Attitudes toward money

[athena53]

Maybe slightly off topic but I've been thinking how relative it all is too. For example, I'm spending around $50 on a new car and paying an extra $1000 for a different color paint doesn't faze me at all. Yet when I go grocery shopping, I'll still carefully look, and will choose one brand over another to save me $0.25.

That's me. I lost $500K on paper during the March/April crash last year. Very bad news, of course, but I waited it out. If I'd had more cash-equivalents sitting around I might have bought more.

And yet... I'm very careful to stay under 1 gig of data on my iPhone plan or it would cost me another $5 for the next gig. I was tickled at getting a $50 Starbucks gift card from e-Rewards this morning and I thought it was a splurge to upgrade to a higher-definition version of Netflix (my only streaming service, no cable) for $5 more/month when I bought a new TV. It's not a miserly life; I fly in Business Class on long-hauls, give generously to charity and enjoy spoiling my grandchildren, but those are high priorities.

I am convinced that all my frugal habits and my obsession with keeping recurring expenses reasonable is how I ended up as solvent as I am.

And you can't talk me out of it.

 

[Time2]

My daughter bought some pumpkin spice coffee creamer, I really liked it, so when I got home I bought some for myself, it lasted about 1 week, so, 52 x $4.79 = $250 a year. Hmm... do I like it that much?

On the other hand some days the portfolio is up or down $10k and I don't think much of it.
P.S. found it at Aldi's for $1.89, hmm... have to think about that!

 

[ProspectiveBum]

Maybe slightly off topic but I've been thinking how relative it all is too. For example, I'm spending around $50k on a new car and paying an extra $1000 for a different color paint doesn't faze me at all. Yet when I go grocery shopping, I'll still carefully look, and will choose one brand over another to save me $0.25.

I think an economist would say that this is perfectly rational. You mentally assign a utility to goods, and are willing to exchange money for perceived added utility. Getting the color of car you want is clearly worth $1,000 to you, but the difference in utility (taste, texture, enjoyment) between 2 brands of peanut butter isn’t worth the $.25 price difference.

 

[teachme]

Thanks, you all are funny and I can relate. Notice that my bulk paper towels have less sheets per package and am bothered by the drop in quantity but a 5% -10% drop in portfolio.... : yawn :

 

[Koolau]

I find myself obsessing more over the smaller things (a few cents/gallon on gas for instance) than the big swings I see in my monthly or quarterly statements. Not sure why, but that's where I live, I suppose. YMMV

 

[DrRoy]

Maybe slightly off topic but I've been thinking how relative it all is too. For example, I'm spending around $50k on a new car and paying an extra $1000 for a different color paint doesn't faze me at all. Yet when I go grocery shopping, I'll still carefully look, and will choose one brand over another to save me $0.25.

+1. Sometimes I wonder about doing the same thing. I believe it is whether you think you are getting something for the money. I'll spend an extra $100 or $1000 if I feel a benefit, but do not want to waste $1 for nothing.

 

[Andre1969]

I know my attitude about money is pretty inconsistent. I handle most of my expenses online, and use my credit card as much as possible, so I don't deal with a lot of cash. However, I guess my cash flow looks something like this

investments --> checking account --> cash in the house --> cash in my wallet

So if my wallet gets low, I refill it with the house cash. Or if I'm already out of the house, I might stop off at an ATM if it's convenient. If the house cash gets low, I hit the ATM, as well. And if the checking account gets low, I do a transfer from an MMA I have with a mutual fund company. And, if the MMA gets low, I sell off a bit from whatever mutual fund happens to be doing the best, at the moment.

But, for whatever reason, if my wallet gets low, or especially if the house cash gets low, I start feeling like I'm broke, somehow. I usually only pull cash out from the ATM $100 at a time, so it's not like we're talking about huge sums of money here. But, for whatever reason, when that cash runs low, I just feel broke. It's almost like I forget, for a moment, that there's more where that came from; I just have to make the effort to get it.

I also get that broke feeling, when the checking account gets low and has to be replenished, but it's usually not as severe. And, admittedly, when the MMA gets low, and I have to sell off some of the other funds to replenish it, I'm not a fan of that feeling either, but again, it lessens.

But it's odd, it's like the higher up the food chain I go, the less the mental anguish is. Maybe it just has something to do with the amount of time and effort involved? I actually have to make the effort to leave the house and drive to the bank, to pull out that $100, and that's about 35-45 minutes of my time. But to transfer the money from my MMA to my checking account only takes a few minutes. And the same, selling off some of the other funds to replenish the MMA.

The human mind can be a funny thing, sometimes. At least, I know mine can be!

 

[Spanky]

It seems funny that I find myself focusing on little things like credit card cash points, mileage points, sign up bonus, checking and saving sign-up bonus, fee, coupons, discounts, etc. It's so much to take your mind off and engage in something more fun, e.g., walking, hiking, pickleball, table tennis, and tennis as I am already FI and have a portfolio that I sleep well.

 

[RobbieB]

I know my attitude about money is pretty inconsistent. I handle most of my expenses online, and use my credit card as much as possible, so I don't deal with a lot of cash. However, I guess my cash flow looks something like this

investments --> checking account --> cash in the house --> cash in my wallet

So if my wallet gets low, I refill it with the house cash. Or if I'm already out of the house, I might stop off at an ATM if it's convenient. If the house cash gets low, I hit the ATM, as well. And if the checking account gets low, I do a transfer from an MMA I have with a mutual fund company. And, if the MMA gets low, I sell off a bit from whatever mutual fund happens to be doing the best, at the moment.

But, for whatever reason, if my wallet gets low, or especially if the house cash gets low, I start feeling like I'm broke, somehow. I usually only pull cash out from the ATM $100 at a time, so it's not like we're talking about huge sums of money here. But, for whatever reason, when that cash runs low, I just feel broke. It's almost like I forget, for a moment, that there's more where that came from; I just have to make the effort to get it.

I also get that broke feeling, when the checking account gets low and has to be replenished, but it's usually not as severe. And, admittedly, when the MMA gets low, and I have to sell off some of the other funds to replenish it, I'm not a fan of that feeling either, but again, it lessens.

But it's odd, it's like the higher up the food chain I go, the less the mental anguish is. Maybe it just has something to do with the amount of time and effort involved? I actually have to make the effort to leave the house and drive to the bank, to pull out that $100, and that's about 35-45 minutes of my time. But to transfer the money from my MMA to my checking account only takes a few minutes. And the same, selling off some of the other funds to replenish the MMA.

The human mind can be a funny thing, sometimes. At least, I know mine can be!

Hehe, I do the same thing (broker - MMA - cash in the safe - cash in the wallet) and yeah, when the wallet gets low I get nervous, can't buy lunch. Yes I can with credit card, but I don't like to use credit cards at eateries.

I bought the boat with cash from the safe, didn't even need to go to the bank. But the safe was then empty, so I'm getting $500 (max daily) from the atm (3 benjis, 10 jacksons) and putting the benjis in the safe.

Also getting to the end of the year so the MMA is getting low. Which means a call to the broker after Christmas.

Like annual clockwork -

 

[Winemaker]

I have mentioned this before in other threads. My local grocery gives gas perks as loyalty points, accumulating on purchases. For over 7 years, I have received "free" 30 gallons of gasoline. We use a SW credit card, and we qualified again for a companion pass for 2022. We have switched cards now to accumulate points on another airline card, last year we qualified for 2 visits to their flight lounge.

The portfolio is up 25% from 11/1/20. We are blessed and most thankful.

 

[NW-Bound]

My highest portfolio daily loss was close to $150K. My highest daily gain was almost $100K. Of course, these extremes happened when the market was in huge turmoil, and this has not happened recently.

It does not change how we shop. The other day while on a grocery errand, we saw select-grade T-bone steak for $4.99/lb. What the heck? How could it be? Of course we had to get a pack, and later it turned out to be fine steak, and we pat ourselves on the back for getting a good deal.

A couple of months earlier, we were at a supermarket when the butcher took out a cart full of pork tenderloins with a sticker saying "Manager Special $0.99". My wife picked one up and asked how many pounds the loin was. The butcher said "No, it's $0.99 each loin". WHAT THE HECK? He said they were near expiration date, and he had to get rid of them, and added that if we froze them, they would be fine. I don't remember how many my wife picked up, but this is how our two fridges are always full. The main one is 30 cu.ft., while the secondary one is 25 cu.ft.

We still won't pass up a bargain if we run across it. And the portfolio going up a 7-figure sum does not make me feel richer. Hopefully, when I lose a 7-figure sum I will not feel miserably poorer.

 

[NW-Bound]

^^^ My memory of $150K up day and $100K down day was not incorrect, but incomplete. Those numbers were before Covid.

I just looked back at my diary. On Thursday March 12, 2020, which was 3 weeks after the market set new high, and the US finally awakened to the pandemic that had been killing Europeans, I was down $165k, on top of $600K already down from the top. The next day, on Friday, I was up $120k. I guess bargain hunters swooped in on that day.

After the market digested more Covid bad news over the weekend, on Monday March 16, I was down $189k. And that's not the bottom yet.

I logged daily the total of my investable accounts, going back to pre-2000. I can look back and remind myself of these horrible days. What a ride!

 

[RetiredHappy]

NW-Bound, you have amazing record keeping, either that or your brokerage system allows you to get historical daily snapshot.

Last year was a blur because I did not want to think about when the market crashed in March. The only thing that I remember was 7-figure loss during the period, which has since recovered and more.

 

[NW-Bound]

As mentioned, I have been keeping a diary, in which I simply record the total from Quicken screen, which logs all accounts at different institutions. I use Quicken in order to have an overall view of all my accounts. I initially used MS Money, and when it became defunct I switched to Quicken.

Quicken does let me go back to any day in the past. However, having my own record allows me to scroll through the years very fast, compared to having to type in a date and waiting for Quicken to look it up. And my file went back to pre-2000.


PS. For more details, I have to look up the state of my accounts on a particular past date with Quicken. For example, going back to 2/12/2020, the day the market set a new high before it tumbled into the Covid abyss, I rediscovered that I had fortuitously reduced my stock AA. I had a decent return up to that point, and decided to cut back my stock AA. That was a great help, as I would have been hurt worse otherwise. And having more cash allowed me to buy back later. It could have been worse.

 

[Closet_Gamer]

I definitely value money differently in different pockets/situations. $35 for a steak at a restaurant? OK, and let's get the whole bottle of wine.

But at the store I cringe to spend $20 on a bottle of wine and shop the meat aisle like I'm on a pauper's pension. No toothpaste tube in the world undergoes torture like the ones in our home. My children make fun of my efforts to get every last bit of yogurt out a of tub.

I've also gotten myself in trouble with long term buckets. I'm a DCA person and I use different accounts for different large, long term goals. Expat'ing also requires us to be quite planful/more complicated as we manage accounts between the countries.

I looked up the other day and realized that if I added up the cash across my accounts rather than just the DCA plan within the each account, I had almost enough cash to buy my own house.

 

[ivinsfan]

Closet, I saw a story yesterday that said liquor store sales were up 10% in our state during the pandemic.

Most people think the opposite they now realize you can cook a steak and/or get takeout and have better quality and more drinks then buying booze when dining out.


I think restaurants are going to be in real trouble going forward. Booze is a huge money maker for most of them.

 

[NW-Bound]

The majority of the posters here are more frugal than the average Joes and Janes. Still, the Covid pandemic has caused an increase in savings rate, although we do not know how long that will last.

The following article is dated Aug 2021.

The U.S. personal saving rate — the percentage of people’s income remaining each month after taxes and spending — skyrocketed to a record 32.2% in April, up from 12.7% in March, according to the U.S. Bureau of Economic Analysis. At the same time, consumer spending fell 12.6% as the economy slowed down and unemployment rose.

Data from the Federal Reserve Bank of St. Louis shows the previous record American saving rate was 17.3% in May 1975, at the tail end of a recession spurred by rocketing gas prices, government spending on the Vietnam War, and a Wall Street stock crash. Over the last 10 years, it has hovered in the 6-8% range.

We have always done a lot of home cooking, and enjoy it more than going out to eat. Money is not the problem, but it's hard to be impressed with restaurant food, so we only eat out occasionally to have a change in scenery and atmosphere.

At the peak of the pandemic lockdown last year, my wife looked into learning to make French bread, something she had never done although she cooked so many dishes. We found out that flour was sold out, and yeast was nowhere to be found. Obviously, a lot of people had the same idea.

My wife eventually got the ingredients to learn to make French bread. And it was quite good, although the effort going into it was not worth it as we do not eat that much bread in order to limit carb intake. So, we are back to buying bread in stores, but my wife has acquired a new skill.

 

[daylatedollarshort]

I keep a spreadsheet of frugal projects, calculate the 40 year savings, how much time they take, and from that what am I "earning" per hour after taxes. Also if I find them fun or not. Something with big saving but I don't want to do like replacing my own floors, I wouldn't do that. I also wouldn't do backyard chickens. That seems like a lot of work for pretty small savings, unless you really like chickens.

Yesterday we dropped off ink cartridges for a $40 coupon, shopped at 99 Cents Only and then Grocery Outlet. We spent around $200 and saved $200 compared to local supermarkets for the same items shopping at the discount stores Or $240 in after tax money for a total of 1 - 2 hours of our time. I actually like grocery shopping, so for me that is worth it and the drive we take to those places is actually very scenic so it is a pleasant outing.

For items I can't get at those two places, I'll order online with free shipping or use free pick up or delivery service. Even with a nice tip for the delivery service driver, it isn't worth my time and gas to drive some place and spend an hour shopping for $10 - $15 savings (over the tip). I have other projects on my frugal list with higher earnings for me for that hour of time.

Small expenses that recur over decades really add up. We reduced our energy use by half with lots of little changes, and because we are on a tiered pricing plan, it reduced our gas and electric bill by 2/3s for the last ten years.

 

[aja8888]

I keep a spreadsheet of frugal projects, calculate the 40 year savings, how much time they take, and from that what am I "earning" per hour after taxes. Also if I find them fun or not. Something with big saving but I don't want to do like replacing my own floors, I wouldn't do that. I also wouldn't do backyard chickens. That seems like a lot of work for pretty small savings, unless you really like chickens.

Yesterday we dropped off ink cartridges for a $40 coupon, shopped at 99 Cents Only and then Grocery Outlet. We spent around $200 and saved $200 compared to local supermarkets for the same items shopping at the discount stores Or $240 in after tax money for a total of 1 - 2 hours of our time. I actually like grocery shopping, so for me that is worth it and the drive we take to those places is actually very scenic so it is a pleasant outing.

For items I can't get at those two places, I'll order online with free shipping or use free pick up or delivery service. Even with a nice tip for the delivery service driver, it isn't worth my time and gas to drive some place and spend an hour shopping for $5 - $15 savings (over the tip).

Speaking of chickens....

When we lived in California, our second home was zoned horse property and was equipped with all the required stuff to board and train horses.. We had my daughter's Quarter Horse there and one day at the feed store, my daughter, 14 at the time, saw some baby chicks for $0.50 each. Well, she talked dear old Dad into buying two of them (unknown sex, of course) and they turned out to be two Rhode Island Red hens!

Well, I built a chicken coop for those little gals but they decided the horse stall was "home" and would hang out there at night with Blue Badger Hoy, my daughter's mare. The horse liked the company!

During the day, the two hens had the run of the yard and would feast on snails (a southern California thing). And they would eat chicken scratch occasionally. When the two hens got old enough, they would lay eggs under bushes, in a empty horse stall, and in the hay barn, but not in the chicken coop. Every morning, before I went off to work, I would stop by and hunt down the eggs and give them to my sister and Mother who were living at the house at that time.

We had eggs for quite a long time!

 

[brett]

We are frugal to the extent that we typically purchased based on value, not price.

Always willing to pay more for higher perceived value.

 

[Stormy Kromer]

Closet, I saw a story yesterday that said liquor store sales were up 10% in our state during the pandemic.

Most people think the opposite they now realize you can cook a steak and/or get takeout and have better quality and more drinks then buying booze when dining out.


I think restaurants are going to be in real trouble going forward. Booze is a huge money maker for most of them.

I thought of this post after I took DW out to dinner the other night. First time really since the COVID shutdown. Two beers and two sandwiches later the bill came to $84. It actually bothered me a bit. Then I looked at our portfolio gains for the month of October and I could buy a small liquor store. I guess its all relative.

 

[street]

^^^ My memory of $150K up day and $100K down day was not incorrect, but incomplete. Those numbers were before Covid.

I just looked back at my diary. On Thursday March 12, 2020, which was 3 weeks after the market set new high, and the US finally awakened to the pandemic that had been killing Europeans, I was down $165k, on top of $600K already down from the top. The next day, on Friday, I was up $120k. I guess bargain hunters swooped in on that day.

After the market digested more Covid bad news over the weekend, on Monday March 16, I was down $189k. And that's not the bottom yet.

I logged daily the total of my investable accounts, going back to pre-2000. I can look back and remind myself of these horrible days. What a ride!

You made me look and see if I had anything documented for March 2020. And I did. I have a note for a one day loss on March 9th 2020 of $528,000. I do not track everyday but significant or extraordinary events I may look and track or document the event.

 

[ivinsfan]

I thought of this post after I took DW out to dinner the other night. First time really since the COVID shutdown. Two beers and two sandwiches later the bill came to $84. It actually bothered me a bit. Then I looked at our portfolio gains for the month of October and I could buy a small liquor store. I guess its all relative.

Well yes I could start my wood burning outdoor fire pit by burning a 50 dollar bill but that doesn't mean I'm going to it. I would never miss that 50 either.

 

[NW-Bound]

You made me look and see if I had anything documented for March 2020. And I did. I have a note for a one day loss on March 9th 2020 of $528,000. I do not track everyday but significant or extraordinary events I may look and track or document the event.

Well, the more you lost, the more you had. I mean you had to have a bigger pile to lose $528k in a day.

Just to think that the really fat cats in the world, they win or lose tens of billions in a day. The amount is mind boggling.

I guess virtually all of the billionaires of the world are LBYM. How can they spend 4% WR each year?

 

[Koolau]

Well, the more you lost, the more you had. I mean you had to have a bigger pile to lose $528k in a day.

Just to think that the really fat cats in the world, they win or lose tens of billions in a day. The amount is mind boggling.

I guess virtually all of the billionaires of the world are LBYM. How can they spend 4% WR each year?

Yeah, if their money were in cash, they could only count it by weight in 18-wheelers. YMMV