I read a book called The Richest Man in Babylon and it states “that which we consider to be our necessary expenditures will always rise to meet our income, unless we protest to the contrary”. I’ve tried to remember that lesson my whole life. You must be very intentional about expenditures, scrutinizing each one, and scrutinize it in the context of the lifestyle you wish to maintain, not the one you’re newly capable of sustaining.
Splurging won’t make you happy in the longterm. Saving and buying your own home might. That’s why you want to save money, to have options available.
That would be great if the prices of houses didn’t rise faster than it is possible to save for the majority of people.
Achieving financial security and independence is more valuable than any stupid item/service/vacation you might purchase.
I grew up with modest means, took out the smallest student loans that would suffice and worked my way through college. I’m now middle aged and do allow myself a few nice things but have always kept my spending very intentional. I’ve achieved a position where, barring some major war or disaster, I could realistically just stop working and I’d have enough resources to make it to the end of my days, although I’d have to stay modest.
I still work, though. How i spend the next 5 years will determine what degree of comfort I will be able to afford in retirement. I’ll probably just take an easier, part time position to keep myself busy and comfortable.
My point is, if you allow lifestyle creep to consume all your resources as you become a productive adult, you may have nice things (and you may impress others with your flashy crap) but you’ll just be living to work. Early retirement with my old truck seems way better than driving a brand new car to work.
No, you get off the wage:spend treadmill and enjoy your life before you’re old and living with constant medical issues and tethered to care facilities.
I feel the correct balance of this practice will reach a point when you start answering “fuck it, but that thang!”
If I’m scrutinizing every choice then as my money grows my concerns wouldn’t be the same. I might have not splurged on that X-Men mansion attack by sentinel diorama 10 years ago, but now if I scrutinize my parameters would be different. Now that diorama would look banging on my dining room table.
Automatically transfer all excess funds into a separate account with penalties for withdrawal.
From the article : “people compare their own lifestyle with others”.
Don’t.
U avoid it by not being a sucker for the rampant consumerism being shoved down your throat. U dont need the new expensive thing just cos its shiny the old one is 99% identical. Dont fall for peer pressure etc.
Our financial advisor gave us these tips:
- Don’t create excessive overhead for managing money. Ideally, you know your monthly expenses, put all the money to cover them in a bill account. That money doesn’t exist and comes out with automatic payments. What remains is “carefree” money that you should enjoy.
- Work towards a new $0. This is for building a safety buffer. You pretend $250 is $0. When you get to $250 in the bank, you start to watch your finances much closer to figure out how to not spend. Then next month, you make the new $0 as $275. By doing this, you get in a better habit of saving.
- Take company matches on 401K & other benefits if you can use them. This should be more money you pretend doesn’t exist because the long term gains are very good compared to the short term outcomes of more money now.
- Have forcing functions built into your calendar for reviewing finances. Once a week, once a month. You shouldn’t stress about money constantly, but you shouldn’t be unaware either.
- As others have said, there’s a big mental & emotional component to doing this work & having the self discipline needed.
- Always pay off the Credit Card balance. Always.
- …No seriously, do not carry CC debt…
I’ve had life style issues 3 times in my life, which I’m really fortunate for honestly. You only get lifestyle creep from growing means & a failure to adjust your situation. It’s significantly harder for many people in our modern world to do some of these steps because people are already paycheck to paycheck. If you get a raise, it’s a blessing (I’m a UU), but you got to use it for good, whether that’s your security or the security of others.
