Saved half of income last year - struggling to see the point

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The Wine Dark Sea
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Saved half of income last year - struggling to see the point

Post by The Wine Dark Sea » Sun Jan 03, 2016 8:24 pm

Hello everyone - this is my first post, but I have read these forums intermittently for the past couple of years and have always appreciated the straightforward and no-nonsense attitude most of you have.

My question is basically the one posted in the thread title. We are a early-thirties couple with young kids. Two weeks ago I put pencil to paper and realized that in 2015 we saved about half our gross income, without really meaning to. There was no goal or plan, no budget, and there wasn't even much of what I'd consider scrimping. Our income just outstrips our expenses. The problem is that I don't feel any sense of accomplishment in saving this kind of money, nor do I feel that this money has benefited me in any way. In fact I kind of feel cheated (?) in that I've busted my rear for years in a high-stress, high-hours profession to live the same kind of life that I'd be living if I made half as much. But if I were to spend that money, I don't know to what end - I (and my wife) have no interest in new cars, expensive clothes, or whatever. I have no interest in spending just to spend.

I guess I'd just like to hear your perspective. How to continue self-motivating? Is there some avenue for spending this "extra" money that would actually improve my life? Should I set goals just to get a feeling of satisfaction from achieving them? Or am I just having a premature midlife crisis :shock:

MNGopher
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Re: Saved half of income last year - struggling to see the point

Post by MNGopher » Sun Jan 03, 2016 8:42 pm

Continue to do what you are doing and in another 15-20, when you have your real midlife crisis, you will be able to retire or do what you want with your time. :D

Pinotage
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Re: Saved half of income last year - struggling to see the point

Post by Pinotage » Sun Jan 03, 2016 8:44 pm

Congratulations! Strong work saving and even stronger work not noticing that you were doing it.

If you're looking for a reason why, one word - Options.

Saving like you do, and living like you do, opens up options that are simply not available if you are living paycheck to paycheck.

CeeKay1729
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Re: Saved half of income last year - struggling to see the point

Post by CeeKay1729 » Sun Jan 03, 2016 8:47 pm

The payoff comes about 10 years later when you sit down with your wife and ask her "So...you want to retire?" I think its great you can save that much and not feel it. It just means you are not at your savings ceiling yet :wink:

Soon2BXProgrammer
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Re: Saved half of income last year - struggling to see the point

Post by Soon2BXProgrammer » Sun Jan 03, 2016 8:49 pm

The Wine Dark Sea wrote:Should I set goals just to get a feeling of satisfaction from achieving them?
Yes, that is what i do.. First goal was max all tax advantaged accounts. Then the goal was to pay off the house. Then the goal was to do the maximum Mega Roth Backdoor via after tax 401k funds. Now the goal is to manage to Superfund my expected 18 years of contributions i planned to our children's 529 plan as fast as possible.

I have a tracker that shows how many "months" I have left to contribute. Once this goal looks like it is going to be finished, I'll start planning for the next step in my journey. All of this is to achieve the end of eventually retiring early.

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just frank
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Re: Saved half of income last year - struggling to see the point

Post by just frank » Sun Jan 03, 2016 8:50 pm

If you are happy and didn't scrimp, keep doing this until it feels like scrimping or you need to spend more to be happy.

According to simple models, if you do this for 17 more years (and are still happy with the spending level) then you can retire and spend this much annually forever.

http://www.mrmoneymustache.com/2012/01/ ... etirement/

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cfs
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Re: Saved half of income last year - struggling to see the point

Post by cfs » Sun Jan 03, 2016 8:56 pm

Welcome aboard !!!!
There was no goal or plan, no budget . . .

Contratulations, you are doing a great job! As far as goals, planning, etc, recommend starting with your Investment policy statement and keep things simple.

Again, welcome aboard and good luck in your investment career.
~ Member of the Active Retired Force since 2014 ~

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MikeWillRetire
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Re: Saved half of income last year - struggling to see the point

Post by MikeWillRetire » Sun Jan 03, 2016 9:06 pm

If you really feel this way, then yes, you are saving too much. If the idea of being financially independent at an early age doesn't do it for you, then spend some more to enjoy your life now.

Dave1mo1
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Re: Saved half of income last year - struggling to see the point

Post by Dave1mo1 » Sun Jan 03, 2016 9:07 pm

Have you considered significant charitable giving to a cause you and your wife care about deeply?

RedDog
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Re: Saved half of income last year - struggling to see the point

Post by RedDog » Sun Jan 03, 2016 9:10 pm

The tangible rewards of saving and investing are often very obvious...early retirement, paying for children's education, a buffer for unexpected expenses, ect.

But the positive example you set for your two children is worth even more. Before we even knew who Jack Bogle was, we lived very much within our means, saved and planned for the future. When you see your children thoughtfully choosing careers, carefully weighing education cost/benefits, opening 529 accounts for your granddaughter...you and your wife's discipline will be extremely well repaid.

A word of caution, don't expect to see these positive traits while they're children, teenagers or even their first few years after leaving home. :wink:

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Phineas J. Whoopee
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Re: Saved half of income last year - struggling to see the point

Post by Phineas J. Whoopee » Sun Jan 03, 2016 9:10 pm

Welcome to the forum!

You truly are in an enviable economic position, but I understand your concern. My advice in this matter, which is much easier said than done, is to replace feeling with thinking.

PJW

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kellyfj
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Re: Saved half of income last year - struggling to see the point

Post by kellyfj » Sun Jan 03, 2016 9:18 pm

You're doing a great job financially but feeling hollow.

You might be burned out and need a break, vacation or job change.
Given the head start you have given yourself and your family could you find a less stressful job in the same or related industry and "just" save 20% of your gross?

If it's not making you happy (and that condition lasts > 3-4 months) it's time for a change. Life is too short and money is just money.

yosef
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Re: Saved half of income last year - struggling to see the point

Post by yosef » Sun Jan 03, 2016 9:23 pm

Normally, I'd say you are saving too much. But since you say there's nothing you want to spend the money on either, I mostly think it sounds like you need to find something in life you enjoy, and do more of it. If your high-stress, high-hours profession gets in the way of that, then maybe that's something you could look at changing; you've more or less established that you don't need the extra money...

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HomerJ
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Re: Saved half of income last year - struggling to see the point

Post by HomerJ » Sun Jan 03, 2016 9:29 pm

The Wine Dark Sea wrote:The problem is that I don't feel any sense of accomplishment in saving this kind of money, nor do I feel that this money has benefited me in any way. In fact I kind of feel cheated (?) in that I've busted my rear for years in a high-stress, high-hours profession to live the same kind of life that I'd be living if I made half as much.
Basically, the benefit to saving a ton is you get to QUIT the high-stress, high-hours profession fairly early in life.

If you spent the money (especially on recurring expenses, like a more expensive house or car payment), you'd be STUCK in a high-stress, high-hours profession for the rest of your life. So don't do that.

Congratulations on keeping your expenses low... If you really hate your job, quit it, and get a lower-paying job. If you can stand your job for 5-10 more years (how much do you have saved so far, how much are you saving a year, and how much are your expenses?), then perhaps think about gutting it out, and retiring early thanks to your aggressive savings rate.

Really need more details though for anyone to give you really good advice.

jjface
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Re: Saved half of income last year - struggling to see the point

Post by jjface » Sun Jan 03, 2016 10:13 pm

Your aim should be whichever makes you the happiest...
a) carry on and retire early
b) carry on and give more to your kids later in life
c) carry on and spend more on your family and your kids now- maybe do some travelling
d) get a job that you enjoy / value more but pays less
e) Work part time if work allows
f) Have one spouse stay at home

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Re: Saved half of income last year - struggling to see the point

Post by Grt2bOutdoors » Sun Jan 03, 2016 10:42 pm

Depends on your occupation. If you have an occupation where your employment can be outsourced overseas, terminated, etc., you'll soon find out those savings will provide you with options.
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Re: Saved half of income last year - struggling to see the point

Post by PoeticalDeportment » Sun Jan 03, 2016 11:05 pm

Dave1mo1 wrote:Have you considered significant charitable giving to a cause you and your wife care about deeply?
Or, even better than writing a check, go volunteer at a soup kitchen or homeless shelter or emergency room. Maybe get a part time weekend job that involves hard manual labor for meager wages. It sounds like you are becoming numb to what an enviable position your family is in.

For most people, even those who earn fat paychecks that exceed their present needs by wide margins, it takes many years (or decades) of high savings before they are sitting on a large enough pile of assets that truly allows for freedom and independence - you may not be as far along as you think. One year of saving 50% is really only a good start, not much more than that. Be careful before you derail a solid early trajectory.

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Re: Saved half of income last year - struggling to see the point

Post by jlawrence01 » Sun Jan 03, 2016 11:36 pm

OP,

Your story pretty much sounds like ours. I spent a couple of years living with monks and when I did leave and eventually marry, I found a farm girl who lived a similar lifestyle. I cannot get motivated to go out and spend for the sake of spending.

When I decided to retire my corporate job at 53, on the my financial planning friends (on a personal basis) asked me "how much di you save"? And the honest answer was "I don't know.". The next question was "how much do you spend?". "Not much.

Put the money aside and forget about it. Spend your efforts on raisin your children and the important things in life. At some point - probably after 50, you will find what you are doing to be significantly satisfying. If you continue your trajectory, you will be able to walk away at a very early age.

cusetownusa
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Re: Saved half of income last year - struggling to see the point

Post by cusetownusa » Mon Jan 04, 2016 9:29 am

just frank wrote:If you are happy and didn't scrimp, keep doing this until it feels like scrimping or you need to spend more to be happy.

According to simple models, if you do this for 17 more years (and are still happy with the spending level) then you can retire and spend this much annually forever.

http://www.mrmoneymustache.com/2012/01/ ... etirement/

That model is based on savings as a percentage of take home pay. He is saving 50% of gross...which means it will take a lot less than 17 more years as you suggest.

Rodc
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Re: Saved half of income last year - struggling to see the point

Post by Rodc » Mon Jan 04, 2016 10:16 am

I think setting goals can be very motivating for some people, especially people who are achieving their goals.

At some point well along in the game I set up a graph showing what I hoped was a median line for growth of college funds and retirement accounts, along with optimistic and pessimistic line, and also paying off the house, over time. Also networth.

Now and then I plot a new point (in the beginning it was monthly, but recently it has just been year end). 2008 showed a big dip in the retirement accounts, but even then we stayed between the optimistic and pessimistic lines. It takes a while to really get rolling but as you see the upward sweep of exponential growth it is pretty neat, and seeing the dips in context actually make them easier to take. By increasing college investments over time we are not well above the original target which is also motivating to see.

More recently as I get closer to retirement I have been estimating the retirement income we could generate if we retire today, in a few years, at age 65. I was shocked to find we could retire earlier than expected. At some level we were now financially independent! Every year that goes by our "retire today" income goes up and the more we can choose to work or not. And work pressure goes down - hey fire me if you want! :) Fortunately we continue to like our jobs and full pay has its benefits.

It sounds like part of your problem is that you do not have visibility into your accomplishments. If so, set something up to make the progress and accomplishment more concrete.

And keep up the good work!

PS. That said, if the real issue is you don't like your job, get another one. Given your low expenses you could take a job you love even if it came with a much lower salary. Life is too short to bust you butt at a job you do not like if you have the option to do something else.
Last edited by Rodc on Mon Jan 04, 2016 10:22 am, edited 1 time in total.
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goingup
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Re: Saved half of income last year - struggling to see the point

Post by goingup » Mon Jan 04, 2016 10:21 am

The Wine Dark Sea wrote:Or am I just having a premature midlife crisis :shock:
Could be. Maybe you're realizing that saving money or having a pile of money doesn't, by itself, feel very satisfying.

I have read and found to be true that happiness can be had by having these 3 things: Something to do. Someone to love. Something to look forward to. Perhaps planning a nice trip with wife and kinder would feel rewarding. :)

anonforthis
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Re: Saved half of income last year - struggling to see the point

Post by anonforthis » Mon Jan 04, 2016 10:22 am

If your goal is financial independent not early retirement then take a few more vacations.
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scouter
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Re: Saved half of income last year - struggling to see the point

Post by scouter » Mon Jan 04, 2016 10:23 am

Things can change a lot between your thirties and your fifties. No matter how satisfied you are now with your jobs and where you live, that could all be drastically different and beyond your control in a few decades. The career I loved and dedicated my life too ended due to changes beyond my control. My wife's job became unbearably stressful. But because we have always saved and invested the way you are doing now, she was able to retire at 58 and I had the freedom to switch gears and do something else I love on a part-time basis.

It's all about giving yourself (and your kids) freedom and choices in the future.

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Watty
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Re: Saved half of income last year - struggling to see the point

Post by Watty » Mon Jan 04, 2016 10:32 am

The Wine Dark Sea wrote: The problem is that I don't feel any sense of accomplishment in saving this kind of money, nor do I feel that this money has benefited me in any way. In fact I kind of feel cheated (?) in that I've busted my rear for years in a high-stress, high-hours profession to live the same kind of life that I'd be living if I made half as much.
The problem might be more in the job than on the spending side.

I recently retired and while I am doing some moderately expensive things like traveling(which does not to be all that expensive) one of the things that I enjoy doing now is walking on hiking trails for a couple of hours at a time. This costs next to nothing but it is something that I didn't have time to do much when I was working and commuting.

Depending on your profession cutting back to more reasonable hours might be a good thing to consider instead of waiting for retirement for any gratification. This is especially true when you kids are young.

There is a reasonable chance that you and your spouse will not live long enough to retire or that you both might not in good health then and able to enjoy it. Another problem is that if all you do is to work for 35 years then suddenly stop, then you might not know how to enjoy your retirment and there is a fair percentage of people that have a hard time adjusting to being retired.
The Wine Dark Sea wrote:here was no goal or plan, no budget, and there wasn't even much of what I'd consider scrimping. Our income just outstrips our expenses. The problem is that I don't feel any sense of accomplishment in saving this kind of money, nor do I feel that this money has benefited me in any way.
One thing that I do is to keep a simple spreadsheet where I update my net worth each year as of January 1st. This helps me see how much progress I have made over the years.

To give some meaning to that number try calculating these things and also write them down on the spreadsheet to see the progress each year.
(These are just very rough so the the calculations do not need to be detailed.)

1) How long until you can have a paid off house,if it is not already paid off?

Getting your house paid off is a major milestone which most people get a lot of satisfaction from. This also can greatly improve your cash flow numbers even if they are already good.

You said, "to live the same kind of life that I'd be living if I made half as much." The lifestyle might be the same but living in a paid off house is a lot different than one with 27 years of mortgage payments left.

2) If you HAD to stop working today then could you live on what you have for the rest of your life if you had to?

You don't even need to look at moving to some underdeveloped country. There are relatively decent areas of the midwest and the south where you can by a very modest but passable house for $60K. With a paid off house and eventually Social Security it really does not cost that much to live a very modest lifestyle. I went to college in a midwest college town where you can get a house like that so I even occasionally looked online at the housing there to try to picture that alternative.

I would not have wanted to have lived like that but I was probably in my 40's when I realized that I could do that if I had to. That helped reduce any stress about having "enough".

3) How long will it be until you could retire with your current lifestyle?

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Re: Saved half of income last year - struggling to see the point

Post by MrDrinkingWater » Mon Jan 04, 2016 10:46 am

While I agree with other forum members that devoting adequate amounts of current income toward savings and super-savings will give you options and off ramps into early retirement, voluntary or involuntary, when you are in your 50's, I suspect that you might be living too ascetic of a life where you are meeting basic needs, but over-saving and under-spending on "wants".

You may be fine now, but there is some risk of having supersaver burnout at exactly the wrong time somewhere down the road.

Maybe you should consider conducting an experiment for just the next year: Plan to spend 50% of your current year income on "needs", 30% on "wants", and 20% toward "savings". Look at how a change like that in your spending and saving pattern might improve your quality of life.

Your wants might include things like spending a little more on slightly better shelter (beyond basic needs), and really having hobbies and some recreational activities that cost some money to do.

It is okay to continue to have a "want" be some additional super-savings, but try to keep your overall savings rate at 30% or less for the next year as part of the one year experiment to find and experience some "wants" that may possibly increase your satisfaction with daily life, even beyond your current level of happiness. You may not know what you are missing until you find and try some new activities.

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Re: Saved half of income last year - struggling to see the point

Post by protagonist » Mon Jan 04, 2016 10:53 am

The Wine Dark Sea wrote:I kind of feel cheated (?) in that I've busted my rear for years in a high-stress, high-hours profession to live the same kind of life that I'd be living if I made half as much. But if I were to spend that money, I don't know to what end - I (and my wife) have no interest in new cars, expensive clothes, or whatever. I have no interest in spending just to spend.

I guess I'd just like to hear your perspective. How to continue self-motivating?
I think you make a very good point.

I can see two good alternatives for you:
1. Stop "busting your rear", live an easier life, and make less money that is compatible with your desired lifestyle , saving just enough for the future
2. Keep "busting your rear", save half of what you earn, and retire early....as soon as you think you have enough. Then move to a tropical island, climb a tree and learn to play the flute. Or whatever your dream is.

Which you choose depends on your attitude towards life....whether you are more of an existentialist or more of a planner.

Snowjob
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Re: Saved half of income last year - struggling to see the point

Post by Snowjob » Mon Jan 04, 2016 11:01 am

As in all things -- balance.

Run the numbers, if by saving this amount for the next 10-15 years you will be way ahead of your retirement needs your saving to much and can afford to spend more today. I saved a ton my first 10 years and now I have taken the foot off the gas so to speak. I realized that the level of savings, if maintained would deprive me of many opportunities and experiences that Id love to have today -- while I'm still young. Better to smooth your consumption over time than to be it all on an uncertain future. Instead of saving half, would you be OK with 40%? 30%? I suspect so. Again, run the numbers and if your comfortable with a lower savings rate, go ahead and enjoy life a little more today.

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Re: Saved half of income last year - struggling to see the point

Post by TareNeko » Mon Jan 04, 2016 11:09 am

The Wine Dark Sea wrote:The problem is that I don't feel any sense of accomplishment in saving this kind of money, nor do I feel that this money has benefited me in any way. In fact I kind of feel cheated (?) in that I've busted my rear for years in a high-stress, high-hours profession to live the same kind of life that I'd be living if I made half as much.
Position of power. If you work in a more demanding job that pays more, and save as much as you can, then you'll be ahead of where you need to be financially. At that point, you can quit the high stress job and find something less demanding. And you can do that even before you reach your retirement number or financial independence number.

Here is a simple example. If my house is paid off, my yearly expenses would be around $30k. So I can save $30k * 25 = $750k and "retire", or, let's say if I saved $400k, I can quit my high paying but stressful job for something that pays around $30k to cover my expenses and let my $400k savings grow.. Position of power..

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Re: Saved half of income last year - struggling to see the point

Post by Swampy » Mon Jan 04, 2016 11:22 am

To paraphrase 'Dory' in Finding Nemo, "Just keep saving, just keep saving..."

You answered your own question without realizing it.
Our income just outstrips our expenses. The problem is that I don't feel any sense of accomplishment in saving this kind of money, nor do I feel that this money has benefited me in any way. In fact I kind of feel cheated (?) in that I've busted my rear for years in a high-stress, high-hours profession to live the same kind of life that I'd be living if I made half as much.
You just have to dig a little deeper. Maybe you should first take a step back and clear your head with some time off. In your position, it costs money to take time off - so I'd 'spend' it here. It's very easy not to see the forest for all the trees. Been there, done that.

Do you still want to be doing the same high stress, high hours profession 15-20-25-30-35 years from now?
Think of individuals who are - do they look happy to you?

You are in an enviable position. You're intelligent and have the ability to do whatever you WANT to do instead of being on the endless treadmill much sooner than others.

Cautionary tale: Don't go seeking ways to squander hard earned money. Unexpected expensive 'things' happen in life. I had colleagues that went in search of 'adventure' to fulfill a sense of adventure and purpose. Many found expensive ways to die. Others went bankrupt, others are still on the endless (for them) treadmill.
Last edited by Swampy on Mon Jan 04, 2016 1:20 pm, edited 2 times in total.
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Re: Saved half of income last year - struggling to see the point

Post by Rodc » Mon Jan 04, 2016 11:35 am

Depending on your profession cutting back to more reasonable hours might be a good thing to consider instead of waiting for retirement for any gratification. This is especially true when you kids are young.
I did this then fired back up when the kids were older. It was great.
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Re: Saved half of income last year - struggling to see the point

Post by White Coat Investor » Mon Jan 04, 2016 11:45 am

The Wine Dark Sea wrote:Hello everyone - this is my first post, but I have read these forums intermittently for the past couple of years and have always appreciated the straightforward and no-nonsense attitude most of you have.

My question is basically the one posted in the thread title. We are a early-thirties couple with young kids. Two weeks ago I put pencil to paper and realized that in 2015 we saved about half our gross income, without really meaning to. There was no goal or plan, no budget, and there wasn't even much of what I'd consider scrimping. Our income just outstrips our expenses. The problem is that I don't feel any sense of accomplishment in saving this kind of money, nor do I feel that this money has benefited me in any way. In fact I kind of feel cheated (?) in that I've busted my rear for years in a high-stress, high-hours profession to live the same kind of life that I'd be living if I made half as much. But if I were to spend that money, I don't know to what end - I (and my wife) have no interest in new cars, expensive clothes, or whatever. I have no interest in spending just to spend.

I guess I'd just like to hear your perspective. How to continue self-motivating? Is there some avenue for spending this "extra" money that would actually improve my life? Should I set goals just to get a feeling of satisfaction from achieving them? Or am I just having a premature midlife crisis :shock:
If there is something you could buy (including more free time) that would make you happier, go buy it. If not, don't feel bad putting the money away or giving it to charity or others you see who may need it. I have a similar issue and wrote a number of posts about it recently. We saved 5 times as much this year as our original financial plan called for. It's a great problem to have. One thing I'm spending money on this year is buying back some more of my time by working less.
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Re: Saved half of income last year - struggling to see the point

Post by HomerJ » Mon Jan 04, 2016 11:52 am

TareNeko wrote:
The Wine Dark Sea wrote:The problem is that I don't feel any sense of accomplishment in saving this kind of money, nor do I feel that this money has benefited me in any way. In fact I kind of feel cheated (?) in that I've busted my rear for years in a high-stress, high-hours profession to live the same kind of life that I'd be living if I made half as much.
Position of power. If you work in a more demanding job that pays more, and save as much as you can, then you'll be ahead of where you need to be financially. At that point, you can quit the high stress job and find something less demanding. And you can do that even before you reach your retirement number or financial independence number.

Here is a simple example. If my house is paid off, my yearly expenses would be around $30k. So I can save $30k * 25 = $750k and "retire", or, let's say if I saved $400k, I can quit my high paying but stressful job for something that pays around $30k to cover my expenses and let my $400k savings grow.. Position of power..
Exactly. All that money saved equals freedom. My wife and I saved like crazy for 10 years, without depriving ourselves at all... The last 2 years, she started to hate her job. We focused on paying off the mortgage, and then she got to quit. That's how saving so much improved her (our) life. She took a year off, and then found a job that paid half as much, but that let her work from home about 1/3 of the time that she used to work (so, really, a raise!)

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Re: Saved half of income last year - struggling to see the point

Post by Christine_NM » Mon Jan 04, 2016 11:56 am

The problem may be that you saved without a plan. The point is not only the money itself but also the sense of accomplishment that goes with meeting a goal. Just like working out is boring and you would not see the point unless you had the expectation of getting in or staying in good shape.

Make a financial plan.
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Re: Saved half of income last year - struggling to see the point

Post by rbaldini » Mon Jan 04, 2016 12:07 pm

Seems to me that the answer to everything is this:

(1) Determine your long term financial goals
(2) Save/invest enough money to meet them, and some extra (because things won't go as expected)
(3) Use the remainder in a way that makes you happiest (that could mean saving it all, if you are a miser)

In your case: If you are easily meeting your long term goals, then do what you want with your money. Don't let any of us tell you what that is.

Personal experience: As of the last few months I have decided to be somewhat more willing to spend money, as we are easily meeting our long term goals. But, not being the kind who naturally spends, I've found it hard to do. So I decided to ask myself: what have I spent money on in the past that has made me happiest? For me, the answer is highly particular: camping trips with friends and family. So now I make an effort to plan multiple trips per year. (Luckily camping is cheap.)

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Re: Saved half of income last year - struggling to see the point

Post by ClevrChico » Mon Jan 04, 2016 12:37 pm

A little money can buy a lot of time.

- We hired a cleaning service after our youngest was born. Now that things are calmer, we discontinued it.
- We pay a little more for grocery delivery. This freed up part of an weekend afternoon. Our weekends can now be dedicated to family time.
- I have an arrangement with my employer for an extra, unpaid week of vacation/year.


If you're feeling frazzled, I'd focus on making time for some R&R, but not necessarily spending money to spend money.
Last edited by ClevrChico on Mon Jan 04, 2016 12:38 pm, edited 1 time in total.

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Re: Saved half of income last year - struggling to see the point

Post by letsgobobby » Mon Jan 04, 2016 12:37 pm

Sounds like the solution is to ask for a pay cut.

Or get a lower paying job.

Or work half as much.

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Re: Saved half of income last year - struggling to see the point

Post by EnjoyIt » Mon Jan 04, 2016 12:52 pm

My experience:

I save about as much as you. 50% of gross is about where I am at. Probably more if you add in some more aggressive school loan repayments. After doing this for 6 years I find myself in a place of freedom. I currently have options.

1) I can spend more
2) I can cut my lifestyle down and retire today
3) I can work a little less and spend a little more

I looked at what makes me happy, and it turns out traveling a little more luxuriously makes me more happy. It also turns out working less makes me more happy as well. After 6 years of busting my butt, I have cut my hours and spend a little more on travel.

Since I started this path about 6 months ago, I enjoy my work and life outside of work so much more. In return I have no problem working a few extra years longer. Actually I hope that I continue to enjoy my job and willing to work part time right into my 60s.

My advice is to keep at what you are doing while you are still young and it is easier to work hard. Think of your goal as buying options and freedom in your life. Maybe it is worthwhile trying to learn and understand what makes you happy and what your career goals may be.

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Re: Saved half of income last year - struggling to see the point

Post by Meg77 » Mon Jan 04, 2016 2:31 pm

goingup wrote:
The Wine Dark Sea wrote:Or am I just having a premature midlife crisis :shock:
Could be. Maybe you're realizing that saving money or having a pile of money doesn't, by itself, feel very satisfying.

I have read and found to be true that happiness can be had by having these 3 things: Something to do. Someone to love. Something to look forward to. Perhaps planning a nice trip with wife and kinder would feel rewarding. :)
Something to do, someone to love, and something to look forward to. This rings true indeed.
"An investment in knowledge pays the best interest." - Benjamin Franklin

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Re: Saved half of income last year - struggling to see the point

Post by Watty » Mon Jan 04, 2016 2:55 pm

EmergDoc wrote: If there is something you could buy (including more free time) that would make you happier, go buy it. If not, don't feel bad putting the money away or giving it to charity or others you see who may need it. I have a similar issue and wrote a number of posts about it recently. We saved 5 times as much this year as our original financial plan called for. It's a great problem to have. One thing I'm spending money on this year is buying back some more of my time by working less.
Good point.

In addition to working less if hiring someone to do things like cut your grass, clean your bathrooms, paint your deck, change your oil, or shovel your driveway, etc buys you more time to spend with your family then that might be a good choice.

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Re: Saved half of income last year - struggling to see the point

Post by WIAV8TOR » Mon Jan 04, 2016 3:48 pm

It's great to save as much as one can, then again we won't be around forever. It's a balance that's different for different people. How often have you heard of someone near meeting an untimely death?

Yes, I save a good amount, but not to the detriment of living today. I've seen a fair amount of kids and young adults not very grateful. Much of the time people are better off when they've had it a bit hard for a while.

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Re: Saved half of income last year - struggling to see the point

Post by investnoob » Mon Jan 04, 2016 3:58 pm

Sounds like you have a lot of options.

But I agree that you need a plan. What is point of making this money, exactly? Are you trying to retire early? Send the kids to nice private universities? Once you have figured this out, you can then weigh your options.

Maybe you don't need to save as much and can be more liberal with your spending.
Maybe you can change jobs - earn less and get less stress.
Maybe you can accelerate your savings and retire/do something else.

I save about 25% of my net pay (15% of gross), and am fortunate enough to also contribute to a very good defined benefit pension plan (contributions to this plan are not included in my 25% savings rate). My plan is to continue working to 55 (pushing 40 now), retire, and pursue my hobbies.

Until then, I have decided that I don't need to be too aggressive with savings. I can easily save more, but the need isn't there. I've decided that to live the lifestyle I want (in the city I want) - a 25% savings rate suits me fine.

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Re: Saved half of income last year - struggling to see the point

Post by feh » Mon Jan 04, 2016 4:36 pm

The Wine Dark Sea wrote: I guess I'd just like to hear your perspective. How to continue self-motivating?
You're saving for your future self. When you are 50, you will be very pleased with the options you'll have.

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Re: Saved half of income last year - struggling to see the point

Post by vitaflo » Mon Jan 04, 2016 5:22 pm

Your problem isn't your savings rate or not spending money, it's your high-stress, high-hour job.

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Re: Saved half of income last year - struggling to see the point

Post by Boglemama » Mon Jan 04, 2016 6:52 pm

Options & freedom.

Your children: They are young. As they get older, you will want to provide other things for them. Activities, college, weddings, etc. If you have money, then you have the option and freedom to do that.

Employment: It might not be something that's always enjoyable. You said that it's high pressure and high hours. Enough money gives you the option and the freedom to say GOODBYE! I'm leaving. Living paycheck to paycheck doesn't allow that freedom.

Family: Do parents need financial help? Can they afford a retirement community? If not, you have the option and freedom to help them.

The more money you have, the more options and freedom you have. Does Warren Buffet give a sh*t what anyone thinks of him? Is he worried about job security? Check out the Mister Money Mustache site about early retirement too.

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Re: Saved half of income last year - struggling to see the point

Post by cherijoh » Mon Jan 04, 2016 8:17 pm

The Wine Dark Sea wrote:
The problem is that I don't feel any sense of accomplishment in saving this kind of money, nor do I feel that this money has benefited me in any way. In fact I kind of feel cheated (?) in that I've busted my rear for years in a high-stress, high-hours profession to live the same kind of life that I'd be living if I made half as much. But if I were to spend that money, I don't know to what end - I (and my wife) have no interest in new cars, expensive clothes, or whatever. I have no interest in spending just to spend.
If you made half as much money but spent the same amount, you would be living paycheck-to-paycheck - which in and of itself is a source of major stress. It doesn't sound like you have ever been faced with a major financial shock such as unemployment, unexpected medical bills, or a major large unexpected expense (e.g., car gets totaled in accident, your roof starts leaking, HVAC system dies, etc.). By having that cushion of savings and investments, you are protecting your family from distress - which should give you a significant sense of satisfaction/accomplishment. I'm not sure why it doesn't. Maybe you are burned out from your job and should look for something else that doesn't require as long hours or as much stress. Because you have been living below your means, you have options to find a less stressful job -- even if it doesn't pay as much. Or you might decide to go back to school. As others have pointed out, you have far more options than your "alternate self" (the one who makes half as much).

I find I get the best value from experiences. If you aren't taking full advantage of any vacation you have earned, maybe you should plan a trip with your family to relax and recharge. You can afford a baby sitter and a romantic dinner out with your spouse on a regular basis. As your kids get older, they may pick up sports, want music lessons, or to participate in a special program in the summer. Stuff like that takes money. You won't have to decide what you need to give up to be able to afford to give them what they want.

You also might consider volunteering your time to help some of the less fortunate in your community. I always find that gives me a fresh perspective on how lucky I am.

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Re: Saved half of income last year - struggling to see the point

Post by freebeer » Mon Jan 04, 2016 8:31 pm

The Wine Dark Sea wrote:... I've busted my rear for years in a high-stress, high-hours profession to live the same kind of life that I'd be living if I made half as much. But if I were to spend that money, I don't know to what end - I (and my wife) have no interest in new cars, expensive clothes, or whatever. I have no interest in spending just to spend.

I guess I'd just like to hear your perspective. How to continue self-motivating? Is there some avenue for spending this "extra" money that would actually improve my life? Should I set goals just to get a feeling of satisfaction from achieving them? Or am I just having a premature midlife crisis :shock:
Hello! I did the same in my 30s and it helped me later on move into a more rewarding and less stressful role outside MegaCorp land at a lower salary at 50. It also funded a divorce... not that this was planned or a Good Thing but it was serendipitous to have a retirement buffer big enough for two households not just one. What helped for me (and still does) is the reward of the work itself both inherently and the feeling of what I've accomplished. I often have joked that I would work for free but it's not entirely a joke. And high-stress (not so much high-hours but maybe a bit of that too) can be a positive for some people. After all climbing mountains is high-stress and on a climb it's certainly high-hours... and we do that for fun, at significant cost and objective risk. I don't regret at all what I'm doing now but in some ways I do miss the higher-stress world I had before (and might even have again in the future).

I come back to Steve Jobs famous graduation speech: “Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life. Almost everything--all external expectations, all pride, all fear of embarrassment or failure--these things just fall away in the face of death, leaving only what is truly important."

What is truly important is definitely not spending - so you are definitely on the right track there! But nor it is saving either, not for its own sake. But savings can equate to freedom to make the choices you want to make about what's truly important to you.

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Re: Saved half of income last year - struggling to see the point

Post by The Wine Dark Sea » Fri Mar 18, 2016 4:10 pm

Hi everyone - OP here. I haven't signed in in the 2+ months since I made this thread but rest assured I did read every response, and thought carefully on them. I do appreciate the various perspectives raised.

I have decided to, in the medium term, set a financial goal for myself: save enough non-retirement funds to pay off the mortgage by my 37th birthday. Whether I actually do pay it off is a question for a later day; what's important is knowing I have enough money to do so. I think working towards this goal, including tracking it on a snazzy color coded spreadsheet, will give me some sort of illusion of progress. Again, thanks to all for your comments and help.

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Re: Saved half of income last year - struggling to see the point

Post by abuss368 » Fri Mar 18, 2016 4:12 pm

You are on the path to financial independence. Stay the course!
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Re: Saved half of income last year - struggling to see the point

Post by cjhud32 » Fri Mar 18, 2016 4:16 pm

Pinotage wrote:Congratulations! Strong work saving and even stronger work not noticing that you were doing it.

If you're looking for a reason why, one word - Options.

Saving like you do, and living like you do, opens up options that are simply not available if you are living paycheck to paycheck.
That is a phenomenal way of looking at this scenario as I feel the same as the original poster. Thank you for giving me one word to summarize: options.

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Re: Saved half of income last year - struggling to see the point

Post by joebh » Fri Mar 18, 2016 4:49 pm

The Wine Dark Sea wrote:There was no goal or plan, no budget, and there wasn't even much of what I'd consider scrimping. Our income just outstrips our expenses. The problem is that I don't feel any sense of accomplishment in saving this kind of money, nor do I feel that this money has benefited me in any way.
There's your problem - you don't have a plan, nor any goals.

Sit down and think about what you want out of your life now, in the future, and particularly later on when you retire. Those form your goals.
Then set up a plan to achieve those goals.

Working hard toward achieving important goals is the best way to gain a sense of accomplishment. Just working without a thought as to why is a mistake.

Life moves pretty fast. If you don't stop and look around once in a while, you could miss it.

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