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I think this is taking things too far
Old 08-11-2012, 04:16 PM   #1
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I think this is taking things too far

I'm frugal, I always have been and probably always will be. I mean how can I change now? But I think this is taking things way too far! I can see how after decades of saving that one can get caught up in not spending but there is a point where the situation calls for spending money. I do and don't care because what else is the money for. I don't squander it though.

Stupid Move: Spending Too Little Money - Forbes
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Old 08-11-2012, 04:28 PM   #2
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I don't know, Verumchuka. From the article,

Quote:
What about people who spend too little? This is especially a problem for retirees who habitually tighten their belts, long after they need to. It harms their quality of life.
Harms their quality of life? I could see that if they were eating catfood and living under a bridge. But what if the retiree is living a perfectly fine life with everything he or she wants, and just is not blowing money right and left beyond that point? I don't know. I guess it all depends on the definition of under-spending. Oh look - - he provides his definition of that:

Quote:
My definition of under-spending: Expenditures that are significantly less than the amount you could conservatively dispense annually, and still have a 99% chance of never running out of money.
Guess I am under-spending, then. FIRECalc says I have a 100% chance of never running out of money if I spend a whole lot more than I have been spending. But gosh - - I am spending so much more than at any other time in my life, even if that isn't much by some standards. I don't spend as much as a lot of our members, for example, but I am perfectly content and have everything I want.

Some people (like me), just don't want that much and are happy living a normal middle class life even if that leaves money left over. So why should I spend on things that I don't want, and that would consume my time and energy in their own ways? I am thinking of time and energy spent shopping, caring for all the items and caring for the bigger home in which to store all of them. I think all of THAT would detract from my quality of life.

The examples that he gives are awful, I agree, but they sound like people who just are not taking care of themselves or their possessions. If they had fewer/smaller possessions, they could probably afford to take care of them more easily.
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Old 08-11-2012, 04:33 PM   #3
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I think we need to form an online chapter of Underspenders Anonymous.
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Old 08-11-2012, 04:42 PM   #4
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I think we need to form an online chapter of Underspenders Anonymous.
There are plenty of us here living on withdrawal rates given 99% success in FIRECalc, I suspect! So it might be a big club.
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Old 08-11-2012, 04:44 PM   #5
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My parents don't take the frugalness that far, but the way they act I thought they must be slowly going broke with the horrible interest rates now available. I got the nerve up a few months ago to ask how they were doing financially after listening to him complain about how everything costs so much. He told me they are saving over a $1000 a month, and have $750,000 in reserves ( everything is paid for, and his health insurance through a union and medicare covers every penny of his health costs). Pushing 80 accumulating assets shouldn't be a high priority, but you cant change lifetime habits. I even know a friend whose father has boarded up his 2 bedrooms and put his bed in the living room to save on heating and cooling even though his house is only 1200 sq. foot and he is worth $2 million and has no debt. I hope I always respect my money and maintain adequate reserves, but I sure hope I don't hoard my money in my advancing years and not enjoy the use of spending it.
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Old 08-11-2012, 04:49 PM   #6
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Also, the definition in the article,

Quote:
My definition of under-spending: Expenditures that are significantly less than the amount you could conservatively dispense annually, and still have a 99% chance of never running out of money.
does not allow for those who want 100% chance not running out of money, so that they can be assured of leaving something to their kids or to charities.
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Old 08-11-2012, 05:11 PM   #7
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The passage quoted below says it all for me. We're pretty frugal but yesterday we splurged and spent almost $2 grand on golf equipment for me and DW. Very out of character for us, but my old sticks were 15+ years old, we can afford it and we will enjoy it since I play regularly (2-3 times a week) and DW is keen to enjoy the game. While a part of me laments spending that much on "entertainment", I think we got a good deal, will enjoy the sport for many years to come and things like this is why we saved to begin with.

I can see where frugality can be dysfunctional if you don't keep the right perspective. I have a great-uncle who was blue collar but he and my late great-aunt scrimped and saved and I'm told have considerable wealth. However, he is in his 90s and should be in a nursing home rather than living alone, but he is unwilling to go to a nursing home because it is too expensive. Meanwhile, rather than letting go of the purse strings and being properly taken care of he is living alone in squalor and dirty diapers and has alienated just about every human being who cares about him (and some who are just waiting for him to die to get his money). I fully expect that he will be found dead and will have suffered and his wealth will pass to those who attend his funeral out of obligation rather than grief. Really sad.

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The cure to under-spending is not laying out money frivolously or indulgently, on things or experiences that don’t add value to your life. Instead, it’s using what you have to make your life more comfortable and enjoyable.

There is a season to plant for the future, with hard work, frugality and saving. There is also a season of harvest. That’s the time to use what you accumulated to support your health and wellbeing.
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Old 08-11-2012, 05:14 PM   #8
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Old 08-11-2012, 05:19 PM   #9
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I must be dense, but somehow, I just don't see that the definition of underspending given in the article
Quote:
My definition of under-spending: Expenditures that are significantly less than the amount you could conservatively dispense annually, and still have a 99% chance of never running out of money.
has anything to do with not taking care of oneself. A person can spend any amount of money, high or low, and still not take care of himself/herself.

I have known plenty of poor older people (in their 90's) who were not able to afford assisted living, and yet were able to take care of themselves better than this:

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Originally Posted by pb4uski View Post
living alone in squalor and dirty diapers and has alienated just about every human being
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Old 08-11-2012, 05:25 PM   #10
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Originally Posted by REWahoo View Post
I think we need to form an online chapter of Underspenders Anonymous.


It was a tad painful powering up after the initial period of ER when it became apparent that Mr Market(aka time in the market) allowed an upward drift in expenses(ER Budget).

Mentally during the accumulation phase, I maxed 401/!RA and some mad money(a few good stocks) and partied frivolously on the rest(lived in New Orleans). First few years of 'unplanned ER' went way overboard on underspending until confidence gradually built that we were doing ok in retirement.

heh heh heh -
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Old 08-11-2012, 05:31 PM   #11
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It was a tad painful powering up after the initial period of ER when it became apparent that Mr Market(aka time in the market) allowed an upward drift in expenses(ER Budget).

Mentally during the accumulation phase, I maxed 401/!RA and some mad money(a few good stocks) and partied frivolously on the rest(lived in New Orleans). First few years of 'unplanned ER' went way overboard on underspending until confidence gradually built that we were doing ok in retirement.

heh heh heh -
But what do you spend it on now? If you spend much, you don't post about it. As I recall you don't own a mansion, an RV, airplane, or boat, and you don't spend a lot of money on international travel or living the Life of Reilly. I like that, and I think you live a terrific lifestyle, from what you have posted from your small house on the hill in Missouri.
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Old 08-11-2012, 05:40 PM   #12
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Pretty dumb definition if you are spending like a drunk sailor and still haven't overtaken the 99% barrier.
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Old 08-11-2012, 05:44 PM   #13
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So, if 30+% of my retirement budget is for traveling, entertainment, vacations, etc. then I am doing something right

Never had time when I was working...
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Old 08-11-2012, 05:57 PM   #14
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Look at the example in the article. Is any of us here like that? If so, I'll say you've got a problem.
They worked hard all their lives and managed to save $2 million...

Based on a very conservative withdrawal rate of 3%, they could easily afford to take $60,000 from their portfolio each year. Instead, they withdraw $10,000...

... neither has seen a dentist for several years. Eleanor needs hearing aids but won’t get them because they “cost too much.” Even though Martin’s eyesight is failing and night driving is difficult, they insist on motoring thousands of miles to visit their children because airline fares are “so outrageous.”
As for myself, if I spend at 3.5%WR, then by definition I am living exactly at my means, right? I don't have any problem, do I?
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Old 08-11-2012, 06:19 PM   #15
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The thing is that it is possible to be frugal to a fault. I think of my uncle and my now deceased aunt. They were always very frugal and lived very modestly and even on relatively small incomes saved quite a bit of money. So 50 years later they still lived in the same tiny house (which was fine) but then my aunt had health problems which ultimately resulted in amputations of both legs. Their house was not handicap friendly at all. It had one tiny bathroom that was not able to be used by someone in a wheelchair. They did eventually get in some help for a few hours of the day, but at night it was just my aunt and her husband (who was 90ish). My mother (in her mid-80s at the time) would go down there at night and she and my uncle would try to lift my aunt so you could go to the bathroom at night and it was very hard on everyone.

Ultimately my aunt had extremely uncomfortable last few years. She did take care of herself medically, but she lived in pain and deprivation when she and my uncle could have easily either moved to a more handicap friendly home or assisted living or could have even spent the money to try to convert their house to make it more handicap friendly. But she just couldn't stand to spend the money even though the money had been saved for "their old age."

The thing is that some people save money for "their old age" but when old age gets here and they need to spend some of it they are so used to not spending that they are just unable to spend it.
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Old 08-11-2012, 09:19 PM   #16
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I could see that if they were eating catfood and living under a bridge. But what if the retiree is living a perfectly fine life with everything he or she wants, and just is not blowing money right and left beyond that point? I don't know.
I think my parents-in-law were the inspiration for this article.

When gasoline gets "too expensive" (an arbitrary price based on my FIL's memories of driving in the 1950s) then all sightseeing trips are restricted to the radius of one tank of gas. Sometimes they even skip the hotel (driving for 6-8 hours) because it's "too much money".

They essentially live in the dark because electricity costs money. At night the entire room is dark with one small light for whoever's reading. Lighting the whole room? Frivolous.

My FIL refused to spend more than $5/month on Internet access (dial-up on a 28.8K modem in 2006). Then they moved to a FIOS area where the Internet is "free" with their "cable TV" and phone service. He thinks he's paying $100/month for the latter two and getting ISP broadband for free.

My FIL spent hours working on his Subaru's ignition problem. I finally backed out of it when I didn't have the special sockets to remove its spark plugs, but then my FIL embarked on an expensive Easter-egg troubleshooting pilgrimage to the auto parts store. Then "the kid" up the street (in his 20s) mentioned that he had an OBD-II fault-code reader. More trips to the auto-parts store. End result: $500 in parts and a week of troubleshooting before he called the tow truck. (I refused to tow him with any of our vehicles.) The problem cost a $30 relay and a $75 mechanic. But "those bahstids" at the garage are always ripping off the old folks.

My MIL spends hours of each week writing letters (you know, in an envelope with a stamp) to manufacturers to praise or complain about their products. She does this in the hope of receiving coupons. She's a scrivener for less than minimum wage.

When they were renting our house, they absolutely refused to spend any money on repairs or maintenance. We literally had to sneak in there when they were on vacation to replace toilet parts or to clean the carpets or even to prune some of the shrubbery. (By that point we needed helicopter-deployed chainsaws.) Of course when they eventually moved out we spent thousands of dollars (and a couple months without rent) hosting the parade of contractors through the property to get it livable for real humans.

I could go on and on. But this is how these people choose to live their lives. We're going to have to step in when one of them starts shopping for cut-rate surgery tools or second-hand dental picks.
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Old 08-11-2012, 10:05 PM   #17
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......My FIL spent hours working on his Subaru's ignition problem. I finally backed out of it when I didn't have the special sockets to remove its spark plugs, but then my FIL embarked on an expensive Easter-egg troubleshooting pilgrimage to the auto parts store. Then "the kid" up the street (in his 20s) mentioned that he had an OBD-II fault-code reader. More trips to the auto-parts store. End result: $500 in parts and a week of troubleshooting before he called the tow truck. (I refused to tow him with any of our vehicles.) The problem cost a $30 relay and a $75 mechanic. But "those bahstids" at the garage are always ripping off the old folks......
The secret to doing your own automotive work is knowing when to stop and take it to someone who knows what they are doing.
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Old 08-11-2012, 10:34 PM   #18
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The people being talked about here are no longer normal. They sound paranoid and antisocial.
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Old 08-11-2012, 10:50 PM   #19
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Wow. Sounds like some of the folks referred to on this thread would take the Four Yorkshiremen seriously and not as comedy.

My 'luxuries' above base budget usually involve travel (USA mostly, some Canada) and remodeling. I make use of nice motels(not super posh), meals out, and contractors when remodeling.

Still cannot pull the trigger on a last great act of defiance - ? sports car or similar adult toy.

heh heh heh -
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Old 08-11-2012, 11:27 PM   #20
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I have a great-uncle who was blue collar but he and my late great-aunt scrimped and saved and I'm told have considerable wealth. However, he is in his 90s and should be in a nursing home rather than living alone, but he is unwilling to go to a nursing home because it is too expensive. Meanwhile, rather than letting go of the purse strings and being properly taken care of he is living alone in squalor and dirty diapers and has alienated just about every human being who cares about him (and some who are just waiting for him to die to get his money). I fully expect that he will be found dead and will have suffered and his wealth will pass to those who attend his funeral out of obligation rather than grief. Really sad.
That's just sad.
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