I’m not skeptical of the FIRE movement. I think people who choose that route are at least doing some of the front-end work of thinking about and planning their finances. They might get it wrong or be too optimistic, but at least they are asking questions. It remains to be seen whether things pan out as planned/hoped.
The people who I don’t get are those who live in a level of denial, who make plenty of money and “don’t know where it all goes.” I like to listen to a lot of financial podcasts, especially those where people write in with questions about their personal situations (what can I say; i was a psych minor). I just listened to one where empty nesters make more than $250k/year and live in a low-cost area, but they are always broke. An example: Dh was stranded at the gas station because his card was declined. His wife had to pick him up, because he was out of gas and had no way to get more and then drive him to work. WTH? Can you imagine living such an infantilized existence in your mid-50s? Lots going on here, only some of it about money.
I listened to a podcast (Money Watch with Jill Schlesinger) while gardening. The question was about what to do with liquid savings. It amazed me that the couple was willing to share all their account balance details. Same for Dave Ramsey and other shows. In this case impressive savings. But sometimes it is shocking debt. Either way, TMI.
There are a lot of people that do live ‘above their means’ - they do it with having a fair amount of debt. They may not really realize how much ridiculous spending they have and the behavior patterns they have gotten into.
People cannot separate out in some situations emotions and rational thinking. Key is to identify one’s weaknesses and work on them.
There are probably thousands of ways to save money. The question is: Is it worth the time and effort? For many people yes, some no. I may have shared this in this thread (or some other) so apologies if I’m repeating myself:
When my wife and I were young, recent law school graduates, we were really frugal. My sister (who was already an established attorney) came into town for a conference and left a day early so she let us use her hotel room at the Four Seasons. It was on a Sunday and they gave a free newspaper to all hotel guests. We loved the Four Seasons but loved the coupons from the free paper even more. We sat in bed clipping coupons.
Fast forward 25 years, if it requires effort, we wont do it unless it’s economically material because now our time is worth more than a few dollars we save. Being frugal early helped us accumulate wealth so we no longer need to worry about a few dollars here and there. Plus, writing a check for $85k for tuition/room & board, etc. next year (potentially $170k in 2 years D24/D26) makes nothing seem expensive.
For certain people, they’ve never been frugal and never will. They overspend. Unfortunately, at some point, they may be frugal by necessity and not by choice.
Yes, you and I remember those early ‘lean’ years. DH and I had a goal to get into our own home ASAP, and we were able to do so by sharing one car (I worked night shift and he worked day shift for 1 1/2 years) - with DINKs (dual income no kids), we paid off his not too large student loans (which were a necessity for him to get through engineering school), and got into our first home a year after graduating college. We took out a 2nd mortgage (at the time 12% interest) to pay off the equity built up with the house and assumed the primary mortgage (8 3/4% interest, which was ‘good’ at the time), but had that second mortgage paid off in a short time – we lived off one income and were able to use the 2nd income to purchase needed furniture pieces as well. We didn’t pick up a 2nd vehicle until our second town and second purchased home (had a company move) - and that was a low cost but well running two door Ford Maverick to get DH to and from work (no AC) - and later upgraded to a better used car (with AC).
We hope to have passed on to our DDs good principles on managing home finances. Due to where they (and their significant other) are with their careers, home ownership has not ‘happened’ for DDs yet. But they possibly both are in their city where they will be able to put down roots. DD1/SIL manage their money well (and their time too) - they have 4 young children, 2 in day care and 2 in private elementary school.
Even now, there are ways I look to save money - for example, DH asked me to pick a restaurant for him to take me out for Mother’s Day (he mentioned this last Friday) - and I picked lunch at a steak place I like (coordinated our calendars to go Wednesday); why pay the dinner prices when I can get a great meal at lunch time (and not over eat). We tip the wait staff well - we know how it is when you are depending on those tips due to the restaurant having a low base hourly rate for wait staff.
I like to always remember there is a nice middle lane or a slight lean one way or another between being very very frugal and very very spendy.
We didn’t have the resources to be “very spendy” though spendy or frugal is up for interpretation. That said we didn’t deny simple pleasures with our kids and families, our home.
And that is how we land now, sort of in the middle. We still work hard, still consider our spending, enjoy some simple pleasures and hope for the best. Can’t say there is zero worries about a financial future because who knows what is in store, but I don’t regret how we got here - enjoying life a little, teaching that middle of the road life, enjoying our home and family.
We have a lot of those expenses (major urban market, high property tax, high income tax) except we don’t usually fly business class or stay in 4 star hotels for vacations and definitely don’t eat out anywhere near three nights a week though we do entertain a fair bit. We buy our food at Costco. No private jets (would love it for work) and cars at 5 figures but 10 years old.
@OregonMom2024, I would guessing that the lifestyle described requires $250K or $300K after tax for that. Is your assumption about the Nest Egg is in after tax dollars? If so, I guess you would need to gross the required Nest Egg to account for taxes.
Interesting how certain frugal practices continue while certain “extravagances” creep in as you move up the affluence ladder. For me, I always have had and continue to have a habit of calculating unit costs of any groceries that were commodities to me. I’d definitely pick the store or off-brand or the bigger size even if it only saved me pennies per unit. I look at menu’s the same way, looking at components and serving sizes/weights. I still wander in the weeds looking for golf balls if there is no one behind me (a successful round is one where I end up net ahead in balls) even though I have 20 boxes of new ProV’s in my garage from tournament prizes/giveaways. These were all habits I developed in my youth/college/law school days. On the other hand, when I am with friends these days, I have no problem throwing down the plastic for round(s) of drinks, or buying my kids the best gloves, bats, or full pay their colleges when the state flagship would have been a quarter of the cost, or treating my wife and I with nice new cars every 3/5 years.
Same here. But it’s the frugal habits that helped make things comfortable for us in retirement, despite the unfortunate reduction of our pensions.
The podcast I listened to yesterday was about two CA public schoolteachers, around age 40. I was surprised that their combined income was over $200k, but hey… I know teachers work hard. Sounds like they’ve been making wise decisions, saving for their kids college etc. Not sure the area of CA, but their house worth is about $700k so reasonable COL. I was even more surprised that they anticipated being able to retire at age 60 at near full salary. (Maybe with healthcare benefits too? But no SS). OK, I was a little jealous on that point. I do realize this is an unusual situation. In most areas I think teachers, even married teachers, have a hard time buying their first house.
This makes so much sense to me. My parents were people for whom monetary considerations were of utmost importance. They were extremely frugal (cheap is probably a better word) and always worried about losing money. They couldn’t enjoy life and that’s very sad.
I can relate to everything you said except the car thing. I just can’t get past the fact that cars suck money, whether I have the money or not. I’ve bought mostly new cars, handed down 3 to sons, bought my Mercedes just off someone’s 2 year lease, very low miles, looked brand new inside and out, and still had like 3 year mfg warranty - half the price of a new model that looked exactly the same. We drive cars until they die, I don’t think I’ll ever get past that habit.
This is my husband!!! He buys used Mercedes. I have a 2009 Mercedes ML350 SUV that has 225K miles on it (maybe a little more) and it runs well. H says I can get a new SUV when the ML hits 250K.
I’m another who found a middle ground (have some fun “now,” but save for the future too). I was poor growing up, but graduated from college with zero debt and zero money. I always saved at least as much as got matched for retirement, and increased that over time as I could afford it. Rarely ever had credit card debt.
When kids were young and we made less, we did very simple vacations or went to visit my mother. As they got older and we could afford it, we did nicer vacations, even though that money could have gone to savings instead.
We paid for college, but we wouldn’t have done full-pay for very expensive private.
The last couple of years we worked, we decided we would take some really nice (to us) vacations while we were still working. Now that we are both retired, we continue to travel a fair amount, but if we had a bad year we would just cut out or decrease our travel expenses (which is our big ticket non-necessity item).
We buy new cars but keep them a long time.
Frugal At Home Me clips Walgreens coupons, eats leftovers for lunch most days and is not above $5 wine bottles when my favorite wine store has an inventory sale.
Vacation Me will spend $800 on a meal for two at a Michelin 3 star.
Vacation Me is fun to hang out with but would lead me to bankruptcy and an early grave so his influence is intentionally limited.
We are also middle of the road. We were DINK (double income, no kids) and still broke the first several years of our marriage. Both changed careers, made better money and were finally able to save. But we did spend on some things for fun, too. It’s all about balance for us.
