I dont know how to spend money

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
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jb1
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I dont know how to spend money

Post by jb1 » Fri Jul 20, 2018 9:34 pm

Hey BH

Im currently 27, and Ive realized the older I get the worse I am at wanting to spend money. Im making an average 51k a year but I have a very high savings rate. I currently have 24k in a Roth IRA, 47k in a 2 fund portfolio (75% US market, 25% International), and 30k in a savings account. I am in the process of closing on a house (10k down) where I will have roommates live with me to offset the mortgage essentially living in a house for $100 a month. On top of that I have a Simple IRA though work where I put in the company match. I am absolutely miles ahead of my peers, some of my friends couldn't even say what a stock is, most dont even know what an IRA is. One thing they do know however is how to spend money.

I feel like I am not living life sometimes. Everything is a monetary value to me. Part of me believes this is because I know what adversity is. I lived in an apartment when I was 24 and washed my clothes in the sink, yes the sink jus to save $5-$10. I would go without spending money to eat lunch $10-$15 if I didnt have anything. This compounds over time. Thousands saved on partying, clothes, food, has been invested. Except I have a problem now, I just do not know how to spend money.

Older BHs, do you have any tips? I know I can always make money back, I just wish I had a more laid back approach to it all.

EHEngineer
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Re: I dont know how to spend money

Post by EHEngineer » Fri Jul 20, 2018 9:40 pm

Are you upset because you enjoy a frugal life, or that you don't know what you enjoy at all?
Few thoughts:
Count yourself lucky if you enjoy a frugal life.
Alternatively, you may need to (re)consider how you want to spend your life. Set some goals. Use your income to achieve them.
Finally, This surplus earnings phase may not last long. If/when you have a spouse and a kid you will have unlimited reasons to spend.
Last edited by EHEngineer on Fri Jul 20, 2018 9:47 pm, edited 1 time in total.
Or, you can ... decline to let me, a stranger on the Internet, egg you on to an exercise in time-wasting, and you could say "I'm probably OK and I don't care about it that much." -Nisiprius

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arcticpineapplecorp.
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Re: I dont know how to spend money

Post by arcticpineapplecorp. » Fri Jul 20, 2018 9:47 pm

interesting situation. I think there have been similar posts in the past. In fact I used the search bar at bogleheads and came up with this:

https://www.google.com/search?sitesearc ... pend+money

Maybe start with those posts and see what gems of wisdom you get. If you don't have your question answered, bump this post for other ideas.

You can't take it with you.
Don't be the richest person in the graveyard.
Be rich in spirit and generous with others
etc.

What are your goals, i.e., why are you saving so much? If for retirement, what number are you trying to reach? When you hit it do you think you can start to spend at that point? Hobbies sometimes (not always) can involve spending money. So it doesn't have to be partying. You can take classes, learn an instrument, travel for enjoyment/experiences, etc.

But you must know your values. If you don't value something, don't spend money on it. What do you value? Spend money on those things (or experiences). Money is meant to be spent. It does no good compounding unless you plan to spend it later or give it away.

Remember all your money will be spent. The only questions are: when? and by whom? For instance:

You can spend your money now or
You can spend your money later (retirement) or
You can give your money away now (charity, family/friends) or
You can give your money away later (bequeath)

Your choices. Make the choice consciously.
Last edited by arcticpineapplecorp. on Fri Jul 20, 2018 9:48 pm, edited 1 time in total.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

stoptothink
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Re: I dont know how to spend money

Post by stoptothink » Fri Jul 20, 2018 9:48 pm

EHEngineer wrote:
Fri Jul 20, 2018 9:40 pm
Don't sweat it. Count yourself lucky if you enjoy a frugal life. This phase may not last long. If/when you have a spouse and a kid you will have unlimited reasons to spend.
+1. I am perfectly content living a life similar, perhaps even more spartan, than the OP and did so while I was single (despite making more than the OP). I am probably comfortable with that type of lifestyle because I grew up in a level of poverty where many of those those things were not an option. Now married and with two children, I'd never expect them to live at that level of frugality. If you are happy with it, no reason to change, and it will change as you progress through life.

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jabberwockOG
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Re: I dont know how to spend money

Post by jabberwockOG » Fri Jul 20, 2018 9:50 pm

I spent most of my money on sleazy companions, booze, and drugs, the rest of it I wasted.

But seriously it's important to have fun in life but that actually has little to do with spending more money. So if you are happy and active at present there is no need to spend more. Too many folks equate spending money with living it up, and usually spending money for some high cost experience or item does little to provide a better life or long lasting joy/peace. However if you are denying yourself valuable activities or critical necessities then you need to lighten up a little on the savings action and spend enough to fund an active and purposeful life.
Last edited by jabberwockOG on Fri Jul 20, 2018 9:56 pm, edited 3 times in total.

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JMacDonald
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Re: I dont know how to spend money

Post by JMacDonald » Fri Jul 20, 2018 9:55 pm

Actually, I think you are doing good so far. Make a budget with setting a portion for entertainment or some activity you are interested in doing. You just need to loosen up a bit.
Best Wishes, | Joe

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mrspock
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Re: I dont know how to spend money

Post by mrspock » Fri Jul 20, 2018 10:10 pm

jb1 wrote:
Fri Jul 20, 2018 9:34 pm
Hey BH

Im currently 27, and Ive realized the older I get the worse I am at wanting to spend money. Im making an average 51k a year but I have a very high savings rate. I currently have 24k in a Roth IRA, 47k in a 2 fund portfolio (75% US market, 25% International), and 30k in a savings account. I am in the process of closing on a house (10k down) where I will have roommates live with me to offset the mortgage essentially living in a house for $100 a month. On top of that I have a Simple IRA though work where I put in the company match. I am absolutely miles ahead of my peers, some of my friends couldn't even say what a stock is, most dont even know what an IRA is. One thing they do know however

I feel like I am not living life sometimes. Everything is a monetary value to me. Part of me believes this is because I know what adversity is. I lived in an apartment when I was 24 and washed my clothes in the sink, yes the sink jus to save $5-$10. I would go without spending money to eat lunch $10-$15 if I didnt have anything. This compounds over time. Thousands saved on partying, clothes, food, has been invested. Except I have a problem now, I just do not know how to spend money.

Older BHs, do you have any tips? I know I can always make money back, I just wish I had a more laid back approach to it all.
Make an investment plan with a goal (I.e. “your FIRE number”, update/adjust the plan each year as your life, earnings and market returns change. With plan established, put as much of your financial life on auto-pilot as you can (bills, taxable accounts, IRA contributions, 401k etc), now here’s the kicker....the rest is yours to spend...you earned it!

I would also say try to focus spending on travel & experiences while you are young, full of energy and healthy. “Things” rarely bring much joy, with the possible exception of those which enable some experience (hiking, surfing, motorcycling etc).

As for learning to let loose a bit, I think everyone is different. For me, I really learned after hearing about a co-worker who passed at 31 after finding out they had terminal cancer. That was a warning shot over my bow so to speak, life is too short...for some of us even shorter, so enjoy the journey because we just don’t know when it will be over.

Good luck!

runner3081
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Re: I dont know how to spend money

Post by runner3081 » Fri Jul 20, 2018 10:16 pm

The spending of money (or not spending) has nothing to do with my happiness.

Think about what matters to you.

We save >50% of salary.

longleaf
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Re: I dont know how to spend money

Post by longleaf » Fri Jul 20, 2018 10:22 pm

Travel is fairly expensive. There is more than you can see in one lifetime- good luck on your unique adventure.
Frugality, indexing, time.

Doctor Rhythm
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Re: I dont know how to spend money

Post by Doctor Rhythm » Sat Jul 21, 2018 12:17 am

jb1 wrote:
Fri Jul 20, 2018 9:34 pm
I will have roommates live with me to offset the mortgage essentially living in a house for $100 a month.
$100 a month....hmmm. Can't you find one more roommate and break even?

jb1
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Re: I dont know how to spend money

Post by jb1 » Sat Jul 21, 2018 7:38 am

Doctor Rhythm wrote:
Sat Jul 21, 2018 12:17 am
jb1 wrote:
Fri Jul 20, 2018 9:34 pm
I will have roommates live with me to offset the mortgage essentially living in a house for $100 a month.
$100 a month....hmmm. Can't you find one more roommate and break even?
Thank you for there replies everyone. For this instance yes. Payments would be 1225 a month without utilities. If I charge them 550 each (2 roommates) ill pay the difference.

Since I am not putting 20% down I am required to live there for 2 years.

warner25
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Re: I dont know how to spend money

Post by warner25 » Sat Jul 21, 2018 8:12 am

Like you, it's my nature to save as much as possible, probably to the point of being unhealthy. I've found two things that help.

1. Getting married and especially having kids. Other members of the family need/want a lot of stuff, and I usually feel like I have more money than time, so I pay for a lot more conveniences. It has really altered my perspective on the value of money. I probably live better than I would if left to my own devices as a single guy, living at the poverty line to save 90% of my income.

2. Making a spreadsheet with long-term projections. Even with some very conservative assumptions, it's clear that I need to spend money somehow. Imagining myself at 80 years old with an 8-figure net worth after a lifetime of sacrifices isn't appealing.

investingdad
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Re: I dont know how to spend money

Post by investingdad » Sat Jul 21, 2018 8:13 am

jb1 wrote:
Fri Jul 20, 2018 9:34 pm
Hey BH

Im currently 27, and Ive realized the older I get the worse I am at wanting to spend money. Im making an average 51k a year but I have a very high savings rate. I currently have 24k in a Roth IRA, 47k in a 2 fund portfolio (75% US market, 25% International), and 30k in a savings account. I am in the process of closing on a house (10k down) where I will have roommates live with me to offset the mortgage essentially living in a house for $100 a month. On top of that I have a Simple IRA though work where I put in the company match. I am absolutely miles ahead of my peers, some of my friends couldn't even say what a stock is, most dont even know what an IRA is. One thing they do know however is how to spend money.

I feel like I am not living life sometimes. Everything is a monetary value to me. Part of me believes this is because I know what adversity is. I lived in an apartment when I was 24 and washed my clothes in the sink, yes the sink jus to save $5-$10. I would go without spending money to eat lunch $10-$15 if I didnt have anything. This compounds over time. Thousands saved on partying, clothes, food, has been invested. Except I have a problem now, I just do not know how to spend money.

Older BHs, do you have any tips? I know I can always make money back, I just wish I had a more laid back approach to it all.
I'm reading your post as a combination of envy over your peers spending money and a reluctance to brag to them about what you have saved / invested.

Perhaps I'm wrong, but this exactly how I felt at 27 when I was in a similar situation as you (almost 45 now).

So I'll tell you that I still feel that way. Only now the value of the peer purchases are much higher. Of course, so is our portfolio. And just like then, I couldn't brag to anyone about joining the 2 comma club in our 30s... though I did share that on here.

But the latter depended on doing in our 20s what you're doing right now.

And we did allow our lifestyle to go up a few notches over time. Most evident in our vacation budget and some other pursuits.

You'll have to decide what's most important for yourself.

zengolf2011
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Re: I dont know how to spend money

Post by zengolf2011 » Sat Jul 21, 2018 8:39 am

jb1 wrote:
Fri Jul 20, 2018 9:34 pm
I feel like I am not living life sometimes. Everything is a monetary value to me.
First, I laud your introspection. You are wise beyond your years, wisdom reflected in your request for help from older BHs. That's not often heard from folks your age.

Your aren't missing anything by passing on partying and conspicuous consumption. These are superficial distractions. They will not make you happy, nor will copying the crowd.

You might consider examining your deepest values and ambitions -- your core drivers. Are you an introvert or extrovert? How important is it to your self-worth to help others? How important are close relationships with others? There are no right or wrong answers, but honesty is key. And there is no time limit.

The next step may be to align key elements of your life (e.g., job, relationships, leisure) with your unique values and goals.

You obviously have a high level of maturity and sense of responsibility, so I think your savings habits and financial life will take care of themselves.

davidsorensen32
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Re: I dont know how to spend money

Post by davidsorensen32 » Sat Jul 21, 2018 9:00 am

It’s over for you mate. You are destined to become a gazzilionaire. No one can stop you.

jb1 wrote:
Fri Jul 20, 2018 9:34 pm
Hey BH

Im currently 27, and Ive realized the older I get the worse I am at wanting to spend money. Im making an average 51k a year but I have a very high savings rate. I currently have 24k in a Roth IRA, 47k in a 2 fund portfolio (75% US market, 25% International), and 30k in a savings account. I am in the process of closing on a house (10k down) where I will have roommates live with me to offset the mortgage essentially living in a house for $100 a month. On top of that I have a Simple IRA though work where I put in the company match. I am absolutely miles ahead of my peers, some of my friends couldn't even say what a stock is, most dont even know what an IRA is. One thing they do know however is how to spend money.

I feel like I am not living life sometimes. Everything is a monetary value to me. Part of me believes this is because I know what adversity is. I lived in an apartment when I was 24 and washed my clothes in the sink, yes the sink jus to save $5-$10. I would go without spending money to eat lunch $10-$15 if I didnt have anything. This compounds over time. Thousands saved on partying, clothes, food, has been invested. Except I have a problem now, I just do not know how to spend money.

Older BHs, do you have any tips? I know I can always make money back, I just wish I had a more laid back approach to it all.

five2one
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Re: I dont know how to spend money

Post by five2one » Sat Jul 21, 2018 9:05 am

I completely understand your situation. I've been same since I joined professional workforce at about same age.
I have definitely made foolish purchases but able to recover with a bit of wise...and patient..investing.

I've saving/investing 30% of take home and it is tough to watch others buy flashy stuff and you are staring at your statements on "normal" furniture.
This is one of the reasons I come to this site is a bit of emotional support.

All flowers eventually die but their death enriches the soil.
In other words, strength is not the same as beauty.
Find joy in experiences & memories--not things.

DVMResident
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Re: I dont know how to spend money

Post by DVMResident » Sat Jul 21, 2018 9:11 am

I was similar at 27. Cheap rent, traveled by bus, vacations were backpacking, food was cheap (but still healthy), and my car was old/used then (still have the same one). A ~decade later, I am still this way. Except, now I'm married with a kid. The family is expensive but worth it.

Don't worry. Life catches up.

minimalistmarc
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Re: I dont know how to spend money

Post by minimalistmarc » Sat Jul 21, 2018 9:19 am

Most of the things I like the most are free, like walking, cycling, reading, watching TV.

I bought a new belt for £2.50 today.

Family does cost money, but not that much so far

stan1
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Re: I dont know how to spend money

Post by stan1 » Sat Jul 21, 2018 9:22 am

Do your frugal habits impact your ability to achieve life goals such as meeting and dating a potential spouse or maintaining the professional image your expected in your career? You can find a spouse who shares your values and enjoys a hike in the mountains more than a $500 night out for dinner, drinks, and clubbing. Creativity is a good substitute for spending a lot of money.

You can pick up some used furniture off Craigslist or Freecycle to furnish the new "dorm house" for less than a whole room special at a discount furniture store. A great pick in a spouse would be someone who would help you do that.

lightheir
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Re: I dont know how to spend money

Post by lightheir » Sat Jul 21, 2018 9:37 am

I know where you're coming from, even though yes, you were even more frugal than I was, but I was victim to having to live in a HCOL area due to educational situations, not by choice.

I actually don't think your thinking is too far off. When you're only earning $50k/yr, in today's USA where the social safety net has literally been pulled out from underneath you, it makes sense to be very conservative about spending on nonessentials, especially when you are single and don't have other dependents to accelerate your spending.

The toughest part however, is that at $50k/yr, it will be very, very hard to save enough to really relax about spending no matter how long how you save for. I think you know that instinctively - expenses like a car, health insurance deductible costs, home/mortgage will eat up huge amounts of your income after taxes and you will have little left. When I was making that much money, the only way I could make it work (in a HCOL area, granted) was to be frugal.

For me, there were two things that led me to break my frugality (in a good way, I know I was being excessively and even unrealistically frugal.)
1. Big income jump. But even this alone didn't lead me to spend more
2. Getting married and moving to a nicer neighborhood. WOW - you pretty much are forced to take a giant leap of faith to spend more, and it's scary, even if the math shows you can readily afford it.

As frugal as you are, it is REALLY hard to force your wife and kid to equal your miserly ways. It's doable, but if you really make her do the frugal walk, you will be risking your relationship!

herennow
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Re: I dont know how to spend money

Post by herennow » Sat Jul 21, 2018 10:58 am

I was in the same situation in my 20s. The reasons can be varied, I was personally saving a lot because of a very modest and sometimes hard childhood. I found that I was able to relax a little bit when the bank balance started going up. If you find yourself a saver, don't fret. Save 50-70% of your salary, and 'force' yourself to spend the rest. Treat it as your reward for working your back off for the month. have a separate acct for the forcible spending if needed. When you find that acct growing as well, buy yourself something big and worth it. Like a good electronics item, or shoes, or car - something that you would use everyday or frequently, so you feel its money well spent. If you cannot spend on yourself, treat a family member to a nice restaurant or small vacation. Charity also makes you feel good. These are things I spend on and find meaning in the spending, while also feeling good about saving. All the best!

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aspirit
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Re: I dont know how to spend money

Post by aspirit » Sat Jul 21, 2018 12:33 pm

jb1 wrote:
Fri Jul 20, 2018 9:34 pm
Hey BH

Im currently 27, and Ive realized the older I get the worse I am at wanting to spend money. Im making an average 51k a year but I have a very high savings rate. I currently have 24k in a Roth IRA, 47k in a 2 fund portfolio (75% US market, 25% International), and 30k in a savings account. I am in the process of closing on a house (10k down) where I will have roommates live with me to offset the mortgage essentially living in a house for $100 a month. On top of that I have a Simple IRA though work where I put in the company match. I am absolutely miles ahead of my peers, some of my friends couldn't even say what a stock is, most dont even know what an IRA is. One thing they do know however is how to spend money.

I feel like I am not living life sometimes. Everything is a monetary value to me. Part of me believes this is because I know what adversity is. I lived in an apartment when I was 24 and washed my clothes in the sink, yes the sink jus to save $5-$10. I would go without spending money to eat lunch $10-$15 if I didnt have anything. This compounds over time. Thousands saved on partying, clothes, food, has been invested. Except I have a problem now, I just do not know how to spend money.

Older BHs, do you have any tips? I know I can always make money back, I just wish I had a more laid back approach to it all.
Your lifestyle is fine. Do yourself a favor and read Harry Browne's lifestyle teachings. Particularly "How I Found Freedom in a Unfree World"-https://www.google.com/imgres?imgurl=ht ... FHoECAsQFA Your income is average, so your savings rate will offset your income.
Like you I've slept in unoccupied areas of my R.E holdings for years, rerouting what would have been a rental expense to my retirement.

No doubt your in for inordinate experiences. I had one tenant leave me their dog as last months rent. Others leave you high and dry. Plan on it.

I'd put that 30k into a TBM/BND bond account for rebalancing purposes. Most of these average 5% over 20/30yrs.
I do not believe in emergency funds, I've high limit CCs for that, pay them off asap.

You do not have to get married, spar w/a wife till death, have 2.5 costly & ungrateful bratz, a dog & cat & bird to drown out the
wife whining over the manicured lawn & white picket fence she always wanted. etc. and bratz wanting everything everyone else has, ..unendingly.
Not everything is as ideal as portrayed.

This boils down to, your not FI :moneybag yet, I'd suggest not to stop saving till you are.

Good luck!
Last edited by aspirit on Sun Jul 22, 2018 10:07 am, edited 1 time in total.
Time & tides wait for no one. A man has to know his limitations.

MJS
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Re: I dont know how to spend money

Post by MJS » Sat Jul 21, 2018 3:34 pm

Since you've bought a house, you will have lots of opportunities to spend money! Home Depot will be your second home. Think about the long term difference between cheapest & most durable/efficient.

Set up your spending priorities. I use these categories:
* Long term: house/maintenance/insurance, 403b, ira, emergency fund...
* Health: well fitting shoes, insurance, hiking gear, ann ck up, sunscreen, nutrition...
* Safety: car, [good dead bolts for hse insurance,] flashlights & emergency kit, back up generator...
* Profession: training, networking/time with colleagues, garments, memberships, gear, travel to professional meetings...
* Giving: hard-back books of favorite authors, work by local artists & crafters, patronize local stores, charity, bird feeder, gifts to family/friends...
* Comfort: air conditioning, music, mattress, excellent bed linens & towels, desk+desk chair that really fit my needs...
* Amusement: travel, movies, kindle, music, collections, coffee...

shell921
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Re: I dont know how to spend money

Post by shell921 » Sat Jul 21, 2018 3:42 pm

MJS wrote:
Sat Jul 21, 2018 3:34 pm
Since you've bought a house, you will have lots of opportunities to spend money! Home Depot will be your second home. Think about the long term difference between cheapest & most durable/efficient.

Set up your spending priorities. I use these categories:
* Long term: house/maintenance/insurance, 403b, ira, emergency fund...
* Health: well fitting shoes, insurance, hiking gear, ann ck up, sunscreen, nutrition...
* Safety: car, [good dead bolts for hse insurance,] flashlights & emergency kit, back up generator...
* Profession: training, networking/time with colleagues, garments, memberships, gear, travel to professional meetings...
* Giving: hard-back books of favorite authors, work by local artists & crafters, patronize local stores, charity, bird feeder, gifts to family/friends...
* Comfort: air conditioning, music, mattress, excellent bed linens & towels, desk+desk chair that really fit my needs...
* Amusement: travel, movies, kindle, music, collections, coffee...
LOVE this advice--lot of great advice on entire thread !!

RadAudit
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Re: I dont know how to spend money

Post by RadAudit » Sat Jul 21, 2018 3:54 pm

Buy what you need. Don't buy stuff you don't need. Once you buy it, wear it out.

I'm going through my DS' closet in anticipation of the remodelers arriving on Monday. We're donating suits that are lightly used / worn, sweaters, coats, books, DVDs, etc., etc. The amount of money represented by this stuff is simply amazing.

(The only upside is that I'm now losing enough weight that I can get into some of the business suits he outgrew.)
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The Calvary isn't coming, kids. You are on your own.

MathWizard
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Re: I dont know how to spend money

Post by MathWizard » Sat Jul 21, 2018 4:08 pm

I think you are just fine the way you are.

I assume that now that you have money, you are not washing your clothes in the sink anymore.

Do you have any student loans left? You could get rid of those.

I was 31 and was making more than you are (after adjusting for inflation) and did not feel like I had enough.
I was over 50 before I felt comfortable enough to let up on the reins, and was married 25 years before we started flying
for vacations. But since then my wife and I have been to Europe 3 times already, and she has flow to meet me after business trips
several more times.

By saving a lot, we were able to pay off our house 2 years ago 17 years not a 30 year mortgage, leaving the last of our debt behind.

If it is not causing you problems in your personal life, I would not worry about it.

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arcticpineapplecorp.
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Re: I dont know how to spend money

Post by arcticpineapplecorp. » Sat Jul 21, 2018 4:14 pm

You don't have to spend money to have a fulfilling life. Volunteers are needed all the time. Give back to your community and you will feel like you're spending your time valuably. Time is our most precious resource so spend it wisely. Then if you have more money than you need, you can always give that away too. Bill Gates and family, Warren Buffett and others do:

https://givingpledge.org/
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

Edward Joseph
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Re: I dont know how to spend money

Post by Edward Joseph » Sat Jul 21, 2018 4:18 pm

I had similar questions in my late 20's. It was more along the lines of not knowing the appropriate ways to spend money. For close to 15 years, I've abided by the 50-30-20 framework. (google it for more details)

To be more conservative--start with your take home pay.

50%- Needs. (Utilities, basic food, clothing, shelter, mandatory bills and obligations.) These are all things you'll probably still spend money on even of you lost your job.

30%-Wants. (These are fun,nonessential things you spend money on. Travel, eating out, nightlife, entertainment, nonessential clothes shopping) These are all things you'll cut if you ever lost your job.

20%-After tax savings.

The key to this is if you ever lost your job, you'll be able to live on half your take-home pay easily. The hard part is determining what's a "need" and whats a "want". I use Mint.com and break my spending down into 2 categories. Each has their own subcategories for me to monitor. Even with this framework, at times I was still saving close to 50% take home pay though.

Ninnie
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Re: I dont know how to spend money

Post by Ninnie » Sun Jul 22, 2018 9:35 am

Are you happy with your job and career? Do you have friends and enjoy yourself with them?

I don't think skipping lunch is such a good idea. It's great that you pack your lunch, but give yourself a break if you forget it and be kind to your stomach.

wolf359
Posts: 1298
Joined: Sun Mar 15, 2015 8:47 am

Re: I dont know how to spend money

Post by wolf359 » Sun Jul 22, 2018 9:52 am

jb1 wrote:
Fri Jul 20, 2018 9:34 pm
Hey BH

Im currently 27, and Ive realized the older I get the worse I am at wanting to spend money. Im making an average 51k a year but I have a very high savings rate. I currently have 24k in a Roth IRA, 47k in a 2 fund portfolio (75% US market, 25% International), and 30k in a savings account. I am in the process of closing on a house (10k down) where I will have roommates live with me to offset the mortgage essentially living in a house for $100 a month. On top of that I have a Simple IRA though work where I put in the company match. I am absolutely miles ahead of my peers, some of my friends couldn't even say what a stock is, most dont even know what an IRA is. One thing they do know however is how to spend money.

I feel like I am not living life sometimes. Everything is a monetary value to me. Part of me believes this is because I know what adversity is. I lived in an apartment when I was 24 and washed my clothes in the sink, yes the sink jus to save $5-$10. I would go without spending money to eat lunch $10-$15 if I didnt have anything. This compounds over time. Thousands saved on partying, clothes, food, has been invested. Except I have a problem now, I just do not know how to spend money.

Older BHs, do you have any tips? I know I can always make money back, I just wish I had a more laid back approach to it all.
Your situation describes my early adult years, all the way down to the house with roommates to offset the mortgage. I achieved an 80% savings rate during that time.

Don't worry about it. Don't try to spend money for the sake of spending money. However, you can start evaluating life in terms of more than just money. Money is a resource, and it can buy quality, convenience, and time. Sometimes it is okay to spend money to gain time, or better results than if you did something yourself.

Keep saving. Life has seasons, and putting away money during a season of plenty will offset when times are lean. Keep in mind that assets are artificially inflated right now, so everybody feels like they have more assets than normal. You will spend more when you: 1) get married; 2) have children; 3) get older and have health issues; and/or 4) decide to stop working.

If you want to give yourself permission to spend more, set aside a line item in your savings plan for bigger ticket items, like house maintenance, replacing the car, and vacations. If you're like me, that current spending line item will get bigger than required to address those items, allowing you to splurge on a nicer car, nicer vacation, or higher quality home improvements, without guilt.

shell921
Posts: 53
Joined: Fri Jul 06, 2018 5:13 pm

Re: I dont know how to spend money

Post by shell921 » Sun Jul 22, 2018 10:39 am

arcticpineapplecorp. wrote:
Sat Jul 21, 2018 4:14 pm
You don't have to spend money to have a fulfilling life. Volunteers are needed all the time. Give back to your community and you will feel like you're spending your time valuably. Time is our most precious resource so spend it wisely. Then if you have more money than you need, you can always give that away too. Bill Gates and family, Warren Buffett and others do:

https://givingpledge.org/
I like this advice a lot!

I read the other day about a "gratitude bank". When something good happens in your life, put some $$ in
a box or a jar and, at the end of 6 months or a year, GIVE away this $$ to someone less fortunate or donate it to a charity.

Luke Duke
Posts: 704
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Location: Texas

Re: I dont know how to spend money

Post by Luke Duke » Mon Jul 23, 2018 8:59 am

jb1 wrote:
Fri Jul 20, 2018 9:34 pm
Hey BH

Im currently 27, and Ive realized the older I get the worse I am at wanting to spend money. Im making an average 51k a year but I have a very high savings rate. I currently have 24k in a Roth IRA, 47k in a 2 fund portfolio (75% US market, 25% International), and 30k in a savings account. I am in the process of closing on a house (10k down) where I will have roommates live with me to offset the mortgage essentially living in a house for $100 a month. On top of that I have a Simple IRA though work where I put in the company match. I am absolutely miles ahead of my peers, some of my friends couldn't even say what a stock is, most dont even know what an IRA is. One thing they do know however is how to spend money.

I feel like I am not living life sometimes. Everything is a monetary value to me. Part of me believes this is because I know what adversity is. I lived in an apartment when I was 24 and washed my clothes in the sink, yes the sink jus to save $5-$10. I would go without spending money to eat lunch $10-$15 if I didnt have anything. This compounds over time. Thousands saved on partying, clothes, food, has been invested. Except I have a problem now, I just do not know how to spend money.

Older BHs, do you have any tips? I know I can always make money back, I just wish I had a more laid back approach to it all.
A girlfriend will solve your spending problems.

FireProof
Posts: 545
Joined: Thu May 05, 2011 12:15 pm

Re: I dont know how to spend money

Post by FireProof » Mon Jul 23, 2018 9:23 am

I'd say focus on the value of time. You already understand it in one direction - every overpriced lunch means more time slaving away in the office. But it cuts in the other direction, too - spend a bit of money upfront on a washing machine and you'll save countless future hours of joyless scrubbing in the sink.

I don't know exactly what your other overly-frugal habits are, but sometimes it comes down to undervaluing time and convenience. I've certainly fallen into that trip - walked half an hour to save $1.20 on the bus, and then thought, "Is my time worth $2.40/hour?" Sure, you might be able to save some money by shopping at 3 different grocery stores, but how large is the savings compared to the time spent (and hassle) driving to three different places, waiting in three different checkout lines, etc?

michaeljc70
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Joined: Thu Oct 15, 2015 3:53 pm

Re: I dont know how to spend money

Post by michaeljc70 » Mon Jul 23, 2018 9:47 am

It doesn't have to be you blow all your money or save all your money. Establish a reasonable budget and spend it. You don't have to sit home eating cereal for dinner every night, but that doesn't mean you need to go out and spend a fortune either. If you are saving 25k, change that to $20k and spend the money on things you enjoy. You will still be doing very well with savings. You are also only young once. No matter how much money you have when you are 70, some of the things you could be doing while 27 you won't be doing at 70. There are a few vacations I didn't take when younger due to wanting to save the money that I regret.

randomguy
Posts: 5978
Joined: Wed Sep 17, 2014 9:00 am

Re: I dont know how to spend money

Post by randomguy » Mon Jul 23, 2018 11:25 am

JMacDonald wrote:
Fri Jul 20, 2018 9:55 pm
Actually, I think you are doing good so far. Make a budget with setting a portion for entertainment or some activity you are interested in doing. You just need to loosen up a bit.
He is doing good at saving money. But he also has developed an unhealthy relationship with money where saving is more important than anything else. Over saving might be rarer than overspending but it is also not a desireable outcome. There is a difference between not spending money because it isn't anything that will you bring you happiness and not spending money because it makes you ill.

Strummer
Posts: 52
Joined: Thu Dec 28, 2017 4:15 pm

Re: I dont know how to spend money

Post by Strummer » Mon Jul 23, 2018 5:49 pm

My question for the OP is this: What do you think that money will buy you?

Frugality is great, I agree, but if you think you're missing out on life because you're being too frugal, there's a pretty good chance that is actually what is happening. You have to ask yourself some new questions: What do you want out of life? What sort of experiences do you want to have? What do you value? It's perfectly normal for those answers to be different from other people, and they can even be different from what your family and friends want for you.

You've already started considering some of these things. Keep going.

(BTW, one of the best ways I know of getting out of a mental rut is to travel to a different country. You don't have to go someplace exotic to see it; even Canada has significant cultural differences from the US, Great Britain and Ireland more so, and everyone will still speak English. It's a wonderful way to begin to understand that there may be greater possibilities in things than you were previously aware.)

jb1
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Location: NC

Re: I dont know how to spend money

Post by jb1 » Mon Jul 23, 2018 7:45 pm

Luke Duke wrote:
Mon Jul 23, 2018 8:59 am


A girlfriend will solve your spending problems.
haha havent had one of them in years. :(

FRT15
Posts: 38
Joined: Wed Dec 16, 2015 9:58 pm

Re: I dont know how to spend money

Post by FRT15 » Mon Jul 23, 2018 9:57 pm

I have been frugal as well. A few negative things I have noticed are a lack of desire/hunger to advance career and earn more given the fact you can save almost all of your income. It can be difficult dating and making the changes in lifestyle once you are long set in your ways. Lastly there is the potential issue of bringing a lot of resources in to the relationship and having your partner bring zero or debt. These don't have to be issues, just mentioning they could be.

Hulu
Posts: 130
Joined: Wed Oct 22, 2014 7:55 pm

Re: I dont know how to spend money

Post by Hulu » Mon Jul 23, 2018 11:34 pm

I'd look more into what you believe money is and what money isn't. It's sounds like you're obsessed with money in a way that lowers your enjoyment.

Perhaps also look and see what you like about your current situation. And also look for people (especially w dating) that behave like you. Early Retirement Extreme has a lot of high % savers.

joeblow
Posts: 108
Joined: Sat Nov 28, 2015 12:17 pm

Re: I dont know how to spend money

Post by joeblow » Tue Jul 24, 2018 12:00 am

jb1 wrote:
Mon Jul 23, 2018 7:45 pm
Luke Duke wrote:
Mon Jul 23, 2018 8:59 am


A girlfriend will solve your spending problems.
haha havent had one of them in years. :(
Maybe start with not washing your clothes in a sink in order to save $5-$10?

Is that per load or per month?

There is a difference between being frugal and being cheap.

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