Getting Defensive About Spending Habits

Here’s a mild little rant to end the work week. It’s about people judging other’s spending habits. Let’s start off with those who think there are some who save too much. Take this comment received by MyTwoDollars:

You always talk about saving money and making sacrifices, don?t you ever spend any money? Don?t you have stuff you want or things you want to do? What good is money if you don?t spend it?

As it turns out, David likes to travel on vacation and eat organic food. Or this one found by The Simple Dollar:

What?s the point in making money if you?re going to live your life like a miserable miser. All this money that you?re ?saving?, what do you do with it? Take it to the grave?

Seriously, I can’t name a single blogger that is a “miserable miser”. Not even close. Does anybody out there really even know any bona fide miser at all? The only people I know that are miserable are the people who spent more than they had, and are now digging out of consumer debt. They’re stressed. My friends who are frugal – they all seem pretty happy!

I have my own theory about why people attack other people’s choices. It’s because they get defensive about their own spending habits. They take advice such as “How brown-bagging your lunch saves you money” and read it internally as “You dined out for lunch today? Ha! What a waste of money. What a stupid, uninformed decision.”

But at the same time, at the other end of the spectrum, sometimes the culture of anti-consumerism goes too far as well. For example, I often think twice about writing about some toy I want to buy, or the international trips I want to take, because inevitably there will be the comment asking “Why are you buying that crap if you’re trying to save money?”. Perhaps they take my writing to say “Why don’t you spend money on travel? What, are you too cheap to widen your horizons?”

I think what I mean to say is – Don’t misinterpret words to be at one of these extremes unless it really says that. Be comfortable in your own “financial skin”. As long as you are making your desired progress towards your financial goals, why feel guilty about how you spend any excess income. If you’re not, perhaps some changes are indeed in order.


  1. Here is a self-criticism. I have definately gone through stages in my life where my penny-pinching has made me a miserable miser. My wife, who by default spends most of the money (she does the shopping…) has had to put up with quite a lot of my micro-managing, even though she has really done quite a good job sticking to our budget, being frugal, and spending much less than we earn. This in turn has caused some rocky times for us, ‘miserable’ aptly described the situation between two people at odds over financial matters. So working to balance my over-frugality with her needs to provide a good home for our family has been a good learning experience.

    Jonathan C

  2. Great post. I think we all need to realize that each of us wants different things. What may seem to be penny pinching or depriving oneself to one person may not be to someone else. As an example, I dont have a car yet and dont plan to get one in the near future. However I did buy a big screen TV recently because I decided that the benefit I was going to get from it was worth the cost. And so far I’ve loved it and been very happy with my purchase. When I read about how much you save the only thought going through my head is that I would love to have the salarys you and your wife have now. Im always impressed by how much you save, and am planning out how I will do the same.

  3. Seems like you are internally getting defensive about those gadgets you buy.

    On another note, can the blogosphere arrange a day or two without spending one penny on anything. This would be a good step toward the materialistic culture of America and a fun event.

  4. My friend’s father seems miserly in many ways, even though he has millions in the bank. He won’t turn on the heat until the house temp is 55 degrees, refuses to eat out, etc. On the flip side, he paid tuition in full of each of 3 children’s college education. Day to day he seems to be a hard character to live with, but really he has a good heart.

  5. Been reading your blog for a while and while I’ve learned a TON from what you’ve written (especially in your hunt for the higher returns on savings accounts), I think this —

    “They take advice such as ‘How brown-bagging your lunch saves you money’ and read it internally as ‘You dined out for lunch today? Ha! What a waste of money. What a stupid, uninformed decision.'”

    — is by far one of the best observations you’ve ever presented. What you don’t mention here, at least not blatantly, is that often the thoughts one has about their finances are directly related to their self esteem in that area of their life. When your self esteem is low, it’s hard to take anything that looks like criticism, even when it isn’t criticism! (An example being the advice you sometimes give on savings, and a reader taking that thought to an extreme; it’s like a stawman argument in their head.) Often raising that — by way of something as simple as reading books on the subject and acting upon THAT advice — will help raise the overall status of that person’s life, financially and emotionally.

    Keep doing what you’re doing: you have a phenomenal site and I’m very glad I found it (especially because I’ve profited from doing so).

  6. Maximizing value is a way to make dollars go further. Among fungibles or near-commodities (such as, say, good wine), getting two for the same price as one doubles one’s pleasure, no?

    As for saving: I save for emergencies and for the children. “Dad, I got into Stanford!” “So sorry, my boy, we just. can’t. afford it.” NOT gonna happen!

    Also: if SAVING MONEY gives you pleasure, well, heck, what’s the big deal? Finding bargains gives me glee–so shut up, already.

    Lastly: my parents never saved a DIME (one died in poverty, the other…will); in fact, not one of my forebears ever passed anything down (and I don’t necessarily mean money: I mean anything of value, even personal value), and I mean to create intergenerational family value, however monetarily insignificant, that can be handed down to say “this is who we are.” And, heck, a couple mil in the bank won’t hurt either.

  7. Thanks for the mention and I think you are right on…it’s defense. Great post.

  8. personally, I’ve seen those that whip out the credit card for any such thing and then spend days complaining that they have this massive debt. Once we buy something / do something the money is gone….unless you get a really expensive Persian rug or something…saving is a foundation to build on and the things you can do and have with something beneath you is much more satisfying than standing on quicksand made of credit.

  9. this post makes me think you guys are getting defensive about your savings habits

    this does make me wonder about my ‘budget’ though…i dont really have a budget nor did i understand why people budgeted, my thought process was always- save every penny you can, why are you budgeting to save only $x amount?
    but recently i have changed ways and am spending out the wazoo, i reached my goal for a downpayment on a house so there’s no need for us to save all that cash

  10. @3bean it seems like maybe the gentleman fears what happens to many retirees. Running out of money. I know it seems unlikely for him because of the millions but he might have a deep seeded paranoia, “What if it’s not enough?” or possibly he fears a coming recession in which the dollar might become completely useless.

    That’s the only thing I can think of, I mean, he’ll invest in education, which is most certainly a necessity, so that means that he only buys what is necessary.

  11. Wonderfully thoughtful and incisive post.

    3bean – a lot of people from the generation that lived through The Great Depression or WWII in Europe have a fear about having “enough” money for the reasons that Kristofer stated, experience has shown them that you can loose it all and that you should save. Later generations have different experiences and don’t have that attitude hardwired into them – the opposite in fact.

    Shak – rather than the blogosphere organizing something new they should participate in what already exists – Buy Nothing Day (the day after Thanksgiving) which was organized by AdBusters years ago

  12. I catch this type of stuff all the time. I make a decent wage right out of college, but when I received a $3k X-Mas bonus last year my Dad just assumed I would be able to join him for his yearly golf trip to Phoenix. This is a big money tournament that runs about $3k in total (one week long), when you include lodging, gambling, and everything else. Well I paid off a credit card that accumulated during college and he just could not believe it.

    Now he’s goating me to take the trip again and I’m trying to stockpile money for a house down payment, I have nowhere close to 10% (or 5% for that matter).

    Apparently because he has no problems paying for the trip, I’m supposed to crush myself financially to make the trip also. He says he wishes he had my discipline financially but still is all dissapointed when I don’t fork over the dough.

  13. There is a great deal of subjectivity in the use of money.

    For example, I could only live in a house. Never rent. Never own a condo and live the apartment lifestyle. How do you quantify in dollars and cents how every single day of your life is better because of your living conditions?

    I have a friend who lives in a tiny studio apartment. Owns almost nothing. Spends almost nothing. He saves/invests the highest percentage of his income than anyone I have ever met. But I could never live the way he does and be happy.

    It isn’t that one way or the other is better. It’s about each individual figuring out what is best for themself.

  14. It’s America’s materialistic ways that allow the rest of us to enjoy such great returns in the stock market. If you wish those to end, then you with America’s main source of economic growth to vanish. I guess I don’t understand why people spending their money on things bothers other people so much. How does it effect you when other people do something you and perhaps your close circle of friends choose not to do?

  15. There’s definitely a balance needed. There is no point in spending every penny and then some, if it doesn’t improve your happiness. There’s also not point in saving every single penny if it also doesn’t improve your situation and happiness. Somewhere in the middle there is accomplishing your goals and increasing your own happiness.

  16. There’s an interesting article on spending habits on the Knowledge @ Wharton website. Try the “spendthrift-tightwad (ST-TW) scale” survey.

  17. People wrecklessly spending their money doesn’t bother me in the slightest. In fact, it seems quite converse, it seems the people that are spending are always saying “why aren’t you spending?” This is a little math equation that we should all try to use:

    People Wrecklessly Spending = Them giving money to us + Putting it into our bank. It’s simple. but I like it.

  18. Damned if you do……..damn if you don’t…… big sweat……. πŸ˜‰

    Anyway……..I’m becoming more & more of a penny pincher, the older I get.

    My ultimate goal is to be “BEHOLDEN TO NO ONE”!!!!!!! πŸ™‚

    Well, the gov’t will ALWAYS get their money, but I don’t need an extravagant life, I just want financial independence.

    I was late on my property tax on my Sea Doo & now, instead of $65, they doubled it to $130 so……..ya………I’ll owe the gov’t FOREVER no matter what……….but that’s life!

  19. Consumption is a large part of demand, so economically speaking it’s good for us if other people consume more.

  20. I’d say I buy the things I want. But I do try to control what I spend on things I don’t care that much about. And I certainly try to be aware of what I am actually paying for.

    It made a big impression on me when books pointed out that Coca Cola has a lot of merit as an investment. Coke has a recognized brand, and even though it is basically sugar and water, they can raise their prices when other soft drink companies can’t. Their brand allows them a kind of power over consumers.

    I happened to have a gift certificate for a little gourmet food shop in town, and I dropped in to buy something with it today. I’m an academic and I live in a small Midwestern town; very rural. A lot of my faculty colleagues feel like this place is hick backwards. To them the gourmet food shop is one of the things that makes living here almost bearable.

    To me, it’s a little shop where the food has a huge markup; I don’t know how they get away with it. I bought some chocolate, way more expensive than I would usually buy; one bar was excellent, and the other was not so good. I was glad to try them both because I had been curious about it. But when I got home, I told my wife, “I know a lot of our friends like that store, but it just isn’t for me.”

    She told me, “That’s what you said the last time you walked in.”

    Personally, I like that many of the things I enjoy are things I can get a good deal on. I’m not embarrassed to like Hershey’s chocolate. I’ve had better chocolates, but I’ve had worse too; and price wasn’t everything.

    And it means that I have money for the things that I really want to spend on. We purchased a large LCD television last year. We watch a lot of movies at home, and we love that TV. Eating $0.99 chocolate instead of $4 chocolate (together with other similar choices) is a big part of being able to say to my wife, “Oh, you want a TV? Okay, I’ll check brands and we’ll get something.”

    For me, saving $10/week bringing my own lunch a few times, means I can spend $250 somewhere along the way on something I’ll care about more than lunch.

  21. Good post! Love what you said about misinterpretation.

    I have stopped posting in forums (this one excepted as this group of readers seem eminently more intelligent) as people read into comments exactly what they want to read into them. Doesn’t matter what is said. For example, I could post, “The sky today in southern, CA is blue (assuming that to be a true statement of fact on that day)”. You will have someone argue with you that you said something else and they will read something else into the statement. Drives me insane and if you try to argue with them and point out you said no such thing you get more BS from them.

  22. I believe that having a plan with your resources and working towards those goals is the entire reason for having a budget and sticking to it. That budget includes spending for the things that I want in my life but also for my future. To me, there is absolutely nothing wrong with caving to a particular lifestyle vice as long as it fits within your overall plan.

    Taking a trip for a unique experience is a fabulous thing, but if that trip is financed at the expense of all other goals then it’s not the right thing to do and a person has to have the ablity to look at an opportunity reasonably. Plus taking the time to be prepared for the opportunity when it knocks (i.e. saving for travel in a special savings account for such purpose). It is truly a disciplined approach.

    We, as a culture, have convinced ourselves that budgeting and dieting are synonymous – that means a life without pleasure(s). I believe that the general public thinks that it’s too difficult to plan effectively so they don’t even bother. It takes a bit of work, but it doesn’t necessarily take much time.

    We are all in the business of living our lives but we are also charged to be good stewards of our lives and to those that depend on us for their well being. Prioritization should always be at the forefront of any financial decision – big or small – but in your quest for financial peace/freedom, you must not forget that you have only one pass at this life so make those special purchases worth every cent and not be mired in the regret of a poor choice.

    Great blog!

  23. I don’t read this blog so much for what you spend your money on, I read it to learn new ways to help me save mine. I like reading about what trips you might take or “toys” you might buy…gives me ideas but I dont see why anyone would trash what YOU decide to do with YOUR money… I guess I just like to live by the “Don’t tell me how to live my life and I won’t tell you how to live yours”

    Great Blog!!

  24. I think this was a great post. Lately I have had my own internal conflicts about feeling like I am over-saving to the point where it affects me enjoying my life. Saving/investing sometimes almost becomes an addiction, where I see every single dollar I spend as a dollar I could have invested instead. I find myself sometimes having a hard time drawing the line on what is being frugal and what is taking it too far to the point where I do not want to spend money on any minor luxuries whatsoever (bars, movies, clothes, etc.) Almost like a game to see how little I can spend each month. Chalk it up to my own, anal-obsessive personality I guess. Or maybe I am just cheap, lol. Anyone else ever get like this?

  25. Well Jonathan, it’s devolved into post and you don’t have trackbacks, so here’s the link:

    and an excerpt:

    David and Trent (the bloggers being linked to) are evangelists for the Frugal Lifestyle (tm), but they’re not doing anything that makes me want to be like them. They’ve put frugality front and center as if saving money were some type of self-fulfilling cult. Check out Trent’s post here. He puts like 1000 words into explaining his investment portfolio but at no point does he mention what he’s actually planning to do with the money! He’s just templating some “savings plan” and saying “this is good, it works”, while completely ignoring the purpose of the money he’s saving.

    I’m sure that his aims are valiant, but “regular joes” simply can’t buy into this concept. These uber-savers simply don’t seem human, they don’t have any desire connections (material or philosophical). They’re not “saving money to buy their XBox 360” or “saving their money to help save the whales”, they’re just “saving money”. And average people don’t buy that b/c it’s not really rational, you don’t save money “just because”, you save money “for something”.

    When you’re writing a blog about frugal living you have to put the goals front and center. People have to see that you have something other than just numbers on a ledger. They have to see you saving money AND spending money. Otherwise you just look like some kind of freak.

  26. Rob,

    I feel you completely. I go through phases. I’ll save every penny and then I’ll slap a new computer on my credit card. Then I’ll cut out the simple things (bar, movies, clothes) to pay off the computer.

    Such is life…

  27. Great post, I couldn’t agree more!

  28. I’m so glad you wrote about this. Judgment and assumptions are something I’ve been thinking a lot about lately (and did write about recently on my blog as well, and intend to write about and explore even more). To me, this issue is not about money, at all. It’s about judgment, plain and simple, about any subject.

    You say: “I have my own theory about why people attack other people?s choices. It?s because they get defensive about their own spending habits.”

    I basically agree with you. I think judging others’ personal business is based on people’s issues in their own lives. You’ll often notice the areas people are sensitive about in their own lives are the areas they attack others about.

    This behavior isn’t limited to pf discussions. It happens all the time over any topic. I think learning to worry about oneself and figure out why others’ lives are pushing our buttons so much is the value that can be drawn from this. Rather than lash out at someone else, we can look at ourselves and figure out what isn’t quite right with us that we are so worked up about someone else’s life.

    In my view, looking at our assumptions (as well as judgments) about others often will tell us what our own weak points are. This is why it’s so imp. to think before speaking. Because we can learn so much from the things we feel compelled to say and will often find, I believe, that we don’t need to say them to others at all, but to ourselves.

    I think judgment is only natural–not good or bad. But what we do with it when we feel it is what’s important. Do we use it to attack others, to create divisions between people, to try to make ourselves feel superior or feel okay with our own choices we aren’t certain about it our hearts? Or, do we use it to look at our feelings and try to figure out how to improve our own lives so that feel content and our contentment allows us to not be so affected by what others do or don’t do in their lives (esp. when it does not have any direct effect on us).

    I think judgment directed inward can lead to growth, but applied and expressed outwardly to others inhibits growth in my opinion (unless it is analyzed after the fact at least, learned from, and then not continually repeated in the future.) We each have our own views and I know others don’t feel this way about this topic. But this view is what I’ve discovered makes the most sense to me and matches both my experiences and observations.

  29. I totally agree with mc’s comments. I have experienced and observed the same thing so many times. So many people seem to hear just what they want or expect to hear, regardless of what was said. It’s certainly not a good environment for healthy discussion to thrive in.

  30. Rob,

    I’m exactly the same way. Being a college student, one would think that I like to go out and do stuff every night of the week, but the truth is that my roomates are sick of me never wanting to do anything but stay in and watch tv because I hate to spend money.

  31. Gates VP

    I disagree with you entirely. As the article cited by Kristofer explains, for frugal people the act of saving money is what makes them happy.

    I’m one of those people. To my surprise I found that over the past year, I saved half of my net salary (38k). It is fun to try all the cheap Trader Joe’s wines until I find one I like, instead of spending $30 on a bottle. Or finding online coupons that make the Adirondack chairs I want to buy my boyfriend $15 cheaper. It’s the joy of beating the system, and being happy with what you have. When I was going to be out of town two weeks every month, I got a roommate to fill my two empty rooms and share the rent. We’ve become great friends, and I wouldn’t want to live without her anymore.

    Do I need the money? For retirement maybe. And otherwise I’ll find a great charity and give it away. To me it’s so clear that rich people aren’t happier – I’m not trying to gather a million. I just don’t see the need for all this spending.

  32. Rob,
    100% me. Ok, so I save half my after tax income and ride my bike to work and bring my lunch and am horribly cheap about small things. But because I know that I’d rather be spending my money on iced coffee in Vietnam than at Starbucks.

    By myself I can be as cheap as I want, but never say no to going out with my friends. I’ve included that in the budget, and I don’t feel particularly bad about spending money with them now.

  33. Well, in many ways I am miserly. I study the supermarket ads and plan my shopping, I constantly play cable and phone companies off of each other, get my dvd’s at the library when not gettng free trials, get my books there,find the best yields on accounts, get free bonuses.
    Doing this I am able to hop on a plane at a moment’s notice when family needs me (( sister called 11 PM I was on first plane out next day), I travelled to Europe for 2 weeks a couple of months ago. I am happy, I am satisfied with what I have, I am able to choose what I can do without and to get the things or do the things I need or want.

  34. See… none of that seems miserly to me at all. πŸ™‚

    I view as miser as a person with no friends, who sits in a un-heated house reading a discarded newspaper next to their single CFL bulb. They value money above all else – food, companionship, exercise, culture…

    What I see here mainly is people is using money as a tool in order to achieve what else they want ultimately. Delayed gratification is still gratification.

    I agree that when you share your life with someone you have to find yet another balance so that both of you are happy. It can be tough!

  35. Shrug … there is plenty of nonsense in this world with zero purpose. Being a miser is a piddling thing in the big picture. What would they be missing out on? The opinion of others on how they should live their lives? Somehow I doubt misers would care about that. Their brains are probably wired from birth to produce pleasure endorphins when they save. Might as well force left-handers to always use their right in order to confirm to the majority.

  36. Hmm… the idea of pleasure from saving is an interesting one. I think I am more in the pain from ‘not saving’ camp.

    Just the other day I forgot to peel of the “Save $1 Off Now” sticker off something from the grocery store and I was so depressed when I got home and found out. Whaddya gonna do…

  37. I hate it when people say “You can’t take it to the grave!”
    I rather be “dead and rich” then “alive and broke”.
    I got this friend who’s 26 and still lives with his mom and spends all his money on dvds, action figures and video games and he’s always trying to give me advice on money and life.
    I think people who have nothing but “stuff” are miserable.

  38. @Yinna

    You can “disagree” all that you want, but at least try to pick on something specific. Saving money for the “joy of saving” isn’t rational, if anything it’s wasteful. You’re wasting all of this time earning money that you never plan to spend. People make money to “do stuff” with it; the goal of frugality is to “do more stuff I enjoy” with the money that I have.

    That’s why Trent and Dave get the type of flak quoted at the beginning of the post. This frugal, “I-don’t-buy-anything” lifestyle just doesn’t make sense to most people.

    And you pointed out the whole flaw here: Do I need the money? For retirement maybe. And otherwise I?ll find a great charity and give it away.

    You don’t even know what you’re planning to do with the money. “Retirement” is a lifestyle phase, not some self-fulfilling goal. You don’t just “retire”, you have to “do” something. You don’t even have a charity picked out, just “some good one”. Regular people can’t connect with that. As far as they (and I) can see, you’re saving money “just because” and hopefully you’ll figure out something to do with it before you die. Wow, some dream.

    The “not-so-average-joe” would ask you why you make money you don’t need or want just so you can donate it to charity. Why not just work one less day each week/month (you don’t need the money) and spend that time volunteering? Sure if you made $200/hour then it may be a better use of your time to donate money, but you’re making

  39. Gates VP

    I think you missed the point. Trent is saving for his children, so he can retire comfortably and so he can build a house in 15 years time. He talks about this all the time. Yinna is frugal so that she has enough funds to visit her sister at the drop of a hat if she wishes/needs to and so she can travel abroad. Many frugal bloggers are that way in order to get out of debt they dug themselves into by carelessly spending their income, they have discovered that only by being frugal and tracking their spending do they actually have the money they need for special purchases, and to pursue their interests beyond work.

    This is a perfect example of misinterpretation, of commenting when you maybe don’t have all the info or when you only read part of the information being presented – latching on to that and venting on your pet peeve or whatever (I’m guilty of this as well, we all are, this post may very well be misinterpreting Gates VP. If that is the case, then my apologies in advance.)

    w/r/t retirement, yes it is just a phase of your life and no you don’t just retire, nor is it wise to do so. You need to have specific goals that you are moving towards which is why it’s important to plan your retirement beyond saving money, why people need to have a retirement vision. I posted on this same topic a couple of weeks ago.

    For my retirement I hope I don’t have to work as hard or as much as I do now, but it all depends on how much I manage to save now by being frugal.

  40. It’s not that I want to judge them, it’s just that they constantly complain and whine to me that they don’t have enough money and yet everyday they’ll buy some Starbucks.

    If they would just say, “I like to spend money, that’s why I don’t have enough and so I’m stressed” then I would be perfectly fine.

    But instead they’ll be showing me their latest gadget and then complain about how much debt they have.

  41. OMG Jonathan, you said ” forgot to peel of the ?Save $1 Off Now? sticker off something from the grocery store and I was so depressed when I got home and found out.” Are you my long lost twin brother?

    Re that $50 Ing bonus thru NYTimes. Seems many links say it ends 9/30 but just saw someone at FW saw ad where there is one that ends 10/30. DK if it is the same code NY3 that ends 9/30. Anyway I already have an ING (which I emptied of all but $10) but opened a joint account for my minor daughter as the primary and got $50 in her account, using her info including my email, and linked account. Found how to do this at FW and now can’t find particular message to link to. To do it choose joint account, have your ID number and enter it when asked on second page, do not enter your name, the id will link it up. Iused the same email I use for mine, and the same checking account to link to. Ill look for the particualr FW post and come back to id it when I find it.

  42. Found it
    if this doesn’t take u directly to it go to p 4 of thread

  43. Mariette, you did misread – you mixed up me and Katie. But I think you make good points.

    Hey Gates, what’s the resentment? Johathan wrote this post exactly to point out that people make different choices. If I want to save for no obvious reason, why does that bother you so? I chose a profession that I knew I would love, and I am paid enough so that I can do all the things I like and have money left over. Why would I work shorter? I can volunteer all I like in my weekends and evenings.

    Not everything that’s good about life is about money. In fact, the more money you spend, the less you appreciate the luxury. Eating out is wonderful when you’re aware that you don’t have to do the dishes, but if you never cook it becomes a necessity that’s quite often unhealthy too. We should try to enjoy the things we do, and do the things we enjoy. For me, being frugal makes me appreciate the good things in life, both the ones I paid for and the ones that just happen. But that’s just me!

  44. Part of the reason that I am so frugal is because when I want to take a nice trip or buy a big-ticket item I don’t have to feel bad about it.

  45. With so many other bad habits to have — smoking, drinking, gambling, speeding, eating unhealthy foods, addiction to shopping/tv/games/internet/sex, picking your nose when driving — saving for the sake of saving is a MINOR MINOR MINOR problem to have. The only difference is the vast majority of people can’t save their way out of a paper bag and hence need to put savers down to make themselves feel good.

  46. Joseph Sangl says:

    In the hundreds of financial counseling appointments I have held, I have found that many people are defensive about their spending habits because they KNOW that they have been spending their money without a plan and because they are extremely reluctant to tell themselves (or their children) the most powerful word in the English language – “NO!”

  47. I agree with your comments 100%.

    People should not even be worried about what others are choosing to spend money on. All that matters is each person’s own individual desires for living now and living in the future. It’s a balancing act of how much fun you can have now – and still be able to have fun in the future (if you live that long)….

    I personally always save 20% of all gross income in all investment vehicles available to me – then the rest is spent on bills, fun and international vacations. I also choose to remain debt free (except for my mortgage – which is healthy debt in my opinion).

    I would rather travel now, before it’s too late – should any diseases or other problems come up that prevent me from going later on in life.

  48. I have made a lot of mistakes with money for years- ran up 80k in credit card debt. My a@@ was saved by lower mortgage interest rates and rising house values, as well as getting a better-paying job. Now I am saving 17.5% of my gross in retirement plans, and paying an extra $250 per month on my house. As my income went up I did not increase my standard of living much, I increased my retirement savings. So I thought I was doing pretty well, but since I started reading The Simple Dollar I must admit I can do better. My biggest indulgences are dining out and buying books.

    I wish I had controlled my spending in my 20’s, 30’s or even 40’s. Now I will have enough for a good retirement, probably better than lots of baby boomers. But I won’t be able to retire until 65. The TIME VALUE OF MONEY is incredibly powerful.

    You can only spend each dollar once, so every time you spend money on a mocha or a motorcycle, you are giving something else up. For some people, the motorcycle is a worthy goal. Before spending money think about what you are giving up.

    Love the posts on “The Bank of Dad” and I will start reading “Your Money or Your Life” soon.

  49. sfordinarygirl says:

    One of my guy friends gives me a lot of crap about my financial priorities. This “friend” commented I live pretty “hand to mouth” because I ate black beans instead of buying beef during this one month I bought too much food and practiced “eating down.” I budget pretty carefully and I’m always looking for ways to reallocate or make extra a month.

    There are some months I don’t spend any money on entertainment – not one single concert ticket and tons of amazing bands come through San Francisco. Sure $50 a month for entertainment isn’t a lot but I think of the extra $50 I didn’t spend can be used toward taking a friend out to eat while on vacation. And I don’t feel like a miser and I’m making poverty-level wages in a big city. I feel pretty happy and ecstatic!

    I think my friend’s judgments are due to his own lack of savings and insecurities. He sold a large part of his ROTH earnings to buy furniture and pay bills because he went out to eat/drink way too much. And on the other hand I’m talking about how I saved $30 off my grocery budget and how I didn’t buy clothes one month so I save another $40.

  50. @gate VP: Trent at The Simple Dollar has said many times he is saving to become financially independent. Maybe he didn’t say it in the post about his portfolio, but if you read other articles on the site his particular goals definitely get stated quite frequently.

    There are other things to do with money besides spend it on things. What’s 5% of a million dollars? $50K. Now imagine if you had a million dollars in the bank @5% earning $50K a year. Not only is it earning $50K, but its not even a very risky $50K. Its pretty well guaranteed. I don’t know about you, but I’d probably quit my job if I had that. and I’d rather be able to quit my job and live off interest than have the latest ipod. Even if it means sacrificing for 20 years. 20 years of sacrifice is better than 40 years of working for the man.

  51. sfordinarygirl,

    Your friend made a terrible mistake. By cashing in his ROTH IRA to pay for overspending, he may have had to pay taxes and penalties, if he is under 59 1/2 and did not have the account open for 5 years. Much worse, he gave up the future earnings on that account. Suppose he is 30 years old and took $10,000 out of his ROTH. If he had left it in the ROTH until he was 65 at 10% per year it would be worth $326,386 at age 65 and the earnings would be completely tax-free.

  52. Interesting to me, how many of my fellow posters did actually reward themselves with the Big Screen TV, but held back on a lot of other things. I feel the same way about that, by the way, but just haven’t had the heart to part with the cash quite yet (I was waiting for the serious discounts to happen).

    The thing I have a problem with is not being able to turn it off sometimes. We don’t live a miserly life, but sometimes, like in your last line you said “excess income”. What is “excess income”? Something you haven’t yet earmarked for investment? Well, then, you have an extra $100 this week — let’s be really clever and stick it into a mutual fund. But how far does this cleverness go? (I know I’m asking you but really struggle a little with this myself). Although I have no trouble discovering things I’d love to spend money on, I find myself being “clever” and then I actually start annoying myself! I feel like “cheapo!! spend some money already!”

    As far as other people go, everyone makes their own decisions. I can’t understand people spending lots of money on clothes, for instance. You can get nice stuff for really cheap, so why would you go to those boutique stores to get ripped off? I also don’t understand buying a luxury car. I love them, don’t get me wrong — but the point A to point B thing is really true. I actually don’t “love” vacationing in exotic places. The Caribbean is as exotic as I want to get. I live in a pretty nice spot and really prefer my own bed, 99% of the time. Then the old “send your kids to Ivy League” schools comes up. I don’t actually think this is that important although many of my own relatives (and husband) seems to think it is the only key to success. A solid school, with a good reputation should be fine, and one with the lowest price tag would be nice. I actually think the kids major is far more important than an ivy league education. And not being broke is the also a good thing to do for your kids. They need someone to fall back on when they are young and finding their way. Whatever makes your life easier and less stressful, IMO, is the right choice for you.

  53. Thrifty Penny says:

    I like this post. I notice that people who often complain how they are in debt don’t do anything about it. They’d rather complain; it’s getting irritating quickly. I’m making a conscious effort to dig myself out of debt. I notice that they try to make me spend money by inviting me out to lunch and teasing me when I say no. I guess my actions make them feel guilty because they aren’t trying. I notice the same behavior when it comes to losing weight.

    I’d rather not spend money on what I consider frivolous. However, I am willing to spend quite a bit on what I value is important to me. I’d rather spend money on travel whereas I’m a cheapskate when I shop for clothes. It’s all about perspective. Besides, who are they to judge? It’s MY money!

  54. There is an entire book on this topic…

    “Your Money or Your Life” link

    It was ranked one of the best books to give newlyweds.

  55. @Icup:
    There are other things to do with money besides spend it on things.

    Unless you have a really loose definition of “things” or “spending”, then there isn’t anything else you can do with money except spend it. Money = Time = Exchanged for Goods & Services. Investing == Spending money on a venture of some risk in the hopes that more money is returned.

    Maybe we’re arguing semantics here, but the express purpose of money (or currency) is for spending.

    Not only is it earning $50K, but its not even a very risky $50K. Its pretty well guaranteed.

    Were you around in 2000 when interest rates dropped beneath 2% and we were actually in an inflationary recession? (inflation > interest rates). This statement is a whole blog in foolish.

    I don?t know about you, but I?d probably quit my job if I had that.
    and I?d rather be able to quit my job and live off interest than have the latest ipod. Even if it means sacrificing for 20 years. 20 years of sacrifice is better than 40 years of working for the man.

    And what would you do if you quit? What type of “retirement” do you envision? Why the heck would you spend 40 years “working for the man”? Why don’t you work for yourself and do something that you love every day? Why do you have to make 20 years of sacrifice?

    This is the fundamental difference. I wouldn’t quit my job if I had a million in the bank, b/c I love what I do. I work for a guy, but I don’t “work for the man”. I show up for work and generate income and I am paid a risk-factored portion of the money I generated. This isn’t “sacrifice”, it’s a fair exchange and if it isn’t a fair exchange then I find a new job or do something else with my life.

    You said you’d quit your job if you had a million in the bank, but you didn’t say what you’d do if you quit. But isn’t that the most important thing?

  56. Yes, I know people who are misers. They have allowed their love of money to come between their love of people. They would deny their aged father home care from his own money because it would reduce their inheritances. That is my definition of a miser. Being a little frugal doesn’t have any relationship to these people.

  57. Well spoken. Some of us “save-a-holics” have a goal in mind…say…buying a house. If I sacrifice one candy bar ($.50) a day — especially since I don’t need the fat and sugar — over the course of five years, that’s a thousand dollars that I frittered away just by getting a sugar rush. Crazy, huh?

    Or take the example of finding something you love and doing it differently. I love peppermint mochas. Love them. I drink them while I write, which I also love doing. Starbucks charges me $5.00 for a mocha I can make at home for $.61. You’re seeing it right – 61 cents. And that’s made with starbucks espresso that I bought in the grocery store. That’s four and a half dollars that I save by doing it myself AND I get to sit in a living room that doesn’t smell like burnt coffee. Add that up for five years? $8K. Yes. Really. And I still get to enjoy my espresso.

    Some people are just jealous, I guess πŸ™‚

  58. And what about this idea – the more a person spends, the more he/she earns. My friend sticks to this principle. And it works! In order to buy expensive clothes, she tried several jobs and managed to find one that lets her spend as much as she wants. You may think, that she is a spendthrift, but look, she never exceeds her credit card limit and has a credit score about 700! Can you believe this?

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