What’s important and what’s not?

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nydoc
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What’s important and what’s not?

Post by nydoc »

Hi,
I have started to get busier at my work with commensurate increase in my income. I used to fuss over every expense but have realized that it’s taking a lot of my time which K could instead use for my family and career. Example- looking around for a modem or router instead of just getting one from the ISP. I have a fear if I start to ignore little things soon I will be ignoring big expenses and waste significant amount of money. So question is how do you decide where to focus up on and what to let go financially?
Thank you.
livesoft
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Re: What’s important and what’s not?

Post by livesoft »

You delegate such decisions to your spouse and children.
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123
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Re: What’s important and what’s not?

Post by 123 »

Those of us with a mindset of getting the best value for our dollar likely all have this problem to some degree. My spouse is afflicted with it far less than I am so if she wants something that is not unreasonable she gets it. Yet I will watch for a sale to save $30 on a $500 TV even though that technology ages in the time I wait for the sale.

I have found that I will pay more for something more easily if there is a significant convenience, return, or warranty benefit from a source like Amazon or Costco.
Last edited by 123 on Sun Jul 05, 2020 4:43 pm, edited 1 time in total.
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oldfort
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Re: What’s important and what’s not?

Post by oldfort »

A reasonable rule of thumb is if something costs less than you make in an hour, it's not worth worrying about. Assuming you can get paid for picking up extra hours/shifts/procedures, a doctor who earns $300/hr, is losing money if they spend an hour on the phone with the cable company to get $20/month taken off their cable bill.
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whodidntante
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Re: What’s important and what’s not?

Post by whodidntante »

For high income people the marginal utility of a dollar is lower. It's up to you where to draw that line. I do suggest you try to avoid bad ideas that become recurring expenses, like renting a cable modem as in your example. Doing that for five years is hundreds of dollars wasted. But then, it's quick and easy for me to order a suitable modem. And avoid the big one time mistakes like purchasing too much house, or too much car. This can be tens of thousands down the toilet.
dachshunddad
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Re: What’s important and what’s not?

Post by dachshunddad »

Here are some things I do personally. Small and/or reversible decisions should be made quickly. For example, you can save a lot of money getting your own modem/router. Don't look around, order from Costco and have it delivered. Don't spend your time researching/shopping around. This is small and reversible. These types of decisions can suck all of your time if you research them too much.

Go for bang for your buck. For example, I spent a whole day youtubing how to fix something in my house. I did a great job and it felt good to see my work. However, it took a whole day to educate myself, get the tools/supplies, and fix it. Like you , I'm working a lot and have limited free time. This just isn't a good use of my downtime. Now I have a handyman/contractor come every 6 months or so and I make a big list and it's done in a day or two. Yeah, it costs more than doing it myself but it saves me a ton of time. Same idea with lawn care.

Finding a balance is key and takes time.
wackerdr
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Re: What’s important and what’s not?

Post by wackerdr »

oldfort wrote: Sun Jul 05, 2020 4:41 pm A reasonable rule of thumb is if something costs less than you make in an hour, it's not worth worrying about. Assuming you can get paid for picking up extra hours/shifts/procedures, a doctor who earns $300/hr, is losing money if they spend an hour on the phone with the cable company to get $20/month taken off their cable bill.
This is pretty good rule of thumb. Over time, learned to get outside help for lawn mowing, shoveling and handy man stuff that I don’t enjoy, not obsessively cross shopping for few dollars. For me it improved quality of life.
New Providence
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Re: What’s important and what’s not?

Post by New Providence »

wackerdr wrote: Sun Jul 05, 2020 5:03 pm
oldfort wrote: Sun Jul 05, 2020 4:41 pm A reasonable rule of thumb is if something costs less than you make in an hour, it's not worth worrying about. Assuming you can get paid for picking up extra hours/shifts/procedures, a doctor who earns $300/hr, is losing money if they spend an hour on the phone with the cable company to get $20/month taken off their cable bill.
This is pretty good rule of thumb. Over time, learned to get outside help for lawn mowing, shoveling and handy man stuff that I don’t enjoy, not obsessively cross shopping for few dollars. For me it improved quality of life.
Yes, I agree with both of these comments.

Focus on your career, your energy should be on earning more. Penny pinching is not productive and at times can be exhausting. (Unless bargain hunting is your hobby).
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tyrion
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Re: What’s important and what’s not?

Post by tyrion »

1. I focus more on recurring costs than one time costs. Paying $30/month more for a bunch of premium channels can add up over time, much more than overpaying to see a movie because the time is convenient (vs the cheaper matinee). Avoid unnecessary lifestyle creep, but do buy the things that make a difference.

2. Under a certain dollar limit, I really don't worry too much for one time purchases. That dollar limit changes somewhat due to long term and short term criteria. If I've recently purchased something large, I tend to drop the 'don't care' limit until the credit card has hit the next monthly cycle.

3. I'm sometimes more concerned about getting ripped off than whether something is too expensive, so I tend to be more willing to buy something at a fixed-markup location like Costco than I am from somewhere with varied pricing like amazon. On amazon I will usually check camel camel camel just to make sure I'm not overpaying. I know this probably doesn't make a ton of sense, but it's what I do.



While I understand the mentality of paying someone to fix something for me, I often get a lot of satisfaction from figuring out the repair myself even if it's not a great financial choice.
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ResearchMed
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Re: What’s important and what’s not?

Post by ResearchMed »

wackerdr wrote: Sun Jul 05, 2020 5:03 pm
oldfort wrote: Sun Jul 05, 2020 4:41 pm A reasonable rule of thumb is if something costs less than you make in an hour, it's not worth worrying about. Assuming you can get paid for picking up extra hours/shifts/procedures, a doctor who earns $300/hr, is losing money if they spend an hour on the phone with the cable company to get $20/month taken off their cable bill.
This is pretty good rule of thumb. Over time, learned to get outside help for lawn mowing, shoveling and handy man stuff that I don’t enjoy, not obsessively cross shopping for few dollars. For me it improved quality of life.
It's not just "what you could earn in an hour". There is another very important factor, especially as you get more busy (and are earning more so there can be a bit of extra convenience, etc.).
Think about whether the task is something you are fairly indifferent to, or something you might sort of enjoy as a change or for itself, or... is it something you dread?
Tasks that could take approximately the same amount of time should probably be evaluated differently based upon whether you might enjoy the diversion, or whether you are muttering under your breath something like, "I'd have paid someone x times my hourly rate to avoid being here/doing this now. Never again!!"
Also, some tasks my leave you more physically exhausted, and if you are already getting short on sleep or just feel tired, then those are probably tasks to leave to others.

Start by hiring out just one or a couple of tasks, and see how you feel? Is it relief, e.g., "I should have done this sooner!" Or is it something more like regret, e.g., "I could have done this myself and it wouldn't have taken long at all; heck, I might have enjoyed learning more about how toilets work" or whatever. Sometimes the most unexpected things can be interesting, truly.

RM
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abonder
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Re: What’s important and what’s not?

Post by abonder »

Lots of good advice. I personally think that people who tend towards heavy analysis/optimization won’t be happy simply ignoring that instinct. Rather, I think it makes sense to assess where and how your efforts are best directed. The cost of your time can be one part of the equation but shouldn’t be the only.

Would definitely try to outsource anything dangerous or anything that consumes a lot of time without long term benefit. Some tasks might make sense to outsource fiscally but either bring you joy yor aren’t convenient to outsource. For example, right now, some people might not be comfortable having somebody come to clean their living space due to covid concerns. So it might make sense for them to do their own cleaning even if, mathematically it makes more sense to outsource.

Additionally, things that you do to advance career/earnings are likely to pay off handsomely as the rewards of higher salary/greater opportunity are recurring, not one time benefits. Also I personally like projects where I can learn a skill that I will apply again (like painting). Projects that require very specific and non-transferable skills are less appealing.
Afty
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Re: What’s important and what’s not?

Post by Afty »

I suggest focusing on big things and on absolute dollars saved rather than percentage saved. Saving 50% of a $10 item is $5. Saving 10% of a $10,000 item is $1000. It’s better to spend your time saving the $1000.

I also agree with a previous poster who recommended prioritizing tasks you enjoy vs. ones you hate. I sold my car last year private party for about $2000 more than the trade-in offer, but I wish I had taken the trade-in offer. I absolutely hated dealing with random people from Craigslist/Facebook, people trying to rip me off, people making appointments and not showing, etc.
e5116
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Re: What’s important and what’s not?

Post by e5116 »

Good topic. I struggle with this. I like doing quick internet searches to price compare on electronics and the like as it's easy and I derive some enjoyment out of it. However, something like house cleaning I am VERY happy to pay somebody else to do. It was a source of angst/stress in my relationship, don't enjoy doing it, takes a lot of time. So even though a maid costs thousands over a year, still worth it to me... Travel is another area I love trying to find the best deal/use of dollars and points (well used to....). Might not always be logical from a dollars and sense perspective but I think it's more based on enjoyment derived from it or not.
MathWizard
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Re: What’s important and what’s not?

Post by MathWizard »

I manage lots of computer equipment at work. I have in the past bought my own router and wifi router, and could do so again.

I now pay $7 per month to the cable company for both. I could do it for less if I stayed with the same company and bought my own and set it up. However any time there is a problem, I spend a long time diagnosing my own equipment. By using the ISP's I just call them up after a few small diagnostic steps, and they will come out and fix the problem. That is the time savings for me .

I also pay for a few things that I used to do myself. Oil changes, car repair, bathroom remodel, roof repair ,replacing windows on the house to name a few recent ones. My time is currently worth more than what I can hire someone else to do the work.
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SB1234
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Re: What’s important and what’s not?

Post by SB1234 »

nydoc wrote: Sun Jul 05, 2020 4:33 pm Hi,
I have started to get busier at my work with commensurate increase in my income. I used to fuss over every expense but have realized that it’s taking a lot of my time which K could instead use for my family and career. Example- looking around for a modem or router instead of just getting one from the ISP. I have a fear if I start to ignore little things soon I will be ignoring big expenses and waste significant amount of money. So question is how do you decide where to focus up on and what to let go financially?
Thank you.
Sounds like you may need to adopt a spending plan aka budget for monthly adhoc expenses. This helped me defocus from all the small adhoc expenses that you do over the month. For me this includes categories like eating out, gas, groceries, Costco, walmart, Amazon etc). I estimate amount for this based on the i have spent on these items over the past few months using Bank account tracking tools.
Once I did this I never have to fuss over these many small expenses. As the decision to spend was made when the budget was made. I also use a separate account for these purchases so I can track that I am not exceeding this ad-hoc category budget I set for myself.
Then I can still focus on big ticket items as needed.
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TheDDC
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Re: What’s important and what’s not?

Post by TheDDC »

nydoc wrote: Sun Jul 05, 2020 4:33 pm Hi,
I have started to get busier at my work with commensurate increase in my income. I used to fuss over every expense but have realized that it’s taking a lot of my time which K could instead use for my family and career. Example- looking around for a modem or router instead of just getting one from the ISP. I have a fear if I start to ignore little things soon I will be ignoring big expenses and waste significant amount of money. So question is how do you decide where to focus up on and what to let go financially?
Thank you.
Bad example here. Granted my life is IT so I have a bias toward getting a deal on the low hanging fruit. It’s really easy in this case not to get ripped off by being prudent. I don’t care how much someone may say they have, paying money and getting nothing out of it does not help anyone’s finances.

Agree with the person who said if you’re not interested you should be delegating to other household members.

-TheDDC
Rules to wealth building: 90-100% VTSAX piled high and deep, 0-10% VIGAX tilt, 0% given away to banks, minimize amount given to medical-industrial complex
oldfort
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Re: What’s important and what’s not?

Post by oldfort »

TheDDC wrote: Sun Jul 05, 2020 10:02 pm
nydoc wrote: Sun Jul 05, 2020 4:33 pm Hi,
I have started to get busier at my work with commensurate increase in my income. I used to fuss over every expense but have realized that it’s taking a lot of my time which K could instead use for my family and career. Example- looking around for a modem or router instead of just getting one from the ISP. I have a fear if I start to ignore little things soon I will be ignoring big expenses and waste significant amount of money. So question is how do you decide where to focus up on and what to let go financially?
Thank you.
Bad example here. Granted my life is IT so I have a bias toward getting a deal on the low hanging fruit. It’s really easy in this case not to get ripped off by being prudent. I don’t care how much someone may say they have, paying money and getting nothing out of it does not help anyone’s finances.

Agree with the person who said if you’re not interested you should be delegating to other household members.

-TheDDC
Most items have an opportunity cost, even if you don't explicitly account for it. I don't know exactly what the OP makes. A doctor who chooses to work one fewer hour in a week, at $150/hour, because he chooses to spend the hour researching routers or has to drive 30 minutes each way to return the router to the ISP has an opportunity cost of $150 less taxes. It's good to remember what seems really easy to us, might not seem so obvious to a non-techie. How many people don't know the difference between a single band vs dual band vs tri-band router?
TheDDC
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Re: What’s important and what’s not?

Post by TheDDC »

oldfort wrote: Sun Jul 05, 2020 10:25 pm
TheDDC wrote: Sun Jul 05, 2020 10:02 pm
nydoc wrote: Sun Jul 05, 2020 4:33 pm Hi,
I have started to get busier at my work with commensurate increase in my income. I used to fuss over every expense but have realized that it’s taking a lot of my time which K could instead use for my family and career. Example- looking around for a modem or router instead of just getting one from the ISP. I have a fear if I start to ignore little things soon I will be ignoring big expenses and waste significant amount of money. So question is how do you decide where to focus up on and what to let go financially?
Thank you.
Bad example here. Granted my life is IT so I have a bias toward getting a deal on the low hanging fruit. It’s really easy in this case not to get ripped off by being prudent. I don’t care how much someone may say they have, paying money and getting nothing out of it does not help anyone’s finances.

Agree with the person who said if you’re not interested you should be delegating to other household members.

-TheDDC
Most items have an opportunity cost, even if you don't explicitly account for it. I don't know exactly what the OP makes. A doctor who chooses to work one fewer hour in a week, at $150/hour, because he chooses to spend the hour researching routers or has to drive 30 minutes each way to return the router to the ISP has an opportunity cost of $150 less taxes. It's good to remember what seems really easy to us, might not seem so obvious to a non-techie. How many people don't know the difference between a single band vs dual band vs tri-band router?
This is why I advised OP to consult with another member of the household. It's money you don't need to spend. Money you don't need to waste. Heck, it doesn't take long at all. It's a recurring cost, so not small over time.

-TheDDC
Rules to wealth building: 90-100% VTSAX piled high and deep, 0-10% VIGAX tilt, 0% given away to banks, minimize amount given to medical-industrial complex
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