
Legitimate complaint on HN of all places. TODO apps shouldn't be embedding whole browsers.
>HN commenters complain about how some TODO app is using 300Mb of memory or has 700 dependencies.
yes because as we've learned this year nothing bad ever happens when you have hundreds of dependencies
we're living in an obese society, metaphorically and literally, we should put everyone through a decade of whatever the equivalent of playing ping pong with a spoon is in every domain of life. Being concerned with too much frugality is like being concerned there's not enough corn sirup in our diets
> we're living in an obese society, metaphorically and literally, we should put everyone through a decade of whatever the equivalent of playing ping pong with a spoon is in every domain of life.
What’s stopping you? Go ahead, live in a trailer and wash once a year.
I'm hoping the AI RAM crisis will turn out to be a good thing in some ways, although that's probably being way too optimistic.
If a society does not thrive its advice and morals ar obviosly less valueable. So if a society tithers on the brink of civil war or is stuck in a theo cracy. Its advice on frugality is less valueable.