Submitted by Narrow-Imagination96 t3_11dxydl in personalfinance
I’ve always been conservative with money but over the last three years I have started to have issues with actually spending money. I feel like I am sacrificing quality of life in some ways while I watch my savings grow. What is a healthy balance?
Agreed. We need some specifics from OP. What did OP mean by losing quality of life? This is kinda subjective and differs from person to person.
Pick a safe amount per month to treat yourself. 50, 100, 200 whatever works for your income and budget.
Eat out, buy hobby stuff, something new to replace something worn.
Save for a nice vacation too or something.
This. OP, I used to do the same thing as you and then I forced myself to spend $100 a week on myself for things that I wanted, drastically improved my QoL and was still saving a majority of my paycheck at the time. Don’t live like you’ll die tomorrow but don’t live like you’ll live forever.
I really like this advice. I was like the OP for a long time, and my husband pushed me to buy things for me once in a while (we have a rule that I am always welcome to buy yarn because I almost never buy other things). There's an element of "if I don't spend my money, who will?" to consider as well. All that money is useless to you when you're dead, and it's possible you won't be able to travel in retirement like you'd always planned anyway due to declining health.
Unhealthy when you're afraid to spend.
Saving money for the sake of saving money is unhealthy. If you're already meeting your:
...then continuing to save beyond that seems like it's pointless unless you literally can't think of anything to do with the money.
This response really hit me. You’re right. Hard to set reasonable savings goals for myself though. Any recommendations on books or other sources?
No specific books, but savings is more about other goals and not specific to money - start with the other goals and their timelines, costs, etc and work backward from there.
"I need $1M in 20 years so that I can retire..." Or something like that. (You'll need to figure out your own numbers, but you could start with 30x what you expect to spend). Or shorter term goals "I need $x for a house down payment ..."
I’d recommend the book “Die With Zero”!
Anything but Dave Ramsey
I say spending money for the sake of spending it is unhealthy. I'm positive we could sell everything and quit and live off the proceeds. We definitely have hit your bullet points. I spend, but just slower than the average bear. Frankly I find the spending habits of most to be obscene.
This is terrible advice.
They're setting themselves up for an earlier retirement, bigger down payment for a house, larger inheritance for their kids, or many other things down the road rather than just burning through everything that isn't earmarked as savings.
Why would you hoard money with no purpose?
Its a tool, not a collectable
This is really well said. Obviously saving is better than wasting but there’s definitely a grey area where you we are denying ourselves things we would enjoy when the additional savings have little marginal benefit. It’s important to have financial flexibility and emergency funds and all of that but also important to live your life. The balance of that is so very personal - depends on your priorities, health, kids, job, goals and a million other things.
For me, it took having someone in my life who was somewhat fiscally irresponsible for me to see how much I was hoarding, and how I was avoiding spending on things I’d actually enjoy a lot and had relatively minimal costs. So I’m glad OP asked this question because if you’re eating ramen because you’re paying down a 5-figure credit card that’s good, but if you’re eating ramen while having fully funded lifestyle, retirement savings, emergency fund, health insurance, outside investments, etc…well it’s worth taking a closer look at your priorities and financial targets. (Unless you just love ramen of course)
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Because you might think of a specific purpose or have an unanticipated need later and you'll be glad you made saving a priority instead of a last resort.
I didn't say anything about hoarding.
> a specific purpose
This leads to the paradoxical line of thinking i mentioned before
> an unanticipated need
Isn’t that what an emergency fund is for?
You imply hoarding. You can spend thoughtfully while still enjoying the money that isn’t delegated to a specific savings bucket.
I don't imply anything.
Additional savings never hurts, and it's always better to save than to spend frivolously. That's it.
Whether you meant to or not, you did
Ultimately I agree if that’s the point you’re trying to make. Although I still think it’s poor advice in this context
Edit: I guess I don’t agree given my second sentence.
It may be better on paper, but that fails to consider emotional components which are important. You say it never hurts, but it is clearly hurting OP
We disagree on a philosophical level. I don’t think its healthy or worthwhile to avoid consumption like the plague. You should enjoy life a little.
To each their own
For what it's worth I didn't read that much into the comment. You both assumed too much of each other.
I wasn't aware I was talking to the sole arbiter of what someone meant by a statement, regardless of what the person making the statement actually said or meant.
You can continue this conversation with yourself as long as you like since you keep putting words in my mouth and completely ignoring what I (and the OP) actually said.
> continue this conversation with yourself
You are right - this is much like talking to a wall
>up for an earlier retirement,
Part of "Retirement goals"
>bigger down payment for a house
Part of "Short-to-medium term expenditure goals"
>larger inheritance for their kids,
Part of "Any other savings goals"
You realize people get to decide their own goals, right?
They might not be goals at the time, but having the money later gives you options that don't exist if you think the way you described.
This is just an endless paradox
Thinking this way, you will never spend money in anticipation of some hypothetical better opportunity down the line
No it's not, it's just making sure you're spending money for a reason instead of just spending everything that isn't associated with a specific saving goal you have today.
You can spend thoughtfully and still enjoy yourself.
You should be looser with the money leftover after allocating a portion to specific savings goals. You have to live a little
Especially in the context of OP’s situation who is clearly depriving themselves of basic life experiences.
Your advice alludes to spending money only on basic necessities and nothing else, even if that isn’t what you meant
You keep saying I alluded to this or implied that.
Just read what I actually said, which you probably don't like to hear since it doesn't encourage frivolous spending.
Clearly, the implications were there. Again, whether you meant to or not.
Hence the downvotes.
I don’t think anyone here would disagree that you should spend all dollars thoughtfully. Clearly that isn’t what you communicated
>but having the money later gives you options
Part of "Any other savings goals"
Ok if literally any theoretical future spending goal is covered under that, how does the rest of your comment make any sense?
If someone is unsure about their goals and wants to keep their options open, then yes, that would be considered a savings goal.
>how does the rest of your comment make any sense?
Very well, once you understand it.
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Sure, there is a middle ground.
I wrote what I did in response to someone who said it's pointless to save beyond savings goals unless you can't think of anything else to do with the money.
I would say that you should save excess money unless you can think of something worthwhile to do with the money rather than basically spending it on whatever you can think of at the end of the month to get rid of it, because you'll probably come up with something worthwhile at some point in the future and wish you had some extra money.
That doesn't mean you need to obsess over what you have, constantly worry whether it's enough when those concerns are not objectively valid, or not spend any money at all. Just don't spend money to spend it because someone told you saving beyond what you can think of right at the moment is "pointless".
Given the person I was responding to said that "any other savings goals" in his list can include saving in general for literally anything you haven't even thought of yet, I would say he actually agrees with me.
Edit: Sorry about your dad.
Reasonable. Not everyone reading your comments assumed so much. This whole comment chain turned into a nit-picking back and forth rather than advice for the OP.
Yeah, it's reddit so I don't expect anything different. People live to read whatever they want into statements and then go off on that.
To be honest, I'd approach this from two angles.
The first, future goals. What is most important to you? When would you like to retire? What are some bucket list items that would require money down the line? What are some major expenses you see coming up (down payment, car, big vacation etc.)in the next 5-10 years? What would you need to guard against emergencies? I would then put a dollar value on each of these goals and work backwards to see exactly how much I need to save today. This helps minimise anxiety that often comes with non-specific saving, whether the amount will be enough or not.
The second part is figuring out what's important to you today. What brings you true joy and happiness? Contrary to some of the advice in this thread, I don't think spending for its own sake is healthy. But spending to add lasting value to your life is. And the goal then would be to be as frugal as possible in areas of your life that matter less so than you can direct your spending to those areas that bring you the most lasting fulfilment and joy.
A couple of book recommendations: The Psychology of Money (Morgan Housel) and Your Money or your Life (Vicki Robin).
My friend's dad's best friend really never spent anything in life. He never went anywhere, he never bought a single thing nice, etc. He died with 6 million in the bank. While it is an extreme case, he never saw one moment of enjoyment.
Today's people have the totally opposite problem. I don't meet too many people that save "too much." I think one unhealthy trend that I tend to notice on this forum, is putting saving/investing on a huge pedestal, while home ownership is ignored, or even renting favored almost as a form of investment. Where you can take the "difference" of a mortage of a larger home and invest. I don't know anyone who retired comfortably, only with a rental to their name. That is a home payment in perpetuity. What is also lost is the inflation. My 15 year mortgage costs the same as day 1. You'd be hard-pressed to find any rent that is the same as 15 years ago. While I agree this may not be the most opportune time to buy a house, many will never find that right time.
Maybe he did enjoy having all that money in the bank and it did bring him happiness. Did he say otherwise?
While it's possible, it's hard to imagine such a life where you deprive yourself of everything. Need a careful balance.
I used to be this way! I overcame it when I broke down my expenses and earnings and laid it all out to see. The things I wanted to "splurge" on came out to such a small fraction and didn't affect anything that it was more of a headache living without it and thinking about it, than just buying it, this weighted thinking got me to start spending.
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You only have 1 life to live, don't live it so shitty. As long as you're meeting your financial goals and are well aware of the underlying costs of a purchase (like opportunity costs, maintenance, etc.) break down and plan out that balance yourself.
What aspects of your QoL do you feel is lacking?
Why are you saving?
What are your financial goals?
How does addressing your current QoL issues affect your financial goals?
Check out The Wealthy Barber and/or The Wealthy Barber Returns. Quick, encouraging reads.
Great question.
Sometimes it's expensive to be frugal. For example, you can buy inexpensive boots and replace them more often or you can spend more and get good quality and replace them less. Also, it takes money to go to the dentist for cleanings and check ups. The trade off is that issues are caught early and cost less to fix. I've heard the saying "stepping over dollars to pick up dimes". I try not to do that.
This life doesn't come with an expiration date. It can all go away at any moment.
Don't live with regret. Grab it by the nads.
Unless you are dreaming of a nice golf cart ride to the Winn-Dixie twice a day. You won't spend it on cool shit when you get old. live
you should join sub redit 🔥 FIRE group. that's all we do! lol
Allot yourself fun money each month, it can be $50, $100, $250, etc. Buy or do something you like with it. I do not know how old you are but often 20’s and 30’s are the time people tend to be more conservative. Trying to get to a happy middle ground of saving, investing and spending is a process.
This post hit close to home. I am just like you! I make enough to cover all savings goals plus some more, since I live in a relatively cheap area. I am having hard time justifying spending for fun...my default is to save.
Forced scarcity and delayed gratification is all good and needed to become an adequate saver. However, if you are consistently saving at least 25% of your income monthly, you can probably go a bit easy on your self. Just don't drop below 25%, unless of course you need to for a short time.
Work backwards.
State your goals and then figure out what savings rate you need to accomplish those goals. Once you have those met, the rest is available to spend on stuff.
All things being equal, it's OK to treat yourself. If the financial goals are met and you are in position, go ahead and plan rewards for yourself.
Only you can really figure out what makes sense for you.
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I used to have the same problem, here's what I do: break down after-tax pay into three categories- short term expenses/fun, medium term goals (new car, travel etc), and retirement. Decide percentages for each that make sense for your income and lifestyle. Right now I'm doing 50-25-25 respectively. That way you make sure your future goals are taken care of but you're also giving yourself permission to spend money on the present. Adjust those percentages until you're happy with the balance/results.
What does your budget look like? Are you saving for a car, home improvements, lots of legit uses for savings including a European vacation.
The best way to "fix" this is to have a monthly line item in your budget for fun/spending money. That way you are allocating funds that need to be spent on a night out etc
There is nothing inherently good about saving. It is a very powerful tool that can certainly be leveraged to improve your life vastly, but if you work your whole life pinching pennies and saving millions, what have you gained?
So is the money you're saving now being saved with a purpose (buying a house, retirement, travel, helping family, etc, etc) and does that purpose bring you more joy than spending it today would? If the answer to both questions is "yes", you're doing well. If not, you probably need to re-examine your goals.
I was once told that when you have your budget accounted for, that you should consider any raise to be 1/2 savings for the future and 1/2 blow it money.
This, is obviously a very case by case point... But if you're obsessing over your savings then chances are you are well aware of your actual needs.
I have a similar issue! I’d recommend seeing a therapist. Therapy has really helped me confront my money issues and recognize what is healthy vs not healthy.
I’ve done my best to put everything on auto and what’s left is actual spending money. I have my weekly debits, investments etc, and have a number in mind that I like to hover around. If my savings grows too much, I invest or more it to another account (emergency fund) then go back to auto pilot.
I still think about everything I spend, but it’s all automatic now, so I really just try to balance my account at a certain number. If I’m over or under it allows me to invest more or scale back my spending.
>When does saving become unhealthy?
When the shit around you starts falling apart, aka:
House/Cars because you skipped regular preventative maintenance.
Relationships because you said, "no", to going out too much and now they don't ask anymore.
Body when you saved by not paying for the gym and healthy foods. Also, by skipping the necessary medical check ups.
Most people know how to save but never learn how to spend. I suggest listening to Ramit Sethi's podcast and reading his book. It's very goal orientated on spending to live a rich life.
I think that difference is going to be different for everyone. To plug a pf podcast I listen to; “How to Money” always tries to focus on the why behind your money. To try to figure out what your joys and goals in life are and then make your financial situation work towards that. So one person shouldn’t buy a fancy car just because they can afford the payment. But another person might justify a car that stretches their budget because cars and driving give them a lot of joy. Some people are super into FIRE and will live like paupers for 15 years in order to retire at 35. Some people enjoy their jobs a lot and don’t mind working until their 75.
Figure out how much money you need to live (housing, food, not having to work til your dead), then figure out how much it costs to live the life you want (travel, early retirement, new gadgets) and make those two work within your budget.
I have also seen people tout budgets as not just a tool for the financially irresponsible, but also for those who feel guilt around spending (which sound like it might be you). If you have a line item for concert tickets, then you don’t have to feel bad about buying that pricy concert ticket instead of investing in an already plump retirement fund. You’ve already planned for the expense so it’s okay to spend it.
Honestly, I'm going to give you some advice that I struggle to follow myself.
Think of someone you love. And then imagine they have the EXACT financial situation as you. And they tell you they need/want something. What advice would you give them?
I've been having heart palpatations and my arm is numb, but I have such a high copay. Would you tell them, "Yeah, it's probably OK to put off seeing a doc and see if it just goes away on its own"?
I literally have not bought new clothing for myself in 3 years, and my pants are becoming threadbare. Would you tell them, "Yeah, you really don't deserve new pants until you have another $2,000 in savings"?
See what I am saying? Thinking of a loved one helps you love and respect yourself a little more. And trust yourself. You know you wouldn't steer your loved one wrong. Why are you doing it to yourself?
I don't get a ton of pleasure out of spending. I'm very frugal and it suits me just fine. I have pretty much met my short term financial goals and think I'm on track to retire relatively young, but I am still very frugal because I think it will serve me better in the long run. Maybe I'll retire earlier or maybe I'll do something else with it, but for now it's rather continue to save for whatever opportunities I find in the future, rather than spend it on things I can do without. I don't have any kids to leave it to, though, so who knows maybe I'll die full of regret.
Find a collectible hobbie. Supposedly whatever you buy will increase in value.
This will relieve you of guilt when spending
CunningCobra t1_jabg1zd wrote
> I feel like I am sacrificing quality of life
Can you try to put numbers on that feeling, how much would you have to spend to increase your quality of life by how much?
> What is a healthy balance?
Healthy is whatever you're comfortable with, which doesn't seem to be the case at the moment.