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Generally I am pretty frugal. I have waste and inefficiency, especially when it comes to wasting money. But I also have expensive hobbies. I also value stress free life over money. Sometimes I question my values. Why am I trying so hard to save pennies only to drop thousands on random things. Anyone else like that?
For example, I try to conserve water because we always go over our water allowance and have to pay extra. So I switched all our sink faucets to use water saving nozzles. My wife hates it. I leave our A/C at warm temperature to save electricity. I look for deals and coupons for anything I buy. I hate spending more than $5 for lunch or $10 for dinner. But then I sold my condo for a lost of $100k because I don't want to deal with being a landlord.
Being frugal isn't necessarily quantifiable. Losing $100K on your condo gave you some value in that you don't have to deal with bad renters or a further drop in the market or take care of the place any more. You got some of your time back to do other things. If you can financially handle the loss of money and move on in your life, then you made the right move for you.
My wife worked 6-7 days a week, 10-12 hour days to make a small business successful. When we retired my new job was to see that she could have anything she wanted. So far I have succeeded. And I am thankful her wants are few.
Compared to most people in Sub-Saharan Africa, most of America's poor people are profligate.
The big picture concept to focus on is to consistently have a gap between what you earn and what you spend. Then you save and invest the difference (and no, the house you live in is not an investment). If that gap isn't a minimum of 10% on a consistent basis (yes, saving 10% of your income is on the low end of what's necessary if you want any reasonable measure of financial security), then that's a red flag. It means you need to do some combination of earning more or spending less in order to increase the gap.
Of course, you have to be careful with investing as well. Real estate investing requires a lot of work, up front. With index funds (or even low cost actively managed mutual funds), stock and bond investing has never been easier. But the financial markets will go up and down, so the hardest part for most people is to continue to contribute consistently in good markets and bad without moving money around from fund to fund (which almost always hurts your returns).
Generally I am pretty frugal. I have waste and inefficiency, especially when it comes to wasting money. But I also have expensive hobbies. I also value stress free life over money. Sometimes I question my values. Why am I trying so hard to save pennies only to drop thousands on random things. Anyone else like that?
For example, I try to conserve water because we always go over our water allowance and have to pay extra. So I switched all our sink faucets to use water saving nozzles. My wife hates it. I leave our A/C at warm temperature to save electricity. I look for deals and coupons for anything I buy. I hate spending more than $5 for lunch or $10 for dinner. But then I sold my condo for a lost of $100k because I don't want to deal with being a landlord.
sweating the small stuff while blowing it on the big stuff is all to common .
famous researcher michael kitces looked in to this phenomenon.
EXECUTIVE SUMMARY
The personal finance space has no shortage of tips to managing your spending, from bag lunches in lieu of eating out at work to home-brewed coffee instead of the morning Starbucks routine. Yet the reality seems to be that in so many situations, we dig ourselves a tremendous spending hole because of our big purchases, and then worry tremendously about the small stuff trying to make up the difference. If you really want to change your financial reality for the better, though, it’s the big stuff you really need to focus on – where you live, and what you drive.
Yet as I looked at the list, I couldn’t help but think… really? The key to my financial future is clipping $0.50 coupons for my morning cereal and making sure that I don’t impulse buy any snacks in the checkout line? Yes, I realize that spending an extra $4/day x 5 days/week x 50 weeks/year means you could be spending $1,000 at Starbucks, which is no trivial amount. But overall, most of this seems like small potatoes.
Instead of doing so much to sweat this small stuff, I wish that we could do a better job focusing on what really matters – where we live, and what we drive. Because the reality is that for most people, our dominating expenses are actually not all this little stuff; it’s our cost for shelter and transportation.
sweating the small stuff while blowing it on the big stuff is all too common .
EXECUTIVE SUMMARY
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Instead of doing so much to sweat this small stuff, I wish that we could do a better job focusing on what really matters – where we live, and what we drive. Because the reality is that for most people, our dominating expenses are actually not all this little stuff; it’s our cost for shelter and transportation.
I agree with the last sentence- both house and car can be unmanageable fixed expenses if you borrow for them. OTOH, I've saved thousands of after-tax $$ over the years on little things that didn't change the quality of my life that much. Switch from the $100/month plan Verizon initially sold me to Ting 5 years ago: $80/month over 5 years = $4,800 at zero interest. Switch from the cable company TV + Internet to Google Fiber + Netflix 3 years ago, about $120/month, so $4,320. Buying my iPhone outright and keeping it for over 5 years: depends on your assumptions about what the average person does, but sure cheaper than one of those plans with "free" upgrades.
Before you know it, you've got enough for a Business Class flight to Europe! (When that becomes possible, of course.)
Generally I am pretty frugal. I have waste and inefficiency, especially when it comes to wasting money. But I also have expensive hobbies. I also value stress free life over money. Sometimes I question my values. Why am I trying so hard to save pennies only to drop thousands on random things. Anyone else like that?
For example, I try to conserve water because we always go over our water allowance and have to pay extra. So I switched all our sink faucets to use water saving nozzles. My wife hates it. I leave our A/C at warm temperature to save electricity. I look for deals and coupons for anything I buy. I hate spending more than $5 for lunch or $10 for dinner. But then I sold my condo for a lost of $100k because I don't want to deal with being a landlord.
I think you should change the water faucets back since your wife hates them and put the a/c at a comfortable temperature.
I have a friend literally obsessed with the little things. She will make an extra grocery trip regularly rather than pay more for blueberries, but due to time constraints, she lost 4K on an insurance claim by not filing it in a timely manner.
It would be better to pay a little more for blueberries and leave time for the bigger things. It is an OCD thing with her.
Not sure if you can fault yourself for selling your condo at a loss. Maybe it was just really bad timing due to your life circumstances. Just try to plan for the future when you buy your next place. I wouldn't worry too much over the little things. Try to be conscious of spending but don't go overboard. I agree with another poster that you should really think of changing the water faucets back to how they were before and turn the AC up. How can you put a price on your happiness? To me saving a few hundred or even a thousand a year isn't worth being uncomfortable.
I agree with the last sentence- both house and car can be unmanageable fixed expenses if you borrow for them. OTOH, I've saved thousands of after-tax $$ over the years on little things that didn't change the quality of my life that much. Switch from the $100/month plan Verizon initially sold me to Ting 5 years ago: $80/month over 5 years = $4,800 at zero interest. Switch from the cable company TV + Internet to Google Fiber + Netflix 3 years ago, about $120/month, so $4,320. Buying my iPhone outright and keeping it for over 5 years: depends on your assumptions about what the average person does, but sure cheaper than one of those plans with "free" upgrades.
Before you know it, you've got enough for a Business Class flight to Europe! (When that becomes possible, of course.)
It’s okay to add the small stuff after you fix the big stuff .
The problem is most people don’t fix the big stuff .....
There is nothing in life we can’t do cheaper ...we can always do without , down grade , deprive ourselves of things we would like .
Many times we downgrade to things we are not really happier with ,they are just cheaper .
When I worked I enjoyed buying breakfast every day ...it was something I looked forward to doing ... could I save giving it up ? Sure ,but I don’t want to give it up.
I would never give up spectrum for google tv , I have choices in cheaper cell phone service ...Verizon works the best here and I don’t want to give it up .
So The idea is not deprive yourself things you rather have or do by fixing the big stuff...
I went through life not cutting expenses as much as I concentrated on better investing to make up the difference ...I did what I had to do to earn extra money to invest early on
I agree that choosing the big stuff wisely will make the largest financial impact, but most truly frugal people have already done that while also tackling the small stuff. Frugal people don't like to overpay and won't go heavily into debt because we want something whether the item is large or small. Someone who isn't naturally frugal who finds themselves in a financial bind may make the mistake of going after savings on small items rather than large items, but frugal people attack both.
We're mindful of our spending but don't deprive ourselves of the things we really want. We don't fall into the trap of always buying the cheapest and we also don't fall into the trap of believing that more expensive always equals higher quality. We spend on the things we value but don't waste money on the things we don't. Combined savings on little things can really add up over the years.
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