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Old 11-15-2018, 06:19 AM
 
Location: Cebu, Philippines
2,388 posts, read 879,538 times
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There were times in my life when I didn't need to be frugal. But I was anyway, on a daily lifestyle basis, I just didn't sweat it if something came up that I had to let frugality slide a little.
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Old 11-15-2018, 06:51 AM
 
65,330 posts, read 66,785,192 times
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Quote:
Originally Posted by athena53 View Post
That's close to mine- a big % of my expenditures are travel, charitable donations and adding to the granddaughters' 529 accounts. I'd hate to cut any of those back but I could if I had to.

When I read about seniors "losing all their investments" in a stock market crash, I figure it's one of two things: either they panicked and sold at the bottom, or else whatever withdrawal rate they were using was largely for necessities and they couldn't reduce it, so they kept withdrawing the same $$ amount from a smaller pot.
actually we have not had a situation since 1966 where a retiree drawing 4% inflation adjusted actually had to take a cut in draw, unless they went over .

but most of us mentally just are not going to spend the same if a sudden big reduction in dollars happens . i know being down 150k plus from where we were mentally i cant get myself to spend as freely as we were .

so having flexibility is very important . unfortunately for many they won't understand the concept , that it is not just living below your means but how you live below your means , that becomes important , until they get there .

like tyson said " everyone has a plan until they get punched in the face "
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Old 11-15-2018, 07:01 AM
 
Location: Pennsylvania
9,447 posts, read 3,256,909 times
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Quote:
Originally Posted by jaxrhapsody View Post
personally i'd live below my means. Most just make more than they spend, even though they buy a bunch of expensive crap.
bang!
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Old 11-15-2018, 09:51 AM
 
Location: NJ
22,890 posts, read 28,791,609 times
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so how do we define frugality for a rich person?

warren buffet is a silly example but for me it seems he has a mental disorder, not simply frugality. but i dont for one second think that he is a good example because he is so unique. most rich people are spending more money but the reality is that expenses dont increase as much as their income.

the most expensive property in my town is currently listed for about $7 million. but after that, $2.4 million gets you to the next tier of expensive properties. what that means is that a rich person's house costs substantially less to them as it does to you. you can only be in one place at a time, eat a certain amount and drink a certain amount per day. its pretty easy to accumulate savings when you are earning millions a year.
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Old 11-15-2018, 11:08 AM
 
Location: The Triad (NC)
26,971 posts, read 58,392,088 times
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Quote:
Originally Posted by CaptainNJ View Post
so how do we define frugality for a rich person?
It's fair to say that frugality is ONLY applicable to those with some degree of financial worth.
That doesn't have to mean "rich" but it does mean having a reliable source of adequate income.
At the least enough worth that the CHOICE to buy X vs Y can actually be a choice.

Too many use the term frugal to describe/define what the poor will/must do in order to hold it together.
There are some parallels but tolerance of this usage is mostly about being nice to or PeeCee about that cohort.
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Old 11-16-2018, 12:56 AM
 
9,201 posts, read 3,819,204 times
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Quote:
Originally Posted by CaptainNJ View Post
so how do we define frugality for a rich person?
define it for a poor person first... because to me, poor people are not frugal, they are cheap. they call themselves frugal because being called cheap hurts their feelings

frugality is when you have the option to spend excessively and choose not to, poor people do not have this option, so they cant be frugal to me. they either go cheap or spurge...

if a poor person thinks cutting back the heat and wearing clothes to stay warm is "frugal", they are deceiving themselves... they only make that choice because they cant afford both the heat and the water bill or food bill or etc. they have to compromise on where their money go, this isnt frugal, its called stretching your paycheck because you dont have enough money.
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Old 11-16-2018, 03:18 AM
 
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by definition frugal means :
sparing, frugal, thrifty, economical mean careful in the use of one's money or resources. sparing stresses abstention and restraint. sparing in the offering of advice frugal implies absence of luxury and simplicity of lifestyle. ran a frugal household thrifty stresses good management and industry. thrifty use of nonrenewable resources economical stresses prudent management, lack of wastefulness, and use of things to their best advantage. an economical health-care plan

so it really has nothing to do with financial resources . lower incomes may just have no choice but to be careful in the use of their money hence frugal
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Old 11-16-2018, 03:32 AM
 
Location: Honolulu, HI
4,941 posts, read 1,249,111 times
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Quote:
Originally Posted by mathjak107 View Post
Living below your means is one of those sayings that are neither meaningful nor actionable .
Agreed, it's a lazy cliche that's been used too many times. There's millionaires who barely live below their means while there are burger flippers who greatly live below their means. Yet their quality of life and financial status is still far different despite both living below their means.

But the point is that "living below your means" means 100 different things to 100 different people.

Living beloew your means for a rich person means having 3 cars instead of 6. Living below your means for a poor person means buying fast food at the dollar menu because you can't afford quality organic whole foods.
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Old 11-16-2018, 04:14 AM
 
65,330 posts, read 66,785,192 times
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what there needs to be is more information about what constitutes a good make up of " living below your means " or HOW TO SPEND ,like the example i posted above .

there is so much research in to how to develop a retirement income stream and how to allocate yet very little on setting up a lifestyle with flexibility .

there needs to be more guidance for different situations so people know how to get that healthy ratio so if push comes to shove they did not put a lifestyle in place of mostly fixed amount bills with no where to cut back .

we are retired and we use a variable withdrawal method . it provides a dynamic income yearly . we get rewarded in up years more than the 4% safe withdrawal rate would , but in down years we could see up to a 5% cut . if we hit an extended downturn we could see a few years with a 5% cut so it is important to have flexibility in a wide portion of your spending .

this is what i posed earlier , but this would not apply to retirees , so this is why different situations need a different plan .

this is only one example of a spending plan that is actionable . this allows for 30% of the budget to be flexible .

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Old 11-16-2018, 07:07 AM
 
4,367 posts, read 4,469,748 times
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Iíd consider myself pretty frugal. I doubt Iíd consider myself rich, probably high income(atleast for my area) and it hasnít really changed our spending habits. About 6 years ago we had a HH income of about $60k, now itís 4x that and we still live a very similar lifestyle after you count the 2 kids in daycare. I just donít see the value in spending money just to spend. Iíd rather save a ton and be in a position to never need to work again as soon as possible than go out to expensive dinners 2x a week or buy a bunch of groceries that get thrown away every week, or a new car every 3-4 years, etc.
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