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No Desire To Spend

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Re: No Desire To Spend

#41

Post by dagw »

Do you live within biking distance from work? No? Then move closer to work. This has three huge benefits...

It also has one huge downside the article neglects to mention. If your work is in the center of town (as many offices are) you often either have to greatly increase the amount you spend on housing or greatly decrease the 'quality' of the housing.

For disclosure sake I do live in an apartment in the center of town, but in doing so I'm sacrificing things like a garden and a my daughter getting her own room. It's a price I'm willing to pay, but I'm fully understanding of people who aren't.

Re: No Desire To Spend

#42

Post by dblock »

debacle wrote: post #37
johnrydell wrote: post #13

Here is my own piece of financial advice that I learned from a wise man 20 years ago: You have to double your income in order to improve your standard of living by 10%. Many people get a raise or a new job and they think they are now rich and can spend like crazy. You can't. Double your income and you'll honestly only see a 10% lifestyle change. Don't forget it. Keep saving. Limit spending. And give a percentage of y…

While it sounds like a compelling anecdote, it's complete bullshit. If you are just squeaking by at 30k, and you get a raise up to 60k, you suddenly have an extra 30k per year to play with. That can mean many things - for every year you work, you could theoretically retire one year earlier. You could now afford a car that doesn't cost more in maintenance than gas each year. You could now afford to double your extreme…

"While it sounds like a compelling anecdote, it's complete bullshit. If you are just squeaking by at 30k, and you get a raise up to 60k, you suddenly have an extra 30k per year to play with."

That is if you live in a tax-free zone :)

Re: No Desire To Spend

#43

Post by IgorPartola »

debacle wrote: post #27

"The people who generally have their financial shit together don't usually realize when it's pay day." Seems like a pretty specious argument. If you pay bills, then you know when bills are due and you know when payday is. That's finance in a nutshell - managing your AR and your AP. "Do you live within biking distance from work? No? Then move closer to work." I live in one of the better school districts in the area an…

"Do you live within biking distance from work? No? Then move closer to work." is dubious advice. If you have to pay 2x what you pay now to live closer to work, are you saving enough by not having a longer commute? Better advice is "Use common sense with where you live and work."

Re: No Desire To Spend

#44

Post by jiggy2011 »

debacle wrote: post #37
johnrydell wrote: post #13

Here is my own piece of financial advice that I learned from a wise man 20 years ago: You have to double your income in order to improve your standard of living by 10%. Many people get a raise or a new job and they think they are now rich and can spend like crazy. You can't. Double your income and you'll honestly only see a 10% lifestyle change. Don't forget it. Keep saving. Limit spending. And give a percentage of y…

While it sounds like a compelling anecdote, it's complete bullshit. If you are just squeaking by at 30k, and you get a raise up to 60k, you suddenly have an extra 30k per year to play with. That can mean many things - for every year you work, you could theoretically retire one year earlier. You could now afford a car that doesn't cost more in maintenance than gas each year. You could now afford to double your extreme…

You do have to take taxes into consideration if you are in a country with progressive taxation.

I think it might better to think that if your income doubles you should only increase your lifestyle by 10% or so.

You should put as much of the extra income into investment , savings , getting clear of debt etc.

Re: No Desire To Spend

#45

Post by debacle »

logn wrote: post #28

I found one easy way to save is to think of it like spending. Like, sweet, I just bought $500 in stock, cha-ching.

My wife and I have found this type of investing really fulfilling. Instead of investing in larger but more infrequent chunks, we'll buy stocks 50 or 100 at a time to add to our portfolio.

Since we've started, we've increased our annual allocation to long-term savings 100%. Investing is also a lot more fun.

Re: No Desire To Spend

#46

Post by leeHS »

patio11 wrote: post #40

I spent more than a few years scrimping to the bone earlier in my twenties. The notion has an intrinsic appeal to me. Just so you know the context when I say: For what it's worth, if you're a HNer, I'll tell you something Ramit Sethi says often which would have been useful to internalize, oh, five years earlier: it is very hard to cut expenditures in such a meaningful fashion that your financial situation qualitative…

If you can get a raise, that's fantastic, and congrats! My experience however is that without asking "why do I buy the things I do", people tend to raise their spending to their new salary level. Why not two or three latte's per day? That's what $15 per day, or about $4000 per year.

Re: No Desire To Spend

#47

Post by cslacasse »

I wouldn't forget what day I get paid any more than I would forget what day of the week it is. Being cognizant of the details of your life says nothing of your financial health.

Re: No Desire To Spend

#48

Post by jiggy2011 »

dblock wrote: post #39
jiggy2011 wrote: post #22

The big problem, at least in the UK is that cost of food and other essentials has gone up by a lot while wages have remained stagnant. This can make even a frugal budget fall apart because at the end of the day you still need to put some food in your face. It's easy enough to stop buying consumer stuff that you don't need, but you do need some way to entertain yourself and if you want any social or family life at all…

I think one should some hard math on how much food costs vs. some of these other expenses that the article says to start cutting _first_. TV is 100$, which is easily 5 days of food in New York City if you live on a budget. A car is 500$, which is a month worth of food. Even if food prices were to go down, it wouldn't be by 50%.

I agree, don't buy stuff you don't need if you are buying stuff you don't need then stop doing that.

My point is more that this is trumpeted as ground breaking financial advice but actually in many cases you can still have financial problems even if you aren't buying crap you don't need at which point trying to cut expenses gets exponentially harder.

Re: No Desire To Spend

#49

Post by legulere »

dagw wrote: post #41

Do you live within biking distance from work? No? Then move closer to work. This has three huge benefits... It also has one huge downside the article neglects to mention. If your work is in the center of town (as many offices are) you often either have to greatly increase the amount you spend on housing or greatly decrease the 'quality' of the housing. For disclosure sake I do live in an apartment in the center of to…

Does the quality of the housing mean space? Living a more minimalist life also means having less stuff. The reason why we build everincreasing houses is that we need space for our stuff.

Re: No Desire To Spend

#50

Post by jiggy2011 »

patio11 wrote: post #40

I spent more than a few years scrimping to the bone earlier in my twenties. The notion has an intrinsic appeal to me. Just so you know the context when I say: For what it's worth, if you're a HNer, I'll tell you something Ramit Sethi says often which would have been useful to internalize, oh, five years earlier: it is very hard to cut expenditures in such a meaningful fashion that your financial situation qualitative…

Good point, to an extent is a vicious cycle.

If you want to get that salary raise, at some point it has to be backed by somebody actually buying something.

If everybody becomes super frugal then the economy shrinks and unemployment gets worse. I guess this is because we're at a point where we don't need anything close to 100% employment to cover everybody's 'basic' needs.

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