Most people in the US are pulled into living on credit straight out of school. You get a student loan, then a car loan, then a credit card, then a mortgage. You finance vacations, appliances, kitchen remodels, smartphones - mostly to keep up with friends and coworkers who finance their lifestyles too. A lot of people are in non-stop debt from the age of 18 to 55, if not longer. By most estimates, only about 10-20% of US households are debt-free.
Spending and getting into debt are useful tools. But I don't have any friends in tech who need to be told "hey dude, you should be spending more". I have quite a few friends who would be better off spending less.
For sure it's more common for people not to save enough. But for people who are frugal and save diligently for most of their lives, there often comes a point where they cross a threshold where they have met all of their financial goals, and the "problem" is no longer how save money but to enjoy spending it. And this can be a real challenge for people who have built up deeply ingrained saving habits.
My mother, for example, refuses to replace her iPhone SE with something with a larger screen despite 1) having failing vision and difficulty reading the screen, 2) using her iPhone every day, 3) easily being able to afford it. The idea of spending $1,000 on a phone is just something she is unable to bring herself to do, even though I think it would help alleviate a real source of frustration in her life.
My father, when he started shopping for his most recent car (and probably his final car), set out with the intent to buy a luxury car. But again, despite being able to easily afford one, all he was able to bring himself to buy was a well-equipped Toyota. Don't get me wrong - it's a great car and has served him incredibly well. But it makes me a little sad that he wasn't able to bring himself to finally treat himself to a luxury car after a lifetime of hard work and saving. They did a lot of long road trips together in that car in retirement, and I think they would have enjoyed something a bit more luxurious (though on the other hand, the reliability of the Toyota is not to be discounted).
I think what you're attributing to frugality might be a more a matter of age? Many older folks are just wary of change.
I'm not that old, but every time I upgrade my PC or phone, some of my workflows break and I need to pointlessly re-learn things I'd rather not re-learn. UI buttons get moved around, icons change, some settings are removed and others are added... this was exciting the first ten or twenty times, but it's just tiring now.
Basically, I'm at this stage in life where my reaction to systemd wasn't "oh wow, this is progress" but "ugh, I need to learn how to start, stop, or modify services again". In another ten years, I'll probably just say "no, I'm not doing this again, just let me use my old computer for as long as possible".
> my reaction to systemd wasn't "oh wow, this is progress" but "ugh, I need to learn how to start, stop, or modify services again"
I must be young at heart while >60 years old; my reaction was "why is everybody whining about it, it's pretty nice, I like it". Same with jj vs git, jj is amazing!
Lots of discussions on HN about it recently [1], [2], I heard of it right here. It works on git repositories, so it's very easy to try.
For me, the killer feature is updating some commit deep inside some feature branch, and all child commits and branches get auto-updated, no more faffing with endless rebases. Also conflict handling is so much more pleasant than git's.
It's definitely varies by person. I'm much more like the GP where relearning how to do basic things I already know how to do is one of the absolute last things I want to spend my time on, but I know plenty of people who are the opposite. Newness and novelty are genuine features for some, and that's totally fine.
The annoying thing is that the latter group is over-represented in tech and a lot of core products like phones force people into that path. Most of the non-tech people I know couldn't care less about the latest iphone/android update,they just want the damn buttons to stay the same so they can do the stuff they were doing yesterday. But the only two phone platforms both change their UX regularly and users just have to go along with it.
I am with you on UI updates, just moving things around and re-skinning the UI without useful functionality additions make me mad often. But then I grind my teeth and bear it.
Possibly there’s an element to this. The iPhone SE still has the home button, which may have been a factor when she bought it. And my father was a bit put off by some of the bells and whistles on luxury cars.
I think he was considering a Lexus RX. I doubt he even looked at BMW, Mercedes, etc (not really his style).
His Toyota was probably under $40k. This was back when cars were quite a bit less expensive than now. Nice car for sure, but the Lexus probably would have been a bit more refined.
My own parents are in their late 90’s. Because they grew up in the wake of the Great Depression, I always assumed their extreme frugality was a function of the economic distress in their formative years. They also properly accounted for the fact that old-age care is very expensive. Parenthetically, most do not seem to anticipate that accelerated burn rate near the EOL. It’s also a phase whose duration is hard to predict.
When I started driving my car had vinyl seats that you had to peel yourself out of on a hot day, a plastic steering wheel that you could barely touch when the sun was out, hand wound windows, fixed seat belts and a handbrake that barely worked.
Even the cheapest car on the market feels luxurious now.
In comparison the difference between a Toyota and a Lexus is marginal.
Expensive cars are mostly about status signalling, we are long past good enough.
>Expensive cars are mostly about status signalling
Uhm, only if you are counting the most basic utility, then you're right.
However if you actually enjoy driving (A->A driving), there is a HGUE difference and it's not just signaling. It's that you probably can't tell the difference, or don't care.
There is no comparison between driving a new Porsche or Bentley vs a new Toyota or even a Lexus.
They cannot, because they are wrong. And I say this as a person who has owned no small number of fancy cars (but I got better).
A new base-model Prius is absurdly luxurious compared to a base model car of 1975 or 1985 or even 1995. If you have lived long enough to see this change, then dropping 2x or 3x or 10x the cost of the Prius self-evidently puts you wildly beyond the point of diminishing returns.
The Prius is going to have excellent climate control, and a phenomenal stereo. It's going to have adaptive cruise control, and will warn you when you drift out of your lane, or if you're about to run into an obstacle.
Outside of motorsports-sorts of things, what you get out of more expensive vehicles is of limited utility. Mostly, it's just showing off.
Now, if you want a track weapon, then yeah, you DO get more by spending. But for a regular person who wants to get from point A to point B comfortably and safely? The Prius is fantastic, and it's hard to justify spending more unless you're willing to admit that it's a keeping-up-with-the-Joneses kind of thing.
Even in motorsports, presumably it’s still
mostly showing off? Unless you are a pro, you’d still lose any seriously comepetitivr race and have plenty to learn and enjoy driving a not-quite-top of the line sports car?
I don’t know motorsports, but in all the sports I do know it’s that way. Tennis, cycling… there are serious diminishing returns in all of those and most kit spending isn’t justified by performance as much as status or stamp collecting.
So much of our lives are taken up by worrying about tiny performance differences that really don’t matter. It makes me sad for the waste of life sometimes.
That's definitely true, and I have a whole other rant how my cycling pals and I love to poke fun at dudes who show up to the group ride on a brand new $10,000 bike and get dropped before the midpoint.
BUT! It's easier than you think to get a point in participatory motorsports where the difference between, say, a Cayman and a Miata is something you can actively use.
The groupset would drive it for me. If I was buying a new bike, and I knew I wanted to be a rider, I wouldn't mess about with anything less than Shimano 105. At Specialized, the lowest end bike with the 105 groupset on it is $2100. That's the Allez Comp, which has an aluminum frame and wheels.
The next step up the ladder would be their "endurance" frame, which is carbon. It's called the Roubaix, and equipped with 105 it's $2800.
Either of those would be a good first "serious" bike.
If the question is more about diminishing returns, I'd offer my own bike, which is a Giant TCR Advanced. It's a couple years old. I have about $5500 in it, all in, but that includes the middle-grade SRAM electronic shifting group, carbon wheels, and a power meter. The meter is skippable if you're not doing serious training, but I did and do use power data for training. Subtract $800 if you don't want that.
I honestly think spending more is just showing off. If that's your jam, knock yourself out, but it's probably not making a big difference UNLESS you need a custom frame to be comfortable.
>That's definitely true, and I have a whole other rant how my cycling pals and I love to poke fun at dudes who show up to the group ride on a brand new $10,000 bike and get dropped before the midpoint.
This has nothing to do with higher end cars or bikes being "signaling" this is just an anecdote between your skill and the next level.
You could say the same thing about a tour de france winner with any bike vs you and your pals.
If you are competitive, you get to a point where the differences do matter.
>This has nothing to do with higher end cars or bikes being "signaling" this is just an anecdote between your skill and the next level.
No, that's precisely what it's about.
>You could say the same thing about a tour de france winner with any bike vs you and your pals
In cycling, a TdF rider's bike isn't significantly more expensive or fancy than the highest-end bike available from any given maker. A novice rider rolling up on something one or two ticks away from the absolute top of the line is being a silly person. Novices in any discipline who opt for the high end of equipment are making foolish choices, and are frequently teased about it.
>If you are competitive, you get to a point where the differences do matter.
My guess is that you don't know very much about cycling. Pogi would be as very nearly as fast on my $5000 road bike as he is on his TdF bike. His comp bike is a little bit lighter, and it has components that are one tick higher up and thus lighter, but the differences at this level are tiny.
Nobody who isn't being paid to ride needs to go higher than $5k on a road bike. Going higher is just showing off, which is of course a totally reasonable thing to do, but don't pretend it makes a real difference.
>Even in motorsports, presumably it’s still mostly showing off? Unless you are a pro, you’d still lose any seriously comepetitivr race and have plenty to learn and enjoy driving a not-quite-top of the line sports car?
I was at a track day once, and you'd see guys rolling up with very expensive cars, and they were often clocked as noobs before anyone even spoke to them. The guy rolling up with a beat up 1st gen miata pulling a trailer with two sets of spare tires? Yeah, that guy got respect. Dude was scary quick in the turns.
I'm replying to the comment that expensive cars are mostly signaling. And it's false.
For people who don't like cars (/r/f*kcars is strong on HN) I understand their viewpoint. For people who LOVE cars, we see the details and appreciate the engineering, craftsmanship and art.
Will a Prius get you a->b the same as a "signaling car", yes. But for the hobbiest, it's the journey not the destination.
If you compare a Porsche SUV to a Lexus SUV, there's almost no difference.
If you compare a Porsche Boxster to a Toyota, the Porsche is much more of a driver's car and if you're the right kind of driver, there's simply no comparison. (We'll ignore the FT86 / 86 for the moment ;)!)
If you buy a Bentley... you probably pay someone else to drive it for you.
Something to remember in all of this is hedonic adaptation. Buying a Porsche will feel in the moment different from buying a Toyota. But a few months later, you will be driving "your car" and much of the time, you'll be thinking about driving, traffic, signs, speeds, lights, pedestrians, bikers, the song you're playing, your next turn, a dozen other things. For the most part, you won't be thinking about how much "better" your car is in comparison to the alternative. You'll be used to it. You'll have adapted.
Different cars are certainly different for a personality who is drawn to the merits of automobiles. My favorite car was a $20K used Mazda 3 hatchback. I liked it much better than some much more luxurious cars (including the Polestar 2 Performance Plus I have now.) But that wasn't because of luxuries (the Mazda had luxury and heated seats and climate control and swivel headlights and adaptive cruise control and... and...) but because I enjoyed pressing the clutch, pulling the gear lever into second, releasing the clutch, putting my foot down, and steering through a corner. (The Polestar has some merits as well, but they are very different merits.) The Mazda 3 had a whopping ~186 HP... but it was fun. (Don't get me started on my 2007 Honda Fit... oh the memories!)
I've owned or driven cars from almost every auto-manufacturer found in the US/EU. I can clearly say (subjectively) there is a HUGE difference between a Porsche Cayenne GTS, Turbo S or Turbo GT than Any F-Sport Lexus. Sorry, not the same league.
As far as the adaptation, maybe. But driving a Toyota never brought a smile on a twisty, ever. But it was reliable and always started :) The Porsche, every time, it never gets old [feeling] after many years.
Maybe you live somewhere that's possible, or not too far from such a somewhere. Rare to find such places within 50 miles of a big city though, unless you're in Germany and have the autobahn.
I suspect most premium cars get to spend a tiny fraction of their mileage doing the kind of driving where they'd measurably beat a mid-market model.
Bah. I've driven luxury bmws, porches, and corvettes. You want to know what my daily driver is? A miata. Those other cars are faster, yes, but nothing else makes driving quite the occasion that a miata does. You don't have to go expensive to buy something you actually enjoy driving.
Yep, I've always said it's much more fun to drive a 'slow car fast' than a fast car slow. I drove a friends suped up vette and I could barely breathe on the gas pedal without breaking laws. Meanwhile I can rip my miata to redline in 3rd gear and not raise too much suspicion getting on the interstate.
I'm curious what the breakdown is. I definitely know people who buy nice cars just for the status aspect. My neighbor bought a Porsche recently and I was talking to them about which fun roads they've driven in around here (I bike and ride motorcycles so I've been on a lot of fun backroads) and they said they've only tried one road once.
I ended up asking them what they do with their Porsche and apparently it's mostly going to car meetups and saying that they have a Porsche and feeling good about owning a Porsche.
So yeah as a former Miata owner I know that expensive cars tend to just be more fun to drive but if you live in an HCOL area with people who are highly leveraged, you'll find a lot of people who buy nice cars only for status signaling. I suspect in HCOL areas more do it for status than the actual love of driving.
(FWIW I find this in a lot of hobbies. I can ride a loaner bike faster than a lot of riders around here decked out in fancy kit, clips, and the best groupsets. A lot of people in HCOL areas engage in hobbies as an excuse to nurse a shopping and status addiction.)
Which goes back to the root comment that a lot of tech people highly leverage their life because it enables them to have a lifestyle and status that they think they need or deserve.
I'm perhaps pathologically frugal myself. I've found for myself the best compromise is to force yourself to pick at least one feature other than cost. We've got a 17 year old Toyota Yaris that I tell myself is for fuel efficiency, and an old Ford Ranger because I wanted at least one of our vehicles to be able to move sheet goods. Technically I could probably walk onto most any lot and pay cash for whatever I wanted, but I know there's zero chance I'll ever do that.
With cars if you wanted to bias yourself towards newer cars you could prioritize safety features alongside cost.
A Yaris and a Ranger (who doesn’t love a Ranger!) are going to serve you well, but they’re not going to have the active and passive safety features of a more modern car. Put next to cost it makes it a bit harder to perform maladaptive frugality.
But what is 'luxury'? You may have in mind a Rolls Royce. But maybe he doesn't want that.
If they've been frugal their entire life, they aren't as far along the hedonistic treadmill, a new reliable car is a luxury.
If you're used to darning socks, buying new socks is a luxury.
If I buy a PS2 today, why is that not a splurge, if I didn't have one previously? Yes it doesn't have the best graphics but it's a step up from my PS1. Getting the latest and greatest just because, is keeping up with the Joneses. And that's a path to spending money, not happiness.
The knowledge that you have enough in your bank account if things go to pot, itself brings happiness
Are you sure they were deciding only or even primarily based on cost? I often find myself choosing cheaper options over more expensive ones, because I find them easier or more enjoyable to use. I think with expensive/luxury products, there tends to be more "curation" and opinionation, which can work well if your preferences line up but is a detriment if not. I also think a lot of times more expensive products are just "luxury-hacking," having focused on "building a brand" to the point where they are able to charge more for worse products. Example: Beats headphones adding weights inside just so that they "feel more premium" https://www.news.com.au/technology/home-entertainment/audio/...
> The idea of spending $1,000 on a phone is just something she is unable to bring herself to do
Your parents are smart. 1000 dollars for a phone is absolute nonsense. A luxury car is something you should be sure you will thoroughly enjoy, because they are a good way to set money on fire. If you do want one, buy it second hand, for it will cost hundreds of dollars per km for the first kilometers.
Having a credit card is like having a video game passive that makes everything permanently 2% cheaper. Everything should be put on a credit card for that discount as well as fraud protection provided you are disciplined enough to never ever ever ever ever ever carry a balance.
You get roughly the same level of fraud protection on both at this point. This is both due to converging legal protections in many places and due to market developments (both Visa and Mastercard require issuers to offer "zero liability" on debit cards just like on credit cards).
One advantage of credit cards is that you don't have to wait until the dispute has been at least accepted to get your money back, though.
I don't get the down voters, it is, or should be a tool.
Although we are talking about it being an issue. Which you have already covered.
Problem is, most people don't spend that much time thinking about it. So I suspect "don't get a credit card" or "only use it in emergencies" are generally good advice. Although perhaps we should just be better at teaching house hold type finance
Of course somebody is paying your 3%; there's no free lunch. To a large extent it's yourself (via interchange paid as part of the merchant's fees); part of it is however also other people paying cash and often not receiving a discount for doing so.
Regardless of all that, at the individual level, not using a credit card is still irrational. Not quite the tragedy of the commons, but it's pretty close.
The only way out is probably outright regulating the entire thing away, like the EU has successfully done; the market seems too inefficient and consumer behavior too sticky for card-specific surcharges (i.e. "you pay for your own points") alone to solve this.
Debt is also a way of normalizing, essentially, wage theft. You're encouraged to use credit to bridge gaps when what you're paid doesn't cover your necessities, let alone other expenses that you're expected to take on. When you can't pay back the debt you took out to live what is considered a normal or even frugal lifestyle, the justice system is used as a cudgel against you, often in the form of professional debt collectors and their attorneys suing you in small claims court (a venue which was established for laymen), where they abuse the lax rules to extricate full payment on a debt they bought for pennies on the dollar.
Somewhat related, here is a video from a guy trying to avoid just this sort of scenario by refusing to put his company's business expenses on his personal credit; follow-ups show the price he's paying.
If society expects you to consume, you should be paid enough to support it. A system that leverages greater and greater amounts of its future to pay for the present eventually reaches a point where it is statistically unlikely that the debt will ever be paid back. That's when all hell breaks loose.
That's a personal choice. You alone should be able to decide if that's worth the complications it introduces to your taxes and your relationship with your employer. However, the cleanest and most dignified route is to pay for expenses incurred in the course of business. And employees should have the right to refuse to put up their own money for such expenses, without consequence.
Heavy debt is a part of the US culture. You can probably imagine the responses folks would have when they found out I was 40, a tenured professor with a family, and didn't own a house. Nobody had a heart attack but I'm sure some were close. I was just violating cultural norms too much by not going into debt to buy a house as anyone in my position was supposed to do. Then they'd find out I drove an old vehicle and didn't take expensive vacations...sometimes you have to go with the math rather than cultural norms.
Home debt has traditionally been seen as "good debt" for a bunch of reasons, but the big ones were that
(a) Home loans meant you were accumulating equity in an appreciating asset; and
(b) Mortgage interest was enough to allow most people to take a larger-than-standard deduction on income taxes; and
(c) The relationship between home prices and the equivalent rental market meant you could probably have a nicer place for a lower monthly payment in many markets.
These were generally slam-dunk truths for decades, but in the last 20 or so years they've stopped being true.
Home ownership isn't the guaranteed rocket-ship to wealth it once was. Appreciation is spotty, and varies wildly by market. My own view of this is that a lot of the gains are now baked in, and we're unlikely to see the kind of rise in value (in real dollars) that characterized, say, 1990 to 2015. Last year I sold a townhouse in Houston that I'd owned since 2000; I made money, but not the kind of upside that you wanna write home about.
Second, the tax law changes in Trump's first term dramatically raised the standard deduction -- enough so that we stopped itemizing. Part of this was that we were deep into the mortgage, so we were paying less in interest every year, but it's still a factor.
Third, rents may be high now, but home prices and interest rates are higher. When I bought in 2000, I went from renting a place for $1200 a month to OWNING a place at a bit under $2k (including taxes and insurance). This was with 20% down.
In my old neighborhood now, a nice rental is gonna be $2500-$3000, and housing is just unattainable. First, 20% now means probably $90K. Second, servicing the loan is going to be more than the rent, plus you've got another $450 a month in property taxes AND probably another $450 in insurance. And you've got to accumulate the $90K somehow while paying $2500 in rent. It's crazy. I have no idea how a young person who isn't making top-5% income can afford to buy without family help.
> Last year I sold a townhouse in Houston that I'd owned since 2000; I made money, but not the kind of upside that you wanna write home about
Sure but you made money. If you had rented you would have lost that money. Renting only makes sense if the opportunity cost is higher, e.g. if you think the time value of the money that would be put into the down payment is higher in the markets than it would have been on a home. The other thing is mortgages are risk uncorrelated with major equities, usually at least. If there's a major recession your equities may be underwater for a few years. Your fixed rate mortgage will stay the same.
I'm saying it made sense for ME in 2000. I'm saying it's less obviously a good move for a 30 year old in 2026.
I have a strong suspicion that housing is due for a correction. Appreciation requires demand, and housing is now so expensive that Gen Z can't get on the ladder. That plus the looming Boomer die-off seems to point to a reversal of some housing gains.
I think housing in the US is just such a complicated space (Fannie/Freddie backstopped loans, ridiculous zoning and building requirements (FAR, setbacks, etc), environmental laws, varying property tax regimes, prevailing wage requirements for building in places, etc that it's just really difficult to understand. It's like a ridiculously complicated layered system of public and private regs and incentives that lead to very inscrutable results.
For me, owning your own home is partly about (mostly) paying it off before retirement, that way most people won't need a large retirement income to pay the rent. Also in my country, aged care asks for a large refundable deposit, for example 600k, if it comes to that.
It doesn't pay for the increased medical expenses near the end. But it can pay them off if sold after death.
In california I've noticed lots of other things. prop 13 might make apartments pay less taxes than comparable condos, and condos also have HOA fees that can easily be $2k. I've even seen HOA fees on single family homes.
HOA fees on freestanding homes are VERY common, but they're generally not as high as places with shared walls.
It's only in condos and whatnot that they get crazy, though. My sister has $2500 in monthly fees associated with her fully owned condo in Philly, for example.
This really struck me when I bought a new car and my mother asked me how much it cost. I told her what we'd paid, and she said, but how much is it per month? The idea of just buying a car didn't compute.
At least I finally got her off the lease treadmill. Toyota helped a lot by not making anything she particularly liked. When I suggested she buy out her lease instead of getting a new one, it was a revelation.
> By most estimates, only about 10-20% of US households are debt-free.
This needs to be qualified with the fact that it doesn't make sense for many people to be debt-free if they are financially literate. I know many people, myself included, who carry debt they could easily pay off because it would be irrational to do so. Being debt-free would actually make them poorer.
This often holds true even when ignoring obvious cases like debt interest well below the Treasury rates.
Minmaxxing your finances is maladaptive frugality. You have something even better than 1% extra interest in your account: you have no mortgage. You can do whatever the fuck you want to your house and your bank doesn't stick its nose in your business to ensure the value of the house stays up. You can do whatever the fuck you want with your career and you don't have to worry the bank will come and take your house back.
being debt assumes appreciation on the asset you are holding under that debt which has been artificially inflated by the governments for yeeeeears now. you would never hold a debt on the house (even at 3.5%) if the house stayed the same price the day of the purchase and date of the sale. too many people are saying “some debt is good/great” which is only marginally true if you make certain assumptions which is exactly what they are - assumptions.
No it doesn't. The math works out the same regardless of changes in asset value. Paying cash has significant opportunity and liquidity costs. These can often exceed the cost of debt.
I had mortage on a condo for $460k. total money paid to pay it off via debt, little over $1m. I sell 30 years later for $460k I just lost $550k :) (I didn’t, paid it off in 5 years saving myself 100’s of thousands …)
ask yourself why “we” think that some debt (e.g. real estate) is great) while others (e.g. vehicle) is bad? it just might ge that one is looked at as appreciating asset while the other not so much.
comments like yours always remind of the stripper scene from the movie “big short”
having debt also makes you a forever slave (true capitalism at work). God forbid you lose your source(s) of income and don’t have FU money or significant stash, now you fucked. with no debt and roof over your head life is infinitely better even during trying times..
You aren't making a consistent or coherent argument. The math of e.g. interest rate arbitrage doesn't care whether you are buying a house or a car, you will profit the same regardless.
In many cases the risk is literally zero, the scenarios you are imagining where it has bad consequences don't exist as a real thing that can happen. If you have enough money to pay cash then you also have enough money to pay off the equivalent debt at any time of your convenience.
Many people believe many things that are not based in physical reality. Many popular beliefs about debt are no different and debt has no intrinsic moral significance.
Let's say that each month I have an extra $1000. Should I use that money to pay down a 4% mortgage, or should I invest it in an index fund that is all but guaranteed to earn more than that?
> that is all but guaranteed to earn more than that?
say SP500 nominal avg is around 10% - no brainer, yes? but that is an avg of many 30-year windows. some 30-year windows might not be that kind to you. market crash in say first 5-6 years will hurt you a lot
so there is just no certainty here except we think (just like we expect appreciation on the house) we’ll end up on the “right” side of this.
and of course not to mention the most obvious, roughly 99.56% of people will not be investing this money to get more than 4%…
Even if the house prices stayed the same, it would make sense to keep the low interest debt and invest in other assets that have higher yield, like shares.
this again assumes a lot… it assumes that you can make up the money you are donating to lenders with some ficticious higher yield investments. I’d ballpark less that 5% of people would make out on the positive side of this.
For years I did this with the thermostat - something I learned from my father who always kept the house under 65F (18C) in Winter. I'm somewhat ashamed to admit it even led to arguments with my spouse early in our marriage when I would enter a room and find the thermostat set to a balmy 70F.
Eventually I just sat down, looked at how much it costs keep the house a few degrees warmer in winter, and realized we could afford to be comfortable. And if I were really hell bent on saving money, there were other lower-priority expenses I could cut back on first. But I don't even think it was even necessarily about the money - it was more that saving energy and toughing it out felt virtuous to me. Which is all fine, but not something that should be imposed on your partner if they don't share the same beliefs (or if they just get cold easier than you).
I love the winter for this. My thermostat is set to 16C at night. I prefer if the heat never even kicks on, it’s noisy and disruptive to have air blowing through the vents. I wish there was AC that could make my house that cold at night while making no noise!
Going on your Slavic username: as an American who moved to a country without forced-air HVAC, it’s been quite a revelation to discover how backwards forced air really is.
Funny, I went the other way round in the Bay Area. PG&E bills were so high so it was the choice of putting on a jacket or paying $1k extra over the winter months. And my reasoning was "I can afford a jacket".
I think I would still take that option, at least partially! Our gas bills where I am have gotten awful in recent years after the gas company separated from it's parent and all the homes (apartments) around here have god awful insulation since they're 80-150 years old.
I bought some fleece sweatpants for $40 and the amount I was able to keep my home unheated was totally fine and I made that money back within that month.
Also the cost of apartment-friendly insulation paid for itself immediately as well (which wouldn't apply to most decent apartments).
Where I live these days, it's 50/50 heat included in rent versus not, and I have to remind my friends that literally all of the buildings they rent in are 50+ years old.
And if your landlord is balking at including heat in rent, there's a decent chance it's because your bill will be outrageous because there's zero insulation, and as a tenant there's little you can do to fix that.
I’m always colder in my mother’s house in Scotland (-5°C on cold days) than I am at my MIL’s house in the frozen Canadian wastelands (-40°C/F on cold days), because my mother will play games with thermostat to save money, where my MIL would simply die of exposure if the heating wasn’t on consistently for 6 months of the year.
There's also a very different type of cold close to the water. -40C will dry out your skin and make it feel like it's burning, but -5C in Scotland or on one of the Gulf Islands near Vancouver will make your bones feel frozen without good insulation.
You know those Christmas cards that show a frosty twinkly white treescape? That climate will kill you even at -5C.
People die on Ben Nevis every few years because they think its not that cold. But Scottish cold in that part of the world is brutal, there's so much moisture in the air that freezes if you get wet and cant quickly get dry you will die fast.
If the relative humidity is 100%, then being wet won't make you colder: the water has to evaporate in order to cool you, and it can't do that at 100% relative humidity. The problem that high humidity cold causes is increased convection, and the problem being wet causes is the dramatic near-complete loss of the insulation value of many garments.
There is a _lot_ of folk science about cold weather that is just plain wrong.
I had a home battery put in recently and switched over to wholesale power...and the most shocking thing has been how little power our reverse cycle air conditioners actually use. Like, we bought them for efficiency, but between solar panels and a battery I can actually just have them on all night and we might just barely run out if we had good sun that day.
Basically a bunch of technology has just crossed over to make being comfortable not just affordable, but visibly so (which would've been great when I was a kid - it made a huge difference when I hooked the power monitoring up for my dad and proved to him that he should just set the AC to a target temperature and the fastest fan speed he could stand the sound of and it would use less power...and he actually did it!)
I think if you want to keep it on the cold side, you can still do that. Builds character, isn't dangerous, and saves a couple of bucks. You can also keep it warm when you feel like being warm. There's something in human psychology about being able to endure discomfort and then come back to "safety".
And some of us literally have no choice. I need my home office to be under 18℃ in order to not imitate a drowned rat. Anything over 28℃ and I am dripping with sweat even completely naked. And no, I am not obese.
I struggle with this. I feel so guilty for replacing my four year old phone this week, even though my old phone has had hardware issues for more than a year. There wasn't really a puritanical element for me, it seems to be just from growing below the poverty line.
The flip side of it is I've accidentally joined the FIRE movement. Making a moderate tech salary for most of my time since graduating college but feeling guilty about spending means I'm now in my early 40s and don't really have to work anymore, or at least, could comfortably take any job I want without worrying about what the pay rate is. I don't really know how to feel about that. After my last job in tech I took about a half a year off before realizing I also felt guilty about not working, and took a job I wanted. But there are also weird feelings from working because you want to at a workplace where most everyone else is working because they have to.
You know there’s an upcoming generation of developers who are so jealous of you? Not your fault or anything.
We managed to make the latter irrelevant or by no means a high earner.
Everything is expensive, tech took over all the jobs, now tech itself has found ways to end those jobs. You either have to be a medical professional/media person now to live without worry.
I'm in the same situation as GP and while I think you're right (we're some of the last well paid software developers who aren't also founders) it doesn't help with feeling less guilty!
It's a weird kind of guilt because it's not like we individually created these economic conditions; we were just there at the right time to take advantage of them before they were gone. I tend to think of this as "useless guilt" (vs. guilt about taking a transatlantic flight or other high-impact activity -- which I still do, but I think that guilt is societally useful)
> You know there’s an upcoming generation of developers who are so jealous of you? Not your fault or anything.
I do, and and I think that's part of the reason I feel guilty about not working. Why should I get an easy ride when other people did not? I suppose there's some small element of worrying that I'm wrong about my future needs . I know I have some skills that are still useful and I can put them to work now, but I'm less sure I'd be able to do that in five years. That part of it is probably not maladaptive, however, even though it probably comes from the same place of growing up with very little.
> I do, and and I think that's part of the reason I feel guilty about not working. Why should I get an easy ride when other people did not?
Devils Advocate: Why don't you feel guilty for continuing to work, continuing to absorb a salary that doesn't really matter for you but could be life changing for someone else who is looking for their chance?
That's certainly a consideration. The story I tell myself is that brought a skill set to the job that the organization I work for otherwise couldn't afford and took a salary well below the market rate for the position. It's a worker-owned cooperative retailer with a relatively flat pay scale that doesn't differentiate between types of roles, only levels, so I'm on the same pay ladder as our cashiers and dishwashers. I am, though, perhaps taking a job from someone else who wanted to pivot their career. There are no perfect answers.
Working a paid job does nothing to help those less fortunate than you. Maybe by retiring early you can free up time to help others in more creative ways?
> You either have to be a medical professional/media person now to live without worry.
No, you just need to live within your means.
The internet is amazing, I like to watch videos from developing nations, where people live on a fraction of western budgets... what strikes me is the happy, free people I see. That's hard to fake.
What you see is the happy side of things, of a particular section of society, packaged in a way to make the viewers feel good and not sad. They’re either too poor and uneducated or too rich.
Most of us, educated, are aware of the fact that we are one medical emergency away from being bankrupt.
> No, you just need to live within your means.
I politely disagree. Means for me personally includes not worrying about healthcare, losing a job, unexpected expenses, affording the facilities to participate in society rather than becoming a travelling nomad. It’s easy to be blind to your own blessings, even more so if you have already lived a life. These are life goals for people of my generation in my country.
People, educated ones, are no longer marrying. Guess why?
> What you see is [...] packaged in a way to make the viewers feel good and not sad.
Maybe. Or maybe they are genuinely young, free, and happy.
> Most of us, educated, are aware of the fact that we are one medical emergency away from being bankrupt.
Yes, but being aware of your mortality is inextricably linked to the human experience. Not a bug, a feature.
> Means for me personally includes not worrying about healthcare, losing a job, unexpected expenses, affording the facilities to participate in society rather than becoming a travelling nomad.
My friend, I do not know your circumstances so I venture carefully. Your reply seems to be focused on risk, rather than what a person can control by their own behavior. Risk is a part of life - we all have different tolerance of risk. What I mean by "live within your means" is to spend less than you earn. I understand the difficulties, but it is not impossible. I have been in poverty in my life, and I feel fortunate that we were able to escape it.
> People, educated ones, are no longer marrying. Guess why?
I have my own theories, but I'd be happy to know yours
> but being aware of your mortality is inextricably linked to the human experience.
They aren't aware / afraid of their mortality. They are aware of the lack of financial safety net / social support. It is in effect everyone accepting a more primal state of affairs, where the weak die, as a virtue. Rather than a state of affairs that we are economically capable of: Universal healthcare. Many of us understand this is a political hurdle. But that is precisely what makes it so disheartening. If we were all too poor to afford socialized healthcare, we could at least take solace in our shared experience. But that is not the state of affairs. It is an invented problem. And most frustrating of all, we already spend more than people with universal healthcare. Maddening.
You are looking at this from the wrong angle. We get taxed a lot (not if you are ultrawealthy but still…). so government is taking shitton of money in exchange for…? well in the USA it is in exchange for paying down debt and department of “defense” so that we can bomb the shit out of everyone we want whenever we want. we also spend shitton of money on healthcare already but this money is going you know where, middlemen and racking in profits and doing a whole lot of other things except providing care. so the question is - where would you rather your tax dollars be spent? and also another question which is why are Americans the only citizens of any developed nation where providing care is “impossible”?
Thank you, I'm confident I will fairly consider all which you're about to reveal!
> We get taxed a lot (not if you are ultrawealthy but still…). so government is taking [sic] of money in exchange for…? well in the USA it is in exchange for paying down debt and department of “defense” so that we can bomb the [sic] out of everyone we want whenever we want.
An idea so crucial to the birth of this nation, is that taxes are not paid in any "exchange". Your property is removed from you and your government makes use of it as it will. In fact, the federal income tax was unknown to our country before it was concocted to raise funds for WW1 and was unfortunately never retired. Pointing out our current conflicts is definitely appropriate!
> we also spend [sic] of money on healthcare already but this money is going you know where, middlemen and racking in profits and doing a whole lot of other things except providing care. so the question is - where would you rather your tax dollars be spent?
I would rather my government didn't help itself to my money at all. In my opinion concentrating the wealth of a nation in the hands of a few is exactly the circumstances most certain to create the corruption I think you've described.
> and also another question which is why are Americans the only citizens of any developed nation where providing care is “impossible
In the United States emergency care must be provided, regardless of ability to pay.
For non-emergency care, please consider some of the issues I've already raised.
> What I mean by "live within your means" is to spend less than you earn.
I see where you are coming from, I genuinely take it in good faith. There's just this constant pressure to be this or that at certain stages of our lives, especially in the asian culture I am part of. I've managed to avoid these all my life but lately I've been falling for it as well.
> I have been in poverty in my life, and I feel fortunate that we were able to escape it.
Genuinely happy to hear this. :) It gives a lot of hope.
> I have my own theories, but I'd be happy to know yours
It's a cultural thing, I have friends who haven't married yet because they feel they can't afford a family with their current circumstances. Here marriages are a family thing, so the parents need to approve. And no father or mother will send their daughter to such a person when they have more options available to them. You could live the frugal life or the glamorous instagram life people are brainwashed with. Everyone is running in a constant state of survive or die mentality because no one has a safety net to fall back to.
I am not saying all are like that, there are independent strong women/men but they are dime a dozen.
What you described, it reminds me of what I saw on TV when I was a little boy, lemmings marching to the sea. I see similarities with young people in USA.
We are smarter than lemmings, we can see the danger, but we're also smart enough to convince ourselves that our eyes betray us there is no danger.
Marching forward while calling back for those behind to carry a rope, this is still the same madness, isn't it?
> You either have to be a medical professional/media person now to live without worry.
Civil Engineer here. Used to get clowned on by other STEM students for going into one of the "lowest paying" engineering majors. Post grad, I can't imagine a more stable job, and my generational cohort is having a hard time. Boy do I feel smart. And the bonuses after construction season? Forget about it.
I would think the biggest reward in civil engineering is seeing some tangible piece of infrastructure you designed, built, and serving society. Software engineering has been an interesting career, but I die a little inside when software I've written gets blown away like a Tibetan sand painting.
I just replaced my five year old phone for the same reasons, but I haven't been able to let go of my old one yet. It still works so I must find something to use it for!
> After my last job in tech I took about a half a year off before realizing I also felt guilty about not working, and took a job I wanted
Well, yeah, that's kind of the problem. If you're the kind of person who can FIRE, you're not the kind of person who'll be happy on permanent vacation at the age of 40. It's nice to have that option, but many people who get into FIRE commit themselves to a lifetime of slight misery instead of learning to be okay with living life when they can. I had these struggles too - I cut corners I didn't need to, and it took me a long time to internalize that I'd rather enjoy my life in my 20s than save money to do nothing in my 40s.
E: I'm editing to say this because like four different people have issued variations of the same response: the alternative to FIRE is *not* not saving! It's saving for your future while not aiming to retire early. Set a good target savings rate that will help you comfortably retire in your 60s, and spend the rest on things you care about. Let go of the mindset that any spending is taking years off your retirement.
I think this is a false dichotomy. My wife and I worked through our 20s, but regularly took vacations. We flew to NYC from LA at least 2x per year from 25-30. We had season ski passes. We lived frugally but well.
I was in grad school, she was a consultant. Our income was solidly lower middle class for LA, and we still managed to save 25-40% of our income per year.
Now that I've got a kid and am in my 40s, I've taken a year off, and I don't think I'd be bored in "early retirement". I'd probably spend time with my daughter, do more camping, and work on intellectual side projects (I have more than I can count).
The trick has been: I don't try to keep up with other people, I follow my own passions. I know how to cook, and to make my own fun. I'm curious and I like find out answers on my own. I never took on credit card debt.
I'm lucky because I had support from my parents through early college. I got student loans and supported myself after sophomore year or so. (I'm strategically still paying the minimum on those loans fwiw.) otherwise I stayed out of debt until I got a mortgage in my late 30s.
So, it is possible to do both. But I have noticed that I have a better ability to control my desire for acquisition than most people, and a decent amount of frugality in most areas of my life.
I've struggled with this... not personally, but watching other people going crazy with whatever money they get and then complaining about not resting enough, not traveling enough, not having fun enough.
They go ahead and ONLY take full 2 weeks vacations, never even trying spreading some of those days here and there, perhaps right next to a holiday to make it a long one, and then complain later that they are burned out...
Most people even with means complain about some of us doing this normally (we don't have to travel the world every weekend, come on), and you talk with them, and if they just stopped "wanting to live outside their means", they could actually accomplish it, even if little by little.
I commend you for living such a life, because even if none of our lives are perfect, some of us enjoy it as best we can. :)
OK if you were in grad school, ski passes, multiple flights to NYC per year, living in LA and saving 20-40% of your income, your wife must have been making a hell of a lot as a consultant.
Ski passes for 2: $500 at mammoth. (Yes, the prices have definitely increased.) We'd sometimes drive up just for the day (leave 4am, back 9pm) to save on lodging. This was fairly doable in my 20s.
Flights to NYC: we'd book on cheap off-days, and I think round trip was usually about $400 for both of us. LA<->NYC is a very competitive route and deals can be amazing. I learned to use Priceline like a pro, so we typically stayed in manhattan for about $100/night or less(!) for fancy hotels that usually charge $300+. We often would stay in 2-3 different hotels to save on money.
So all-in for these activities was probably about $6k-7k per year. Grad stipends were $25k, which covered rent plus most of the vacation, and my wife had an entry-level job at a decent firm.
Didn't feel like a stretch in part because we were really flexible, but we were careful about how we spent our money.
No cable TV, for example. That shit steals your time and money (doubly so because the ads encourage you to spend more money).
> many people who get into FIRE commit themselves to a lifetime of slight misery instead of learning to be okay with living life when they can
Source for this assertion?
I've been in contact with various people at various points on the FIRE journey, and I haven't seen a lot that go "too far" towards being miserly, cheap, and miserable. Especially when they are high earners like the parent comment. They live lifestyles that may appear lavish, but are done while spending well below their means, because they are also investing in their future, while being mindful about spending today.
The point of FIRE isn't that you invest in your future. I think it's unreasonable to say the opposite of FIRE is to save nothing, when it is in fact saving at good rate while aiming to retire in your 60s. My point is that aiming to retire early - like 20 years early, when you're in you're 40s and still eager to work - is likely to make your life miserable if you're the kind of person who actually enjoys work and can commit to goals like FIRE. That's what I've seen in communities I know where people FIRE. Hell, I know many people in my parents' generation who retired in their 60s and still want to work, and end up not dipping into their savings at all.
I'm sure there's tons of people who love being on a FIRE path. It's a lovely goal with self-reinforcing metrics that is easily gamified. And I bet your first year off work also feels great, which is why I encourage everyone to take a sabbatical every 10 or so years.
> The point of FIRE isn't that you invest in your future
Huh? "Financial Independence, Retire Early" Sure sounds like you're saving money and investing it in such a fashion that at some future date, you're no longer obligated to do paid work -- before the traditional retirement age.
> I think it's unreasonable to say the opposite of FIRE is to save nothing, when it is in fact saving at good rate while aiming to retire in your 60s.
Again you confuse me. Most people do not save enough for a solid retirement in their 60s, so it does not seem like you can say that is the "opposite" of FIRE. The "opposite" is simply being financially dependent on your working income (at least) until traditional retirement age.
"Retire early" does not force you to "never work again" if it's something you desire. It means you have the financial independence and means to decide how to spend your time. If you really like working for money, being financially independent does not prevent you from doing it, and I can't see how it will make you miserable.
The best part of FIRE is the Financial Independence bit. When my boss asks me to do something, I'll do it if I think it's a good idea, and ignore it otherwise, because what's the worst that can happen?
FIRE is achieved primarily by not buying a lot of "stuff". Living a great life and having incredible experiences is relatively inexpensive and you don't need a lot of expensive stuff to do it. If you are being miserable then you're doing it wrong.
FIRE should really just be a continuation of what you are already doing, just with less responsibility and financial risk. It isn't about saving up for a permanent vacation. It shouldn't even be conceptualized as a "vacation".
Most people I know who are FIREd are busy living a mundane life they find personally satisfying. They aren't having an existential crisis.
> It isn't about saving up for a permanent vacation. It shouldn't even be conceptualized as a "vacation".
"Permanent vacation" is permanent time off work, not a holiday. If you're continuing doing what you're doing, why quit? Why not just keep working and save 25% of your income instead of being frugal, saving 40-50% and retiring early to stay frugal? If you're the kind of person who is hard working enough to make good money, you're not going to enjoy retirement and living a "mundane" life - you might as well keep working on something you're passionate about and make money off it.
The only reason to FIRE is if your life's grand ambition somehow cannot be monetized at all, which in the current day is harder and harder to conceive.
> The only reason to FIRE is if your life's grand ambition somehow cannot be monetized at all, which in the current day is harder and harder to conceive.
This is a non sequitur. The ability to monetize something has no bearing on the optimal way to go about it unless money for its own sake is your sole objective in life. Being required to monetize an activity frequently produces a strictly inferior outcome by the standards of the person doing it. Not needing to optimize for monetization allows people to prioritize things like craft, quality, sustainability, etc.
The discourse around "enshittification" is almost entirely about the consequences of this dynamic.
> I'd rather enjoy my life in my 20s than save money to do nothing in my 40s.
I think this is a lie that people who are bad with money tell themselves, that the only two options available are to spend without restraint or live miserably frugal.
The truth is that there are some things better experienced in younger years. I can't imagine backpacking across Europe is better in your 50's than it would be in your 20's, and if you're doing something with a chance of injury, you bounce back a lot faster the younger you are.
But I really think you're underestimating how active even the average 70 year old retiree can be.
> that the only two options available are to spend without restraint or live miserably frugal
When did I say that? I have a 35% savings rate and still am able to spend happily. The point is that you don't need to aim to retire early. Set a target savings rate, spend the rest - enjoy your life instead of trying to maximize savings so you can retire early.
"Miserable" is subjective obviously. If you're regularly working evenings and weekends at your high paying law firm, I'd characterize that as miserable. If you're living cheaply in some exurban place but can only see your friends or family twice a week, I'd characterize that as miserable. But I can't speak to anyone else's state of mind.
I agree. To add a data point, I used to squirrel all my money away, because I was afraid that if I didn't, there wouldn't be any left at retirement. It's like I was inadvertently following FIRE principals.
It wasn't until I created a simple monthly budget that I realized that I can pay myself first, pay my bills and I still have plenty money left over to enjoy today and 10, 20, etc. years down the line.
Can I ask, how old are you now? I notice this sort of 'black and white' thinking in a lot of younger folks. You don't have to live like a miser (especially in tech!) to be able to FIRE. You simply have to be disciplined and consistently save and invest instead of trying to keep up with the Joneses.
I admit, I was probably more frugal in my 20's than I should have been, but 40 something me is very grateful to 20 something me, and honestly my life is so much more stress free now.
I think the issue is a widespread equation of "productive work" and "[wage] labor". Of course, a lot of people may not do much outside of work beyond watch TV (though how much of that is from tiredness from working at their job so much and dealing with the rest of life's obligations?), but plenty could fill their days with productive work that just happens not to align with what corporate institutions want to hire people for.
Lots of people who retire poorly, die. I don't mean money, I mean a plan.
I think even if you retire, you need a JOB. You can define it, but you need something to do, to engage you. You also need vigorous exercise and strength training.
A wife is a useful thing to have in this respect, not because they tend to profligacy, but because this kind of thing is much easier to detect and fix in someone close to you than in yourself. Both my wife and I have lived frugal lives at various times[0] and I feel much happier with the degree of spending we have now.
I'm reminded of the intelligent corvids in Adrian Tchaikovsky's Children of Memory where the sum of the two birds forms a being with intelligence in a way that the individual segments do not. The frugality is a deeply embedded piece of our being and undoing it seems hard, but together we financially operate in a place that leaves us both feeling comfortable.
0: In the US sense of the term, not in the sense of the term as known in Taiwan or India.
Just a reminder that since a couple of centuries ago in most Western societies, wives are not "things" anymore, but rather human beings on the same level as husbands.
It's "incline", the subtext is: "Reader, you might start thinking of a certain common stereotype at this point, but don't do that, because my argument is very different, and that stereotype is irrelevant or possibly untrue."
Compare to: "A pick-up truck is a useful thing to have, not because you are insecure about your genitalia, but because you can take home bigger products from IKEA."
While the underlying intent behind bringing awareness to microaggressions is likely pure, it has a tendency to promote a level of hypersensitivity which is a net negative for society.
It’s often more beneficial to bring an open mindedness to a conversation that allows for benign usage of words that could otherwise be intended to slight. Constantly worrying about if everyone is being sensitive enough can also just be exhausting. To everyone.
Whatever happened to the idea that one should assume someone else is speaking in good faith, and that you should chose the most charitable interpretation of someone's words?
My experience has been that it's easy to say, "oh, it's just me", but much harder to subject someone you care about to the same standard that you would yourself. I'm in a similar position with the thermostat, even though something we initially bonded over was that we both kept our thermostats at a low temperature that was outside the window of being socially acceptable.
In the winter, I keep the thermostat at frigid temperatures when I am home alone and jack it up to warm just before any one else gets home. My thinking is that it is wasteful to warm up the entire house when it's just me since I can put on a sweater but I don't want to subject others to my, shall we say, quirks.
I keep meaning to calculate how much I am actually saving by freezing my butt off. My guess is it'll work out to something like $0.75 a day or something equally trivial.
Depending on the kind of heating system you have and the temperature differences you talk about it can be cheaper to heat the house to a constant temperature (because your heating can run more efficiently under lower load).
Correct, or the people doing this for environmental reasons... it's probably not better to do this. It would be better spending money on better insulation (assuming it isn't up to date).
I once got a programmable thermostat and went through the trouble to set it up for the times we were normally at home and away, and my energy bills went up.
Now I just set a temperature that everyone can tolerate and I forget about it.
It probably costs more to do that than to maintain a constant temperature. When you turn the setpoint down, everything inside your house and also your house itself starts losing heat. When you turn the setpoint back up, the cooled off house and items inside of it will suck up most of the heat until the stuff is warm again, and then the air warms up.
This is much more noticeable when you go into a freezing cold building and turn on the thermostat, it takes almost an entire day to heat up the stuff and building.
> A wife is a useful thing to have in this respect, not because they tend to profligacy, but because this kind of thing is much easier to detect and fix in someone close to you than in yourself.
I think what you mean is, a wife/spouse can help you see maladaptive patterns that you're blind to?
I don't think you propose that you can "fix" your spouse's behavior?
Spouses can "fix" behaviors in each other (up to a point) if they are each ammenable and open to it.
You can't "fix" someone who doesn't want to be fixed, however. And you really can't change deeply engrained personality traits. This will just lead to conflict and stress. This is what pre-marital counseling will try to discover, and it's too bad more people don't do it, as it would go a long way to reducing the number of unhappy marriages.
This doesn't mean that opposites cannot have happy lives together, but they need to accept each other for who they are and not be unhappy that the other person cannot change "for them."
A lot of spousal disagreement tends to come down to issues about money though, so a frugal person paired with a spendthrift will probably have a tough go of it.
I do something kinda similar, I guess it counts as maladaptive frugality?
Whenever I have something a little extra in my fridge, most often Italian prosciutto, I refrain from eating it, instead saving it for a "special occasion" even though it is, like, my favourite thing in the whole world. Eventually I have to throw the mouldy prosciutto away because I was too frugal to eat it.
I'm practicing though, learning to eat it. I don't know why it's so hard, I mean it's delicious! Should be easy!
Exactly the key of mindset that drives me to play through entire RPGs without ever popping a single item. It is essential that I collect 99 potions, and never consume even 1.
I forget what game it was, but I came to a point in the game where there was just an insane difficulty spike. Like I literally could not progress, and I couldn't change difficulties without starting a new game.
Then I remembered I had these strong health potions I'd carried through most of the game. I burned through my entire stockpile but I made it! It felt like the devs were saying 'no, you idiot, we put those items in the game for a reason, use them!'
This is a pretty common issue, I have to remind my spouse to just finish stuff. Eat it, and if it was so good.. buy more at the grocery next time.
One could try to reframe it that having it sit in the fridge going bad is a waste of fridge space/electricity/food/mental energy and unnecessary personal suffering.
Maladaptive frugality is just one of many "maladaptive X" where X is something that we overgeneralized in childhood.
I think it is especially easy to overgeneralize frugality because, either because it is taboo or conventionally boring, parents don't always share the situational details that prompt their behavior.
In my life I internalized "everyone should rule the thermostat with an iron fist always" when the more complete picture would have been "because we're cash-strapped in the 2008 recession and our house is old and leaky we're ruling the thermostat with an iron fist for now".
I fixed it by simply placing a value on my own time. When I started I figured my time was worth at least $50/hr. Spending an hour trying to save less than $50 is an absolute loss, recognizing that, my behavior changed easily.
Paradoxically, this works less and less the higher your income is.
If you value your time at, say $200/hr and you work with other people who claim their billable labor is also close to $200/hr, and you value it at $15/hr, then, no, you’re going to do it yourself.
At high income it can make you feel silly for doing anything other than working. You second-guess walking the dog even if you enjoy it because you can pay someone to do it for so much less.
For some, I think there’s that satisfaction that comes with saving money (like you’re somehow “cheating the system”, even when it’s just a coupon that gets you to buy something you wouldn’t otherwise). In some cases, that satisfaction grows with the amount of time or effort expended to save the money in the first place, which is ironic because that money-value-of-time probably far exceeds the actual amount saved. Practically every engineer here probably has a story about spending a ton of time or effort to optimize something by a tiny amount; saving money can be like that too. It’s a little joy in life, and so long as it doesn’t outright prevent you from spending money when you should (or impose excessive optimization costs), I think it’s fine.
The maladaptive part is when you start regretting not saving money, because it has two knock-on effects: it makes the decision to spend much more emotional (which negatively impacts rational decision-making) and it can negatively impact the enjoyment of the thing itself. For example, the maladaptive part might take the form of being reminded of the cost every time you look at the repaired phone.
I've always found the "time is money" hourly rate comparisons a bit contrived, because I can't actually trade my every waking hour for an hourly rate.
The reality for most people is that the trade-off is actually between time spent on looking for bargains, or time doing something else that doesn't make any money.
My mother still clips coupons in the Sunday newspaper, despite being financially well-off enough to not clip coupons. I considered listing this as an example of maladaptive frugality in another post, but then I figured it’s just something she enjoys doing.
Honestly in current state of world. Which is more enjoyment clipping coupons or looking for bargains or being on social media? Would something actually useful or more enjoyable happen with that time?
Hell. Even other type of media consumption unless you really enjoy it might be balance you can question.
Back when I was younger and earned minimum wage, whenever I thought about buying something I'd run the calculation of how many hours I would need to work to pay for it. That helped me save quite a bit.
Eh, I value my time at a third my hourly comp. It helps me feel less guilty about hiring something out instead of doing it myself, or driving and paying for parking instead of taking transit and taking 2x as long.
In this subject area, I recommend Jacob Lund Fisker[0]'s Early Retirement Extreme book [1]. Don't let the title fool you. The man has a surprisingly level-headed and refreshing approach to spending.
May I suggest you read, "Scarcity: Why having too little means so much"
(https://www.amazon.com/Scarcity-Having-Little-Means-Much-ebo...) it is a really interesting book which explores maladaptive frugality. We often talk about money and how people don't have enough, but these principles apply to any resource, in my own case I found cases where 'never having enough time' would push me to make bad choices about how I spent time. The author is talking about spending money but consider the adage "If its worth doing over then its worth doing right the first time."
This is one of the reasons I like YNAB (both their app and their method). One of their core principles is to align your spending -- including future spending, aka saving -- with your values. Spending on the wrong things isn't good, but neither is saving without clear purpose.
My wife and I both came from fairly frugal households growing up, so frugality is often our default. It's been a helpful exercise to periodically ask ourselves "what do we actually value, and what tradeoffs should we make", then update our plan to match.
This is really the heart of it. Understand what matters to you, and align your finances (and decisions as a whole) with that. If you optimize for some external metric without examining your own values, you're basically adrift.
This is very culture-specific. I've seen this in Poland. Under USSR rule frugality has been necessary to survive, but it left a lot of people forever stuck in that mindset, long after things got better. I know people who have a fortune in the bank, but live like they're broke, because they're afraid to spend anything from a "rainy day fund" even on rainy days.
Yes! I related a little too much with the blog post. My grandparents were Sindhi and they had to flee from Pakistan to India during the partition. As refugees in India, they had to start their life basically from scratch. Now I get why it's ingrained in me to be frugal, and even take pride in it when there's none. I see the very same behaviour in my Sindhi friends when they feel bad for spending money on essentials like hospital visits.
My parents and grandparents lived under scarcity during Soviet (satellite) rule, grandma would can food and store well past best by, save plastic bags and various knickknacks, resisted spending on herself even as she bought us gifts when we came to visit. I think the contrast to US excess stuck with me and I always lived leaner (feeling that possessions own you and your time), though far from her frugality.
It's really a shame. I grew up in a frugal household that venerated Dave Ramsey, and there was a ton of moralizing of finances that didn't need to be moralized. Stuff like "debt is always evil, buying frivolous things like fancy coffees is stupid", etc.
There are unfortunately a lot of people that base their spending and saving decisions not on what they actually value or what their goals are. Rather, they base them on fear of breaking the moral rules.
FWIW the Ramsey folks (whom I haven't really listened to in a few years) are cool with buying "frivolous things like fancy coffees" if you're out of debt. Not saying that's right or wrong (I personally think you can have a damn coffee), but their general philosophy is that if you're out of debt and are saving whatever percent of your income, do whatever you want.
Ramsey is for people who can't be analytic with their money, and need some moralizing to counteract the "I can afford it, it's less than the remaining limit on my credit card" impulse.
I was so frugal that I didn't refinance my (admittedly already low) interest rate during Covid because "we were planning on selling the house in a year or so". Oh well :)
No that can be a frugality mindset of not wanting to pay the refinancing closing costs (which can be 5 figures) .. I've seen family make similar sorts of short term savings vs long term savings trade-offs.
To me this is so much about where you focus your attention. Even from a purely financial perspective. Mental space dedicated to watching your expenses is space you aren't using to improve your top-line. Some people are very proud of being frugal, spending time optimizing expenses - while earning far less than they could otherwise because they don't spend any mental energy on how to earn more. Meanwhile others are spendthrifts, but allocate a lot more energy to earning more - and do earn more.
Stay focused on earning more money and don't spend any more time than you need to watching expenses - just so long as you save/ivnest plenty. You'll enjoy life a lot more.
> Some people are very proud of being frugal, spending time optimizing expenses - while earning far less than they could otherwise because they don't spend any mental energy on how to earn more.
This claim really requieres some kind of proof. Because I have never seen this in real life - a person who realistically could earn more if they spent less time trying to save money.
It sounds like a made up dichotomy or an extremely rare situation.
I met people who earn a lot and save absurdly lot. Or earn a lot and waste it all. Or dont ear and either save or not. But, there being realistic path to bigger earnings that is ignored because of spending too much saving is a corner case.
There's a substantial difference between "reducing what you would otherwise spend" and "not spending / defaulting to the minimum". The latter mindset is less about active money management and more about completely avoiding unnecessary consumption.
> Mental space dedicated to watching your expenses is space you aren't using to improve your top-line.
Not inaccurate, but you have "24 hours in a day". Even if you spend 1 hour on frugality, it's not like you spend 23 on "increasing your income." Why not both?
> Stay focused on earning more money
> You'll enjoy life a lot more
Needs sources. We know that earning more is helpful up to a point, but it reaches a point of diminishing returns.
Similarly spending money can help you enjoy life, but we tend to be bad at predicting how happy any particular spending will make us. Learning this lesson and evolving our spending so that we do "enjoy life a lot more" can be well worth the time invested, even if it doesn't help us earn more.
Not everyone wants to live a life "focused on earning more money."
I have a low salary considering my experience in the tech sector. However I have a job that is low stress, has good benefits, and a very low risk of layoff or downsizing.
I don't spend money on a lot of things that other people do. I drive an old car. I have an old phone. My home computer is probably 10 years old. I don't buy expensive clothes. I cook at home, and rarely go to a restaurant or bar. I do not pay for entertainment such as movies, sports, theatre, travel. None of that is interesting to me.
I don't spend time "watching expenses" I just naturally spend very little. When I have extra money, I just save it. The idea that it is there "in case I need it" or ultimately for my kids to inherit is more rewarding to me than anything I might spend it on.
I'm in a similar place. The greatest luxury the money bought me was that last year, when my job was made redundant, I knew I had over a year before I had to start worrying financially (I found a new position shortly after my garden leave finished)
I've been feeling guilty for buying 2 red bulls (sugar free) at work everday and my salad... a salad that costs $5 (although I can put many toppings eg. meat on it) vs. buying a $3 bag of leaves and make my own salad. I should put every dollar I have towards debt that would be ideal... but it's that time thing too, don't have to prep my lunch/carry an extra bag. Also can just make more money.
Like my car, should I not have bought an $800 RD and $1K on tires or just put that towards the car loan... idk. I enjoy a fast car though.
You can be frugal without spending a lot of mental energy on your expenses. It seems contradictory but it is possible to 'live' frugally without thinking about money all that much (assuming you aren't broke and have positive cash flow). The real challenge is escaping consumerism as a means of (superficial) fulfillment.
> When you default to the lowest cost option without considering the drawbacks, procrastinating or hesitating on spending[...]
This is terrible advice, one of the easiest ways to be frugal is not to be overly attached and to defer spending.
Scarcity: Why Having Too Little Means So Much is a pretty good book about the psychology of this. The stronger your the necessity for saving (whether from poverty or external influence like here), the deeper it gets embedded in your psyche as well, and can start to feel like "this is just who I am" as in habits around this becoming something you see as intrinsic to your personality.
I read this article 10 years ago by a guy named Ricky Yean who went to Stanford as an economically disadvantaged admit and couldn’t shake his poverty mindset and it cost him when he was running a startup.
Why “few successful startup founders grew up desperately poor”
Poverty mindset is maladaptive because it teaches you only money is worth anything, so you hoard it. But in truth time is also worth a lot and sometimes it’s wise to use money to buy time.
I grew up poor. Everyone I knew was poor or barely getting by. It took me a lifetime to realize over-frugality can also be self-destructive.
My extended family members use to trade stories of working dangerous jobs or getting mugged and laugh it off. That was until my aunt got shot in the head working the late shift at a convenience store. She was in the news and the community and the hospital paid all her medical bills; but she was never the same after that.
Growing up gambling was a mysterious force that ran through my family. They worked hard. Like their bodies were physically wrecked and they saved and saved. They would often spend so much time at work or at their side hustles, they would neglect their children who would teach themselves how to cook because no adult was at home. And yet, they would blow their entire savings in a weekend in Las Vegas. Or sometimes came back even in debt.
Now, I would say that frugality is not a moral imperative. Being poor is not a virtue. Sometimes fate deals it to you. But no job is worth wrecking your health. And it is not a sin to spend a little on something that makes life a bit sweeter.
> Poverty mindset is maladaptive because it teaches you only money is worth anything, so you hoard it. But in truth time is also worth a lot and sometimes it’s wise to use money to buy time.
This is something I've observed in overly frugal family. Stuff/money is worth too much to them.
You can't gift them anything "nice" because they will put it on the shelf and never open it (don't want to damage it).
Gifting them consumables with an expiration date also doesn't work as they'll "save it" until the expiration date lapses and then eat expired food.
Taking them out is weird because they'll insist on taking leftovers home off every other persons plate at the table, including stuff they don't normally eat.
They'll fill up 2 bedrooms in their home with 40 year old cheap clothes & furniture that is worth so little we'll need to pay someone to haul it away. They won't donate it because they think the people who receive it will waste it. So they'll pay money to ship some of the 40 year old cheap clothing to poorer family back home who it doesn't fit and could just buy cheap clothes there with the money they paid for shipping.
Owning multiple 30+ year old cars until the mechanic literally refuses to work on them anymore telling you they are too rusted out to repair or drive.
This from people who are wealth enough to own multiple properties, have retired early, have government pensions, etc.
My spouse and I both grew up in this kind of household.
Interesting to see how we & our siblings all responded, some followed suit and others had opposite reaction. I think some people are good at frugality and some are good at income maximizing, and few are good at both.
I turned into an income maximizer.. started working at 14.. post college left home, took a high stakes career and hopped to new opportunities proactively. Response to not wanting anyone to be able to control me via money.
For my spouse & I it was a reaction to
1) having a lot of childhood of consequences/regrets of over-frugality like frozen pipes bursting, parents lamenting not going back home for 10 years during which their own parents died, asking for a single $10 toy for birthday and having them buy a knock-off instead, etc.
2) a reaction to teenage parental control via money like when I was moving to the big city for my job and the housing deposit was due before the hiring company was going to wire me my housing stipend, and my parents refused to float me $1k for a month (and then gifted me more than this as a graduation gift a few months later).
So I think you want to instill a respect for money in your children but not a fear.
Frugality is a state of mind, feeling guilty about it is not a frugality problem more than a labeling one.
It's the same for climate change, a lot of people want to feel good about themselves labeling them ecological when they're not capable to act on it (eating less meat, avoiding to take an airplane to travel, ..etc). They feel guilty not because of 'it' but because they don't want to act about something they reason is the morally good choice. It's performative virtue signalling.
As a general rule I don't think you can label yourself as anything (eg. a liberal, an anarchist, a frugal, a skeptic, a believer, a punk, ..etc). You either are or you aren't. Chasing a label and an identity is the best way to never be it like a perfume wearing you rather than you wearing it.
I see this with my dad as he approaches retirement. I try to remind him that if he doesn't pay with money, he's going to pay with his time... and right now he's saving money he doesn't need for time he doesn't have.
I had a very similar experience and still catch myself on occasion. Even with my "higher" spending, it's still lower than most. I hadn't realized, but I had associated the act of not spending money as righteous, and spending money as bad.
I think it was Ramit Sethi who said something along the lines of "spending money isn't inherently moral or immoral", and that was something that resonated with me. I had to pull myself out of the implicit mindset of "spending money should cause guilt". It's been very nice.
And to clarify examples of this: I no longer hesitate purchasing a drip coffee on Saturday afternoon, or on getting a beer with some friends at the brewery.
The most helpful tool here, I've found, is maintaining a personal finances spreadsheet.
It's one thing, without a spreadsheet, to have the emotion of "I'm not going to have enough and I need to save more to make sure I have enough." I'd argue it's even evolutionary; we want to make sure we have enough to get through the winter we know is coming.
It's quite another when your spreadsheet shows you saved X, your monthly cost of living is Y, and therefore you have enough money saved, even if your income went to zero and you made no changes to your lifestyle, to last you for Z years. Being able to take YouTube University rule-of-thumb advice like "of your take-home pay, use 65% for necessities, 15% for long-term savings, 20% for enjoyment" and seeing how much money that is per month for you in your personal circumstances, along with rules of thumb on things like what ratio you should have achieved by which age on net worth-to-income ratio (1x by 30, 2x by 35, 3x by 40, etc.) and seeing what your personal actual ratio is, to get a sense of benchmarking yourself.
I mean, the influencers could be totally full of shit, but it doesn't matter. Getting actual numbers for where you are, plus getting "generic" advice that you know wasn't directed at you personally, and seeing how those numbers make you feel, can do a lot to either tell you "you don't need to be so frugal anymore" or "yep, your emotions are totally justified, keep saving".
I need to get into building a PF spreadsheet and getting things in better order, but fwiw the way I sometimes frame the question of whether or not it's "okay" for me to buy something is 1) Will spending the money compromise or help my ability to pursue something else I want to do, based on the price and utility, 2) Could I buy 20 of them? Even better if I could buy 20 without tangibly hurting my wallet.
If you can buy 20, 1 is probably fine, don't stress too much.
That is good if you can count on your cost of living being predictable. It's not for many people, even for relatively well-off ones: you may earn a lot for your area but being an immigrant without a permanent enough status in your current country, and your home country which you always have a right to return to may be unsafe or highly undesirable for whatever reason. So you need to consider the emergency of moving somewhere in a political and legal climate not known in advance.
Thus it becomes a more difficult choice what proportion to bet on stability of the current living situation, and what on long-term savings for emergencies which look quite probable but still unmeasurable. And the latter is complicated by absence of reliable and relatively liquid investment opportunities. All in all, fun to be from a sanctioned country.
I think a spreadsheet is still helpful in this case.
> So you need to consider the emergency of moving somewhere in a political and legal climate not known in advance.
Fair enough. So do the financial planning, and ask yourself, how much does it cost to fly/travel to X place that is far away? Put in a risk premium - what if the cost became 2X or 3X because of a sudden catastrophe affecting everyone? What is the actual number that you need to save? Can you keep the money in a bank account, or are you concerned that banks will be inaccessible, and thus need something more portable? If you need something more portable, how much will it cost to protect it (vault/safe, weapons)?
I sympathize that life isn't fair, and that financial goals for some people need to be concerned first and foremost with personal safety instead of luxurious "nice-to-haves". But my point is that there are still actual numbers involved, and that you can put those numbers into a spreadsheet, and that the spreadsheet can help you understand your progress towards those goals. Financial planning is valuable regardless of what your goals are.
All you are saying is that some people have more volatile earning/spending scenarios. The advice is still the same, the knobs on the spreadsheet are just different.
It's not much different than a sales job where income can be highly variable, or go to 0 because the local market is dead.
I think in the case of pathological frugality the spreadsheet approach could make things even worse. A whole 20% spent on enjoyment? I bet I could drive it down to 15%, maybe 10%. In fact, do I really need these things? Why not go down to 0%, maybe 5% once every few months. After all, I might need that money in the future.
This is why I don't budget. I'm not immensely financially irresponsible: I make maybe 1/3 to 1/5 what the average person on HN makes (~50k), but I still contribute to my 401k enough to get my match, I could fairly easily tank about a 10k expense/probably live for 3-6 months on the money I have set aside with adjustments.
But whenever I've tried to budget, I run into the same problem anorexics do with counting calories. I will literally hurt myself in order to see the savings number go up. I can live on $10/week for food. All it will cost is my health. I can be in pain for 8+ months out of the year (MS muscle spasticity + heat intolerance ) so I don't use my heat or A/C because those cost money. Etc. I will literally berate myself to the point of a panic attack over buying a $25 book from an author I've loved for decades, believing it makes me a horrible human being to be so 'frivolous'.
Agreed - I find I spend almost the same time on small decisions as large, and let the default (subscriptions, extra cars, storage) ride. That's turning the decision into a drama that befalls you (and avoiding those that don't). Or you find yourself down or up become cheap or profligate.
So, what big spending is adaptive? Better to drive decisions objectively based on future value.
Some scenarios:
- It lasts a long time, and you'll need to do it anyway. Best to get it early and enjoy it longer - for iPhones, cars, houses, marriage...
- It lasts a long time and you use it daily. Always pay for what you'll be glad to have: good socks, a powerful computer, a nice view.
- Your beloveds needs to know if you care more about money or them. Choose them.
- Something expresses your values: you appreciate an artist's work, so you pay good money for it. Some panhandler is stoic, so you give him a hand. (Just be careful about posturing.)
Another mindset is to think of your money as family (writ large) money, and invest in the future of family or friends. It's as much a vote of confidence as an injection of cash, and it helps you detach from the needy instrumentality of the money to consider what's best for their future. That's the weirder phenomenon: trillions held by baby boomers until they die (just in case), while their progeny waste time in terrible jobs and narrow circumstances for lack of investment. That's maladaptive hoarding.
Fellow frugalite here, and man, is it hard to break the habit of agonising over every purchase. Took me nearly 20 years in tech before I convinced myself I could justify just buying a new laptop every 5 years, and not sit around waiting for things to compile on the old one - and thats an item that is both essential to my work and also tax deductible. The agonising is even worse with items that are technically non-essential (but would make life better)
The internet is amazing, I like to watch videos from developing nations, where people live on a fraction of western budgets... what strikes me is the happy, free people I see. That's hard to fake.
Agree wholeheartedly but I worry some will read this and go all in the opposite. The key point is that humility helps make you free. Couple that with not being a slave to frugality and you can live without as much guilt and without a much restraint.
Though sometimes you may have to choose between being a slave to something less enabling than frugality :\
It really gets bad for those who can't even afford to reach as high as a truly frugal contemporary.
IOW below-frugal becomes a constant element regardless of its current value at any one time, and that leaves the only variable as whether or not any adaptability can be attempted at all, and how much might not be too much to ask :(
There is frugality and there is taking inflation into account when deciding on save vs loan. For the last many years it was net profit to take loans, spend and pay them back later because inflation meant you got more goods/services that way. On the other hand keeping cash/savings over some smallish buffer where opportunity costs dominate is/was always net loss. That not touching US-specific stuff like insane student loans, credit card terms or healthcare.
I am a consulting engineer serving small communities in Central New York.
Ostensibly my job is to design construction projects to fix a problem, but most of my job is actually helping the community figure out how to pay for the fix.
My greatest frustration is Maladaptive Frugality. There are whole communities with this mindset, and it takes a lot of effort to communicate the reality to the town/village board that they're losing money by trying to save money. I've invested a lot of work into projects which come to naught because the decision makers can't imagine a future where spending money saves them money.
"Tripping over dimes to pick up pennies" observed one old farmer.
"I'm too poor to afford cheap tools" say the wiser tradesmen.
That reminds me of the roads in my city. They're disgusting.
The reason is because the city charter mandates they have to take the cheapest bid. Of course the quality is crap and none of the fixes last! Fortunately, we just changed that, so hopefully it will get better.
If you'll allow me the grace to explain, I think the issue is more complicated than it seems at first glance.
Procurement policy in USA is usually "lowest responsible bid", meaning you can reasonably expect that the contractor can complete the work without going bankrupt.
With respect to the work itself, a competent civil engineer will provide for appropriate materials and handling to ensure the contractors are supplying a substantially similar product. Most repaving jobs in the city go no further than resurfacing - remove the top 1-2 inches and install 1.5 - 2.5 inches new.
This treats the symptoms, not the problem!
I'm assuming you're in a wet climate. The problem is the subbase is reflecting strain through the road surface, initiating cracks which are openned further by weather. To noticeably improve, you'd have to remove the subbase to great depth and replace with engineered fill, multiple layers of geotextile, storm drainage improvements, then a full depth asphalt section. Not only are the materials for this work expensive, but it represents a different order of magnitude of labor, the number 1 cost driver. Sometimes the tax base is so weakened that the city cannot even keep up with resurfacing and you end up with roads like you describe.
The economics on this are difficult to assess because everyone knows the roads are forcing more car repairs and accidents, and generally rob you of bliss... but the calculus to improve the roads via property taxes is not straight forward, i.e. it's political.
Yeah this is bad frugality on their part. I like that term "Maladaptive Frugality" - I think it captures it well. You're focused on the initial cost instead of lifetime cost. If you can afford a higher upfront cost for a lower lifetime cost on something that has a long enough timeline, it's the way to go almost all the time.
I like these quotes as this is something my company struggles with. Can you give an example of "Tripping over dimes to pick up pennies"?
At my company, it’s always choosing the vendor who promises the most. The fact that they have extremely dissatisfied customers and leave a trail of shit is always ignored.
Spending money sparingly is like reducing weight in an automobile. A car will get better gas mileage, go faster, break less often, and be more responsive with less weight.
So it is with spending. When you spend less, you can retire earlier, your finances are more secure, you feel less pressure and stress, etc. You have more flexibility in the kinds of jobs you can take. Perhaps best of all, you end up accumulating less stuff, and less complicated things, which makes your life simpler.
Frugality doesn’t get the flashy press that consumerism does, but it’s a winning life strategy.
Retiring early is a single guy internet myth. If you have a family, forget it. If you have a health condition, forget it. If you don’t have low risk investments, forget it. In the US health care can reset your bank account in the blink of an eye which is why so many many people in tech work until Medicare kicks in. Early retirement with a family is at least 10 mil in cash. Better enjoy your job because you’ll be doing it for a long time like 98% of Americans.
If you're truly fortunate, you can end up with an expensive chronic but not deadly condition that penalizes you for saving and having assets. Your healthcare isn't an emergency, so if it isn't paid for, you don't get it. But if you have any money, no Medicaid for you. Instead, you get to drain your accounts until you're impoverished and then they'll help you.
Healthcare is a US only problem. There are definitely people who make enough to retire early if they do not develop expensive tastes. In any case GP said, 'earlier', not 'early'. Why do you need that much if you live simply?
Aren't there health insurance plans with a high deducible (say $10k) that are quite affordable? In your early retirement, you can cover catastrophic health failures with them, and pay for everything else out of pocket.
Sure, but there also are expenses that end up not counting toward the deductible. If something "isn't covered" by the plan, then it doesn't count. You can easily end up in a situation where you'll need to see less experienced or capable doctors due to the network, or where something you need is totally excluded, excluded in practice due to certain narrow shortages, or just gated by step therapy where you'll need to go through multiple cheap drugs before having the more expensive drug that is best suited to your condition, even if doing this is expected to result in poorer long-term health.
Of course, these things aren't exclusive to the cheap plans, but I'd encourage you to compare your employer's plans to some of the marketplace ones.
I like your analogy; but of course, there comes a point where reducing weight in an automobile does have downsides: it might be more noisy because of reduced sound deadening, less safe because of removal of crash structures, less waterproof because of removed seals, and so on.
The point being, in both cases, the virtue lies in finding the optimal balance: maximising the benefits of frugality without going too far and falling down the other side of the curve.
>> I have a hard time spending, to the point where I would often procrastinate on buying things that I know I’ll need in the future.
Well, what I noticed is that I go to great efforts to avoid buying me some stuff that would make my life easier (say an electric bike or a better computer). Month starts, I get my paycheck and every day I fend off the desire to buy the stuff I want/need. And then come the bills. Like some surprise "regularization" gas or electricity bill that costs more than the item I didn't buy. If it's not that, some darn thing breaks and needs repairs. And if it's not that, kid has to go in some school trip, there's some birthday or wedding we have to attend, someone asks me to lend them some money (coze they know I save) or some other event happens and requires a ca$h infusion.
By the end of the month, money's gone and I haven't got nothing. At some point working just to pay bills and expenses makes Jack a dull boy. So funk it, I buy that stuff AT THE BEGINNING OF THE MONTH. And when shit arrives demanding money I can truthfully say: "I don't have any money left". But at least I got the thing, opposed to neither money, nor item.
> I plan to have fun spending my money in the future, so it’s time to start practicing now.
The most optimal thing to do in our world is to pick an age, say, 60, and until your 60th birthday, maximize your suffering via frugality to just under the tolerable limit so as to maximize your potential for compound interest. This leaves you with the most freedom and opportunity during the most fun part of your life, when you no longer have to sell your labor and can do whatever you want.
Within our current model, trying to slip in bits of fun through spending money before that age is getting a poor return: you're trading vacation time, which you could instead barter for more money on retirement, and you're carrying with you a bit of suffering because you have to worry about going back to work. The best thing to do is just push it all until retirement.
The limit of human suffering before suicide frequently happens is apparently quite high, so, you can really stretch yourself out here. Live in your car in the Walmart parking lot, eat beans and rice. You maybe trade a bit of the compound earnings to establish certain time constrained things you want to cash in on at 60 like having a partner or kids, but beyond that, maximize that compound interest!
I hope it's obvious that this is a criticism. It's just, the more I think about it, the more this seems the selective pressure and incentives in our society are set up. Mostly I think it's insane that we both have an idea of "retirement" and also that we set it at an age where a significant portion of the population won't make it, and for those that do, a significant portion will get to enjoy five years of it, and for the remainder, health is bad enough that maximum enjoyment isn't possible anyway.
> The most optimal thing to do in our world is to pick an age, say, 60, and until your 60th birthday, maximize your suffering via frugality to just under the tolerable limit so as to maximize your potential for compound interest. This leaves you with the most freedom and opportunity during the most fun part of your life, when you no longer have to sell your labor and can do whatever you want.
This is the most depressing thing I’ve read in a while.
You don't have to act optimally according to the current system, I don't. My concern is many seem to try to act optimally without understanding how depressing the reality of its incentives are.
I think the thing you are missing is that people are quite complex in how they model these things internally. What works for you, may not work for them.
I don't think your advice is good "general advice" but if you treat it as a "this works for me, it might for you", then it might be worth reading.
I'm not sure if you caught that my post was a criticism of the system. I'm just describing what the optimal strategy is as prescribed by how our society is structured, not advocating for it.
Even more optimal would be to pick an age, say, 60, and commit to moving to Canada for MAID at that time. This means you don't need to compound nearly as long, because you don't need to insure against a long life unable to work. Then you can start not selling your labor while you're still young enough to enjoy it.
I'm not sure what you think the MAID program is, but (leaving aside your ineligibility for health care in canada until e.g. you gain permanent resident status) if you're not suffering from a grievous and irremediable health condition, you're not eligible for MAID.
Many of my happiest moments in life have been at the park, for free, with friends and family.
You don’t need to be retired or a millionaire to be happy. Nor is being retired or a millionaire any guarantee of happiness.
Saving for retirement is just about making sure your needs are met when your health starts to decline and you may no longer be able to work. If you’ve got a little extra saved to travel around the world or whatever, even better. It’s important, but don’t wait until retirement to be happy. There’s no guarantee you’ll even live that long, for starters.
Most optimal by what metric - length of retirement? Retirement years are worth a lot less than prime years. I think most people in society make this mistake and regret it. Most people on there deathbeds regret the things they didn't do.
>HN commenters complain about how some TODO app is using 300Mb of memory or has 700 dependencies.
yes because as we've learned this year nothing bad ever happens when you have hundreds of dependencies
we're living in an obese society, metaphorically and literally, we should put everyone through a decade of whatever the equivalent of playing ping pong with a spoon is in every domain of life. Being concerned with too much frugality is like being concerned there's not enough corn sirup in our diets
> we're living in an obese society, metaphorically and literally, we should put everyone through a decade of whatever the equivalent of playing ping pong with a spoon is in every domain of life.
What’s stopping you? Go ahead, live in a trailer and wash once a year.
If a society does not thrive its advice and morals ar obviosly less valueable. So if a society tithers on the brink of civil war or is stuck in a theo cracy. Its advice on frugality is less valueable.
Most people in the US are pulled into living on credit straight out of school. You get a student loan, then a car loan, then a credit card, then a mortgage. You finance vacations, appliances, kitchen remodels, smartphones - mostly to keep up with friends and coworkers who finance their lifestyles too. A lot of people are in non-stop debt from the age of 18 to 55, if not longer. By most estimates, only about 10-20% of US households are debt-free.
Spending and getting into debt are useful tools. But I don't have any friends in tech who need to be told "hey dude, you should be spending more". I have quite a few friends who would be better off spending less.
(EDITED)
Otoh, have a few friends in tech (and high finance) who need to be told "dude, we'd be better off if you worked less hard"
(Sorry.. I grew up deprived of data teaching me that "Schlep quickly compounds into Interesting Times")
For sure it's more common for people not to save enough. But for people who are frugal and save diligently for most of their lives, there often comes a point where they cross a threshold where they have met all of their financial goals, and the "problem" is no longer how save money but to enjoy spending it. And this can be a real challenge for people who have built up deeply ingrained saving habits.
My mother, for example, refuses to replace her iPhone SE with something with a larger screen despite 1) having failing vision and difficulty reading the screen, 2) using her iPhone every day, 3) easily being able to afford it. The idea of spending $1,000 on a phone is just something she is unable to bring herself to do, even though I think it would help alleviate a real source of frustration in her life.
My father, when he started shopping for his most recent car (and probably his final car), set out with the intent to buy a luxury car. But again, despite being able to easily afford one, all he was able to bring himself to buy was a well-equipped Toyota. Don't get me wrong - it's a great car and has served him incredibly well. But it makes me a little sad that he wasn't able to bring himself to finally treat himself to a luxury car after a lifetime of hard work and saving. They did a lot of long road trips together in that car in retirement, and I think they would have enjoyed something a bit more luxurious (though on the other hand, the reliability of the Toyota is not to be discounted).
I think what you're attributing to frugality might be a more a matter of age? Many older folks are just wary of change.
I'm not that old, but every time I upgrade my PC or phone, some of my workflows break and I need to pointlessly re-learn things I'd rather not re-learn. UI buttons get moved around, icons change, some settings are removed and others are added... this was exciting the first ten or twenty times, but it's just tiring now.
Basically, I'm at this stage in life where my reaction to systemd wasn't "oh wow, this is progress" but "ugh, I need to learn how to start, stop, or modify services again". In another ten years, I'll probably just say "no, I'm not doing this again, just let me use my old computer for as long as possible".
> my reaction to systemd wasn't "oh wow, this is progress" but "ugh, I need to learn how to start, stop, or modify services again"
I must be young at heart while >60 years old; my reaction was "why is everybody whining about it, it's pretty nice, I like it". Same with jj vs git, jj is amazing!
Never heard of JJ, why is it better than git, and how did you learn about it?
Lots of discussions on HN about it recently [1], [2], I heard of it right here. It works on git repositories, so it's very easy to try.
For me, the killer feature is updating some commit deep inside some feature branch, and all child commits and branches get auto-updated, no more faffing with endless rebases. Also conflict handling is so much more pleasant than git's.
[1] https://news.ycombinator.com/item?id=47763759
[2] https://news.ycombinator.com/item?id=45672280
It's definitely varies by person. I'm much more like the GP where relearning how to do basic things I already know how to do is one of the absolute last things I want to spend my time on, but I know plenty of people who are the opposite. Newness and novelty are genuine features for some, and that's totally fine.
The annoying thing is that the latter group is over-represented in tech and a lot of core products like phones force people into that path. Most of the non-tech people I know couldn't care less about the latest iphone/android update,they just want the damn buttons to stay the same so they can do the stuff they were doing yesterday. But the only two phone platforms both change their UX regularly and users just have to go along with it.
It’s net positive when there’s useful new functionality, but phone software has been mostly a wash for a while now.
I am with you on UI updates, just moving things around and re-skinning the UI without useful functionality additions make me mad often. But then I grind my teeth and bear it.
Possibly there’s an element to this. The iPhone SE still has the home button, which may have been a factor when she bought it. And my father was a bit put off by some of the bells and whistles on luxury cars.
I agree your mother should get a new phone with a big screen, but what qualifies as a luxury car? There are Toyotas that cost 6 figures USD.
I think he was considering a Lexus RX. I doubt he even looked at BMW, Mercedes, etc (not really his style).
His Toyota was probably under $40k. This was back when cars were quite a bit less expensive than now. Nice car for sure, but the Lexus probably would have been a bit more refined.
How old is your old man?
Or get a previous gen used iPhone, then she can have both a big screen and feel good about the cheap phone.
My own parents are in their late 90’s. Because they grew up in the wake of the Great Depression, I always assumed their extreme frugality was a function of the economic distress in their formative years. They also properly accounted for the fact that old-age care is very expensive. Parenthetically, most do not seem to anticipate that accelerated burn rate near the EOL. It’s also a phase whose duration is hard to predict.
It's made harder in that every aspect of services for the elderly is oriented at extracting all their wealth before they die.
When I started driving my car had vinyl seats that you had to peel yourself out of on a hot day, a plastic steering wheel that you could barely touch when the sun was out, hand wound windows, fixed seat belts and a handbrake that barely worked.
Even the cheapest car on the market feels luxurious now.
In comparison the difference between a Toyota and a Lexus is marginal.
Expensive cars are mostly about status signalling, we are long past good enough.
>Expensive cars are mostly about status signalling
Uhm, only if you are counting the most basic utility, then you're right.
However if you actually enjoy driving (A->A driving), there is a HGUE difference and it's not just signaling. It's that you probably can't tell the difference, or don't care.
There is no comparison between driving a new Porsche or Bentley vs a new Toyota or even a Lexus.
Can you explain why?
They cannot, because they are wrong. And I say this as a person who has owned no small number of fancy cars (but I got better).
A new base-model Prius is absurdly luxurious compared to a base model car of 1975 or 1985 or even 1995. If you have lived long enough to see this change, then dropping 2x or 3x or 10x the cost of the Prius self-evidently puts you wildly beyond the point of diminishing returns.
The Prius is going to have excellent climate control, and a phenomenal stereo. It's going to have adaptive cruise control, and will warn you when you drift out of your lane, or if you're about to run into an obstacle.
Outside of motorsports-sorts of things, what you get out of more expensive vehicles is of limited utility. Mostly, it's just showing off.
Now, if you want a track weapon, then yeah, you DO get more by spending. But for a regular person who wants to get from point A to point B comfortably and safely? The Prius is fantastic, and it's hard to justify spending more unless you're willing to admit that it's a keeping-up-with-the-Joneses kind of thing.
Even in motorsports, presumably it’s still mostly showing off? Unless you are a pro, you’d still lose any seriously comepetitivr race and have plenty to learn and enjoy driving a not-quite-top of the line sports car?
I don’t know motorsports, but in all the sports I do know it’s that way. Tennis, cycling… there are serious diminishing returns in all of those and most kit spending isn’t justified by performance as much as status or stamp collecting.
So much of our lives are taken up by worrying about tiny performance differences that really don’t matter. It makes me sad for the waste of life sometimes.
That's definitely true, and I have a whole other rant how my cycling pals and I love to poke fun at dudes who show up to the group ride on a brand new $10,000 bike and get dropped before the midpoint.
BUT! It's easier than you think to get a point in participatory motorsports where the difference between, say, a Cayman and a Miata is something you can actively use.
Curious what would you say is the sweet spot to pay for a bicycle before rapid diminishing returns?
I still feel like if you go out for a long ride on a Huffy from Walmart you might hurt yourself.
Doesn’t have to be long ride.
One time I bought a bike from Walmart and didn’t make it the 5km home before I lost a crank arm.
I only know road bikes.
The groupset would drive it for me. If I was buying a new bike, and I knew I wanted to be a rider, I wouldn't mess about with anything less than Shimano 105. At Specialized, the lowest end bike with the 105 groupset on it is $2100. That's the Allez Comp, which has an aluminum frame and wheels.
The next step up the ladder would be their "endurance" frame, which is carbon. It's called the Roubaix, and equipped with 105 it's $2800.
Either of those would be a good first "serious" bike.
If the question is more about diminishing returns, I'd offer my own bike, which is a Giant TCR Advanced. It's a couple years old. I have about $5500 in it, all in, but that includes the middle-grade SRAM electronic shifting group, carbon wheels, and a power meter. The meter is skippable if you're not doing serious training, but I did and do use power data for training. Subtract $800 if you don't want that.
I honestly think spending more is just showing off. If that's your jam, knock yourself out, but it's probably not making a big difference UNLESS you need a custom frame to be comfortable.
>That's definitely true, and I have a whole other rant how my cycling pals and I love to poke fun at dudes who show up to the group ride on a brand new $10,000 bike and get dropped before the midpoint.
This has nothing to do with higher end cars or bikes being "signaling" this is just an anecdote between your skill and the next level.
You could say the same thing about a tour de france winner with any bike vs you and your pals.
If you are competitive, you get to a point where the differences do matter.
>This has nothing to do with higher end cars or bikes being "signaling" this is just an anecdote between your skill and the next level.
No, that's precisely what it's about.
>You could say the same thing about a tour de france winner with any bike vs you and your pals
In cycling, a TdF rider's bike isn't significantly more expensive or fancy than the highest-end bike available from any given maker. A novice rider rolling up on something one or two ticks away from the absolute top of the line is being a silly person. Novices in any discipline who opt for the high end of equipment are making foolish choices, and are frequently teased about it.
>If you are competitive, you get to a point where the differences do matter.
My guess is that you don't know very much about cycling. Pogi would be as very nearly as fast on my $5000 road bike as he is on his TdF bike. His comp bike is a little bit lighter, and it has components that are one tick higher up and thus lighter, but the differences at this level are tiny.
Nobody who isn't being paid to ride needs to go higher than $5k on a road bike. Going higher is just showing off, which is of course a totally reasonable thing to do, but don't pretend it makes a real difference.
In tennis I’m sure the real way to turn money into competitive gains is personalized coaching.
Not sure about cycling. But a general physical trainer wouldn’t hurt.
>Even in motorsports, presumably it’s still mostly showing off?
What, you mean like F1 where the rules of the engineering / tech of the car and shaving a second can mean 1st place vs not placing?
>Even in motorsports, presumably it’s still mostly showing off? Unless you are a pro, you’d still lose any seriously comepetitivr race and have plenty to learn and enjoy driving a not-quite-top of the line sports car?
I was at a track day once, and you'd see guys rolling up with very expensive cars, and they were often clocked as noobs before anyone even spoke to them. The guy rolling up with a beat up 1st gen miata pulling a trailer with two sets of spare tires? Yeah, that guy got respect. Dude was scary quick in the turns.
How can I be wrong if this is all subjective in the first place?
I've owned a number of cars, and this isn't just about luxury. It's about the quality of the drive.
If you call HVAC and a Stereo luxury, then you haven't updated your definiteion relative to "1976 or 1985".
Again, all purely subjective. But there is a huge idfference between a Prius and a drivers car.
You appear to have some reading comprehension issues. Perhaps revisit my prior reply.
What specific benefits does a "driver's car" have over a "regular" car, praytell?
I'm replying to the comment that expensive cars are mostly signaling. And it's false.
For people who don't like cars (/r/f*kcars is strong on HN) I understand their viewpoint. For people who LOVE cars, we see the details and appreciate the engineering, craftsmanship and art.
Will a Prius get you a->b the same as a "signaling car", yes. But for the hobbiest, it's the journey not the destination.
If you compare a Porsche SUV to a Lexus SUV, there's almost no difference.
If you compare a Porsche Boxster to a Toyota, the Porsche is much more of a driver's car and if you're the right kind of driver, there's simply no comparison. (We'll ignore the FT86 / 86 for the moment ;)!)
If you buy a Bentley... you probably pay someone else to drive it for you.
Something to remember in all of this is hedonic adaptation. Buying a Porsche will feel in the moment different from buying a Toyota. But a few months later, you will be driving "your car" and much of the time, you'll be thinking about driving, traffic, signs, speeds, lights, pedestrians, bikers, the song you're playing, your next turn, a dozen other things. For the most part, you won't be thinking about how much "better" your car is in comparison to the alternative. You'll be used to it. You'll have adapted.
Different cars are certainly different for a personality who is drawn to the merits of automobiles. My favorite car was a $20K used Mazda 3 hatchback. I liked it much better than some much more luxurious cars (including the Polestar 2 Performance Plus I have now.) But that wasn't because of luxuries (the Mazda had luxury and heated seats and climate control and swivel headlights and adaptive cruise control and... and...) but because I enjoyed pressing the clutch, pulling the gear lever into second, releasing the clutch, putting my foot down, and steering through a corner. (The Polestar has some merits as well, but they are very different merits.) The Mazda 3 had a whopping ~186 HP... but it was fun. (Don't get me started on my 2007 Honda Fit... oh the memories!)
I've owned or driven cars from almost every auto-manufacturer found in the US/EU. I can clearly say (subjectively) there is a HUGE difference between a Porsche Cayenne GTS, Turbo S or Turbo GT than Any F-Sport Lexus. Sorry, not the same league.
As far as the adaptation, maybe. But driving a Toyota never brought a smile on a twisty, ever. But it was reliable and always started :) The Porsche, every time, it never gets old [feeling] after many years.
When you actually get to drive it as it can be.
Maybe you live somewhere that's possible, or not too far from such a somewhere. Rare to find such places within 50 miles of a big city though, unless you're in Germany and have the autobahn.
I suspect most premium cars get to spend a tiny fraction of their mileage doing the kind of driving where they'd measurably beat a mid-market model.
Bah. I've driven luxury bmws, porches, and corvettes. You want to know what my daily driver is? A miata. Those other cars are faster, yes, but nothing else makes driving quite the occasion that a miata does. You don't have to go expensive to buy something you actually enjoy driving.
Miata is the exception, it is fun to drive... and it was engineered to be that way.
Yep, I've always said it's much more fun to drive a 'slow car fast' than a fast car slow. I drove a friends suped up vette and I could barely breathe on the gas pedal without breaking laws. Meanwhile I can rip my miata to redline in 3rd gear and not raise too much suspicion getting on the interstate.
I'm curious what the breakdown is. I definitely know people who buy nice cars just for the status aspect. My neighbor bought a Porsche recently and I was talking to them about which fun roads they've driven in around here (I bike and ride motorcycles so I've been on a lot of fun backroads) and they said they've only tried one road once.
I ended up asking them what they do with their Porsche and apparently it's mostly going to car meetups and saying that they have a Porsche and feeling good about owning a Porsche.
So yeah as a former Miata owner I know that expensive cars tend to just be more fun to drive but if you live in an HCOL area with people who are highly leveraged, you'll find a lot of people who buy nice cars only for status signaling. I suspect in HCOL areas more do it for status than the actual love of driving.
(FWIW I find this in a lot of hobbies. I can ride a loaner bike faster than a lot of riders around here decked out in fancy kit, clips, and the best groupsets. A lot of people in HCOL areas engage in hobbies as an excuse to nurse a shopping and status addiction.)
Which goes back to the root comment that a lot of tech people highly leverage their life because it enables them to have a lifestyle and status that they think they need or deserve.
I'm perhaps pathologically frugal myself. I've found for myself the best compromise is to force yourself to pick at least one feature other than cost. We've got a 17 year old Toyota Yaris that I tell myself is for fuel efficiency, and an old Ford Ranger because I wanted at least one of our vehicles to be able to move sheet goods. Technically I could probably walk onto most any lot and pay cash for whatever I wanted, but I know there's zero chance I'll ever do that.
With cars if you wanted to bias yourself towards newer cars you could prioritize safety features alongside cost.
A Yaris and a Ranger (who doesn’t love a Ranger!) are going to serve you well, but they’re not going to have the active and passive safety features of a more modern car. Put next to cost it makes it a bit harder to perform maladaptive frugality.
But what is 'luxury'? You may have in mind a Rolls Royce. But maybe he doesn't want that.
If they've been frugal their entire life, they aren't as far along the hedonistic treadmill, a new reliable car is a luxury.
If you're used to darning socks, buying new socks is a luxury.
If I buy a PS2 today, why is that not a splurge, if I didn't have one previously? Yes it doesn't have the best graphics but it's a step up from my PS1. Getting the latest and greatest just because, is keeping up with the Joneses. And that's a path to spending money, not happiness.
The knowledge that you have enough in your bank account if things go to pot, itself brings happiness
> The idea of spending $1,000 on a phone is just something she is unable to bring herself to do
She wouldn’t need to spend that much. You can get a perfectly fine refurbished iPhone 16e for $400.
Sounds like his money was better spent on the trips than spending more on a car that wouldn’t make the trips any better.
Are you sure they were deciding only or even primarily based on cost? I often find myself choosing cheaper options over more expensive ones, because I find them easier or more enjoyable to use. I think with expensive/luxury products, there tends to be more "curation" and opinionation, which can work well if your preferences line up but is a detriment if not. I also think a lot of times more expensive products are just "luxury-hacking," having focused on "building a brand" to the point where they are able to charge more for worse products. Example: Beats headphones adding weights inside just so that they "feel more premium" https://www.news.com.au/technology/home-entertainment/audio/...
Your parents are smart. 1000 dollars for a phone is absolute nonsense. A luxury car is something you should be sure you will thoroughly enjoy, because they are a good way to set money on fire. If you do want one, buy it second hand, for it will cost hundreds of dollars per km for the first kilometers.
Having a credit card is like having a video game passive that makes everything permanently 2% cheaper. Everything should be put on a credit card for that discount as well as fraud protection provided you are disciplined enough to never ever ever ever ever ever carry a balance.
This is US-specific advice; EU capped merchant fees, and therefore you don't get a free 2% reward at their expense.
The fraud protection and insurance can be useful though.
You still get a 30 day interest free loan. Assuming you pay the full balance.
You get roughly the same level of fraud protection on both at this point. This is both due to converging legal protections in many places and due to market developments (both Visa and Mastercard require issuers to offer "zero liability" on debit cards just like on credit cards).
One advantage of credit cards is that you don't have to wait until the dispute has been at least accepted to get your money back, though.
I don't get the down voters, it is, or should be a tool.
Although we are talking about it being an issue. Which you have already covered.
Problem is, most people don't spend that much time thinking about it. So I suspect "don't get a credit card" or "only use it in emergencies" are generally good advice. Although perhaps we should just be better at teaching house hold type finance
The "provided" part is the reason I'm staying away from credit cards.
3% at restaurants is offset by 3% fee to use cards at restaurants. this benefit is evaporating.
not an argument for or against cards, but they are becoming closer to neutral than a discount.
Of course somebody is paying your 3%; there's no free lunch. To a large extent it's yourself (via interchange paid as part of the merchant's fees); part of it is however also other people paying cash and often not receiving a discount for doing so.
Regardless of all that, at the individual level, not using a credit card is still irrational. Not quite the tragedy of the commons, but it's pretty close.
The only way out is probably outright regulating the entire thing away, like the EU has successfully done; the market seems too inefficient and consumer behavior too sticky for card-specific surcharges (i.e. "you pay for your own points") alone to solve this.
Unfortunately it does so at a >2% average cost to everybody. At the individual level it makes total sense, though.
Debt is also a way of normalizing, essentially, wage theft. You're encouraged to use credit to bridge gaps when what you're paid doesn't cover your necessities, let alone other expenses that you're expected to take on. When you can't pay back the debt you took out to live what is considered a normal or even frugal lifestyle, the justice system is used as a cudgel against you, often in the form of professional debt collectors and their attorneys suing you in small claims court (a venue which was established for laymen), where they abuse the lax rules to extricate full payment on a debt they bought for pennies on the dollar.
Somewhat related, here is a video from a guy trying to avoid just this sort of scenario by refusing to put his company's business expenses on his personal credit; follow-ups show the price he's paying.
https://www.youtube.com/watch?v=EFZIxJyKgE8
If society expects you to consume, you should be paid enough to support it. A system that leverages greater and greater amounts of its future to pay for the present eventually reaches a point where it is statistically unlikely that the debt will ever be paid back. That's when all hell breaks loose.
I have zero consumer debt and pay off any credit card at the end of the month.
But I don’t mind work expenses on my personal card? I get reward benefits for a sizable chunk of expenses that I’m directly reimbursed for?
n=1
That's a personal choice. You alone should be able to decide if that's worth the complications it introduces to your taxes and your relationship with your employer. However, the cleanest and most dignified route is to pay for expenses incurred in the course of business. And employees should have the right to refuse to put up their own money for such expenses, without consequence.
Heavy debt is a part of the US culture. You can probably imagine the responses folks would have when they found out I was 40, a tenured professor with a family, and didn't own a house. Nobody had a heart attack but I'm sure some were close. I was just violating cultural norms too much by not going into debt to buy a house as anyone in my position was supposed to do. Then they'd find out I drove an old vehicle and didn't take expensive vacations...sometimes you have to go with the math rather than cultural norms.
Home debt has traditionally been seen as "good debt" for a bunch of reasons, but the big ones were that
(a) Home loans meant you were accumulating equity in an appreciating asset; and
(b) Mortgage interest was enough to allow most people to take a larger-than-standard deduction on income taxes; and
(c) The relationship between home prices and the equivalent rental market meant you could probably have a nicer place for a lower monthly payment in many markets.
These were generally slam-dunk truths for decades, but in the last 20 or so years they've stopped being true.
Home ownership isn't the guaranteed rocket-ship to wealth it once was. Appreciation is spotty, and varies wildly by market. My own view of this is that a lot of the gains are now baked in, and we're unlikely to see the kind of rise in value (in real dollars) that characterized, say, 1990 to 2015. Last year I sold a townhouse in Houston that I'd owned since 2000; I made money, but not the kind of upside that you wanna write home about.
Second, the tax law changes in Trump's first term dramatically raised the standard deduction -- enough so that we stopped itemizing. Part of this was that we were deep into the mortgage, so we were paying less in interest every year, but it's still a factor.
Third, rents may be high now, but home prices and interest rates are higher. When I bought in 2000, I went from renting a place for $1200 a month to OWNING a place at a bit under $2k (including taxes and insurance). This was with 20% down.
In my old neighborhood now, a nice rental is gonna be $2500-$3000, and housing is just unattainable. First, 20% now means probably $90K. Second, servicing the loan is going to be more than the rent, plus you've got another $450 a month in property taxes AND probably another $450 in insurance. And you've got to accumulate the $90K somehow while paying $2500 in rent. It's crazy. I have no idea how a young person who isn't making top-5% income can afford to buy without family help.
> Last year I sold a townhouse in Houston that I'd owned since 2000; I made money, but not the kind of upside that you wanna write home about
Sure but you made money. If you had rented you would have lost that money. Renting only makes sense if the opportunity cost is higher, e.g. if you think the time value of the money that would be put into the down payment is higher in the markets than it would have been on a home. The other thing is mortgages are risk uncorrelated with major equities, usually at least. If there's a major recession your equities may be underwater for a few years. Your fixed rate mortgage will stay the same.
I'm saying it made sense for ME in 2000. I'm saying it's less obviously a good move for a 30 year old in 2026.
I have a strong suspicion that housing is due for a correction. Appreciation requires demand, and housing is now so expensive that Gen Z can't get on the ladder. That plus the looming Boomer die-off seems to point to a reversal of some housing gains.
I think housing in the US is just such a complicated space (Fannie/Freddie backstopped loans, ridiculous zoning and building requirements (FAR, setbacks, etc), environmental laws, varying property tax regimes, prevailing wage requirements for building in places, etc that it's just really difficult to understand. It's like a ridiculously complicated layered system of public and private regs and incentives that lead to very inscrutable results.
For me, owning your own home is partly about (mostly) paying it off before retirement, that way most people won't need a large retirement income to pay the rent. Also in my country, aged care asks for a large refundable deposit, for example 600k, if it comes to that.
It doesn't pay for the increased medical expenses near the end. But it can pay them off if sold after death.
Yeah, we're 56 this year and have no mortgage anymore. That's nice.
In california I've noticed lots of other things. prop 13 might make apartments pay less taxes than comparable condos, and condos also have HOA fees that can easily be $2k. I've even seen HOA fees on single family homes.
HOA fees on freestanding homes are VERY common, but they're generally not as high as places with shared walls.
It's only in condos and whatnot that they get crazy, though. My sister has $2500 in monthly fees associated with her fully owned condo in Philly, for example.
This really struck me when I bought a new car and my mother asked me how much it cost. I told her what we'd paid, and she said, but how much is it per month? The idea of just buying a car didn't compute.
At least I finally got her off the lease treadmill. Toyota helped a lot by not making anything she particularly liked. When I suggested she buy out her lease instead of getting a new one, it was a revelation.
> By most estimates, only about 10-20% of US households are debt-free.
This needs to be qualified with the fact that it doesn't make sense for many people to be debt-free if they are financially literate. I know many people, myself included, who carry debt they could easily pay off because it would be irrational to do so. Being debt-free would actually make them poorer.
This often holds true even when ignoring obvious cases like debt interest well below the Treasury rates.
*Cries in paid off 3.25% mortgage...
Minmaxxing your finances is maladaptive frugality. You have something even better than 1% extra interest in your account: you have no mortgage. You can do whatever the fuck you want to your house and your bank doesn't stick its nose in your business to ensure the value of the house stays up. You can do whatever the fuck you want with your career and you don't have to worry the bank will come and take your house back.
being debt assumes appreciation on the asset you are holding under that debt which has been artificially inflated by the governments for yeeeeears now. you would never hold a debt on the house (even at 3.5%) if the house stayed the same price the day of the purchase and date of the sale. too many people are saying “some debt is good/great” which is only marginally true if you make certain assumptions which is exactly what they are - assumptions.
> being debt assumes appreciation on the asset
No it doesn't. The math works out the same regardless of changes in asset value. Paying cash has significant opportunity and liquidity costs. These can often exceed the cost of debt.
I had mortage on a condo for $460k. total money paid to pay it off via debt, little over $1m. I sell 30 years later for $460k I just lost $550k :) (I didn’t, paid it off in 5 years saving myself 100’s of thousands …)
ask yourself why “we” think that some debt (e.g. real estate) is great) while others (e.g. vehicle) is bad? it just might ge that one is looked at as appreciating asset while the other not so much.
comments like yours always remind of the stripper scene from the movie “big short”
having debt also makes you a forever slave (true capitalism at work). God forbid you lose your source(s) of income and don’t have FU money or significant stash, now you fucked. with no debt and roof over your head life is infinitely better even during trying times..
You aren't making a consistent or coherent argument. The math of e.g. interest rate arbitrage doesn't care whether you are buying a house or a car, you will profit the same regardless.
In many cases the risk is literally zero, the scenarios you are imagining where it has bad consequences don't exist as a real thing that can happen. If you have enough money to pay cash then you also have enough money to pay off the equivalent debt at any time of your convenience.
Many people believe many things that are not based in physical reality. Many popular beliefs about debt are no different and debt has no intrinsic moral significance.
Let's say that each month I have an extra $1000. Should I use that money to pay down a 4% mortgage, or should I invest it in an index fund that is all but guaranteed to earn more than that?
> that is all but guaranteed to earn more than that?
say SP500 nominal avg is around 10% - no brainer, yes? but that is an avg of many 30-year windows. some 30-year windows might not be that kind to you. market crash in say first 5-6 years will hurt you a lot
so there is just no certainty here except we think (just like we expect appreciation on the house) we’ll end up on the “right” side of this.
and of course not to mention the most obvious, roughly 99.56% of people will not be investing this money to get more than 4%…
Even if the house prices stayed the same, it would make sense to keep the low interest debt and invest in other assets that have higher yield, like shares.
this again assumes a lot… it assumes that you can make up the money you are donating to lenders with some ficticious higher yield investments. I’d ballpark less that 5% of people would make out on the positive side of this.
We are debt-free, but it's because I paid off a mortgage the hard way, and then sold that house to buy another.
Depends on what "debt-free" means here: "not carrying any debt" vs "positive net worth" are different situations.
For years I did this with the thermostat - something I learned from my father who always kept the house under 65F (18C) in Winter. I'm somewhat ashamed to admit it even led to arguments with my spouse early in our marriage when I would enter a room and find the thermostat set to a balmy 70F.
Eventually I just sat down, looked at how much it costs keep the house a few degrees warmer in winter, and realized we could afford to be comfortable. And if I were really hell bent on saving money, there were other lower-priority expenses I could cut back on first. But I don't even think it was even necessarily about the money - it was more that saving energy and toughing it out felt virtuous to me. Which is all fine, but not something that should be imposed on your partner if they don't share the same beliefs (or if they just get cold easier than you).
I love the winter for this. My thermostat is set to 16C at night. I prefer if the heat never even kicks on, it’s noisy and disruptive to have air blowing through the vents. I wish there was AC that could make my house that cold at night while making no noise!
Going on your Slavic username: as an American who moved to a country without forced-air HVAC, it’s been quite a revelation to discover how backwards forced air really is.
Forced air is pretty necessary for air conditioning (cooling).
For heat, radiant is nicer. But most people don't want to pay to have two completely separate climate control infrastructures in their house.
Heat pumps, they are one piece of infrastructure that work for both heating and cooling as it's a symmetric process.
Air heat pump? I don’t notice the sound.
Funny, I went the other way round in the Bay Area. PG&E bills were so high so it was the choice of putting on a jacket or paying $1k extra over the winter months. And my reasoning was "I can afford a jacket".
I think I would still take that option, at least partially! Our gas bills where I am have gotten awful in recent years after the gas company separated from it's parent and all the homes (apartments) around here have god awful insulation since they're 80-150 years old.
I bought some fleece sweatpants for $40 and the amount I was able to keep my home unheated was totally fine and I made that money back within that month.
Also the cost of apartment-friendly insulation paid for itself immediately as well (which wouldn't apply to most decent apartments).
Where I live these days, it's 50/50 heat included in rent versus not, and I have to remind my friends that literally all of the buildings they rent in are 50+ years old.
And if your landlord is balking at including heat in rent, there's a decent chance it's because your bill will be outrageous because there's zero insulation, and as a tenant there's little you can do to fix that.
I’m always colder in my mother’s house in Scotland (-5°C on cold days) than I am at my MIL’s house in the frozen Canadian wastelands (-40°C/F on cold days), because my mother will play games with thermostat to save money, where my MIL would simply die of exposure if the heating wasn’t on consistently for 6 months of the year.
There's also a very different type of cold close to the water. -40C will dry out your skin and make it feel like it's burning, but -5C in Scotland or on one of the Gulf Islands near Vancouver will make your bones feel frozen without good insulation.
You know those Christmas cards that show a frosty twinkly white treescape? That climate will kill you even at -5C.
People die on Ben Nevis every few years because they think its not that cold. But Scottish cold in that part of the world is brutal, there's so much moisture in the air that freezes if you get wet and cant quickly get dry you will die fast.
Still, it's a beautiful part of the country.
If the relative humidity is 100%, then being wet won't make you colder: the water has to evaporate in order to cool you, and it can't do that at 100% relative humidity. The problem that high humidity cold causes is increased convection, and the problem being wet causes is the dramatic near-complete loss of the insulation value of many garments.
There is a _lot_ of folk science about cold weather that is just plain wrong.
> The problem that high humidity cold causes is increased convection
Can you help me understand? How does higher relative humidity increase convection?
Humid air has higher heat capacity and higher heat conductivity than dry air which both increase convective heat loss.
All of that is true, but how does that relate to convection? That is the part I find puzzling.
I think he was talking about the weather conditions. Cold weather fronts with high humidity means strong winds.
I had a home battery put in recently and switched over to wholesale power...and the most shocking thing has been how little power our reverse cycle air conditioners actually use. Like, we bought them for efficiency, but between solar panels and a battery I can actually just have them on all night and we might just barely run out if we had good sun that day.
Basically a bunch of technology has just crossed over to make being comfortable not just affordable, but visibly so (which would've been great when I was a kid - it made a huge difference when I hooked the power monitoring up for my dad and proved to him that he should just set the AC to a target temperature and the fastest fan speed he could stand the sound of and it would use less power...and he actually did it!)
I think if you want to keep it on the cold side, you can still do that. Builds character, isn't dangerous, and saves a couple of bucks. You can also keep it warm when you feel like being warm. There's something in human psychology about being able to endure discomfort and then come back to "safety".
> who always kept the house under 65F (18C)
And some of us literally have no choice. I need my home office to be under 18℃ in order to not imitate a drowned rat. Anything over 28℃ and I am dripping with sweat even completely naked. And no, I am not obese.
Maybe your dad is the same?
I struggle with this. I feel so guilty for replacing my four year old phone this week, even though my old phone has had hardware issues for more than a year. There wasn't really a puritanical element for me, it seems to be just from growing below the poverty line.
The flip side of it is I've accidentally joined the FIRE movement. Making a moderate tech salary for most of my time since graduating college but feeling guilty about spending means I'm now in my early 40s and don't really have to work anymore, or at least, could comfortably take any job I want without worrying about what the pay rate is. I don't really know how to feel about that. After my last job in tech I took about a half a year off before realizing I also felt guilty about not working, and took a job I wanted. But there are also weird feelings from working because you want to at a workplace where most everyone else is working because they have to.
You know there’s an upcoming generation of developers who are so jealous of you? Not your fault or anything.
We managed to make the latter irrelevant or by no means a high earner.
Everything is expensive, tech took over all the jobs, now tech itself has found ways to end those jobs. You either have to be a medical professional/media person now to live without worry.
I'm in the same situation as GP and while I think you're right (we're some of the last well paid software developers who aren't also founders) it doesn't help with feeling less guilty!
It's a weird kind of guilt because it's not like we individually created these economic conditions; we were just there at the right time to take advantage of them before they were gone. I tend to think of this as "useless guilt" (vs. guilt about taking a transatlantic flight or other high-impact activity -- which I still do, but I think that guilt is societally useful)
> You know there’s an upcoming generation of developers who are so jealous of you? Not your fault or anything.
I do, and and I think that's part of the reason I feel guilty about not working. Why should I get an easy ride when other people did not? I suppose there's some small element of worrying that I'm wrong about my future needs . I know I have some skills that are still useful and I can put them to work now, but I'm less sure I'd be able to do that in five years. That part of it is probably not maladaptive, however, even though it probably comes from the same place of growing up with very little.
> I do, and and I think that's part of the reason I feel guilty about not working. Why should I get an easy ride when other people did not?
Devils Advocate: Why don't you feel guilty for continuing to work, continuing to absorb a salary that doesn't really matter for you but could be life changing for someone else who is looking for their chance?
Just a slightly different perspective
That's certainly a consideration. The story I tell myself is that brought a skill set to the job that the organization I work for otherwise couldn't afford and took a salary well below the market rate for the position. It's a worker-owned cooperative retailer with a relatively flat pay scale that doesn't differentiate between types of roles, only levels, so I'm on the same pay ladder as our cashiers and dishwashers. I am, though, perhaps taking a job from someone else who wanted to pivot their career. There are no perfect answers.
Sounds like you’re living the FIRE dream.
Working a paid job does nothing to help those less fortunate than you. Maybe by retiring early you can free up time to help others in more creative ways?
> You either have to be a medical professional/media person now to live without worry.
No, you just need to live within your means.
The internet is amazing, I like to watch videos from developing nations, where people live on a fraction of western budgets... what strikes me is the happy, free people I see. That's hard to fake.
What you see is the happy side of things, of a particular section of society, packaged in a way to make the viewers feel good and not sad. They’re either too poor and uneducated or too rich.
Most of us, educated, are aware of the fact that we are one medical emergency away from being bankrupt.
> No, you just need to live within your means.
I politely disagree. Means for me personally includes not worrying about healthcare, losing a job, unexpected expenses, affording the facilities to participate in society rather than becoming a travelling nomad. It’s easy to be blind to your own blessings, even more so if you have already lived a life. These are life goals for people of my generation in my country.
People, educated ones, are no longer marrying. Guess why?
> What you see is [...] packaged in a way to make the viewers feel good and not sad.
Maybe. Or maybe they are genuinely young, free, and happy.
> Most of us, educated, are aware of the fact that we are one medical emergency away from being bankrupt.
Yes, but being aware of your mortality is inextricably linked to the human experience. Not a bug, a feature.
> Means for me personally includes not worrying about healthcare, losing a job, unexpected expenses, affording the facilities to participate in society rather than becoming a travelling nomad.
My friend, I do not know your circumstances so I venture carefully. Your reply seems to be focused on risk, rather than what a person can control by their own behavior. Risk is a part of life - we all have different tolerance of risk. What I mean by "live within your means" is to spend less than you earn. I understand the difficulties, but it is not impossible. I have been in poverty in my life, and I feel fortunate that we were able to escape it.
> People, educated ones, are no longer marrying. Guess why?
I have my own theories, but I'd be happy to know yours
> but being aware of your mortality is inextricably linked to the human experience.
They aren't aware / afraid of their mortality. They are aware of the lack of financial safety net / social support. It is in effect everyone accepting a more primal state of affairs, where the weak die, as a virtue. Rather than a state of affairs that we are economically capable of: Universal healthcare. Many of us understand this is a political hurdle. But that is precisely what makes it so disheartening. If we were all too poor to afford socialized healthcare, we could at least take solace in our shared experience. But that is not the state of affairs. It is an invented problem. And most frustrating of all, we already spend more than people with universal healthcare. Maddening.
How much money is your life worth?
How much is the government willing to spend to keep it?
How much are you willing to spend?
What is healthcare, and how to distinguish that from simply prolonging the inevitable?
And what of those who refuse to eat well and exercise?
What of those who smoke, drink, and debauch themselves? Or ride motorcycles and jump from high places?
How do we prioritize our doctors' already strained schedules?
Unfortunately, from my perspective, universal healthcare sounds like it may require more draconian calculus than the imperfect system we now enjoy.
Do I empathize with my neighbor who struggles with the load? Of course I do!
But should I want to take his place when I've carried a burden of my own?
You are looking at this from the wrong angle. We get taxed a lot (not if you are ultrawealthy but still…). so government is taking shitton of money in exchange for…? well in the USA it is in exchange for paying down debt and department of “defense” so that we can bomb the shit out of everyone we want whenever we want. we also spend shitton of money on healthcare already but this money is going you know where, middlemen and racking in profits and doing a whole lot of other things except providing care. so the question is - where would you rather your tax dollars be spent? and also another question which is why are Americans the only citizens of any developed nation where providing care is “impossible”?
> You are looking at this from the wrong angle.
Thank you, I'm confident I will fairly consider all which you're about to reveal!
> We get taxed a lot (not if you are ultrawealthy but still…). so government is taking [sic] of money in exchange for…? well in the USA it is in exchange for paying down debt and department of “defense” so that we can bomb the [sic] out of everyone we want whenever we want.
An idea so crucial to the birth of this nation, is that taxes are not paid in any "exchange". Your property is removed from you and your government makes use of it as it will. In fact, the federal income tax was unknown to our country before it was concocted to raise funds for WW1 and was unfortunately never retired. Pointing out our current conflicts is definitely appropriate!
> we also spend [sic] of money on healthcare already but this money is going you know where, middlemen and racking in profits and doing a whole lot of other things except providing care. so the question is - where would you rather your tax dollars be spent?
I would rather my government didn't help itself to my money at all. In my opinion concentrating the wealth of a nation in the hands of a few is exactly the circumstances most certain to create the corruption I think you've described.
> and also another question which is why are Americans the only citizens of any developed nation where providing care is “impossible
In the United States emergency care must be provided, regardless of ability to pay.
For non-emergency care, please consider some of the issues I've already raised.
> What I mean by "live within your means" is to spend less than you earn.
I see where you are coming from, I genuinely take it in good faith. There's just this constant pressure to be this or that at certain stages of our lives, especially in the asian culture I am part of. I've managed to avoid these all my life but lately I've been falling for it as well.
> I have been in poverty in my life, and I feel fortunate that we were able to escape it.
Genuinely happy to hear this. :) It gives a lot of hope.
> I have my own theories, but I'd be happy to know yours
It's a cultural thing, I have friends who haven't married yet because they feel they can't afford a family with their current circumstances. Here marriages are a family thing, so the parents need to approve. And no father or mother will send their daughter to such a person when they have more options available to them. You could live the frugal life or the glamorous instagram life people are brainwashed with. Everyone is running in a constant state of survive or die mentality because no one has a safety net to fall back to.
I am not saying all are like that, there are independent strong women/men but they are dime a dozen.
What you described, it reminds me of what I saw on TV when I was a little boy, lemmings marching to the sea. I see similarities with young people in USA.
We are smarter than lemmings, we can see the danger, but we're also smart enough to convince ourselves that our eyes betray us there is no danger.
Marching forward while calling back for those behind to carry a rope, this is still the same madness, isn't it?
> You either have to be a medical professional/media person now to live without worry.
Civil Engineer here. Used to get clowned on by other STEM students for going into one of the "lowest paying" engineering majors. Post grad, I can't imagine a more stable job, and my generational cohort is having a hard time. Boy do I feel smart. And the bonuses after construction season? Forget about it.
Ah yes, forgot about Civil/Mechanical/Electrical. These I believe are foundational disciplines.
I would think the biggest reward in civil engineering is seeing some tangible piece of infrastructure you designed, built, and serving society. Software engineering has been an interesting career, but I die a little inside when software I've written gets blown away like a Tibetan sand painting.
Well played.
Atoms >> Bytes.
> You either have to be a medical professional
not even any longer, unfortunately
I just replaced my five year old phone for the same reasons, but I haven't been able to let go of my old one yet. It still works so I must find something to use it for!
> After my last job in tech I took about a half a year off before realizing I also felt guilty about not working, and took a job I wanted
Well, yeah, that's kind of the problem. If you're the kind of person who can FIRE, you're not the kind of person who'll be happy on permanent vacation at the age of 40. It's nice to have that option, but many people who get into FIRE commit themselves to a lifetime of slight misery instead of learning to be okay with living life when they can. I had these struggles too - I cut corners I didn't need to, and it took me a long time to internalize that I'd rather enjoy my life in my 20s than save money to do nothing in my 40s.
E: I'm editing to say this because like four different people have issued variations of the same response: the alternative to FIRE is *not* not saving! It's saving for your future while not aiming to retire early. Set a good target savings rate that will help you comfortably retire in your 60s, and spend the rest on things you care about. Let go of the mindset that any spending is taking years off your retirement.
I think this is a false dichotomy. My wife and I worked through our 20s, but regularly took vacations. We flew to NYC from LA at least 2x per year from 25-30. We had season ski passes. We lived frugally but well.
I was in grad school, she was a consultant. Our income was solidly lower middle class for LA, and we still managed to save 25-40% of our income per year.
Now that I've got a kid and am in my 40s, I've taken a year off, and I don't think I'd be bored in "early retirement". I'd probably spend time with my daughter, do more camping, and work on intellectual side projects (I have more than I can count).
The trick has been: I don't try to keep up with other people, I follow my own passions. I know how to cook, and to make my own fun. I'm curious and I like find out answers on my own. I never took on credit card debt.
I'm lucky because I had support from my parents through early college. I got student loans and supported myself after sophomore year or so. (I'm strategically still paying the minimum on those loans fwiw.) otherwise I stayed out of debt until I got a mortgage in my late 30s.
So, it is possible to do both. But I have noticed that I have a better ability to control my desire for acquisition than most people, and a decent amount of frugality in most areas of my life.
Finally!
I've struggled with this... not personally, but watching other people going crazy with whatever money they get and then complaining about not resting enough, not traveling enough, not having fun enough.
They go ahead and ONLY take full 2 weeks vacations, never even trying spreading some of those days here and there, perhaps right next to a holiday to make it a long one, and then complain later that they are burned out...
Most people even with means complain about some of us doing this normally (we don't have to travel the world every weekend, come on), and you talk with them, and if they just stopped "wanting to live outside their means", they could actually accomplish it, even if little by little.
I commend you for living such a life, because even if none of our lives are perfect, some of us enjoy it as best we can. :)
OK if you were in grad school, ski passes, multiple flights to NYC per year, living in LA and saving 20-40% of your income, your wife must have been making a hell of a lot as a consultant.
How much do you think all this cost?
Ski passes for 2: $500 at mammoth. (Yes, the prices have definitely increased.) We'd sometimes drive up just for the day (leave 4am, back 9pm) to save on lodging. This was fairly doable in my 20s.
Flights to NYC: we'd book on cheap off-days, and I think round trip was usually about $400 for both of us. LA<->NYC is a very competitive route and deals can be amazing. I learned to use Priceline like a pro, so we typically stayed in manhattan for about $100/night or less(!) for fancy hotels that usually charge $300+. We often would stay in 2-3 different hotels to save on money.
So all-in for these activities was probably about $6k-7k per year. Grad stipends were $25k, which covered rent plus most of the vacation, and my wife had an entry-level job at a decent firm.
Didn't feel like a stretch in part because we were really flexible, but we were careful about how we spent our money.
No cable TV, for example. That shit steals your time and money (doubly so because the ads encourage you to spend more money).
> many people who get into FIRE commit themselves to a lifetime of slight misery instead of learning to be okay with living life when they can
Source for this assertion?
I've been in contact with various people at various points on the FIRE journey, and I haven't seen a lot that go "too far" towards being miserly, cheap, and miserable. Especially when they are high earners like the parent comment. They live lifestyles that may appear lavish, but are done while spending well below their means, because they are also investing in their future, while being mindful about spending today.
The point of FIRE isn't that you invest in your future. I think it's unreasonable to say the opposite of FIRE is to save nothing, when it is in fact saving at good rate while aiming to retire in your 60s. My point is that aiming to retire early - like 20 years early, when you're in you're 40s and still eager to work - is likely to make your life miserable if you're the kind of person who actually enjoys work and can commit to goals like FIRE. That's what I've seen in communities I know where people FIRE. Hell, I know many people in my parents' generation who retired in their 60s and still want to work, and end up not dipping into their savings at all.
I'm sure there's tons of people who love being on a FIRE path. It's a lovely goal with self-reinforcing metrics that is easily gamified. And I bet your first year off work also feels great, which is why I encourage everyone to take a sabbatical every 10 or so years.
> The point of FIRE isn't that you invest in your future
Huh? "Financial Independence, Retire Early" Sure sounds like you're saving money and investing it in such a fashion that at some future date, you're no longer obligated to do paid work -- before the traditional retirement age.
> I think it's unreasonable to say the opposite of FIRE is to save nothing, when it is in fact saving at good rate while aiming to retire in your 60s.
Again you confuse me. Most people do not save enough for a solid retirement in their 60s, so it does not seem like you can say that is the "opposite" of FIRE. The "opposite" is simply being financially dependent on your working income (at least) until traditional retirement age.
"Retire early" does not force you to "never work again" if it's something you desire. It means you have the financial independence and means to decide how to spend your time. If you really like working for money, being financially independent does not prevent you from doing it, and I can't see how it will make you miserable.
The best part of FIRE is the Financial Independence bit. When my boss asks me to do something, I'll do it if I think it's a good idea, and ignore it otherwise, because what's the worst that can happen?
FIRE is achieved primarily by not buying a lot of "stuff". Living a great life and having incredible experiences is relatively inexpensive and you don't need a lot of expensive stuff to do it. If you are being miserable then you're doing it wrong.
FIRE should really just be a continuation of what you are already doing, just with less responsibility and financial risk. It isn't about saving up for a permanent vacation. It shouldn't even be conceptualized as a "vacation".
Most people I know who are FIREd are busy living a mundane life they find personally satisfying. They aren't having an existential crisis.
> It isn't about saving up for a permanent vacation. It shouldn't even be conceptualized as a "vacation".
"Permanent vacation" is permanent time off work, not a holiday. If you're continuing doing what you're doing, why quit? Why not just keep working and save 25% of your income instead of being frugal, saving 40-50% and retiring early to stay frugal? If you're the kind of person who is hard working enough to make good money, you're not going to enjoy retirement and living a "mundane" life - you might as well keep working on something you're passionate about and make money off it.
The only reason to FIRE is if your life's grand ambition somehow cannot be monetized at all, which in the current day is harder and harder to conceive.
> The only reason to FIRE is if your life's grand ambition somehow cannot be monetized at all, which in the current day is harder and harder to conceive.
This is a non sequitur. The ability to monetize something has no bearing on the optimal way to go about it unless money for its own sake is your sole objective in life. Being required to monetize an activity frequently produces a strictly inferior outcome by the standards of the person doing it. Not needing to optimize for monetization allows people to prioritize things like craft, quality, sustainability, etc.
The discourse around "enshittification" is almost entirely about the consequences of this dynamic.
> I'd rather enjoy my life in my 20s than save money to do nothing in my 40s.
I think this is a lie that people who are bad with money tell themselves, that the only two options available are to spend without restraint or live miserably frugal.
Age is a thing, can't do as many of the fun physical things when you're a lot older
Aging is a nasty thing ugh, the way your bones get weak and your spine curls and you see old people hunched looking down at the ground when they walk
The truth is that there are some things better experienced in younger years. I can't imagine backpacking across Europe is better in your 50's than it would be in your 20's, and if you're doing something with a chance of injury, you bounce back a lot faster the younger you are.
But I really think you're underestimating how active even the average 70 year old retiree can be.
That just comes down to luck.
Some people at 70 are in great health, some not so much.
> that the only two options available are to spend without restraint or live miserably frugal
When did I say that? I have a 35% savings rate and still am able to spend happily. The point is that you don't need to aim to retire early. Set a target savings rate, spend the rest - enjoy your life instead of trying to maximize savings so you can retire early.
"Miserable" is subjective obviously. If you're regularly working evenings and weekends at your high paying law firm, I'd characterize that as miserable. If you're living cheaply in some exurban place but can only see your friends or family twice a week, I'd characterize that as miserable. But I can't speak to anyone else's state of mind.
I agree. To add a data point, I used to squirrel all my money away, because I was afraid that if I didn't, there wouldn't be any left at retirement. It's like I was inadvertently following FIRE principals.
It wasn't until I created a simple monthly budget that I realized that I can pay myself first, pay my bills and I still have plenty money left over to enjoy today and 10, 20, etc. years down the line.
Can I ask, how old are you now? I notice this sort of 'black and white' thinking in a lot of younger folks. You don't have to live like a miser (especially in tech!) to be able to FIRE. You simply have to be disciplined and consistently save and invest instead of trying to keep up with the Joneses.
I admit, I was probably more frugal in my 20's than I should have been, but 40 something me is very grateful to 20 something me, and honestly my life is so much more stress free now.
You're the fifth person to assume me being against FIRE means you should burn all your money, which is kind of the problem with the mindset!
In fairness, if I'm the fifth person to misinterpret what you wrote, you did not do a good job of explaining your position.
>If you're the kind of person who can FIRE, you're not the kind of person who'll be happy on permanent vacation at the age of 40.
Why do you think so? Some people just have more/less expensive tastes and wants than others.
Not because your tastes are expensive, but because you'll want to do productive work well into that time frame.
Having the resources to retire is a great way to do productive work, because much maybe most highly compensated work isn’t productive at all.
I think the issue is a widespread equation of "productive work" and "[wage] labor". Of course, a lot of people may not do much outside of work beyond watch TV (though how much of that is from tiredness from working at their job so much and dealing with the rest of life's obligations?), but plenty could fill their days with productive work that just happens not to align with what corporate institutions want to hire people for.
I struggle with this too. But I remind myself that I'm buying myself one of the most expensive and valuable gift: freedom and independence.
I also continue to work because I enjoy it. And that will let me pass on this gift to my children.
Lots of people who retire poorly, die. I don't mean money, I mean a plan.
I think even if you retire, you need a JOB. You can define it, but you need something to do, to engage you. You also need vigorous exercise and strength training.
great book: younger next year
A wife is a useful thing to have in this respect, not because they tend to profligacy, but because this kind of thing is much easier to detect and fix in someone close to you than in yourself. Both my wife and I have lived frugal lives at various times[0] and I feel much happier with the degree of spending we have now.
I'm reminded of the intelligent corvids in Adrian Tchaikovsky's Children of Memory where the sum of the two birds forms a being with intelligence in a way that the individual segments do not. The frugality is a deeply embedded piece of our being and undoing it seems hard, but together we financially operate in a place that leaves us both feeling comfortable.
0: In the US sense of the term, not in the sense of the term as known in Taiwan or India.
Just a reminder that since a couple of centuries ago in most Western societies, wives are not "things" anymore, but rather human beings on the same level as husbands.
"... tend to profligacy" was really bothering me as well, until I figured OP probably meant "tend" as in 'take care of', and not 'inclined to have'.
No, "tend" means "incline" here, but the normal grammatical reading of the sentence does not suggest wives have profligate tendencies.
Ah, I misread. Thanks.
It's "incline", the subtext is: "Reader, you might start thinking of a certain common stereotype at this point, but don't do that, because my argument is very different, and that stereotype is irrelevant or possibly untrue."
Compare to: "A pick-up truck is a useful thing to have, not because you are insecure about your genitalia, but because you can take home bigger products from IKEA."
Thanks, I misread entirely.
This usage is fine. "A dependable friend is a rare thing to find."
While the underlying intent behind bringing awareness to microaggressions is likely pure, it has a tendency to promote a level of hypersensitivity which is a net negative for society.
It’s often more beneficial to bring an open mindedness to a conversation that allows for benign usage of words that could otherwise be intended to slight. Constantly worrying about if everyone is being sensitive enough can also just be exhausting. To everyone.
Whatever happened to the idea that one should assume someone else is speaking in good faith, and that you should chose the most charitable interpretation of someone's words?
You seem to forget, we're all just squishy meatbags to our future AI overlords. Whom I welcome, by the way (1).
(1) https://www.youtube.com/watch?v=MKx3JlTnHbc
s/wife/spouse/
My experience has been that it's easy to say, "oh, it's just me", but much harder to subject someone you care about to the same standard that you would yourself. I'm in a similar position with the thermostat, even though something we initially bonded over was that we both kept our thermostats at a low temperature that was outside the window of being socially acceptable.
In the winter, I keep the thermostat at frigid temperatures when I am home alone and jack it up to warm just before any one else gets home. My thinking is that it is wasteful to warm up the entire house when it's just me since I can put on a sweater but I don't want to subject others to my, shall we say, quirks.
I keep meaning to calculate how much I am actually saving by freezing my butt off. My guess is it'll work out to something like $0.75 a day or something equally trivial.
Depending on the kind of heating system you have and the temperature differences you talk about it can be cheaper to heat the house to a constant temperature (because your heating can run more efficiently under lower load).
Correct, or the people doing this for environmental reasons... it's probably not better to do this. It would be better spending money on better insulation (assuming it isn't up to date).
I once got a programmable thermostat and went through the trouble to set it up for the times we were normally at home and away, and my energy bills went up.
Now I just set a temperature that everyone can tolerate and I forget about it.
It probably costs more to do that than to maintain a constant temperature. When you turn the setpoint down, everything inside your house and also your house itself starts losing heat. When you turn the setpoint back up, the cooled off house and items inside of it will suck up most of the heat until the stuff is warm again, and then the air warms up.
This is much more noticeable when you go into a freezing cold building and turn on the thermostat, it takes almost an entire day to heat up the stuff and building.
> A wife is a useful thing to have in this respect, not because they tend to profligacy, but because this kind of thing is much easier to detect and fix in someone close to you than in yourself.
I think what you mean is, a wife/spouse can help you see maladaptive patterns that you're blind to?
I don't think you propose that you can "fix" your spouse's behavior?
Spouses can "fix" behaviors in each other (up to a point) if they are each ammenable and open to it.
You can't "fix" someone who doesn't want to be fixed, however. And you really can't change deeply engrained personality traits. This will just lead to conflict and stress. This is what pre-marital counseling will try to discover, and it's too bad more people don't do it, as it would go a long way to reducing the number of unhappy marriages.
This doesn't mean that opposites cannot have happy lives together, but they need to accept each other for who they are and not be unhappy that the other person cannot change "for them."
A lot of spousal disagreement tends to come down to issues about money though, so a frugal person paired with a spendthrift will probably have a tough go of it.
Should all women seek out wives then, so they can have two great minds to put to the task of living frugal and fulfilling lives?
I do something kinda similar, I guess it counts as maladaptive frugality?
Whenever I have something a little extra in my fridge, most often Italian prosciutto, I refrain from eating it, instead saving it for a "special occasion" even though it is, like, my favourite thing in the whole world. Eventually I have to throw the mouldy prosciutto away because I was too frugal to eat it.
I'm practicing though, learning to eat it. I don't know why it's so hard, I mean it's delicious! Should be easy!
Exactly the key of mindset that drives me to play through entire RPGs without ever popping a single item. It is essential that I collect 99 potions, and never consume even 1.
I have the same :(
I forget what game it was, but I came to a point in the game where there was just an insane difficulty spike. Like I literally could not progress, and I couldn't change difficulties without starting a new game.
Then I remembered I had these strong health potions I'd carried through most of the game. I burned through my entire stockpile but I made it! It felt like the devs were saying 'no, you idiot, we put those items in the game for a reason, use them!'
In many games with increasing difficulty, this will just get you stuck on the next fight, and now without any potions. That's why people don't do it.
This is a pretty common issue, I have to remind my spouse to just finish stuff. Eat it, and if it was so good.. buy more at the grocery next time.
One could try to reframe it that having it sit in the fridge going bad is a waste of fridge space/electricity/food/mental energy and unnecessary personal suffering.
Maladaptive frugality is just one of many "maladaptive X" where X is something that we overgeneralized in childhood.
I think it is especially easy to overgeneralize frugality because, either because it is taboo or conventionally boring, parents don't always share the situational details that prompt their behavior.
In my life I internalized "everyone should rule the thermostat with an iron fist always" when the more complete picture would have been "because we're cash-strapped in the 2008 recession and our house is old and leaky we're ruling the thermostat with an iron fist for now".
I fixed it by simply placing a value on my own time. When I started I figured my time was worth at least $50/hr. Spending an hour trying to save less than $50 is an absolute loss, recognizing that, my behavior changed easily.
Paradoxically, this works less and less the higher your income is.
If you value your time at, say $200/hr and you work with other people who claim their billable labor is also close to $200/hr, and you value it at $15/hr, then, no, you’re going to do it yourself.
This helps but it brings its own dangers.
At high income it can make you feel silly for doing anything other than working. You second-guess walking the dog even if you enjoy it because you can pay someone to do it for so much less.
Yes. I've said it before but one of the greatest luxuries in life is the time to be able to do your own gardening and laundry.
You could consider that the higher the hourly worth in your profession, the greater the luxury :)
For some, I think there’s that satisfaction that comes with saving money (like you’re somehow “cheating the system”, even when it’s just a coupon that gets you to buy something you wouldn’t otherwise). In some cases, that satisfaction grows with the amount of time or effort expended to save the money in the first place, which is ironic because that money-value-of-time probably far exceeds the actual amount saved. Practically every engineer here probably has a story about spending a ton of time or effort to optimize something by a tiny amount; saving money can be like that too. It’s a little joy in life, and so long as it doesn’t outright prevent you from spending money when you should (or impose excessive optimization costs), I think it’s fine.
The maladaptive part is when you start regretting not saving money, because it has two knock-on effects: it makes the decision to spend much more emotional (which negatively impacts rational decision-making) and it can negatively impact the enjoyment of the thing itself. For example, the maladaptive part might take the form of being reminded of the cost every time you look at the repaired phone.
I've always found the "time is money" hourly rate comparisons a bit contrived, because I can't actually trade my every waking hour for an hourly rate.
The reality for most people is that the trade-off is actually between time spent on looking for bargains, or time doing something else that doesn't make any money.
It really depends on whether you enjoy looking for bargains or not. If you don’t, then it feels like you are working, only you’re not getting paid.
My mother still clips coupons in the Sunday newspaper, despite being financially well-off enough to not clip coupons. I considered listing this as an example of maladaptive frugality in another post, but then I figured it’s just something she enjoys doing.
Honestly in current state of world. Which is more enjoyment clipping coupons or looking for bargains or being on social media? Would something actually useful or more enjoyable happen with that time?
Hell. Even other type of media consumption unless you really enjoy it might be balance you can question.
Back when I was younger and earned minimum wage, whenever I thought about buying something I'd run the calculation of how many hours I would need to work to pay for it. That helped me save quite a bit.
And now I'm older with a well paying job I find myself having to do the opposite calculation.
Things like, "Actually I will get an uber instead of the bus, so I can spend more time at the party."
Eh, I value my time at a third my hourly comp. It helps me feel less guilty about hiring something out instead of doing it myself, or driving and paying for parking instead of taking transit and taking 2x as long.
In this subject area, I recommend Jacob Lund Fisker[0]'s Early Retirement Extreme book [1]. Don't let the title fool you. The man has a surprisingly level-headed and refreshing approach to spending.
[0] https://en.wikipedia.org/wiki/Jacob_Lund_Fisker [1] https://archive.org/details/earlyretiremente0000fisk
May I suggest you read, "Scarcity: Why having too little means so much" (https://www.amazon.com/Scarcity-Having-Little-Means-Much-ebo...) it is a really interesting book which explores maladaptive frugality. We often talk about money and how people don't have enough, but these principles apply to any resource, in my own case I found cases where 'never having enough time' would push me to make bad choices about how I spent time. The author is talking about spending money but consider the adage "If its worth doing over then its worth doing right the first time."
This is one of the reasons I like YNAB (both their app and their method). One of their core principles is to align your spending -- including future spending, aka saving -- with your values. Spending on the wrong things isn't good, but neither is saving without clear purpose.
My wife and I both came from fairly frugal households growing up, so frugality is often our default. It's been a helpful exercise to periodically ask ourselves "what do we actually value, and what tradeoffs should we make", then update our plan to match.
This is really the heart of it. Understand what matters to you, and align your finances (and decisions as a whole) with that. If you optimize for some external metric without examining your own values, you're basically adrift.
This is very culture-specific. I've seen this in Poland. Under USSR rule frugality has been necessary to survive, but it left a lot of people forever stuck in that mindset, long after things got better. I know people who have a fortune in the bank, but live like they're broke, because they're afraid to spend anything from a "rainy day fund" even on rainy days.
Yes! I related a little too much with the blog post. My grandparents were Sindhi and they had to flee from Pakistan to India during the partition. As refugees in India, they had to start their life basically from scratch. Now I get why it's ingrained in me to be frugal, and even take pride in it when there's none. I see the very same behaviour in my Sindhi friends when they feel bad for spending money on essentials like hospital visits.
Yep, I have a rainy day fund that I never look at when calculating surprise expenses, because "I might need it later". It's potions all over again!
I do that too. But isn’t it true? You might need it later. And you really have to save an awful lot to cope with a truly rainy day…
My parents and grandparents lived under scarcity during Soviet (satellite) rule, grandma would can food and store well past best by, save plastic bags and various knickknacks, resisted spending on herself even as she bought us gifts when we came to visit. I think the contrast to US excess stuck with me and I always lived leaner (feeling that possessions own you and your time), though far from her frugality.
> What I took away: eating at a good restaurant was bad, taking out cheap food was good because it saved money.
Any sort of morality like framing around it is likely to lead to issues imo.
The closer you can get to an analytical approach the better I think - can I afford it, is it good value for money, is it useful/furthers my goals etc
It's really a shame. I grew up in a frugal household that venerated Dave Ramsey, and there was a ton of moralizing of finances that didn't need to be moralized. Stuff like "debt is always evil, buying frivolous things like fancy coffees is stupid", etc.
There are unfortunately a lot of people that base their spending and saving decisions not on what they actually value or what their goals are. Rather, they base them on fear of breaking the moral rules.
FWIW the Ramsey folks (whom I haven't really listened to in a few years) are cool with buying "frivolous things like fancy coffees" if you're out of debt. Not saying that's right or wrong (I personally think you can have a damn coffee), but their general philosophy is that if you're out of debt and are saving whatever percent of your income, do whatever you want.
Ramsey is for people who can't be analytic with their money, and need some moralizing to counteract the "I can afford it, it's less than the remaining limit on my credit card" impulse.
A similar term (often found as a reaction to Amazon LPs) is frupidity.
I was so frugal that I didn't refinance my (admittedly already low) interest rate during Covid because "we were planning on selling the house in a year or so". Oh well :)
Thats more of a forecasting thing than frugality.
No that can be a frugality mindset of not wanting to pay the refinancing closing costs (which can be 5 figures) .. I've seen family make similar sorts of short term savings vs long term savings trade-offs.
It can, but the OC mentioned not refinancing because they thought they'd sell soon, which would mean they wouldn't get the long-term savings.
To me this is so much about where you focus your attention. Even from a purely financial perspective. Mental space dedicated to watching your expenses is space you aren't using to improve your top-line. Some people are very proud of being frugal, spending time optimizing expenses - while earning far less than they could otherwise because they don't spend any mental energy on how to earn more. Meanwhile others are spendthrifts, but allocate a lot more energy to earning more - and do earn more.
Stay focused on earning more money and don't spend any more time than you need to watching expenses - just so long as you save/ivnest plenty. You'll enjoy life a lot more.
> Some people are very proud of being frugal, spending time optimizing expenses - while earning far less than they could otherwise because they don't spend any mental energy on how to earn more.
This claim really requieres some kind of proof. Because I have never seen this in real life - a person who realistically could earn more if they spent less time trying to save money.
It sounds like a made up dichotomy or an extremely rare situation.
I met people who earn a lot and save absurdly lot. Or earn a lot and waste it all. Or dont ear and either save or not. But, there being realistic path to bigger earnings that is ignored because of spending too much saving is a corner case.
There's a substantial difference between "reducing what you would otherwise spend" and "not spending / defaulting to the minimum". The latter mindset is less about active money management and more about completely avoiding unnecessary consumption.
This
I went broke ordering pizza 4 nights a week to fuel my 6-hour-a-night stretches of job searching and upskilling.
But after 3 months, I doubled my income, at the cost of a few pounds of stomach fat.
> Mental space dedicated to watching your expenses is space you aren't using to improve your top-line.
Not inaccurate, but you have "24 hours in a day". Even if you spend 1 hour on frugality, it's not like you spend 23 on "increasing your income." Why not both?
> Stay focused on earning more money > You'll enjoy life a lot more
Needs sources. We know that earning more is helpful up to a point, but it reaches a point of diminishing returns.
Similarly spending money can help you enjoy life, but we tend to be bad at predicting how happy any particular spending will make us. Learning this lesson and evolving our spending so that we do "enjoy life a lot more" can be well worth the time invested, even if it doesn't help us earn more.
Not everyone wants to live a life "focused on earning more money."
I have a low salary considering my experience in the tech sector. However I have a job that is low stress, has good benefits, and a very low risk of layoff or downsizing.
I don't spend money on a lot of things that other people do. I drive an old car. I have an old phone. My home computer is probably 10 years old. I don't buy expensive clothes. I cook at home, and rarely go to a restaurant or bar. I do not pay for entertainment such as movies, sports, theatre, travel. None of that is interesting to me.
I don't spend time "watching expenses" I just naturally spend very little. When I have extra money, I just save it. The idea that it is there "in case I need it" or ultimately for my kids to inherit is more rewarding to me than anything I might spend it on.
I'm in a similar place. The greatest luxury the money bought me was that last year, when my job was made redundant, I knew I had over a year before I had to start worrying financially (I found a new position shortly after my garden leave finished)
Frugality
I've been feeling guilty for buying 2 red bulls (sugar free) at work everday and my salad... a salad that costs $5 (although I can put many toppings eg. meat on it) vs. buying a $3 bag of leaves and make my own salad. I should put every dollar I have towards debt that would be ideal... but it's that time thing too, don't have to prep my lunch/carry an extra bag. Also can just make more money.
Like my car, should I not have bought an $800 RD and $1K on tires or just put that towards the car loan... idk. I enjoy a fast car though.
You can be frugal without spending a lot of mental energy on your expenses. It seems contradictory but it is possible to 'live' frugally without thinking about money all that much (assuming you aren't broke and have positive cash flow). The real challenge is escaping consumerism as a means of (superficial) fulfillment.
> When you default to the lowest cost option without considering the drawbacks, procrastinating or hesitating on spending[...]
This is terrible advice, one of the easiest ways to be frugal is not to be overly attached and to defer spending.
Scarcity: Why Having Too Little Means So Much is a pretty good book about the psychology of this. The stronger your the necessity for saving (whether from poverty or external influence like here), the deeper it gets embedded in your psyche as well, and can start to feel like "this is just who I am" as in habits around this becoming something you see as intrinsic to your personality.
I read this article 10 years ago by a guy named Ricky Yean who went to Stanford as an economically disadvantaged admit and couldn’t shake his poverty mindset and it cost him when he was running a startup.
Why “few successful startup founders grew up desperately poor”
https://rickyyean.com/2016/01/22/privilege-and-inequality-in...
Poverty mindset is maladaptive because it teaches you only money is worth anything, so you hoard it. But in truth time is also worth a lot and sometimes it’s wise to use money to buy time.
Thanks for the article, I really enjoyed it!
A deep and thoughtful piece, thanks for sharing.
I'm wondering at this point what are known methods of overcoming "mindset inequality". Any advice will be appreciated.
I grew up poor. Everyone I knew was poor or barely getting by. It took me a lifetime to realize over-frugality can also be self-destructive.
My extended family members use to trade stories of working dangerous jobs or getting mugged and laugh it off. That was until my aunt got shot in the head working the late shift at a convenience store. She was in the news and the community and the hospital paid all her medical bills; but she was never the same after that.
Growing up gambling was a mysterious force that ran through my family. They worked hard. Like their bodies were physically wrecked and they saved and saved. They would often spend so much time at work or at their side hustles, they would neglect their children who would teach themselves how to cook because no adult was at home. And yet, they would blow their entire savings in a weekend in Las Vegas. Or sometimes came back even in debt.
Now, I would say that frugality is not a moral imperative. Being poor is not a virtue. Sometimes fate deals it to you. But no job is worth wrecking your health. And it is not a sin to spend a little on something that makes life a bit sweeter.
> Poverty mindset is maladaptive because it teaches you only money is worth anything, so you hoard it. But in truth time is also worth a lot and sometimes it’s wise to use money to buy time.
This is something I've observed in overly frugal family. Stuff/money is worth too much to them.
You can't gift them anything "nice" because they will put it on the shelf and never open it (don't want to damage it).
Gifting them consumables with an expiration date also doesn't work as they'll "save it" until the expiration date lapses and then eat expired food.
Taking them out is weird because they'll insist on taking leftovers home off every other persons plate at the table, including stuff they don't normally eat.
They'll fill up 2 bedrooms in their home with 40 year old cheap clothes & furniture that is worth so little we'll need to pay someone to haul it away. They won't donate it because they think the people who receive it will waste it. So they'll pay money to ship some of the 40 year old cheap clothing to poorer family back home who it doesn't fit and could just buy cheap clothes there with the money they paid for shipping.
Owning multiple 30+ year old cars until the mechanic literally refuses to work on them anymore telling you they are too rusted out to repair or drive.
This from people who are wealth enough to own multiple properties, have retired early, have government pensions, etc.
That's not being frugal, that's a hoarder mentality.
My spouse and I both grew up in this kind of household. Interesting to see how we & our siblings all responded, some followed suit and others had opposite reaction. I think some people are good at frugality and some are good at income maximizing, and few are good at both.
I turned into an income maximizer.. started working at 14.. post college left home, took a high stakes career and hopped to new opportunities proactively. Response to not wanting anyone to be able to control me via money.
For my spouse & I it was a reaction to 1) having a lot of childhood of consequences/regrets of over-frugality like frozen pipes bursting, parents lamenting not going back home for 10 years during which their own parents died, asking for a single $10 toy for birthday and having them buy a knock-off instead, etc.
2) a reaction to teenage parental control via money like when I was moving to the big city for my job and the housing deposit was due before the hiring company was going to wire me my housing stipend, and my parents refused to float me $1k for a month (and then gifted me more than this as a graduation gift a few months later).
So I think you want to instill a respect for money in your children but not a fear.
Frugality is a state of mind, feeling guilty about it is not a frugality problem more than a labeling one.
It's the same for climate change, a lot of people want to feel good about themselves labeling them ecological when they're not capable to act on it (eating less meat, avoiding to take an airplane to travel, ..etc). They feel guilty not because of 'it' but because they don't want to act about something they reason is the morally good choice. It's performative virtue signalling.
As a general rule I don't think you can label yourself as anything (eg. a liberal, an anarchist, a frugal, a skeptic, a believer, a punk, ..etc). You either are or you aren't. Chasing a label and an identity is the best way to never be it like a perfume wearing you rather than you wearing it.
I see this with my dad as he approaches retirement. I try to remind him that if he doesn't pay with money, he's going to pay with his time... and right now he's saving money he doesn't need for time he doesn't have.
I had a very similar experience and still catch myself on occasion. Even with my "higher" spending, it's still lower than most. I hadn't realized, but I had associated the act of not spending money as righteous, and spending money as bad.
I think it was Ramit Sethi who said something along the lines of "spending money isn't inherently moral or immoral", and that was something that resonated with me. I had to pull myself out of the implicit mindset of "spending money should cause guilt". It's been very nice.
And to clarify examples of this: I no longer hesitate purchasing a drip coffee on Saturday afternoon, or on getting a beer with some friends at the brewery.
The most helpful tool here, I've found, is maintaining a personal finances spreadsheet.
It's one thing, without a spreadsheet, to have the emotion of "I'm not going to have enough and I need to save more to make sure I have enough." I'd argue it's even evolutionary; we want to make sure we have enough to get through the winter we know is coming.
It's quite another when your spreadsheet shows you saved X, your monthly cost of living is Y, and therefore you have enough money saved, even if your income went to zero and you made no changes to your lifestyle, to last you for Z years. Being able to take YouTube University rule-of-thumb advice like "of your take-home pay, use 65% for necessities, 15% for long-term savings, 20% for enjoyment" and seeing how much money that is per month for you in your personal circumstances, along with rules of thumb on things like what ratio you should have achieved by which age on net worth-to-income ratio (1x by 30, 2x by 35, 3x by 40, etc.) and seeing what your personal actual ratio is, to get a sense of benchmarking yourself.
I mean, the influencers could be totally full of shit, but it doesn't matter. Getting actual numbers for where you are, plus getting "generic" advice that you know wasn't directed at you personally, and seeing how those numbers make you feel, can do a lot to either tell you "you don't need to be so frugal anymore" or "yep, your emotions are totally justified, keep saving".
I need to get into building a PF spreadsheet and getting things in better order, but fwiw the way I sometimes frame the question of whether or not it's "okay" for me to buy something is 1) Will spending the money compromise or help my ability to pursue something else I want to do, based on the price and utility, 2) Could I buy 20 of them? Even better if I could buy 20 without tangibly hurting my wallet.
If you can buy 20, 1 is probably fine, don't stress too much.
That is good if you can count on your cost of living being predictable. It's not for many people, even for relatively well-off ones: you may earn a lot for your area but being an immigrant without a permanent enough status in your current country, and your home country which you always have a right to return to may be unsafe or highly undesirable for whatever reason. So you need to consider the emergency of moving somewhere in a political and legal climate not known in advance.
Thus it becomes a more difficult choice what proportion to bet on stability of the current living situation, and what on long-term savings for emergencies which look quite probable but still unmeasurable. And the latter is complicated by absence of reliable and relatively liquid investment opportunities. All in all, fun to be from a sanctioned country.
I think a spreadsheet is still helpful in this case.
> So you need to consider the emergency of moving somewhere in a political and legal climate not known in advance.
Fair enough. So do the financial planning, and ask yourself, how much does it cost to fly/travel to X place that is far away? Put in a risk premium - what if the cost became 2X or 3X because of a sudden catastrophe affecting everyone? What is the actual number that you need to save? Can you keep the money in a bank account, or are you concerned that banks will be inaccessible, and thus need something more portable? If you need something more portable, how much will it cost to protect it (vault/safe, weapons)?
I sympathize that life isn't fair, and that financial goals for some people need to be concerned first and foremost with personal safety instead of luxurious "nice-to-haves". But my point is that there are still actual numbers involved, and that you can put those numbers into a spreadsheet, and that the spreadsheet can help you understand your progress towards those goals. Financial planning is valuable regardless of what your goals are.
All you are saying is that some people have more volatile earning/spending scenarios. The advice is still the same, the knobs on the spreadsheet are just different.
It's not much different than a sales job where income can be highly variable, or go to 0 because the local market is dead.
I think in the case of pathological frugality the spreadsheet approach could make things even worse. A whole 20% spent on enjoyment? I bet I could drive it down to 15%, maybe 10%. In fact, do I really need these things? Why not go down to 0%, maybe 5% once every few months. After all, I might need that money in the future.
This is why I don't budget. I'm not immensely financially irresponsible: I make maybe 1/3 to 1/5 what the average person on HN makes (~50k), but I still contribute to my 401k enough to get my match, I could fairly easily tank about a 10k expense/probably live for 3-6 months on the money I have set aside with adjustments.
But whenever I've tried to budget, I run into the same problem anorexics do with counting calories. I will literally hurt myself in order to see the savings number go up. I can live on $10/week for food. All it will cost is my health. I can be in pain for 8+ months out of the year (MS muscle spasticity + heat intolerance ) so I don't use my heat or A/C because those cost money. Etc. I will literally berate myself to the point of a panic attack over buying a $25 book from an author I've loved for decades, believing it makes me a horrible human being to be so 'frivolous'.
Agreed - I find I spend almost the same time on small decisions as large, and let the default (subscriptions, extra cars, storage) ride. That's turning the decision into a drama that befalls you (and avoiding those that don't). Or you find yourself down or up become cheap or profligate.
So, what big spending is adaptive? Better to drive decisions objectively based on future value.
Some scenarios:
- It lasts a long time, and you'll need to do it anyway. Best to get it early and enjoy it longer - for iPhones, cars, houses, marriage...
- It lasts a long time and you use it daily. Always pay for what you'll be glad to have: good socks, a powerful computer, a nice view.
- Your beloveds needs to know if you care more about money or them. Choose them.
- Something expresses your values: you appreciate an artist's work, so you pay good money for it. Some panhandler is stoic, so you give him a hand. (Just be careful about posturing.)
Another mindset is to think of your money as family (writ large) money, and invest in the future of family or friends. It's as much a vote of confidence as an injection of cash, and it helps you detach from the needy instrumentality of the money to consider what's best for their future. That's the weirder phenomenon: trillions held by baby boomers until they die (just in case), while their progeny waste time in terrible jobs and narrow circumstances for lack of investment. That's maladaptive hoarding.
Fellow frugalite here, and man, is it hard to break the habit of agonising over every purchase. Took me nearly 20 years in tech before I convinced myself I could justify just buying a new laptop every 5 years, and not sit around waiting for things to compile on the old one - and thats an item that is both essential to my work and also tax deductible. The agonising is even worse with items that are technically non-essential (but would make life better)
The internet is amazing, I like to watch videos from developing nations, where people live on a fraction of western budgets... what strikes me is the happy, free people I see. That's hard to fake.
Agree wholeheartedly but I worry some will read this and go all in the opposite. The key point is that humility helps make you free. Couple that with not being a slave to frugality and you can live without as much guilt and without a much restraint.
Wise philosophy :)
Though sometimes you may have to choose between being a slave to something less enabling than frugality :\
It really gets bad for those who can't even afford to reach as high as a truly frugal contemporary.
IOW below-frugal becomes a constant element regardless of its current value at any one time, and that leaves the only variable as whether or not any adaptability can be attempted at all, and how much might not be too much to ask :(
100% agree. My wife is doing her best to change this habit haha.
There is frugality and there is taking inflation into account when deciding on save vs loan. For the last many years it was net profit to take loans, spend and pay them back later because inflation meant you got more goods/services that way. On the other hand keeping cash/savings over some smallish buffer where opportunity costs dominate is/was always net loss. That not touching US-specific stuff like insane student loans, credit card terms or healthcare.
Inflation has caused my savings and investments to take a hit in real value. Now with oil prices we're getting another inflation hit.
> For the last many years it was net profit to take loans, spend and pay them back later because inflation meant you got more goods/services that way.
this would he true if the wages kept up with inflation and of course that as we know well has not even remotely been the case
I see this with devs all the time, devs that want to pitch their startup and use a subdomain like .vercel.app that gets blocked after 2 weeks
I think Jimmy Yang summarizes this essay more effectively: https://www.youtube.com/shorts/9wJ6B7z3Hyk
I am a consulting engineer serving small communities in Central New York.
Ostensibly my job is to design construction projects to fix a problem, but most of my job is actually helping the community figure out how to pay for the fix.
My greatest frustration is Maladaptive Frugality. There are whole communities with this mindset, and it takes a lot of effort to communicate the reality to the town/village board that they're losing money by trying to save money. I've invested a lot of work into projects which come to naught because the decision makers can't imagine a future where spending money saves them money.
"Tripping over dimes to pick up pennies" observed one old farmer.
"I'm too poor to afford cheap tools" say the wiser tradesmen.
That reminds me of the roads in my city. They're disgusting.
The reason is because the city charter mandates they have to take the cheapest bid. Of course the quality is crap and none of the fixes last! Fortunately, we just changed that, so hopefully it will get better.
If you'll allow me the grace to explain, I think the issue is more complicated than it seems at first glance.
Procurement policy in USA is usually "lowest responsible bid", meaning you can reasonably expect that the contractor can complete the work without going bankrupt.
With respect to the work itself, a competent civil engineer will provide for appropriate materials and handling to ensure the contractors are supplying a substantially similar product. Most repaving jobs in the city go no further than resurfacing - remove the top 1-2 inches and install 1.5 - 2.5 inches new.
This treats the symptoms, not the problem!
I'm assuming you're in a wet climate. The problem is the subbase is reflecting strain through the road surface, initiating cracks which are openned further by weather. To noticeably improve, you'd have to remove the subbase to great depth and replace with engineered fill, multiple layers of geotextile, storm drainage improvements, then a full depth asphalt section. Not only are the materials for this work expensive, but it represents a different order of magnitude of labor, the number 1 cost driver. Sometimes the tax base is so weakened that the city cannot even keep up with resurfacing and you end up with roads like you describe.
The economics on this are difficult to assess because everyone knows the roads are forcing more car repairs and accidents, and generally rob you of bliss... but the calculus to improve the roads via property taxes is not straight forward, i.e. it's political.
Yeah this is bad frugality on their part. I like that term "Maladaptive Frugality" - I think it captures it well. You're focused on the initial cost instead of lifetime cost. If you can afford a higher upfront cost for a lower lifetime cost on something that has a long enough timeline, it's the way to go almost all the time.
I like these quotes as this is something my company struggles with. Can you give an example of "Tripping over dimes to pick up pennies"?
At my company, it’s always choosing the vendor who promises the most. The fact that they have extremely dissatisfied customers and leave a trail of shit is always ignored.
Spending money sparingly is like reducing weight in an automobile. A car will get better gas mileage, go faster, break less often, and be more responsive with less weight.
So it is with spending. When you spend less, you can retire earlier, your finances are more secure, you feel less pressure and stress, etc. You have more flexibility in the kinds of jobs you can take. Perhaps best of all, you end up accumulating less stuff, and less complicated things, which makes your life simpler.
Frugality doesn’t get the flashy press that consumerism does, but it’s a winning life strategy.
Retiring early is a single guy internet myth. If you have a family, forget it. If you have a health condition, forget it. If you don’t have low risk investments, forget it. In the US health care can reset your bank account in the blink of an eye which is why so many many people in tech work until Medicare kicks in. Early retirement with a family is at least 10 mil in cash. Better enjoy your job because you’ll be doing it for a long time like 98% of Americans.
If you're truly fortunate, you can end up with an expensive chronic but not deadly condition that penalizes you for saving and having assets. Your healthcare isn't an emergency, so if it isn't paid for, you don't get it. But if you have any money, no Medicaid for you. Instead, you get to drain your accounts until you're impoverished and then they'll help you.
Healthcare is a US only problem. There are definitely people who make enough to retire early if they do not develop expensive tastes. In any case GP said, 'earlier', not 'early'. Why do you need that much if you live simply?
Aren't there health insurance plans with a high deducible (say $10k) that are quite affordable? In your early retirement, you can cover catastrophic health failures with them, and pay for everything else out of pocket.
Sure, but there also are expenses that end up not counting toward the deductible. If something "isn't covered" by the plan, then it doesn't count. You can easily end up in a situation where you'll need to see less experienced or capable doctors due to the network, or where something you need is totally excluded, excluded in practice due to certain narrow shortages, or just gated by step therapy where you'll need to go through multiple cheap drugs before having the more expensive drug that is best suited to your condition, even if doing this is expected to result in poorer long-term health.
Of course, these things aren't exclusive to the cheap plans, but I'd encourage you to compare your employer's plans to some of the marketplace ones.
I like your analogy; but of course, there comes a point where reducing weight in an automobile does have downsides: it might be more noisy because of reduced sound deadening, less safe because of removal of crash structures, less waterproof because of removed seals, and so on.
The point being, in both cases, the virtue lies in finding the optimal balance: maximising the benefits of frugality without going too far and falling down the other side of the curve.
>> I have a hard time spending, to the point where I would often procrastinate on buying things that I know I’ll need in the future.
Well, what I noticed is that I go to great efforts to avoid buying me some stuff that would make my life easier (say an electric bike or a better computer). Month starts, I get my paycheck and every day I fend off the desire to buy the stuff I want/need. And then come the bills. Like some surprise "regularization" gas or electricity bill that costs more than the item I didn't buy. If it's not that, some darn thing breaks and needs repairs. And if it's not that, kid has to go in some school trip, there's some birthday or wedding we have to attend, someone asks me to lend them some money (coze they know I save) or some other event happens and requires a ca$h infusion.
By the end of the month, money's gone and I haven't got nothing. At some point working just to pay bills and expenses makes Jack a dull boy. So funk it, I buy that stuff AT THE BEGINNING OF THE MONTH. And when shit arrives demanding money I can truthfully say: "I don't have any money left". But at least I got the thing, opposed to neither money, nor item.
> I plan to have fun spending my money in the future, so it’s time to start practicing now.
The most optimal thing to do in our world is to pick an age, say, 60, and until your 60th birthday, maximize your suffering via frugality to just under the tolerable limit so as to maximize your potential for compound interest. This leaves you with the most freedom and opportunity during the most fun part of your life, when you no longer have to sell your labor and can do whatever you want.
Within our current model, trying to slip in bits of fun through spending money before that age is getting a poor return: you're trading vacation time, which you could instead barter for more money on retirement, and you're carrying with you a bit of suffering because you have to worry about going back to work. The best thing to do is just push it all until retirement.
The limit of human suffering before suicide frequently happens is apparently quite high, so, you can really stretch yourself out here. Live in your car in the Walmart parking lot, eat beans and rice. You maybe trade a bit of the compound earnings to establish certain time constrained things you want to cash in on at 60 like having a partner or kids, but beyond that, maximize that compound interest!
I hope it's obvious that this is a criticism. It's just, the more I think about it, the more this seems the selective pressure and incentives in our society are set up. Mostly I think it's insane that we both have an idea of "retirement" and also that we set it at an age where a significant portion of the population won't make it, and for those that do, a significant portion will get to enjoy five years of it, and for the remainder, health is bad enough that maximum enjoyment isn't possible anyway.
> The most optimal thing to do in our world is to pick an age, say, 60, and until your 60th birthday, maximize your suffering via frugality to just under the tolerable limit so as to maximize your potential for compound interest. This leaves you with the most freedom and opportunity during the most fun part of your life, when you no longer have to sell your labor and can do whatever you want.
This is the most depressing thing I’ve read in a while.
You don't have to act optimally according to the current system, I don't. My concern is many seem to try to act optimally without understanding how depressing the reality of its incentives are.
I think the thing you are missing is that people are quite complex in how they model these things internally. What works for you, may not work for them.
I don't think your advice is good "general advice" but if you treat it as a "this works for me, it might for you", then it might be worth reading.
I'm not sure if you caught that my post was a criticism of the system. I'm just describing what the optimal strategy is as prescribed by how our society is structured, not advocating for it.
Even more optimal would be to pick an age, say, 60, and commit to moving to Canada for MAID at that time. This means you don't need to compound nearly as long, because you don't need to insure against a long life unable to work. Then you can start not selling your labor while you're still young enough to enjoy it.
I'm not sure what you think the MAID program is, but (leaving aside your ineligibility for health care in canada until e.g. you gain permanent resident status) if you're not suffering from a grievous and irremediable health condition, you're not eligible for MAID.
Many of my happiest moments in life have been at the park, for free, with friends and family.
You don’t need to be retired or a millionaire to be happy. Nor is being retired or a millionaire any guarantee of happiness.
Saving for retirement is just about making sure your needs are met when your health starts to decline and you may no longer be able to work. If you’ve got a little extra saved to travel around the world or whatever, even better. It’s important, but don’t wait until retirement to be happy. There’s no guarantee you’ll even live that long, for starters.
Jesus no, you could be dead or decrepit by 60. What’s wrong with finding happiness within your limits all the time?
“I hope it's obvious that this is a criticism.”
Most optimal by what metric - length of retirement? Retirement years are worth a lot less than prime years. I think most people in society make this mistake and regret it. Most people on there deathbeds regret the things they didn't do.
I think of this kind of thing whenever HN commenters complain about how some TODO app is using 300Mb of memory or has 700 dependencies.
>HN commenters complain about how some TODO app is using 300Mb of memory or has 700 dependencies.
yes because as we've learned this year nothing bad ever happens when you have hundreds of dependencies
we're living in an obese society, metaphorically and literally, we should put everyone through a decade of whatever the equivalent of playing ping pong with a spoon is in every domain of life. Being concerned with too much frugality is like being concerned there's not enough corn sirup in our diets
I'm hoping the AI RAM crisis will turn out to be a good thing in some ways, although that's probably being way too optimistic.
> we're living in an obese society, metaphorically and literally, we should put everyone through a decade of whatever the equivalent of playing ping pong with a spoon is in every domain of life.
What’s stopping you? Go ahead, live in a trailer and wash once a year.
Legitimate complaint on HN of all places. TODO apps shouldn't be embedding whole browsers.
Why not?
If a society does not thrive its advice and morals ar obviosly less valueable. So if a society tithers on the brink of civil war or is stuck in a theo cracy. Its advice on frugality is less valueable.