Related Posts
Anyone looking for a workout partner in Houston?
Got any jokes?
Additional Posts in Finance
How often do y'all pull all-nighters?
New to Fishbowl?
Download the Fishbowl app to
unlock all discussions on Fishbowl.
unlock all discussions on Fishbowl.
You're not wrong, but you're also not entirely right. The sweet spot is somewhere between blowing every paycheck and eating rice and beans until you're 60. I pay my bills, save around 25% and spend the rest guilt-free. The people maxing out every tax-advantaged account while skipping vacations and eating out of Tupperware at 28 are making a bet that future them will appreciate it. Maybe they will. I'd rather enjoy my knees while they still work.
There has to be a balance to it. When you are first starting to save and build wealth, it's absolutely necessary to forgo discretionary spending for a time. Took me 2 years of saying no a lot to get myself in the position I am now. That doesn't mean I didn't spend anything extra at all for 2 years, just scaled way back to get a solid foundation. The issue is, a lot of people choose the other end of the extreme, spend everything for the sake of today and save nothing for the future. In a perfect world people would go somewhere down the middle, but if I had the option to choose, I would rather sacrifice for a few years than put off saving for decades and end up with no retirement.
Maxing out 401k and IRA/roth contributions is not anything close to extreme savers.
I have a few of these clients. They all have a lot in common.
* They get good feelings from saving that others do not get.
* They have a simpler life and do not value "things."
* They do not get good feelings from spending like a lot of people do.
* None of them feel like they are making sacrifices to save, it is just a part of their routine.
I have a client who, on top of his IRA, Roth IRA, 401K, and an old TSP, had money at 5 different fund companies to buy one fund at each in NQ accounts. He had $100/month set up to each one. As he approaches retirement we talked about consolidating to make life easier and get risk in alignment. We transferred everything into one account, but he could not bring himself to stop the auto investments so now he still has stuff spread everywhere again!
My parents are also life-long savers and I have to goad them to spend their money in retirement because it has been hard for them to flip the switch from save to spend mode... but they are getting there.
Some people take it too far, but a lot of us just find it easier to live well within our means. I honestly don't feel a lot of urges to spend money, and if I don't have anything to spend it on, I'd rather put it to work. A lot of it isn't tied up forever, I could access some of it tomorrow if I had a reason. But for now I'm content being thrifty and piling it up.