LBYM: do we have to do without then?

[kaudrey]

I agree - everyone has different levels and ways of LBYM - so you are right that people shouldn't get jumped on for spending money on things they enjoy.

I consider myself pretty frugal (I save 30% of my salary), but I spend on things that are important to me - which mostly means travel and entertainment costs (my friends and I go out a lot). I bargain shop for clothes, buy used cars, and brown bag my lunch - but call me up for happy hour and I have no problem with it. I have learned over the years that balance is the key and sometimes my first reaction can't be "it costs how much?"

 

[Hamlet]

Deciding how to spend their money is all about a person's values and goals.

If a person loves their job and can't imagine not working, and doesn't have any major financial goals that require large amounts of savings, there is really no reason for them to save beyond the basics of having an emergency fund, adequate insurance (disability especially), and a modest portfolio for retirement. They can happily spend 90% or so of their income and be on track to meet their goals. If their income is even moderately high, this should allow them to spend in a way that appears frivolous to most of this board's members.

On the other hand, if a low-income family of six wants to own their own antique farmhouse in the country on a single salary, some more extreme LBYM techniques are going to be required (see the Tightwad Gazette).

Most people who have financial goals between these extremes should find a balance between these extremes.

 

[Milton]

If a person loves their job and can't imagine not working, and doesn't have any major financial goals that require large amounts of savings, there is really no reason for them to save beyond the basics of having an emergency fund, adequate insurance (disability especially), and a modest portfolio for retirement.

I agree, but would make one minor point: most disability policies terminate benefits at a certain age of presumed 'normal' retirement (e.g., 62 or 67). Accordingly, it would be prudent to ensure that the "modest" portfolio is sufficient to allow for the possibility of involuntary retirement beyond the end of LTD coverage.

 

[donheff]

I don't know Orchid. There are a lot of us on the board who have mentioned travel budgets that some of the most frugal posters could live on. DW and I lived below our means, and saved a lot, and worked a few more years than we had to so that we could live large in ER. Still below our means, but certainly not a spartan existence. And we do entertain.

 

[Orchidflower]

I think of my investing professor who said if he spends even a penny in the day, he goes home and records it in the computer at night. He also said "money isn't everything"...pause here..."it's the only thing." I can't decide whether that's sick...or just sad to think that way.
He was so into his philosophy that he actually makes fun of people who study art, psychology or anything other than finance. He sees anything other than the study of finance a total waste of time. Sad or sick?

Yeah, donheff, lots of people are afraid to roll with the natives in other countries and gasp! eat the local foods, so they spend to stay in a Ritz Carlton in Paris instead of what I would do, which is stay in a pension--cheaper, more fun and you get to be with the native French that way. I don't get the big travel budgets either, but I like to act like one of the locals always and stay where they stay, eat what they eat and do what they do. I've got great stories to tell my grandkids now if I ever get some...ha!

 

[W2R]

LBYM doesn't mean we should seek virtue in masochistic self-deprivation. In fact, I think it's easier to be thrifty if you indulge yourself by rationally choosing to buy a few things that really matter to you a lot.

Introspection and knowing yourself can really help in LBYM, because if you know the difference between need and want, and if you know what items you want the most, you can make wiser decisions.

You can have plenty of things, but not everything. So, buy what you actually need, and then buy what you really want a lot, but stop before you spend more than your goal. Easy. No deprivation required.

I love my plasma TV. But I did without a lot of other stuff that I didn't want as much, so that I could afford it. Yikes, I'm beginning to sound like Suze Orman. Better quit.

 

[W2R]

I think of my investing professor who said if he spends even a penny in the day, he goes home and records it in the computer at night. He also said "money isn't everything"...pause here..."it's the only thing." I can't decide whether that's sick...or just sad to think that way.
He was so into his philosophy that he actually makes fun of people who study art, psychology or anything other than finance. He sees anything other than the study of finance a total waste of time. Sad or sick?

Far be it from me to judge a professor I don't know.... but.... I have always been able to achieve my financial goals without recording every penny I spend. I give myself an allowance for that sort of stuff, instead. I do keep track of my bills, and check my bank account daily to keep track of debit card purchases and checks, but every penny? To me that's a waste of time.

 

[Moemg]

Maybe I'm wrong but what I got from this it's okay to LBYM's but don't do it at a cost of alienating your family and friends . Spend that money on air fare to see your children and grandchildren . Give gifts when appropriate and invite friends over for dinner . The money you spend will produce much better returns than any stock .

 

[Calgary_Girl]

I, for one, don't plan to dress like I belong at Good Hope Mission or drive a 25 year old car that might break down in the hood or not eat healthy, balanced foods--with real meat--or go to the annual Thanksgiving dinner here that some charitable fellow sponsors just to LBYM (that would be me and all the other people on food stamps at the meal if I went, which I won't). And, believe it or not, I know a couple with money who lived in the tony neighborhood I'm in now that actually went to this free dinner every year, which, to me, says not only are they moochers but have no pride. Is this just my perception or is the LBYM philosophy?quote]

I see you've met my uncle. The guy has over $1 million in the bank and owns a few houses that are worth another $1 million. I've actually seen him a few times picking out empty pop cans from the recycling depot at the local store. I knew he was a tightwad but that's taking it to a whole new level!!!!

 

[Orchidflower]

To simplify: "Tight with your money, tight with your love" is an old saying, and one that applies often.
I only did this post as I read how too many seem so delighted that they can live subnormal and deprive themselves, and I ask myself "for what purpose is this?" Why take pride in looking like crap all the time, living in a cruddy apartment when you can live in a decent home, eating mediocre meals? I've known one too many of these myself, and I see no glory in this lifestyle.
My parents had a friend who was some IRS employee with an accounting degree. Really smart guy who did the taxes of a fellow who owned an apartment building, so he did his taxes in return for a 3rd floor walkup apartment. How wonderful to draaaaaag your groceries up 3 flights all the time, and draaaaag your laundry down to the wash in the basement.
Then they ate poorly to me like a sandwich for dinner or some other cheap dish like mac n' cheese. Nothing wrong with a sandwich or mac ' cheese, but they never ate good meat with nice side dishes. Always some cheap meal every day.
The wife work handmade clothing, which would be okay IF she was good at it. Her clothing looked handmade and, frankly, crappy, and heaven only knows they weren't stylish.
Never took nice vacations, never went to the movies or out to eat at a decent restaurant.
They had no kids, but by God! they had tons in the bank, which the wife used to brag about all the time.
So, here you have a woman who dresses like crap, never in style and dowdy, crappy cheap food to eat and living in a 3rd floor walkup, no social outlets hardly but with tons and tons of money in the BANK. Big deal. That is not living to me.
I see no glory in living so below your means that you live like this. I am certainly not impressed by it at all or their tons of money in the bank. The banker might be, but I'm not.
Well, I know a couple people who are impressed by all this depriving themselves: their niece and nephew who inherited it all. I'm sure they've had a ball blowing the money that their cheap Aunt and Uncle scrimped for all their lives.
Sometimes the love of money is a total sickness.
Most of us on here subscribe to living beneath your means and saving, but not at the expense of living a decent quality life, I hope.

 

[kumquat]

To me FI means you have enough to live the way you want. If you want to live in a trailer and eat beans, great. If you can afford the private jet and penthouse in Paris, that's great too.

Enjoy what you got.

 

[CuppaJoe]

I think of my investing professor who said if he spends even a penny in the day, he goes home and records it in the computer at night. He also said "money isn't everything"...pause here..."it's the only thing." I can't decide whether that's sick...or just sad to think that way.
He was so into his philosophy that he actually makes fun of people who study art, psychology or anything other than finance. He sees anything other than the study of finance a total waste of time. Sad or sick?

....

What category would your professor put the study of Dickens?

"Annual income twenty pounds, annual expenditure nineteen nineteen six, result happness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

- Micawber in David Copperfield

 

[spideyrdpd]

Is the problem the 3$ latte or the 3000$ tv's

 

[Nords]

I agree. Regardless of how much money I have, I am always conscious of value.
For me, the question(s) is not "can I afford it?", but "do I really want it? Is it worth the asking price?".

Beyond that, if you consciously make each spending decision with a careful deliberation of the value it will bring to your life (enjoyment. "karmic benefit" from helping others, re-investing to help enhance your future financial security, etc), then you've gone the rest of the way.
I think in terms of marginal utility. Will these bucks spent on supplies to build an airplane bring me more happiness than if I spent more money on the next best use? If so, then it's okay to plunge ahead.
A huge benefit of being retired is the freedom to make decisions which please you and to care a lot less what other people think. That even includes our friends on this very board. My signature line says it more succinctly . . .

Orchid, there's a big difference between "LBYM frugality" and "deprivation". I think that if you're pursuing your values then you're doing the first. If you're "doing without" then you're doing the latter.

These days I spend more time on life simplification than on saving. For example, instead of clipping coupons we've struck a deal with our teen to let her find/clip the coupons so that we can split the savings with her. Personally I'm pretty happy to dress down and teach our kid the finer points of dumpster-diving. As ClifP can attest, I find dressing for success to be a pretty stressful & uncomfortable experience without much benefit-- I'd rather do without!

People on this board are not LBYMers, they are LBYM fanatics!

The fact that you express this sentiment here makes me fear that you haven't been reading SimpleLiving.net. The thread on the broken glass in the peanut butter, in particular, is one example of crossing from straightforward frugality to short-sighted dangerous deprivation.

http://www.early-retirement.org/forums/showpost.php?p=317941&postcount=16

 

[Rich_by_the_Bay]

I feel a little guit for ponying up for a travel trailer, but otherwise I am happy to achieve balance while still enjoying life. But it has taken me a while to get there.

[hijack]So, what'd you buy?[/hijack]

 

[Shawn]

I only did this post as I read how too many seem so delighted that they can live subnormal and deprive themselves, and I ask myself "for what purpose is this?" Why take pride in looking like crap all the time, living in a cruddy apartment when you can live in a decent home, eating mediocre meals? I've known one too many of these myself, and I see no glory in this lifestyle.

I don't understand this. While I think you make some good points, you seem to be a little critical towards people who do not live by your standards (whatever those standards may be). Why do you believe a person is depriving themselves if they live a subnormal life? Who is to decide a subnormal life?

While I don't live in a cruddy apartment, I live in what some might call a "cruddy" house. But it's in a quite neighborhood, safe for pets, no crime, with good neighbors. What more do I need? My 9 inch television is 16 years old. It's been perfect for me. It has a rubber-band around the remote to keep it from falling apart. This doesn't have the slightest impact on my enjoyment of TV. I buy my clothes at Walmart and Target (and the thrift store), just like millions of other people. Some people may say that my $10.99 jeans and $5.99 T-shirts make me look like crap. But my clothes are comfortable and last a long time. Why do I need more? My 28 year old car does what a car is supposed to do. It gets me to where I want to go. When I have a choice of restaurants, I pick fast food. It tastes good. It's what I like.

I do not spend my money on things that I do not value. I have no desire to impress other people in this way. This is not deprivation. It is contentment.

 

[dumpster56]

I don't understand this. While I think you make some good points, you seem to be a little critical towards people who do not live by your standards (whatever those standards may be). Why do you believe a person is depriving themselves if they live a subnormal life? Who is to decide a subnormal life?

While I don't live in a cruddy apartment, I live in what some might call a "cruddy" house. But it's in a quite neighborhood, safe for pets, no crime, with good neighbors. What more do I need? My 9 inch television is 16 years old. It's been perfect for me. It has a rubber-band around the remote to keep it from falling apart. This doesn't have the slightest impact on my enjoyment of TV. I buy my clothes at Walmart and Target (and the thrift store), just like millions of other people. Some people may say that my $10.99 jeans and $5.99 T-shirts make me look like crap. But my clothes are comfortable and last a long time. Why do I need more? My 28 year old car does what a car is supposed to do. It gets me to where I want to go. When I have a choice of restaurants, I pick fast food. It tastes good. It's what I like.

I do not spend my money on things that I do not value. I have no desire to impress other people in this way. This is not deprivation. It is contentment.

28YO car? What is your ride?? How many clicks on that odometer?O0

By the way I thought I was the only one who thought that way about the TV!!!

No big screen for me, not that interested. I like going to see a movie at the movies.

 

[aaronc879]

It's all about priorities. One person mentioned dressing "in style". Nothing ranks lower on my priority list than dressing in style. I haven't bought a new shirt in years and buy 1 or 2 pairs of jeans per year, that's it. I get 1 pair of free shoes per year from work and haven't bought a pair of shoes for 8 years. My order of priority is 401K to max, then roth to the max then I can spend on entertainment. With an income of only $45K/yr there's not much left for entertainment. If I made $75K+/yr I probably wouldn't save any more money and would go on better vacations and such but I don't make that kind of money and retirement savings is more important to me at least at this stage of my life. I grew up so poor I don't want to be pushing 60 and still in debt like my parents. Nothing is more important to me than financial independence. It gives me piece of mind which keeps me sain.

 

[rogersteciak]

I save money in a counter-intuitive manner -- I don't use "money saving" coupons. If I could use a coupon to save $1 on a $10 item, for example, I might find myself "spending $9" to "save $1" if I'm not careful. So I resist the urge to use coupons to make sure I only buy stuff I really need.

Another way I save money is I've never had a cell phone or subscribed to cable or satellite TV. I've managed to survive for decades without any of these items, so what's a few more years of not having them? I have no idea what I'm missing, although I understand from what's on TV that I'm not missing very much. But based on all the saved money I'm able to invest, I'll probably be able to afford all of these goodies someday without any strain on my budget.

 

[HFWR]

Good post!

LBYM means not buying stuff you can't afford. Unless you have unlimited funds, this will involve a value judgement - "what is important?"

 

[rogersteciak]

I think of my investing professor who said if he spends even a penny in the day, he goes home and records it in the computer at night.

I also record every penny I spend, but only indirectly so that it's easy to do.

When I buy groceries, for example, I get an extra $10 - $50 of cash back that I use for walking-around money during the week (I have a debit card with the supermarket where I shop for groceries). I record this purchase as "groceries + cash" in my spreadsheet and the walking-around money is already spent as far as my accounting system is concerned (even though the cash may stay in my wallet for weeks before I actually spend it on something).

I do my accounting this way because I would rather focus on my incomes and outgoes overall than where every penny goes. I found that I would always forget to record every penny that I spend, but this method of "considering my cash-back money spent as soon as I get it" is easy and automatic to implement.

I also make sure I only spend the walking-around money on things I really need. Spending $3 a day on Starbucks coffee, for example, is equivalent to many thousands of dollars of retirement money over a lifetime (which is why I rarely go to Starbucks, even though the coffee there is delicious).

 

[growing_older]

I agree some folks seem to take LBYM too far. I read a book a while ago about someone who was living on almost no income as a choice to "drop out" of the rat race and their version of LBYM included living in an unsafe house with holes in the floor while they searched for free materials to repair them. No way I'm doing that. Likewise I know people who try so hard not to spend any money they are always quibbling about bills and trying to take advantage of others. Again, no thank you. I don't want to live like that.

I suggest LBYM means different things to different people. I consider myself solidly (if not fanatically) LBYM. I could easily afford many things my neighbors spend money on, but I choose not to and save the money instead. On the other hand, I freely spend for those things that are important to me. I suspect everyone has different interests, so the LBYM spending is different for everyone. I live in a very nice but no McMansion house in a neighborhood full of Mercedes, Volvo and BMWs. I drive an old pickup truck. I have an old TV with no cable, but high speed internet. I used to be a wine snob, but my favorites are all way too pricey now, so I'm just a hobbyist exploring midprice wineries and looking for excellence at reasonable prices. I have simple tastes in food but no budget and freely buy top quality fresh ingredients at any price instead of processed and frozen convenience. Everyone on my block has a lawn service but I cut my own (sometimes less than I should). My clothes are not fashionable and I prefer casual, but they are always clean. I'd rather host a party than go out to a restaurant, but if we do go I tip generously and contribute more than fairly to any joint bill - or maybe just pick up the whole tab. There's a difference between cheap (tight) and LBYM in my opinion. My kids won't see much in the way of video games or fashion clothes from me. But I'll sponsor them for teams and activities and contribute to scholarship funds so others can join in too.

To me LBYM means I can choose what I value to spend my means on, but that also includes choosing NOT to spend on things I don't value. One of my values is saving for retirement (and financial freedom) so I make sure to include that.

 

[haha]

I respect frugality, but if I didn't have to practice it I would not. And I don't practice it any more vigorously than I feel I have to.

I am old enough to realize that things which are pleasures now may not always be. I don't happen to like Starbucks Coffee, but there are other coffee houses that I do like. I enjoy them as often as I think I can afford to, as I know plenty of older men who don't seem to enjoy much of anything.

We get conned into thinikng that life is continuous, or even cyclical. It isn't. It has huge discontinuities, and as we age most of them are negative.

So gather ye rosebuds while ye may... within of course your own comfort zone.

Ha

 

[Average Joe]

Minimalism is delightful. Modesty wears comfortably. Simplicity brings freedom. Possessions can be weights that hold us back or drag us down. Learning to be happy with little is satisfying.

On the other hand, reveling in one’s own self control or in one’s ability to be satisfied with little can itself become a kind of vanity. One can take excessive pride in one’s humility. And a self conscious aversion to impressing others can become a sort of non-exhibitionist exhibitionism.

Maybe it’s like my granddad used to say: “People are just no damned good.”

 

[unclemick]

We get conned into thinikng that life is continuous, or even cyclical. It isn't. It has huge discontinuities, and as we age most of them are negative.

So gather ye rosebuds while ye may... within of course your own comfort zone.

Ha

A generic baloney/mustard sandwich from the day old bread store - chased down with a Michelob.

It's the contrast!

heh heh heh - cheap bastard on the ho hum - plurge on the passion of choice - tech toys, food, whatever.