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I think you need to balance things out in terms of your saving/spending to enjoy life. Like someone mentioned above me about being 70 years old and not being able to do the things you wanted to do while you were younger because you saved extremely for retirement. You can still have 'things' while you're younger while saving for retirement. It's the individuals that over do it with the buying of things that get them into financial trouble during retirement. You don't need the biggest house, the most expensive car, upgrade to a new iPhone or iPad every single time a new one comes out. Who cares what the Jones have? Don't try keeping up. You'll still have things and save for retirement!
I agree, it's a balance between spending and saving. It's important to take breaks and give yourself a few perks, but some folks just take it to extremes. My brother complains he won't be able to retire for a long time, but he's purchased 3 brand new cars and a brand new boat over the last 12 years. By my calcs, he has lost over $40,000 in depreciation on vehicles alone. If he had invested that money in even a conservative method and just drove a used car he would have had something approaching $100k with compounding and the money he lost due to interest because all the vehicles were financed. Instead he has nothing. The cars and boat have been sold at a loss and he has nothing to show for it. Sure he had some fun times on the boat, but not worth the thousands he dropped on it. This is the stuff that drives me crazy because it is invisible to someone with no idea about finances. Personal finance should be a required course of all high school seniors.
I think you need to balance things out in terms of your saving/spending to enjoy life. Like someone mentioned above me about being 70 years old and not being able to do the things you wanted to do while you were younger because you saved extremely for retirement. You can still have 'things' while you're younger while saving for retirement. It's the individuals that over do it with the buying of things that get them into financial trouble during retirement. You don't need the biggest house, the most expensive car, upgrade to a new iPhone or iPad every single time a new one comes out. Who cares what the Jones have? Don't try keeping up. You'll still have things and save for retirement!
-Cheers.
Exactly! Find what's important to you. To me it's family, travelling (usually to see family) and spending time doing things, rather than spending money buying things. I'm happy with our tiny apartment, my economical car and my cheap smartphone. I'm looking forward to our summer getaway at the beach and our planned winter vacation back up North with the new baby! If it wasn't for the baby coming and me not being sure if I can leave her home with MIL or a sitter, we would be going to see either Cher or Gaga or some other concert in the Spring. We still might!
I agree, it's a balance between spending and saving. It's important to take breaks and give yourself a few perks, but some folks just take it to extremes. My brother complains he won't be able to retire for a long time, but he's purchased 3 brand new cars and a brand new boat over the last 12 years. By my calcs, he has lost over $40,000 in depreciation on vehicles alone. If he had invested that money in even a conservative method and just drove a used car he would have had something approaching $100k with compounding and the money he lost due to interest because all the vehicles were financed. Instead he has nothing. The cars and boat have been sold at a loss and he has nothing to show for it. Sure he had some fun times on the boat, but not worth the thousands he dropped on it. This is the stuff that drives me crazy because it is invisible to someone with no idea about finances. Personal finance should be a required course of all high school seniors.
This is very very true! I was actually speaking to a friend of mine who is a teacher at one of the public schools here. He teaches technology, which covers a lot of things and includes learning software such as Adobe, some Office products, a little programming and the like. He said that you can approach a school with a proposed class and see if they will go for it. I think doing a personal finance class should be a requirement - just have to find a way to sell it to the schools.
Personal finance should be a required course of all high school seniors.
Amen to that! I've been saying that for years. I also think you should have to wait until at least 25 to get a credit card, but that's another story, lol.
I have a hard time saving for retirement because my Mother never made it to even collect socialsecurity Don't get me wrong I am saving, but many many times I think WHY? Our school district requires consumer economics to graduate h.s. My (private) school required it as well. Most worthwhile class I ever took.
Define living expenses. A lot of people think thats a brand new car and every shiny gadget the feel they should have. People always seem to have money for what they want but never for what they need.
I pay $700 a month towards student loans, would LOVE to put that money towards retirement, I'm young now though. My husband and I both match our employees 401ks, and I also put 5% extra towards my companies stock purchase program. I also have a retirement from a previous job as well. That $700 a month translates to enough for hubby and I to put at least $4k a year towards an IRA.
Hubby and I do things like enjoy ourselves, but we also buy used things like clothes. We shop with coupons, etc. We live in a nicer neighborhood, but would rather have that than worry.
We don't have new cars. I did purchase my car new, but paid it off early, and it's 7 years old now with 100k miles on it, I plan on driving it as long as possible, then buying another used car. My husband's car was bought used.
I think it's easier said than done for many people to save for retirement. But I agree that the cost of living makes it harder. Maybe if I were taxed a little less I could afford to put away more than 10% a month towards retirement.
That's what I was going to say. A lot of people are living paycheck to paycheck trying to keep up with today's bills. Saving for retirement is something they can put off, so that's what waits (and then never happens). They can't put off paying for housing, utilities, food, and transportation to and from work.
For some people your explanation is a true and accurate description of their predicament, but for others it's an excuse and an exercise in disingenuousness. What do I mean? Let's analyze your last sentence:
1. Housing: Well, what sort of housing? Are granite counter-tops de rigueur? Does each kid need his or her own bedroom? Is there a feeling that we deserve a certain level of housing? Are feelings of insecurity entering into the housing decision, leading us to "keep up with the Joneses" (at whatever level slightly above our means the Joneses may be located)?
2. Utilities: Sure, I admit there's less flexibility for utilities. But is there any attempt at frugality at all? Is there any self-discipline in where the thermostat is set?
3. Food: An enormous range of possibilities exists to feed X number of people. How often does the family eat out? Do they feel they deserve to eat out? Where do they eat out when they do? Is steak, even at home, de rigueur a certain number of times a week? Do the kids always have pocket money for wasteful and unhealthy snacks on the way home from school?
4. Transportation to and from work: In what style is that transportation supposed to be? Do the parents feel that certain cars or age of car is "beneath" them? See #1 above about feelings of insecurity.
Sure, at or below a certain level of income it is nearly impossible to save. I cannot put an amount to it because there are too many variables, including but not limited to the cost of living of the place in question and the number of children, if any, involved.
So to summarize, your post can be an excuse or a genuine reason, depending on circumstances.
I pay $700 a month towards student loans, would LOVE to put that money towards retirement, I'm young now though. My husband and I both match our employees 401ks, and I also put 5% extra towards my companies stock purchase program. I also have a retirement from a previous job as well. That $700 a month translates to enough for hubby and I to put at least $4k a year towards an IRA.
Hubby and I do things like enjoy ourselves, but we also buy used things like clothes. We shop with coupons, etc. We live in a nicer neighborhood, but would rather have that than worry.
We don't have new cars. I did purchase my car new, but paid it off early, and it's 7 years old now with 100k miles on it, I plan on driving it as long as possible, then buying another used car. My husband's car was bought used.
I think it's easier said than done for many people to save for retirement. But I agree that the cost of living makes it harder. Maybe if I were taxed a little less I could afford to put away more than 10% a month towards retirement.
I'm assuming by your post that you don't have kids. If you do at some point and struggling now, how do you expect to survive (possibly on one salary) and w extra mouths to feed?
I think desires are more emotional than cerebral. Greed and fear drive economic decisions more times than intelligent thought.
As a society, we spend the majority of our time…
working jobs in which we feel trapped...
in order to get money to buy things we don't need....
in order to impress people we don't really like....
I work next to a guy that has met the age requirement (55 years of age) to retire but cannot due to kids in High school and college and mortgage payment for nice big house in suburbs. So now he has to work many years past retirement age in order to pay for these things because he has the attitude you only live once. I always tease him by saying just think you could be home chillin instead of putting up with all this bs at work here. He counters that he enjoys working and maybe he does enjoy some aspects of the job but other times he gets so pissed off because he is forced to work overtime that he walks off the job in the morning claiming stress or sickness. So now he's trapped to work at a job that is becoming more unpleasant as time passes by. He didn't save enough because he had to keep up with the Joneses and now he has to work where as he could enjoying his 50's retired.
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Don't get me wrong I am saving, but many many times I think WHY? Our school district requires consumer economics to graduate h.s. My (private) school required it as well. Most worthwhile class I ever took.
