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The art and science of spending money

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Re: The art and science of spending money

#91

Post by SassyGrapefruit »

luxurytent wrote: post #36
tehCorner wrote: post #24

> Frugality inertia: a lifetime of good savings habits can’t be transitioned to a spending phase. Coming from a poor family and knowing the hard way the issues of not having money I've been obsessed with saving money since I got my first paycheck 8 years ago and I always thought "at the point I would earn current salary + x I will start enjoying life more and stop worrying about money" but that never happened. 8 year…

This is me and I struggle with it on a regular. We are quite comfortable (on my single salary I can cover mortgage, private care for my kids, and good food), but I feel behind -- because I came from a poor family who scraped on a regular. My parents still work their fairly simple factory jobs as they need to pay off their debts (albeit they are below 65) What I'm trying this year is ensuring I can allocate a certain…

Good luck with that "Free to Spend" category. It just turned into emergency fund 2.0 for me. One thing that allowed me to spend some money is the idea of diversifying my savings by purchasing assets. Rather than let Emergency fund 2.0 sit in an account as cash burning a hole in my pocket why not buy an asset. This could be an apartment, a collectible, a storage facility, etc. For me this feels like saving and spending at the same time.

Re: The art and science of spending money

#92

Post by unity1001 »

sanderjd wrote: post #71

> The more you were snubbed while poor, the more you enjoy displaying your wealth. Man I dunno about this. It does seem like a thing for certain personality types, but I usually see exactly the opposite. All of the people I know who have "made it" from a less wealthy background are the opposite, living with a ton of guilt about their new wealth. I think this is because of having tons of family and friends still scrap…

This is something that is valid more for societies like US, where being rich is seen as proof of 'hard work' and 'making it'. It defines your social status and actual social worth, therefore not being rich is like a stain.

Its even built-into the terms used for describing it - someone's 'net worth'. As if a human being can be qualified by the amount of imaginary numbers attached to his or her social identity.

So becoming rich from poor gives a proof of 'making it' and therefore being a 'valued member' of the society who does not 'laze around' but 'works hard'.

Its early Puritan Christian belief repurposed as a social norm, really.

Re: The art and science of spending money

#93

Post by TeMPOraL »

sanderjd wrote: post #71

> The more you were snubbed while poor, the more you enjoy displaying your wealth. Man I dunno about this. It does seem like a thing for certain personality types, but I usually see exactly the opposite. All of the people I know who have "made it" from a less wealthy background are the opposite, living with a ton of guilt about their new wealth. I think this is because of having tons of family and friends still scrap…

> Something that has frustrated me to no end as I've started making good money is that I can't use any of it to improve the lives of people I actually know. They aren't going to take my money! They're doing just fine thank you very much. Even broaching the subject could ruin a relationship.

There was a period when we had this "dance" with part of my family, who had a rougher patch financially, but tried not to show it. We'd occasionally help them out with shopping (as they didn't have a car, but we did), and always conveniently "forgot" to take money from them, or "accidentally" mixed their and ours grocery so we had to pay for both, and the receipt would "somehow" get "misplaced" along the way. I think both sides knew what's going on, but neither wanted to talk about it directly.

But I guess it's better to maneuver around feelings of pride like this, than having to defend yourself from family members and "friends" who do want your money, quite actively, as I hear is a common problem faced by those who get a windfall.

Re: The art and science of spending money

#94

Post by unity1001 »

mythhouse wrote: post #72
CraigJPerry wrote: post #30

Earlier quoted context omitted.

It’s possible it’s not a problem, I’d be inclined to give yourself a break. A lot of the “essentials” we’re supposed to splurge on (big house, cars, expensive food, etc) are often overrated when you look at it from a “does this make my life better” lens. Investing in yourself - be that skills or life experiences - is worthwhile but you can do even that with a frugal slant.

You made an unconvincing point by reducing money to stereotypical 'expensive cars' . What about going on ski trip while your kids are still young and having a magical and memorable moments in life.

> What about going on ski trip while your kids are still young and having a magical and memorable moments in life.

That's a necessity.

Re: The art and science of spending money

#95

Post by toast0 »

imtringued wrote: post #54
sokoloff wrote: post #28

> Frugality inertia: a lifetime of good savings habits can’t be transitioned to a spending phase I think a lot of financial planners start from a base assumption that their clients will be happiest if they spend their accumulated wealth. That’s not true in my case (at least as far as I can self-analyze). Whatever we don’t spend isn’t lost potential for us, but rather is future potential for our kids. Taking only the…

>Whatever we don’t spend isn’t lost potential for us, but rather is future potential for our kids That's extremely lazy. If your children follow the same pattern then no one will ever benefit. It was all for nothing. So your kids will spend the savings but when will they spend those savings? After your death when they are in their 40s and 50s and long past the point where they need your help or while they are still y…

Just because nobody spends the money doesn't mean nobody benefits.

If I've got a bunch of money in my account that I'd rather not spend, because I want to keep it for a rainy day, I can still spend the dividends. I can also spend more of my income, if I'm satisfied that the bulk amount is enough that I no longer need to save more for emergencies. I can also be less worried about increasing or even maintaining my income; so I can find a job that makes me more happy instead of one that makes me more money; or work less hours or retire earlier.

Having a target dollar amount for savings and not just increasing it without reason does help maintain perspective though. In my mind, from a very priviledged place, I'd like to be able to pay for long term memory care for several years, even in the face of a market crash and high inflation. Anything more than that, is kind of silly to retain; but I'm still frugal, so spending freely isn't spending frivalously.

Re: The art and science of spending money

#96

Post by sokoloff »

sanderjd wrote: post #80
sokoloff wrote: post #28

> Frugality inertia: a lifetime of good savings habits can’t be transitioned to a spending phase I think a lot of financial planners start from a base assumption that their clients will be happiest if they spend their accumulated wealth. That’s not true in my case (at least as far as I can self-analyze). Whatever we don’t spend isn’t lost potential for us, but rather is future potential for our kids. Taking only the…

Check in with your kids about this. I'd rather my parents spend what they have saved. I don't need or really even want them to pass anything on to me. I'd much rather they enjoy their retirement more, pay for more visits to their grandchildren, and have lots of interesting stories and about what they've been doing to tell them.

If we knew when we’d die and how much care would cost from 80 until death, that would be easy. It’s unknowable and my wife’s family has exceptional longevity in most of her genetics. She could realistically blow out a Roman numeral C candle on a cake. Or she could die at 75… One set of my grandparents passed quickly in their 60s; the other in their 90s (with over a decade of independent then assisted living then years of memory care)…

Re: The art and science of spending money

#98

Post by mensetmanusman »

sanderjd wrote: post #71

> The more you were snubbed while poor, the more you enjoy displaying your wealth. Man I dunno about this. It does seem like a thing for certain personality types, but I usually see exactly the opposite. All of the people I know who have "made it" from a less wealthy background are the opposite, living with a ton of guilt about their new wealth. I think this is because of having tons of family and friends still scrap…

Something our family does is to purchase things for the good of helping others. E.g. buy a trailer/truck that others are free to use to move stuff, this can save hundreds of dollars. Broach the topic of getting rid of appliances you are ‘upgrading’ and asking if they would want the old ones, etc.

Re: The art and science of spending money

#99

Post by AnimalMuppet »

tehCorner wrote: post #24

> Frugality inertia: a lifetime of good savings habits can’t be transitioned to a spending phase. Coming from a poor family and knowing the hard way the issues of not having money I've been obsessed with saving money since I got my first paycheck 8 years ago and I always thought "at the point I would earn current salary + x I will start enjoying life more and stop worrying about money" but that never happened. 8 year…

I don't know that I have a problem spending money. I just don't want things.

Take cars, for instance. I can afford to buy a new car. My current car is old enough to have its own driver's license. But, why? It runs all right. It's solid. It has literally never let me down. I don't worry about it getting a dent. I don't worry about taking it on decent unpaved roads. Sure, it will die eventually, but until then, why would I replace it?

Or take vacations. I like vacations. But I don't need to fly to Vegas and stay at the Encore and drop a few thousand at the tables in order to feel like I had fun. I can have fun camping in the Mojave and never pay a dollar for a motel room. (I mean, I can see the point in a really nice hotel room from time to time...)

Or take eating out. I like good food, at least once in a while. But a good medium-to-high-end steak place is as far as I want to go. These Michelin starred places? I look at their menus, and I don't see anything that I actually want to eat.

For me, it's not that I'm still worried about money. It's that I don't have much of a taste for expensive things.

Re: The art and science of spending money

#100

Post by thwarted »

TeMPOraL wrote: post #93
sanderjd wrote: post #71

> The more you were snubbed while poor, the more you enjoy displaying your wealth. Man I dunno about this. It does seem like a thing for certain personality types, but I usually see exactly the opposite. All of the people I know who have "made it" from a less wealthy background are the opposite, living with a ton of guilt about their new wealth. I think this is because of having tons of family and friends still scrap…

> Something that has frustrated me to no end as I've started making good money is that I can't use any of it to improve the lives of people I actually know. They aren't going to take my money! They're doing just fine thank you very much. Even broaching the subject could ruin a relationship. There was a period when we had this "dance" with part of my family, who had a rougher patch financially, but tried not to show i…

The 80s Disney movie "Lots of Luck" is about what you describe in your last paragraph, and I'm willing to say that watching this movie as a kid probably influenced my style of money management.
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