Deny Yourself & Suffer

[jeffrey]

Courtesy of Roger Sorensen from our sister site Investing Page

Denying yourself the small things in life can be misery.

In the last few years of so, if you've been reading most of the information about personal finance that's been flowing from countless sources you'll have heard about how it's the little things that add up to big dollars. An example they give would be 'give up your $3 gourmet coffee every morning, or stop drinking 5 cans of soda a day, and by the time you turn 65 you'll have an additional $100,000 in the retirement fund'.

I'm not here to defend or attack the source of this information. Nor am I going to say you shouldn't cut back on the caffeine, everyone has to make a health choice about their life. What I am saying is that by cutting out the little sources of pleasure in life, you may be setting yourself up for suffering and unexpected misery.




The math behind the long-term projections by others who call themselves "financial experts" is probably very sound. Over many years, a few dollars every day will add up to a large chunk of change just as their multi-year projections show. Everyone who has bought anything on payments knows how a small payment each month adds up to serious money after 30 years.

Being realistic is one of the keys to saving money. Is denying yourself a couple bucks a day practical or even the best way to accumulate future wealth? Is this the most fundamental and best method you can use to be able to afford retirement? I say the answer is no and no. While it is a very good idea to be financially frugal, as in smart, it is irresponsible to think that one strategy, one little adjustment in the day will improve anybody's financial situation.

Why it doesn't work like they say

• What money? - In theory, by not spending $3 a day on your morning gourmet coffee you will be saving $15 a week. In reality, that $3 a day probably rides around in your pocket until it becomes an extra candy bar for the kids, or another slice of pizza at the convenience store. You might as well admit it; $3 lacks sufficient size to be noticeable by itself, and if you don't notice it being spent, than you won't notice it being saved either.

• What bank? - How do you put $3 a day into savings? Do you stop by the ATM on the way to work and make a deposit? No, in fact, most people stopping by the ATM are withdrawing a $20 or larger bill. If you do drop $3 a day into your home piggy bank, how long will it sit there? You have to have real discipline to leave the money there the next time you have a 'small emergency' and need $10 for the paperboy.

Again, accumulating the $3 a day and making a trip to the bank once a month sounds good, but in reality most Americans lack the discipline to make it work. In fact, that is why the American savings rate is at its lowest level in years - the average man on the street will not discipline himself to put money away for the future.

• It is denial. - Day-in and Day-out denying yourself of one of life's little pleasures can be terribly annoying when you have nothing to show for it at the end. If the only change in your finances you make is to cut out a cup of coffee, you will be horribly disappointed when you have no more savings after a year than you had before your money diet. Just like a food diet where you cut out one type of food and the scale doesn't back down, when you cut out a spending choice and your savings doesn't grow, you will be more liable to throw your hands in the air and declare it to be an impossible "Who cares".

What I say will work

Allow me to reiterate that simply stopping yourself from drinking coffee on the way to work will not produce noticeable changes in your savings account. Instead, consider implementing lifestyle-based savings strategies you will see your piggy bank over flowing. I don't have time to go into detail in this article, but when you overhaul your lifestyle you might be able to have your coffee and save the money too.

• Are you buying a mansion? - Americans as a whole have been on a housing frenzy for a while and you have to make sure you don't get caught up in the maelstrom. The best thing you can do your lifestyle and of course your finances, is to do yourself right when you buy a house. You don't need a mansion just because it seems everyone else does. Buy a house that you can afford early in your working career and then stay there. Imagine how much of your income you can save as it increases over the years while your housing costs remain the same. Again, the key again is lifestyle and discipline. Keep your lifestyle simple, and have the discipline to put the unused money into a savings plan.

• Family Matters. - The size of your family is a highly personal economic decision, rightly guided by spiritual and emotional reflections. With that said, however, you have to be aware that the cost of raising a family is increasing at a rate faster than most incomes. Consider the cost of child care, education, and spoiling that child because both parents are at work.

• Driven by Expenses - Americans have loved cars ever since they first came on the market. Unfortunately, the trend over the past few years has been towards bigger, fancier, and costlier. Why spend extra money on a new car, with the latest gadgets? Just like buying a house, decide how large and what style of car you need, buy the best one you can afford, and drive it into the ground. Many vehicles will drive just as well after they are paid for as they did before. Stay in the driver's seat on insurance costs as well, and you can rack up serious money over the vehicles 10 - 20 year lifetime.

I don't want anyone to misunderstand me; you can save money by cutting out the little things in life. The problem is that usually the money not spent on the little things goes into buying something else. Overhauling your lifestyle can make the little things count and give you the discipline necessary to hang onto the money. Even better, overhauling your lifestyle can result in real money for your savings plan. Go ahead and drink a cup of coffee on your way to work, and enjoy peace of mind knowing that you can enjoy one of life's little pleasures after making changes in your lifestyle that
truly will provide for long term financial security.

[katwoman]

I'm gonna play the devil's advocate because......I used to spend $2/day on coffee.

My reasoning was sound; the store was just around the corner, so why make it myself? It tasted better than anything I could make, so why bother? I had to walk my dog in the morning anyway, so why not just walk over there and say hi?

All good reasons to treat myself, right?

Then a new owner comes in and starts messing with the coffee prices. One day they're up the next they go back down. Then the coffee isn't fresh anymore. It's been sitting too long and tastes awful.

I was fed up. My morning routine was ruined by one man's greed. In Target I spotted a expensive coffee maker on clearance and bought it for $45. Then I started buying Millstone coffee on sale. Soon I graduated to Organic coffee on sale with coupons. Later, I score Millstone organic coffee clearanced and used a free gift card from a new prescription to buy it.

I used to spend $60/mnth to buy my coffee and in the first month of making it at home, without sacrificing taste, I recouped that amount and more! Where I used to spend $720/yr I now spend, maybe.....$100/yr if that.

Who said anything about suffering?

[Irq21]

Originally Posted by katwoman

I'm gonna play the devil's advocate because......
Who said anything about suffering?

But what do you do with the ~$620 a year? I think the point was that an average person doesn’t use that savings; instead it goes toward the purchase of something else.

[Thrifty Ray]

I think that it's about your mindset.

I stopped getting the coffee each morning and started brewing my own...but I also started using coupons, stopped eating out, changed careers, stopped frivulous shopping, refinanced my home to consolidate....

Yes, the daily $3 coffee in and of itself wouldn't make or break the bank...but combined with all of the other changes and an attitude adjustment, I am achieving my financial goals more successfully.

It starts with that first step....and sometimes it's the coffee.

[Ima saver]

I agree with Ray. When I stopped smoking, I did take that money every day and I saved it for a number of years to remind me of how much money I use to waste.
Quite a while back, I decided I was not going to go shopping unless I really needed something. I have not been to a mall in over 5 years and there are few stores near me.
That is what is good about this challenge for me, I take the money I would have spent and I save it.

[katwoman]

Have I "saved" that $620? No, not in the strictest sense of the word but here's what it's allowed me to do:

buy gasoline for my car despite the price increase and still go where I want to go when I want to go

still meet my friends once a week for drinks

not raise the rent on my tenents despite the fact that heat and scavenger have gone way up this last year


Did "saving" on coffee do all of the above? No. Like Thrifty Ray said: it's a mindset. You cut in one place so that you can have money for the unexpected. Unlike other landlords I could have easily passed along the increases for operating a building, instead I look for creative ways to save (like using compact flourescent bulbs) and insulation.

My point is this can be done without denying oneself and suffering.

[rob62521]

I think saving is very difficult. I'm one of those strange folks who will put $2 back here and there and then take it to the bank. My husband never used coupons until I came along. He now sees that using coupons can "save" money that we then have for other things. Twenty five cents on something we would normally buy doesn't seem like much, but when there are quite a few of those quarters being saved, it does add up. It's like many of you have written, it's a mind-set and a way of life.

[Thrifty Ray]

And as far as the suffer part goes...well....hmmm....

no designer coffee, no fancy lunches and dinners out, no suits and pantyhose, no trading up on the car every other year, no expensive vacations, no big spender holidays, no spur of the moment shopping trips, no mega-max cable tv with 500 stations,....sigh....

versus:

Time to read, knit, enjoy my family, relax, have a calm-orderly home, be here when my teen needs me, delicious- healthy meals and snacks, homemade gifts, start a beautiful flower garden, take care of my parents....and for the first time in my adult life, MONEY IN SAVINGS because we aren't spending money to make up for all the time we don't have....

yep, poor me...(tongue in cheek) I am suffering.

(smile)...Please, let me "suffer" some more....