Thoughts on money, finances and life

[Chuckanut]

I found this link on the Humble Dollar website.

https://www.fool.com/retirement/2019/01/19/12-quotes-that-will-make-you-rethink-your-personal.aspx

My favorite is the same as Mr. Humble himself


“No. 3: The price of anything is the amount of life you exchange for it. -- Henry David Thoreau
A good way to help yourself spend less is to think of the costs of various things in terms of the hours you work for them. For example, if your earnings average about $25 per hour at your job and you're about to buy a $200 coat, ask yourself if it's really worth eight hours of your life -- a whole workday. If you're tempted by a $3,000 dining room set, does it seem worth 120 of your hours? That's probably 10 to 15 days' worth of work, representing two or three weeks out of the whole year. Putting the price of things in perspective can help you make better spending decisions.”

 

[Backpacker]

Your money or your life, Vicki Robbins and Joe Dominguez. Got my attention and thinking in those terms.

 

[daylatedollarshort]

I don't work these days but I agree with the basic concept. What I do instead are little thought exercises like what is the best or at least a really good use of an extra $10, $20, $50...$10K? Some of the winners for me: $20 bought us a senior pass for 280 state parks. $10 buys two pounds of shrimp on sale.

 

[Music Lover]

For example, if your earnings average about $25 per hour at your job and you're about to buy a $200 coat, ask yourself if it's really worth eight hours of your life -- a whole workday.

And of course, it's really more than a day of work because you're buying that coat with after tax income. You can also work several days for the jacket if you divide disposable income by hours worked

 

[robnplunder]

Not very impressed with the article although I lived by #4 (don't borrow money) when I was still working. I suspect many in this forum are financially well off without following many of the rules in the article.

 

[Nick12]

If everyone thought like us early retirees and saved and planned for the future, the entire USA economy would collapse.

 

[Slepp]

If everyone thought like us early retirees and saved and planned for the future, the entire USA economy would collapse.

That is very true!

Slepp

 

[DrRoy]

No. 2: A budget is telling your money where to go instead of wondering where it went.

I have never really had a budget, but I was so careful with $ that I always had some left over.

 

[iloveyoga]

I have never really had a budget, but I was so careful with $ that I always had some left over.

I agree. I always feel a little guilty when I read about all the budgets and tracking that people do. I just made sure our outflow was much less than what we had coming in.

 

[Onward]

Vicki Robbins & Joe Dominguez, along with Terhorsts, Kalderlis, Malkiel, & Bogle, were the architects of my FIRE.

 

[old woman]

I always compared the cost compared to income after normal expenses. For example you have $200 a month left after housing, medical, food, transportation and you want to spend $1,000 on a splurge item it is 5 months of excess income.
Now retired is different, my income isn't steady so no clue what I might get this year. Do I count SS and RMD or also dividends and interest or gains in investment I don't sell? So my wasted money is really just reducing my future investment income.

 

[street]

I agree. I always feel a little guilty when I read about all the budgets and tracking that people do. I just made sure our outflow was much less than what we had coming in.

Me too.

 

[audreyh1]

Somehow I didn’t have too much trouble saving and limiting buying stuff while I was working and investing. Probably because I was working so much. But I also didn’t buy a bigger house or remodel or upgrade my car. Debt was limited to a mortgage. As my income grew I didn’t automatically spend more, and vacations were rarely lavish.

But once I retired that all changed! I still don’t buy much stuff as we don’t have room for it. We live in a small home, drive one car. But there are lots of ways to spend money that don’t involve accumulating stuff. With the market often moving up and down way more than our annual spending there is no longer any relationship between time it took to earn money to spend - it’s quite ephemeral.

Now it’s simply a matter of what my income is each year from investments and how to put it to good use. I don’t withdraw more than is prudent/sustainable according to the models I have run, so once I withdraw it I don’t sweat spending it. Then it’s just a matter of priorities in how we spend.

 

[Rianne]

FIREcalc allows us @ $80-85K to spend a year for 40 years. We spend, if a normal year, $62K/yr. I followed our spending habits for 5 years, since 2013. I like the cushion but have no plans to actually spend that. We take great vacations and live frugally but it's the way we choose to live. We blew that dough when we remodeled our house, complete remodel. But that's unusual spending.

 

[Willers]

“No. 3: The price of anything is the amount of life you exchange for it. -- Henry David Thoreau

Living in Wisconsin for many years, we used to put purchases in terms of fish fry's. We used to say, you know that's 10 Friday fish fry's. It helped remind us that every purchase is a trade-off. It also added levity to the discussions.

 

[Mdlerth]

They forgot to include Jack Handey

Not a bad list, but I suspect little of it would be news to folks here.

Also, I'm not convinced that "borrowing is robbing your future self" (attributed to one Nathan Morris). Borrowing to squander is foolish, but there are countless examples of borrowing where the benefit exceeds the interest cost so "one's future self" will be better off.

If everyone thought like us early retirees and saved and planned for the future, the entire USA economy would collapse.

Would it really? More likely it would simply adapt.

 

[Lsbcal]

Somehow I didn’t have too much trouble saving and limiting buying stuff while I was working and investing. Probably because I was working so much. But I also didn’t buy a bigger house or remodel or upgrade my car. Debt was limited to a mortgage. As my income grew I didn’t automatically spend more, and vacations were rarely lavish.

But once I retired that all changed! I still don’t buy much stuff as we don’t have room for it. We live in a small home, drive one car. But there are lots of ways to spend money that don’t involve accumulating stuff. With the market often moving up and down way more than our annual spending there is no longer any relationship between time it took to earn money to spend - it’s quite ephemeral.

Now it’s simply a matter of what my income is each year from investments and how to put it to good use. I don’t withdraw more than is prudent/sustainable according to the models I have run, so once I withdraw it I don’t sweat spending it. Then it’s just a matter of priorities in how we spend.

Totally agree.

Many here (but not all) are so responsible and such lifelong savers that the risk is on not spending what they worked and invested for.

 

[Closet_Gamer]

I found this link on the Humble Dollar website.

https://www.fool.com/retirement/2019/01/19/12-quotes-that-will-make-you-rethink-your-personal.aspx

My favorite is the same as Mr. Humble himself


“No. 3: The price of anything is the amount of life you exchange for it. -- Henry David Thoreau
A good way to help yourself spend less is to think of the costs of various things in terms of the hours you work for them. For example, if your earnings average about $25 per hour at your job and you're about to buy a $200 coat, ask yourself if it's really worth eight hours of your life -- a whole workday. If you're tempted by a $3,000 dining room set, does it seem worth 120 of your hours? That's probably 10 to 15 days' worth of work, representing two or three weeks out of the whole year. Putting the price of things in perspective can help you make better spending decisions.”

Good article for people seeking to establish core life and financial disciplines.

I agree with the "how many hours your life does it cost?" thinking, tho that tends to be a negative mindset. Equally important is "how many hours of your life will you get benefit/enjoyment from it?"

We like eating out -- especially with our kids -- but its really a pretty low-benefit use of quite a bit of money.

I have a very nice car in the garage. It makes me smile every time I get into it and just about every time I drive it. I will hopefully keep it for many years.

On an amortized cost basis, it will probably cost $500-600/mo to have that car. Last night we took the kids to the local sushi joint and it cost $100. The more expensive-in-hours car is actually a much better deal than the less-expensive-in-hours meal.

 

[NYEXPAT]

I am retired but my wife still works. If I thought in these terms, I would spend money wily/nily just to keep her out of the house!

 

[Perryinva]

Borrowing can make you rich. Silly sweeping statements. Most is common sense. My most expensive car purchase (which WAS cash) has been my second least expensive overall cost per month. Bought last car with 0.5% financing. OBVIOUSLY, Took the max for 5 years, even though I easily could have paid cash. Duh.

 

[Nick12]

Totally agree.

Many here (but not all) are so responsible and such lifelong savers that the risk is on not spending what they worked and invested for.

You got an AMEN here from Florida!

 

[Sojourner]

Many here (but not all) are so responsible and such lifelong savers that the risk is on not spending what they worked and invested for.

Very true. This is exactly what I struggle with. Almost every day I find myself thinking about getting the best possible deal on something or another (or bemoaning the fact that I overpaid or might end up overpaying for something), even though FIRECalc says I can spend much more than I do each year. I'm really not sure my LBYM mindset will ever fundamentally change. That's good in a way, I guess, but it would be nice if I could get comfortable loosening up the purse strings a little more and enjoying the spoils of my good fortune while I'm still young and healthy enough to do so!

 

[daylatedollarshort]

Totally agree.

Many here (but not all) are so responsible and such lifelong savers that the risk is on not spending what they worked and invested for.

I can't speak for others but my goal in optimizing spending is to have an even better retirement than what we planned for with lower expenses. Based on other recent threads, most posters here are not into frugalness through deprivation, but instead just getting the best value for their money, like taking trips with credit card points or being retired and taking advantage of last minute trip deals.

This week if the weather is nice we will use our 33 Napa wineries for 2 for $100 passport from Costco. The point is not to stay home instead of going wine tasting in Napa but to go, use the passport and save the $1.5K+ on regular priced tasting fees for some additional events, also bought at a deep discount.

 

[misty57]

I can't speak for others but my goal in optimizing spending is to have an even better retirement than what we planned for with lower expenses. Based on other recent threads, most posters here are not into frugalness through deprivation, but instead just getting the best value for their money, like taking trips with credit card points or being retired and taking advantage of last minute trip deals.

This is us. Getting in the habit of getting the best value for our money (for decades) is what helped us get to FIRE. We don't need to do it anymore, but why pay more than you have to, especially when it doesn't take much time or effort to do.

 

[razztazz]

Totally agree.

Many here (but not all) are so responsible and such lifelong savers that the risk is on not spending what they worked and invested for.

I can't get past the thought that I actually will have to spend pretty much all of it in my last few years o medical/quality of life stuff. That's one thing that keeps me from cutting loose now.