Under spending / over saving?

[StellarSaver]

snshijuptr, I just checked out FIRECalc... wow! What a great retirement planning tool. I have been looking for something like that for a while, so thanks for the link. Based on some scenarios I just ran, I'm feeling pretty good about where I stand, so I'm probably going to start putting some more serious thought into what I really want to do, i.e. things that make me happy and that I am passionate about. And after all the helpful and insightful feedback in this thread, I'm feeling a lot more comfortable about how to deal with that $1000 monthly surplus.

[disneysteve]

I think you've gotten good feedback so far. Let me add my 2 cents. I've often shared here that my wife and I don't live on a budget. I have no idea, for example, how much we spent on groceries or dining out or car maintenance last year. We do, however, carefully budget our savings. Right now, 50% of my wife's salary goes into her 401k and 22% of my gross income goes to an assortment of savings vehicles. As far as we're concerned, how the rest gets spent really doesn't matter. Some months, more goes to dining out. Other months, more goes to home maintenance. Still other months, more goes to travel expenses. The past week, a fair amount went to casino gambling as we were on vacation in Atlantic City.

My point is that rather than seeking a number for the fun money, set a number for the savings goals and then work from there. If you want/need to save 30% of income to reach your goals, then do that and live off of the remaining 70%. If you want/need to save 40%, then live off of the other 60%. How you actually break down that 60 or 70% doesn't matter as long as all bills are being paid, you are not taking on debt and you are satisfied with your lifestyle.

I don't think you can over-save but you can under-spend. If you are so miserly that you are miserable (note the similar word roots there), you are under-spending. If, however, you are saving 50% of income and are loving life, don't feel you need to spend more just for the sake of spending.

[StellarSaver]

disneysteve, thanks for your feedback. I think I am pretty similar to you in that I don't live on a budget, but I do ensure that I'm saving over 50% of my gross income each year. Your comments about being "so miserly that I'm miserable" made me think... am I miserable? The answer is no, I'm fairly happy with the lifestyle I lead, and I don't feel like I am constantly depriving myself of stuff because I'm hesitant to spend. I do think, though, especially after reading some of the advice in this thread, that I should feel pretty free to spend more liberally when I want to. For example, I've been putting off replacing a 9-year-old television for well over a year now, so maybe I should just stop worring about spending that money and go do it!

[bjl584]

If you are saving over 50% of your income and you are still enjoying life and not feeling deprived, then I wouldn't change a thing. You are doing excellent. Mid 40's, no debt, a net worth over 1 million, and a high paying job. I am with some of the others that you may be overthinking things. I would Steve's advice and save a set amount each month, and then not worry too much about the details of your spending habits. You don't seem the type to blow money on things that you don't need, and you have obviously done an excellent job of saving, investing, and paying down debts thus far, so why change? Your strategy obviously has worked very well for you.

[timbuckley10]

No debt and over $1mil net worth? I would say go for the new TV :P.

I'm with 97guns. If it is the case that "fun" for you is saving and doing things with your money that will make more money, then look into somethings you could do to make your money work for you. Investing, real estate, etc.

[uRabbit]

Man, looks like I am going to college for the wrong business! Haha

[Fizgig]

I am also an aggressive saver and have difficulty giving myself "permission" to spend money on non-essentials. One approach that helps me is to have a saving account just for splurges - it's fed by automatic transfers just like my retirement and long term savings. It's my fun money for vacations, toys, etc. I can use that money without anxiety that I'm short-changing my other goals.