Anyone else fed up of saving money for ER/FI?

[claire]

Is anyone else fed up of this?

The way ive been feeling lately is that saving money is one long compromise and im really getting fed up the mindset.

Its not really that I want to spend all my disposable income, far from it but sometimes i just think it would be nice to relax a bit and chill out when it comes to money instead of thinking i have to stick rigidly to the savings plan to acheive ER/FI. And then I look at the board and read the "hi I am" sectiion and think well whats the point anyway of saving when people are asking if 2 million is enough - i will never have that amount.

In short im fed up of constantly thinking about money and ways to save more, its not healthy i dont think .

Dont get me wrong im not interest in buying designer clothes or an expensive new car its just the little stuff really, the little stuff which would make a difference to health and temper but which really adds up.

I think it is difficult in this society when we are bombarded with the notion that spending money and buying stuff improves onself

Sorry to ramble on - anyone else feel the same?

 

[brewer12345]

Yeah, I got to that point about 3 years ago. Now I save what I will and I don't worry abut a few thousand bucks either way.

 

[MonarchDon]

Reminds me of the old saying "Live for today but plan for tomorrow" I always try and remind my self that life is short and there are more important things in life than money.

 

[PortlandDiehard]

Nice post. A few things to think about:

* The $1M or $2M number is a bunch of crap. You can retire on much less. Lots of people do.
* It's less motivating to sock away money early when expected returns are 6% than when they're 16%.
* ER doesn't mean sitting like a blob in front of the tube. It can mean doing some part time work. For many the goal of ER is to get out from the spiritual rot of 50 hours weeks browning one's nose.
* It's easy for those making $80K and above to be high-and-mighty about saving - they've got it. If you're pulling in $15/hr, it's all pretty hollow.
* Postponed happiness is a disease. Life is right now. I'd hate to think I traded my 20s and 30s for $100K. Those decades are worth more than that.

I'm the same way - obsessing about savings, etc. About a year ago, I said "heck with it", upgraded my apartment, eat out more, etc. I'm reducing my savings rate by about 25% in exchange for a better life. It's a good deal all around.

It's important to remember value. A cheap meal eaten with good company is priceless. An expensive meal eaten with poor company only gives indigestion.

Jon

 

[justin]

I look at it this way - let's say me and DW are both busy young professionals earning around $100k total. We currently save 60% of our income, or $60k/yr. What happens if we reduce the savings rate just a little to 56%? That gives us $4000 of extra money to indulge ourselves, while only marginally reducing our savings rate. It may add an extra few months or a year to our FIRE date, but who cares if the $4000/yr dramatically improves quality of life for the intervening years prior to FIRE?

I'd rather have 11 years working and enjoying myself (to the extent possible) than 10 years of painful scrimping and saving just to ER a year earlier.

I have to constantly remind myself of that, like I did yesterday when my similarly positioned coworker (with respect to earnings) was complaining about her cheap fiance who rinses and reuses ziplock bags. : There's a line between frugal/value conscious consumer and crazy. Rinsing out ziplock bags is on the crazy side of that line IMHO.

 

[haha]

Truthfully, it may be that many people who feel they saved their way to a very early retirement in reality just had a lucky ride on the Sotck Market Express.

To me, other than gifted and perhaps lucky entrepreneurship, probably the easiest route to ER, by far, is a good government job. The steadiness of it counts, as does the defined and COLA'd pension.

As for living now or living later, I would happily give up retirement to return to the non-stop party of my 20s. It didn't matter that I was working, what mattered was that I was having a lot of fun and life-experiences.

Ha

 

[d]

saving money is one long compromise

as is spending money

 

[macdaddy]

When I buy a stock I feel like I've made a purchase... same as a shirt or a new tie or a DVD... same chemicals released in the brain... but only when I pick out an individual stock or bond, not if I sink the money into an index fund. Sometimes I end up thinking "man I have spent a lot of money this week" just from that.

 

[aaronc879]

Nice post.  A few things to think about:

* The $1M or $2M number is a bunch of crap.  You can retire on much less.  Lots of people do.
* It's less motivating to sock away money early when expected returns are 6% than when they're 16%.
* ER doesn't mean sitting like a blob in front of the tube.  It can mean doing some part time work.  For many the goal of ER is to get out from the spiritual rot of 50 hours weeks browning one's nose.
* It's easy for those making $80K and above to be high-and-mighty about saving - they've got it.  If you're pulling in $15/hr, it's all pretty hollow.
* Postponed happiness is a disease.  Life is right now.  I'd hate to think I traded my 20s and 30s for $100K.  Those decades are worth more than that.

I'm the same way - obsessing about savings, etc.  About a year ago, I said "heck with it", upgraded my apartment, eat out more, etc.  I'm reducing my savings rate by about 25% in exchange for a better life.  It's a good deal all around.

It's important to remember value.  A cheap meal eaten with good company is priceless.  An expensive meal eaten with poor company only gives indigestion.

Jon

I make 15.xx/hr and I still max out my 401k and roth ira. It's not whether you make $100,000 or $40,000/yr, it's whether you're willing to LBYM. If you're not willing to somewhat sacrifice today for tommorow have fun working into your sixties or beyond but I gladly give up a little today to not have to work into my sixties...or maybe even fifties. You don't have to make six figues to do it. I'll never make more than 50-55K in today's dollars and i'll still be done by mid fifties or earlier.

 

[LOL!]

Is anyone else fed up of this?

The way ive been feeling lately is that saving money is one long compromise and im really getting fed up the mindset.
...
Sorry to ramble on - anyone else feel the same?

Yeah, I feel the same way.  So I'm done saving money for FIRE.  I now spend what I want, when I want.  I am improving myself at the same time. 

Maybe you should be Stumbling on Happiness instead as well?

http://www.powells.com/biblio/hardcover:sale:1400042666:17.46

 

[retire@40]

...In short im fed up of constantly thinking about money and ways to save more, its not healthy i dont think...

There are some people who save too much without enjoying life as it comes.

There are some people who spend too much without thinking of the future.

If you can find your sweet spot in between those two, you will find happiness.

 

[Rich_by_the_Bay]

Is anyone else fed up of this?

A great and honest post. I'm nearing FIRE so am closer to the payoff but have felt what you feel.

It's a hard call to make. I think several things can help:

* automate it as much as possible so you don't have to wince every time you set aside $$

* at the same time, automate a small carve-out for play money, then enjoy it once in a while

* there are so many variables in your financial future when you are young that getting off track on your savings once in a while by a modest or even immodest amount is no big deal. Just don't let it get wildly out of control

* as your income improves, don't save the entire increase, but rather just a portion of it; that way you can enjoy the raises as well as set aside more

* repeat ad nauseum how much a dollar saved now will be worth in 30 years.

 

[saluki9]

You have to strike a balance.

A couple months ago I started a thread about a friends wedding. My friend had decided to get married at a 5 star resort on an expensive tropical island.

Considering how carefully my wife and I plan our travel to save $$$ it was so strange to be spending so much for a 3 day trip. (it will cost me over $500 a day) Brewer, CFB, and Nords convinced me that travel is almost always worth it and I was foolish to think of not attending a friends wedding.

Well, I plunked down my mastercard and said what the hell, why not? It was hard to splurge on that while at the same time telling my wife to cut back in other areas. But the funny thing was that we had a market hiccup not long after that and I could see my portfolio "lost" several times what the trip costs me. Now that it's only a couple weeks away, I couldn't imagine missing it.

Life is short and can end very quickly, so it pays to learn to balance current desires with future desires.

 

[Andre1969]

I've learned to start distancing myself emotionally from the swings of the stock market, and the resulting flucutations that it causes on my portfolio. I used to get really excited when my portfolio would hit a new high, and then get kind of saddened when it would slump.

I'll admit, I still get excited when it hits a new high, but the slumps don't bother me nearly so much. For example, with this latest downturn, I'm probably off at least $20,000 from a new high I hit about a month ago. But I'm not worried about it. No, really I'm not.

Now, as for the "finer things in life", well I'm actually somewhat of a minimalist type of person. I'm not going to deprive myself to the point of starvation, or put off fixing an important repair on the house, but I'm not going to spend money on something just to make myself feel better. Sometimes that actually has an opposite effect on me, because then I feel like I wasted money on something I really didn't need. For instance, expensive food, wine, etc is often lost on me, where something that's less expensive will do just fine.

Sometimes I will fret a bit about a new purchase, such as the $255 monitor I recently bought, or the $188 air conditioner. But instead of just flat-out putting off a needed purchase (the existing monitor was on its last legs and the a/c I was replacing was built by Chrysler, which probably dates it to the late 70's) and suffering, I'll at least make the purchase, feel a bit of a flinch, but then not look back.

Basically, like others have said, it's all about balance. That perfect balance will vary from person to person, though.

 

[REWahoo]

So It's all about balance.

claire, you're getting some good advice about balance.

A friend of mine tells the story of walking down the street one afternoon and seeing a little shop entrance that said “Fortune Teller”. He walked in and a lady was sitting at a small table, laughing as she gazed into her crystal ball.

He walked over to her and slapped her face. Shocked, she shouted at him, “Why did you do that!!?"

Of course his response was, “I’ve always heard you were supposed to strike a happy medium.”

 

[sgeeeee]

Being frugal isn’t about sacrifice. It’s about getting as much as you can with as little money as possible. Frugality is about understanding the value proposition in every purchase and making the right deals to guarantee your satisfaction – both now and in the future. It’s about maintaining your quality of life while maximizing the value gained from money you spend. The value proposition the frugal consumer considers asks both 1) “What do I get if I spend this money right now?” and 2) “What do I give up in the future if I spend this money right now?” If you have any long-term goals or large ticket item dreams, then foregoing the immediate gratification will sometimes bring you the greatest value. Sometimes that frivolous, impulse purchase will.

 

[Canadian FIRE]

Ah yes, the balance issue.

I try to look at things this way.  I work damn hard for my money so I'm going to be careful how I spend it.  I want to FIRE by my 45th birthday, but I just bought a house that will more than likely extend that date by a few years.  Why?  I'm a home body that likes to fix things up.  My new house will be my entertainment and enjoyment for the next decade and will house my growing family for years perfectly.

So I might FIRE a bit later, but then again I might sell it for a huge profit and FIRE earlier than that.  Planning for the future is hard, because we save and hope, but no one can predict everything for the next 17 years.  You might get lucky and you might not.  Enjoy the ride and remember its the jourany that matters more then when you get to where your going.

CF

 

[VoyT]

Is there something specific going on, or are you just fed up with the general process?

 

[SteveR]

Spend what you need to live on in the manner you can accept as comfortable but save some percent of your income for your future. How much of each is up to you. Income is relative to your wants and needs. I agree that making $15/hour is different from $150/hour. The difference is in what you can save vs spend over your accumulation period. What is also true though is that the guy making $15/hr can save the same percentage of his income as the other guy; maybe more when you figure in taxes. The total amount will be different for sure but you can't compare these two incomes and the standard of living they can support. You can compare relative percentages of income saved and invested. The market does not care if you make $15/hr of $150/hr. You both have an equal chance to gain or lose your investment $$.

You're right. You can retire on less than $1-2 million. It all come down to how much you want to spend the rest of your life.

 

[Andre1969]

Is there something specific going on, or are you just fed up with the general process?

I wonder if this nasty little thing the stock market has been doing lately might be one source of discouragement? When the times are good, I know it gets exciting watching your nest egg get closer and closer to your goal. But what the stock market giveth, the stock market can taketh away. It can get discouraging to watch your total go down, only to invest more, and see it go down again. And again.

I went through a bleak period myself from about May of 2001 to maybe October of 2002. Even though the tech bubble started to pop in the summer of 2000, I was still investing enough into other funds, and my total portfolio was small enough that I was able to keep pushing it to new highs. I peaked out in October of 2000, and then things started to plummet soon thereafter. Then in early 2001 I invested about $10K more, and things started to come back up, so for May I hit a new high. But that summer it kept eroding, then the 9/11 tragedy hit, and it kept dropping from there. That was a really nervous time for me, and I kept wondering if I should keep investing or not. In the end, I'm glad I did though.

Who knows? We might be going into another bleak period, and if your young, a downturn of a year or more can seem like an eternity. Well, if you're older and lose alot of money in the downturn, I guess it can seem like one, too!

 

[justin]

I'm looking at this market correction as a buying opportunity. If it's a flat/down market for a couple of years, great! I get to buy in cheap.

 

[saluki9]

Andre has an interesting point. Its a interesting emotional tipping point when you realize that your monthly or annual contributions barely make a dent in your portfolio.

It can be hard to forgo that new TV, new car, etc when you can lose several times as much during a short time in your investments.

 

[justin]

When you put it in perspective, the market hasn't been that awful. When I got my monthly statement for May, I found I was only down around 3%, or $6000. That's not a whole lot more than what I invest per month. Sure daily losses of 2-3% hurt, but what really matters is long term performance.

 

[FlowGirl]

Set a budget for saving (AMount per month - that you can live with) - Once you save that amount, feel free to spend the rest. 

I've said it before, but C-Ts advice on this is what has worked well for us.  Money for retirement and other long term goals goes straight into investment accounts and whatever is left in our checking we are free to spend.  The result is that I no longer stress about splurging a little at the grocery store or treating ourselves to a nice meal out or having a soda out of the vending machine or taking a vacation.  It's very liberating.

When we came up with our retirement savings plan a few years ago we both agreed that saving more agressively was possible but not desirable.  We want some of our cookies up front, and we are not willing to spend the next 10-15 years sitting at home eating rice and beans just to shave a few years off our ER timeline.

We have no trouble affording most of what we want, its just a matter of time and budgeting and priorities.  Sure there are times when I wish we could just buy a big ticket item without having to plan and wait for it, but its not a huge deal and sometimes the wait is even good - keeps us from making silly purchases on a whim.

Definitely find balance, even if you have to cut back on savings a little.  If we were still focused on saving every cent, we would have gone nuts years ago and thoughts of ER would have fallen by the wayside.

 

[Rich_by_the_Bay]

I'm looking at this market correction as a buying opportunity. If it's a flat/down market for a couple of years, great! I get to buy in cheap.

That's an accurate assessment and you should feel good about sale prices.

At the other end of the pre-FIRE spectrum it emphasizes the importance of having a few years worth of cash socked away so that you can sit out a few rounds without tapping your treasure chest. I'd hate to have to sell stocks now for my next year's income.