To what end??

[kork13]

This came from another thread, but it sparked a thought... forgive me, feh, for isolating your comments...

try to live frugally, even though you won't need to. Save as much as you can. If you're able to sock away a lot when you're young, you'll be sitting pretty when you reach middle age. Don't buy the mansion just because you can afford it. Don't buy the $40K car just because you can afford it. Live well within your means and save all that extra cash.

This has been bug in my ear for a while now, and I just need to vent a bit... Remember, I'm only 22, so I have my parents, supervisors, you all, and anyone else who feels the need tell me that I should follow this course. I do agree that it's important to save, and I'm doing so intently... but to what end?? I pray not for retirement, because at the rate I'm going, I'll have over $1.5M (in real terms) by only age 50, just in retirement accounts (nearly as much is being saved in other accounts)... and that's a conservative figure, completely ignoring what probably will be 10-15 years between then and my "retirement" date, and already probably more than enough to retire on (esp. considering that I plan to have a military retirement pension). I refuse to live in preparation for retirement, because I feel that would be an immense waste of my life.

Sooo.... when is enough enough? What's the point of a life bent on frugality and saving? How do you strike your balance?

I recognize that I'm still young and probably quite naïve. But I've established my finances securely, and am in a situation where my financial habits are almost assuredly not going to change very much over time. It's admirable that so many on these forums have established themselves, prepared for a secure retirement, own personal homes (or getting there), and so on... Call me short-sighted, but I'm afraid of developing a preoccupation with those things which are so far out for me, and at that, things for which I am already geared for being well-prepared.

In a one-word response to the quote above, WHY?

[jIM_Ohio]

Money in the bank- that is where I draw the line.

If I have 3 years expenses in the bank, and my retirement plan is on track, I can increase expenses somewhat (because if I increased it too much, my 3X expenses in the bank might become 2X just by spending more).

If you are spending less than you earn AND have money in the bank, go ahead and spend more.

Most people which come to this sight have spent more than they earn, piled up debt and need a way to cut back to break even, then cut back more to pay off the debt. You are the minority in that you are trying to start off on the spend less than you earn and save enough path.

[Gjowers]

Balance is the key and you'll probably find there's no consensus here. If you're saving 20+% of your income and can still afford high end things then go for it. If you're young and on the right track then splurge a litte to keep your sanity.

[Joan.of.the.Arch]

Would $750,000 be enough for you to retire on? Because I imagine by the time you are 50, the buying power of that $1,500,000 will be similar to what $750,000 buys today.

If you think it might be taking over your daily thoughts too much, just keep on doing what you are doing until it is nothing more than habit, but not something you have to think, think, think about. And maybe you could take a break from reading about investing, saving, responsible use of money, etc. Just use what you know for now and give any obsessive tendencies a chance to refocus on something else.

[kork13]

Would $750,000 be enough for you to retire on? Because I imagine by the time you are 50, the buying power of that $1,500,000 will be similar to what $750,000 buys today.

My pay is adjusted annually for inflation (as is the case for many other people, though admittedly not everyone), so by planning with today's dollars, I can make the rough assumption that the two cancel eachother, simplifying things significantly.

If you think it might be taking over your daily thoughts too much, just keep on doing what you are doing until it is nothing more than habit, but not something you have to think, think, think about. And maybe you could take a break from reading about investing, saving, responsible use of money, etc. Just use what you know for now and give any obsessive tendencies a chance to refocus on something else.

I wouldn't go quite this far, to say it's taking over my daily thoughts, but I mean more to express that people in my rough age group (early 20's) are being told to save and save and save. Yes, retirement is important to prepare for, as are a house and education. But there's so much between now and then that it becomes difficult (IMO) to strike a good balance between a saver's mindset and what we might call a "consumer's" mindset. In that, I think Jim made a good point, that you can establish some sort of checkpoint where you can allow yourself to become more "consumer-ish".

In the end, as I said, it was partly just a rant. However, I am curious how everyone does determine that balance for themselves, and to what ends their saving is directed.

[maat55]

I see buiding wealth more as building a hard working, low cost replacement for my labor. Until it is built, I have to plow the field myself.

feh's advice is classic. Spending all your money and on extravegance is a vain act.

The younger you start the less frugal you need to be, but living below your means is best at any age.

[snafu]

financial awareness

At 22 y/o you're more aware of financial choices and their long term effect than most. That's great! You will likely join the group known as the 'Millonaires Next Door.' You will make the decisions that are in your best interest. Meanwhile as the economy retreats more people will join this site seeking ways to get out from under poor choices and weighty debt.

We also consider our footprint on this planet. We feel badly for those who consider themselves wage slaves while we have always found employment that we enjoy. I don't understand the need for a car that costs more than my annual income or a house that costs more than three times our annual income. I'm too lazy to vacuum a McMansion.

We want to enjoy life, have fun, as little self imposed stress as possible and love our extended family and friends. That needs planning, researched decisions based on fact etc.

[Snave]

A thread like this pops up every few month and I believe at one point in time I even started one like this. You are right to a degree. Money is to be spent at some time. When you retire, you will be drawing on your savings, etc... You really do need to strike a balance and as long as you are saving for your goals, you should be fine. I will make one point in regards to the "quote" you used. I don't think that even if you are saving a ton and are on pace for your goals that a $40K car is a good idea. I am sure you were using this quote as your example and not that you are going out to buy something like that, but just be reasonable in your spending. At your age, a lot of your friends will have some really cool toys when they get out of school with their first jobs. Just realize that you can indulge so long as you don't over-indulge.

[disneysteve]

I've said many times in discussing our personal budget and spending habits that we save a set percentage of income and really don't tightly budget the remainder. Currently, 20% of my gross goes to savings. Then the bills get paid. The rest gets spent however we feel like spending it. That might mean vacations or dining out or buying something for the house or taking a trip to the casino or seeing a movie or getting some new clothes or something else.

I think the key is to not feel deprived. If you are unhappy with the amount you have to spend, you might be saving too much. You need to run the numbers and see. Maybe ease up on the savings by 1 or 2% and then see where things stand.

Remember, though, nobody gets to retirement age and says, "Gee, I saved too much money." They only get there and say, "I wish I had saved more."

[srblanco7]

Also - keep in mind that life has a way of throwing a few challenges/opportunities your way. It could be marriage and/or kids, business opportunities, health concerns, etc.. which can affect your savings and/or your ability to save.

My advice is to save at least 20% of what you earn and adjust your lifestyle accordingly. And as others have stated, balance is the key - don't go overboard with either spending or saving and you'll be fine.

[Snave]

[QUOTE=srblanco7;201849]Also - keep in mind that life has a way of throwing a few challenges/opportunities your way. It could be marriage and/or kids, business opportunities, health concerns, etc.. which can affect your savings and/or your ability to save.

QUOTE]

Like a 40% drop in your portfolio!

[kork13]

Snave, you're very right... I have some friends that go out and get great stuff, but don't really have much to their name besides their 'stuff'... and that's all it really is, until the next time they just have to have something else. luckily for me it's alot easier for me to save than it is to spend, which may be why I threw this out there. I'm not good at letting myself spend, because there always seems to be one step further that I can go... more into the EF, more cash buffer in my checking, or whatever. So to what Steve said, I'm not unhappy with what I have to spend, just that I have a hard time going out and spending it. As you can see, I'm still working on finding my 'balance', or finding the point where my reserves are sufficient that I'm totally comfortable going out and spending as I see fit.

it feels kind of dumb to be here on a saver's forum essentially complaining about not being able to spend my money.... haha am I a bit crazy? ...maybe.

[pearlieq]

In a one-word response to the quote above, WHY?

Security.

As the commercial says, life comes at you fast. I sleep better at night knowing that I'm better prepared for whatever may come than if I had spent my money on weekly spa trips, a ginormous house, a flashy car, and a vacation home.

I don't know how much is enough, but I know I'm not there yet. Everyone has to find their own balance.

[disneysteve]

As you can see, I'm still working on finding my 'balance', or finding the point where my reserves are sufficient that I'm totally comfortable going out and spending as I see fit.

Just the simple fact that you are having this conversation at the age of 22 is all I need to hear to know that you will do just fine in life. Plenty of people lots older than you are still working on finding the balance that you seek.

[Snave]

Do you have any "blow" money in your budget?

When I was younger and had my first job and had bare minimum expenses and was saving quite a bit, I felt the same way. I would save each month and then when I did want something, I felt guilty b/c I had gotten in the habit of saving a ton and then couldn't part with my money. I set up a "short-term" goal category in my budget even though I didn't know what those short goals were. I put a % or some fixed money in each month and if I didn't spend it, it just continued to add up. When I did come across something that I wanted, I could then buy it guilt free.