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If you get to the point where you have no debt, you're on a solid path for an early retirement, you have plenty in the bank for an emergency fund, is there anything wrong with just looking at the extra funds outside the budget each month as just "fun money"?
So for example, you make $10k a month. You invest $2k of that off the top. You have $5k left over after taxes. Your outgoing expenses are $4k, you have no debt to pay down, and you're left with $1k every month... Anything wrong with just spending that $1k on whatever you want, basically blowing it just for fun?
You are bound to get a lot of opinions on this. I don't think there is a "right" way or wrong way.
What I would be concerned about is creep. When a type of spending becomes commonplace, it can be difficult to stop it and the spending will naturally increase. The second concern I might have is the loss of the idea of "special." When you eat steak every day, it is no longer special. When your desires are always satisfied, you may find life more boring.
Rather than blowing $1K each month, I might set a target of something more expensive as a toy. YMMV
I'm not frugal because I need to be, I'm frugal because it's fun.
Frugal can be a psychosis, just like almost anything. If you are thinking there is something "wrong" with spending money that you can afford to spend, your thriftiness might be interfering with your life. I give you permission to blow all your hard-earned savings on a head shrinker to fix that.
You are bound to get a lot of opinions on this. I don't think there is a "right" way or wrong way.
What I would be concerned about is creep. When a type of spending becomes commonplace, it can be difficult to stop it and the spending will naturally increase. The second concern I might have is the loss of the idea of "special." When you eat steak every day, it is no longer special. When your desires are always satisfied, you may find life more boring.
Rather than blowing $1K each month, I might set a target of something more expensive as a toy. YMMV
This. Habits, once formed, can trap you. I'd give myself a goal to save most of that free money for. While that isn't spontaneous it can still be "fun" and will probably end up being more meaningful. Frittering $1000 away every month on trivialities just because you can seems like such a waste.
Instead of frittering that money away, I'd save it for special treats. I like to travel and if I put $1,000 away each month I could have a nice vacation in the summer.
Instead of frittering that money away, I'd save it for special treats. I like to travel and if I put $1,000 away each month I could have a nice vacation in the summer.
Right but what if you're spending $1,000 a month but really have $5,000 left over each month. So you're still putting $4,000 away for all that other stuff.
Can't take it with you right. If retirement is in line, you have no debt (maybe minus a low interest mortgage) and big emergency fund, what's wrong with just spending/enjoying anything else you bring in. Is a larger number on a computer screen really so important? I don't know... I use to squirrel everything away, as I get older I'm thinking more about enjoying it.
I was an aggressive saver before I retired. If I found myself with extra money from my job, I would just invest more. Today I am very happy I did. I was able to retire well off at age 57. I can blow a lot of money now because of what I did years ago.
We still did fun stuff, international travel, had a nice house and cars, but we kept our lifestyle in check as our income increased. Living nicer, but not nearly as nice as we could have based on our income.
With that being said, I had a “fun” money bucket. It existed just on an Excel spreadsheet. The funds were commingled with cash in my checking. The fun money came from credit card points, sales on eBay, an occasional paid research gig or towards the end rebates from Ibotta. There was always several thousand dollars in that bucket. We took domestic trips, bought good wine, bought a bike or two. All guilt free. It worked for us.
We are about 80% of the way to my original goal for FIRE, which I thought would take about 4-5 years longer than it did, so I've started to loosen the purse strings, while still maxing out our 401ks, Roth IRAs, and HSA. But, I do still keep a budget to get an idea of how much we are spending. I don't want it to be where I creep up to spending an additional 30-40% beyond what we've traditionally spent, but I am fine spending an additional ~10% and not worrying about every single purchase.
Just allocate some money monthly from your budget to go into a guilt free spending account. Spend it on whatever you want and don’t look back. 10% of gross seems like a lot for this category though IMO
Can just light that Havana cigar with a $100 bill.
I maybe cant take it with me, but those last years truly suck if destitute. And its hard to earn it back at that point. Its truly amazing what some people talk themselves into "needing" or "deserving".....
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