Maladaptive Frugality
herbertlui.net
herbertlui.net
Spending and getting into debt are useful tools. But I don't have any friends in tech who need to be told "hey dude, you should be spending more". I have quite a few friends who would be better off spending less.
My mother, for example, refuses to replace her iPhone SE with something with a larger screen despite 1) having failing vision and difficulty reading the screen, 2) using her iPhone every day, 3) easily being able to afford it. The idea of spending $1,000 on a phone is just something she is unable to bring herself to do, even though I think it would help alleviate a real source of frustration in her life.
My father, when he started shopping for his most recent car (and probably his final car), set out with the intent to buy a luxury car. But again, despite being able to easily afford one, all he was able to bring himself to buy was a well-equipped Toyota. Don't get me wrong - it's a great car and has served him incredibly well. But it makes me a little sad that he wasn't able to bring himself to finally treat himself to a luxury car after a lifetime of hard work and saving. They did a lot of long road trips together in that car in retirement, and I think they would have enjoyed something a bit more luxurious (though on the other hand, the reliability of the Toyota is not to be discounted).
I'm not that old, but every time I upgrade my PC or phone, some of my workflows break and I need to pointlessly re-learn things I'd rather not re-learn. UI buttons get moved around, icons change, some settings are removed and others are added... this was exciting the first ten or twenty times, but it's just tiring now.
Basically, I'm at this stage in life where my reaction to systemd wasn't "oh wow, this is progress" but "ugh, I need to learn how to start, stop, or modify services again". In another ten years, I'll probably just say "no, I'm not doing this again, just let me use my old computer for as long as possible".
I must be young at heart while >60 years old; my reaction was "why is everybody whining about it, it's pretty nice, I like it". Same with jj vs git, jj is amazing!
The annoying thing is that the latter group is over-represented in tech and a lot of core products like phones force people into that path. Most of the non-tech people I know couldn't care less about the latest iphone/android update,they just want the damn buttons to stay the same so they can do the stuff they were doing yesterday. But the only two phone platforms both change their UX regularly and users just have to go along with it.
For me, the killer feature is updating some commit deep inside some feature branch, and all child commits and branches get auto-updated, no more faffing with endless rebases. Also conflict handling is so much more pleasant than git's.
Even the cheapest car on the market feels luxurious now.
In comparison the difference between a Toyota and a Lexus is marginal.
Expensive cars are mostly about status signalling, we are long past good enough.
A Yaris and a Ranger (who doesn’t love a Ranger!) are going to serve you well, but they’re not going to have the active and passive safety features of a more modern car. Put next to cost it makes it a bit harder to perform maladaptive frugality.
Uhm, only if you are counting the most basic utility, then you're right.
However if you actually enjoy driving (A->A driving), there is a HGUE difference and it's not just signaling. It's that you probably can't tell the difference, or don't care.
There is no comparison between driving a new Porsche or Bentley vs a new Toyota or even a Lexus.
If you compare a Porsche Boxster to a Toyota, the Porsche is much more of a driver's car and if you're the right kind of driver, there's simply no comparison. (We'll ignore the FT86 / 86 for the moment ;)!)
If you buy a Bentley... you probably pay someone else to drive it for you.
Something to remember in all of this is hedonic adaptation. Buying a Porsche will feel in the moment different from buying a Toyota. But a few months later, you will be driving "your car" and much of the time, you'll be thinking about driving, traffic, signs, speeds, lights, pedestrians, bikers, the song you're playing, your next turn, a dozen other things. For the most part, you won't be thinking about how much "better" your car is in comparison to the alternative. You'll be used to it. You'll have adapted.
Different cars are certainly different for a personality who is drawn to the merits of automobiles. My favorite car was a $20K used Mazda 3 hatchback. I liked it much better than some much more luxurious cars (including the Polestar 2 Performance Plus I have now.) But that wasn't because of luxuries (the Mazda had luxury and heated seats and climate control and swivel headlights and adaptive cruise control and... and...) but because I enjoyed pressing the clutch, pulling the gear lever into second, releasing the clutch, putting my foot down, and steering through a corner. (The Polestar has some merits as well, but they are very different merits.) The Mazda 3 had a whopping ~186 HP... but it was fun. (Don't get me started on my 2007 Honda Fit... oh the memories!)
As far as the adaptation, maybe. But driving a Toyota never brought a smile on a twisty, ever. But it was reliable and always started :) The Porsche, every time, it never gets old [feeling] after many years.
I ended up asking them what they do with their Porsche and apparently it's mostly going to car meetups and saying that they have a Porsche and feeling good about owning a Porsche.
So yeah as a former Miata owner I know that expensive cars tend to just be more fun to drive but if you live in an HCOL area with people who are highly leveraged, you'll find a lot of people who buy nice cars only for status signaling. I suspect in HCOL areas more do it for status than the actual love of driving.
(FWIW I find this in a lot of hobbies. I can ride a loaner bike faster than a lot of riders around here decked out in fancy kit, clips, and the best groupsets. A lot of people in HCOL areas engage in hobbies as an excuse to nurse a shopping and status addiction.)
Which goes back to the root comment that a lot of tech people highly leverage their life because it enables them to have a lifestyle and status that they think they need or deserve.
Maybe you live somewhere that's possible, or not too far from such a somewhere. Rare to find such places within 50 miles of a big city though, unless you're in Germany and have the autobahn.
I suspect most premium cars get to spend a tiny fraction of their mileage doing the kind of driving where they'd measurably beat a mid-market model.
A new base-model Prius is absurdly luxurious compared to a base model car of 1975 or 1985 or even 1995. If you have lived long enough to see this change, then dropping 2x or 3x or 10x the cost of the Prius self-evidently puts you wildly beyond the point of diminishing returns.
The Prius is going to have excellent climate control, and a phenomenal stereo. It's going to have adaptive cruise control, and will warn you when you drift out of your lane, or if you're about to run into an obstacle.
Outside of motorsports-sorts of things, what you get out of more expensive vehicles is of limited utility. Mostly, it's just showing off.
Now, if you want a track weapon, then yeah, you DO get more by spending. But for a regular person who wants to get from point A to point B comfortably and safely? The Prius is fantastic, and it's hard to justify spending more unless you're willing to admit that it's a keeping-up-with-the-Joneses kind of thing.
I don’t know motorsports, but in all the sports I do know it’s that way. Tennis, cycling… there are serious diminishing returns in all of those and most kit spending isn’t justified by performance as much as status or stamp collecting.
So much of our lives are taken up by worrying about tiny performance differences that really don’t matter. It makes me sad for the waste of life sometimes.
I was at a track day once, and you'd see guys rolling up with very expensive cars, and they were often clocked as noobs before anyone even spoke to them. The guy rolling up with a beat up 1st gen miata pulling a trailer with two sets of spare tires? Yeah, that guy got respect. Dude was scary quick in the turns.
I've owned a number of cars, and this isn't just about luxury. It's about the quality of the drive.
If you call HVAC and a Stereo luxury, then you haven't updated your definiteion relative to "1976 or 1985".
Again, all purely subjective. But there is a huge idfference between a Prius and a drivers car.
For people who don't like cars (/r/f*kcars is strong on HN) I understand their viewpoint. For people who LOVE cars, we see the details and appreciate the engineering, craftsmanship and art.
Will a Prius get you a->b the same as a "signaling car", yes. But for the hobbiest, it's the journey not the destination.
If they've been frugal their entire life, they aren't as far along the hedonistic treadmill, a new reliable car is a luxury.
If you're used to darning socks, buying new socks is a luxury.
If I buy a PS2 today, why is that not a splurge, if I didn't have one previously? Yes it doesn't have the best graphics but it's a step up from my PS1. Getting the latest and greatest just because, is keeping up with the Joneses. And that's a path to spending money, not happiness.
The knowledge that you have enough in your bank account if things go to pot, itself brings happiness
His Toyota was probably under $40k. This was back when cars were quite a bit less expensive than now. Nice car for sure, but the Lexus probably would have been a bit more refined.
She wouldn’t need to spend that much. You can get a perfectly fine refurbished iPhone 16e for $400.
> The idea of spending $1,000 on a phone is just something she is unable to bring herself to do
Otoh, have a few friends in tech (and high finance) who need to be told "dude, we'd be better off if you worked less hard"
(Sorry.. I grew up deprived of data teaching me that "Schlep quickly compounds into Interesting Times")
(a) Home loans meant you were accumulating equity in an appreciating asset; and
(b) Mortgage interest was enough to allow most people to take a larger-than-standard deduction on income taxes; and
(c) The relationship between home prices and the equivalent rental market meant you could probably have a nicer place for a lower monthly payment in many markets.
These were generally slam-dunk truths for decades, but in the last 20 or so years they've stopped being true.
Home ownership isn't the guaranteed rocket-ship to wealth it once was. Appreciation is spotty, and varies wildly by market. My own view of this is that a lot of the gains are now baked in, and we're unlikely to see the kind of rise in value (in real dollars) that characterized, say, 1990 to 2015. Last year I sold a townhouse in Houston that I'd owned since 2000; I made money, but not the kind of upside that you wanna write home about.
Second, the tax law changes in Trump's first term dramatically raised the standard deduction -- enough so that we stopped itemizing. Part of this was that we were deep into the mortgage, so we were paying less in interest every year, but it's still a factor.
Third, rents may be high now, but home prices and interest rates are higher. When I bought in 2000, I went from renting a place for $1200 a month to OWNING a place at a bit under $2k (including taxes and insurance). This was with 20% down.
In my old neighborhood now, a nice rental is gonna be $2500-$3000, and housing is just unattainable. First, 20% now means probably $90K. Second, servicing the loan is going to be more than the rent, plus you've got another $450 a month in property taxes AND probably another $450 in insurance. And you've got to accumulate the $90K somehow while paying $2500 in rent. It's crazy. I have no idea how a young person who isn't making top-5% income can afford to buy without family help.
Sure but you made money. If you had rented you would have lost that money. Renting only makes sense if the opportunity cost is higher, e.g. if you think the time value of the money that would be put into the down payment is higher in the markets than it would have been on a home. The other thing is mortgages are risk uncorrelated with major equities, usually at least. If there's a major recession your equities may be underwater for a few years. Your fixed rate mortgage will stay the same.
I have a strong suspicion that housing is due for a correction. Appreciation requires demand, and housing is now so expensive that Gen Z can't get on the ladder. That plus the looming Boomer die-off seems to point to a reversal of some housing gains.
It doesn't pay for the increased medical expenses near the end. But it can pay them off if sold after death.
It's only in condos and whatnot that they get crazy, though. My sister has $2500 in monthly fees associated with her fully owned condo in Philly, for example.
This needs to be qualified with the fact that it doesn't make sense for many people to be debt-free if they are financially literate. I know many people, myself included, who carry debt they could easily pay off because it would be irrational to do so. Being debt-free would actually make them poorer.
This often holds true even when ignoring obvious cases like debt interest well below the Treasury rates.
No it doesn't. The math works out the same regardless of changes in asset value. Paying cash has significant opportunity and liquidity costs. These can often exceed the cost of debt.
ask yourself why “we” think that some debt (e.g. real estate) is great) while others (e.g. vehicle) is bad? it just might ge that one is looked at as appreciating asset while the other not so much.
comments like yours always remind of the stripper scene from the movie “big short”
having debt also makes you a forever slave (true capitalism at work). God forbid you lose your source(s) of income and don’t have FU money or significant stash, now you fucked. with no debt and roof over your head life is infinitely better even during trying times..
In many cases the risk is literally zero, the scenarios you are imagining where it has bad consequences don't exist as a real thing that can happen. If you have enough money to pay cash then you also have enough money to pay off the equivalent debt at any time of your convenience.
Many people believe many things that are not based in physical reality. Many popular beliefs about debt are no different and debt has no intrinsic moral significance.
I presume this is hyperbole and that what you mean is almost or very near zero.
say SP500 nominal avg is around 10% - no brainer, yes? but that is an avg of many 30-year windows. some 30-year windows might not be that kind to you. market crash in say first 5-6 years will hurt you a lot
so there is just no certainty here except we think (just like we expect appreciation on the house) we’ll end up on the “right” side of this.
and of course not to mention the most obvious, roughly 99.56% of people will not be investing this money to get more than 4%…
I’ve owned houses for 30 years and no bank has gotten review of contemplated projects or anything other than appraisals during origination of a mortgage or refinance (which are entirely optional for me, of course).
At least I finally got her off the lease treadmill. Toyota helped a lot by not making anything she particularly liked. When I suggested she buy out her lease instead of getting a new one, it was a revelation.
Somewhat related, here is a video from a guy trying to avoid just this sort of scenario by refusing to put his company's business expenses on his personal credit; follow-ups show the price he's paying.
https://www.youtube.com/watch?v=EFZIxJyKgE8
If society expects you to consume, you should be paid enough to support it. A system that leverages greater and greater amounts of its future to pay for the present eventually reaches a point where it is statistically unlikely that the debt will ever be paid back. That's when all hell breaks loose.
But I don’t mind work expenses on my personal card? I get reward benefits for a sizable chunk of expenses that I’m directly reimbursed for?
That's a personal choice. You alone should be able to decide if that's worth the complications it introduces to your taxes and your relationship with your employer. However, the cleanest and most dignified route is to pay for expenses incurred in the course of business. And employees should have the right to refuse to put up their own money for such expenses, without consequence.
The fraud protection and insurance can be useful though.
One advantage of credit cards is that you don't have to wait until the dispute has been at least accepted to get your money back, though.
Although we are talking about it being an issue. Which you have already covered.
Problem is, most people don't spend that much time thinking about it. So I suspect "don't get a credit card" or "only use it in emergencies" are generally good advice. Although perhaps we should just be better at teaching house hold type finance
not an argument for or against cards, but they are becoming closer to neutral than a discount.
Regardless of all that, at the individual level, not using a credit card is still irrational. Not quite the tragedy of the commons, but it's pretty close.
The only way out is probably outright regulating the entire thing away, like the EU has successfully done; the market seems too inefficient and consumer behavior too sticky for card-specific surcharges (i.e. "you pay for your own points") alone to solve this.
Eventually I just sat down, looked at how much it costs keep the house a few degrees warmer in winter, and realized we could afford to be comfortable. And if I were really hell bent on saving money, there were other lower-priority expenses I could cut back on first. But I don't even think it was even necessarily about the money - it was more that saving energy and toughing it out felt virtuous to me. Which is all fine, but not something that should be imposed on your partner if they don't share the same beliefs (or if they just get cold easier than you).
I bought some fleece sweatpants for $40 and the amount I was able to keep my home unheated was totally fine and I made that money back within that month.
Also the cost of apartment-friendly insulation paid for itself immediately as well (which wouldn't apply to most decent apartments).
And if your landlord is balking at including heat in rent, there's a decent chance it's because your bill will be outrageous because there's zero insulation, and as a tenant there's little you can do to fix that.
People die on Ben Nevis every few years because they think its not that cold. But Scottish cold in that part of the world is brutal, there's so much moisture in the air that freezes if you get wet and cant quickly get dry you will die fast.
Still, it's a beautiful part of the country.
There is a _lot_ of folk science about cold weather that is just plain wrong.
Can you help me understand? How does higher relative humidity increase convection?
For heat, radiant is nicer. But most people don't want to pay to have two completely separate climate control infrastructures in their house.
Hydronic (water transport) heat is great: extremely comfortable and quiet compared to forced hot air.
Basically a bunch of technology has just crossed over to make being comfortable not just affordable, but visibly so (which would've been great when I was a kid - it made a huge difference when I hooked the power monitoring up for my dad and proved to him that he should just set the AC to a target temperature and the fastest fan speed he could stand the sound of and it would use less power...and he actually did it!)
And some of us literally have no choice. I need my home office to be under 18℃ in order to not imitate a drowned rat. Anything over 28℃ and I am dripping with sweat even completely naked. And no, I am not obese.
Maybe your dad is the same?
I'm reminded of the intelligent corvids in Adrian Tchaikovsky's Children of Memory where the sum of the two birds forms a being with intelligence in a way that the individual segments do not. The frugality is a deeply embedded piece of our being and undoing it seems hard, but together we financially operate in a place that leaves us both feeling comfortable.
0: In the US sense of the term, not in the sense of the term as known in Taiwan or India.
I keep meaning to calculate how much I am actually saving by freezing my butt off. My guess is it'll work out to something like $0.75 a day or something equally trivial.
Now I just set a temperature that everyone can tolerate and I forget about it.
This is much more noticeable when you go into a freezing cold building and turn on the thermostat, it takes almost an entire day to heat up the stuff and building.
All else equal, setbacks do reduce energy lost to the outside; whether that saves money depends somewhat on the recovery strategy of your equipment; whether it’s desirable depends on your individual preferences.
I think what you mean is, a wife/spouse can help you see maladaptive patterns that you're blind to?
I don't think you propose that you can "fix" your spouse's behavior?
You can't "fix" someone who doesn't want to be fixed, however. And you really can't change deeply engrained personality traits. This will just lead to conflict and stress. This is what pre-marital counseling will try to discover, and it's too bad more people don't do it, as it would go a long way to reducing the number of unhappy marriages.
This doesn't mean that opposites cannot have happy lives together, but they need to accept each other for who they are and not be unhappy that the other person cannot change "for them."
A lot of spousal disagreement tends to come down to issues about money though, so a frugal person paired with a spendthrift will probably have a tough go of it.
It’s often more beneficial to bring an open mindedness to a conversation that allows for benign usage of words that could otherwise be intended to slight. Constantly worrying about if everyone is being sensitive enough can also just be exhausting. To everyone.
Compare to: "A pick-up truck is a useful thing to have, not because you are insecure about your genitalia, but because you can take home bigger products from IKEA."
The flip side of it is I've accidentally joined the FIRE movement. Making a moderate tech salary for most of my time since graduating college but feeling guilty about spending means I'm now in my early 40s and don't really have to work anymore, or at least, could comfortably take any job I want without worrying about what the pay rate is. I don't really know how to feel about that. After my last job in tech I took about a half a year off before realizing I also felt guilty about not working, and took a job I wanted. But there are also weird feelings from working because you want to at a workplace where most everyone else is working because they have to.
Well, yeah, that's kind of the problem. If you're the kind of person who can FIRE, you're not the kind of person who'll be happy on permanent vacation at the age of 40. It's nice to have that option, but many people who get into FIRE commit themselves to a lifetime of slight misery instead of learning to be okay with living life when they can. I had these struggles too - I cut corners I didn't need to, and it took me a long time to internalize that I'd rather enjoy my life in my 20s than save money to do nothing in my 40s.
E: I'm editing to say this because like four different people have issued variations of the same response: the alternative to FIRE is *not* not saving! It's saving for your future while not aiming to retire early. Set a good target savings rate that will help you comfortably retire in your 60s, and spend the rest on things you care about. Let go of the mindset that any spending is taking years off your retirement.
I was in grad school, she was a consultant. Our income was solidly lower middle class for LA, and we still managed to save 25-40% of our income per year.
Now that I've got a kid and am in my 40s, I've taken a year off, and I don't think I'd be bored in "early retirement". I'd probably spend time with my daughter, do more camping, and work on intellectual side projects (I have more than I can count).
The trick has been: I don't try to keep up with other people, I follow my own passions. I know how to cook, and to make my own fun. I'm curious and I like find out answers on my own. I never took on credit card debt.
I'm lucky because I had support from my parents through early college. I got student loans and supported myself after sophomore year or so. (I'm strategically still paying the minimum on those loans fwiw.) otherwise I stayed out of debt until I got a mortgage in my late 30s.
So, it is possible to do both. But I have noticed that I have a better ability to control my desire for acquisition than most people, and a decent amount of frugality in most areas of my life.
I've struggled with this... not personally, but watching other people going crazy with whatever money they get and then complaining about not resting enough, not traveling enough, not having fun enough.
They go ahead and ONLY take full 2 weeks vacations, never even trying spreading some of those days here and there, perhaps right next to a holiday to make it a long one, and then complain later that they are burned out...
Most people even with means complain about some of us doing this normally (we don't have to travel the world every weekend, come on), and you talk with them, and if they just stopped "wanting to live outside their means", they could actually accomplish it, even if little by little.
I commend you for living such a life, because even if none of our lives are perfect, some of us enjoy it as best we can. :)
Ski passes for 2: $500 at mammoth. (Yes, the prices have definitely increased.) We'd sometimes drive up just for the day (leave 4am, back 9pm) to save on lodging. This was fairly doable in my 20s.
Flights to NYC: we'd book on cheap off-days, and I think round trip was usually about $400 for both of us. LA<->NYC is a very competitive route and deals can be amazing. I learned to use Priceline like a pro, so we typically stayed in manhattan for about $100/night or less(!) for fancy hotels that usually charge $300+. We often would stay in 2-3 different hotels to save on money.
So all-in for these activities was probably about $6k-7k per year. Grad stipends were $25k, which covered rent plus most of the vacation, and my wife had an entry-level job at a decent firm.
Didn't feel like a stretch in part because we were really flexible, but we were careful about how we spent our money.
No cable TV, for example. That shit steals your time and money (doubly so because the ads encourage you to spend more money).
Source for this assertion?
I've been in contact with various people at various points on the FIRE journey, and I haven't seen a lot that go "too far" towards being miserly, cheap, and miserable. Especially when they are high earners like the parent comment. They live lifestyles that may appear lavish, but are done while spending well below their means, because they are also investing in their future, while being mindful about spending today.
I'm sure there's tons of people who love being on a FIRE path. It's a lovely goal with self-reinforcing metrics that is easily gamified. And I bet your first year off work also feels great, which is why I encourage everyone to take a sabbatical every 10 or so years.
Huh? "Financial Independence, Retire Early" Sure sounds like you're saving money and investing it in such a fashion that at some future date, you're no longer obligated to do paid work -- before the traditional retirement age.
> I think it's unreasonable to say the opposite of FIRE is to save nothing, when it is in fact saving at good rate while aiming to retire in your 60s.
Again you confuse me. Most people do not save enough for a solid retirement in their 60s, so it does not seem like you can say that is the "opposite" of FIRE. The "opposite" is simply being financially dependent on your working income (at least) until traditional retirement age.
"Retire early" does not force you to "never work again" if it's something you desire. It means you have the financial independence and means to decide how to spend your time. If you really like working for money, being financially independent does not prevent you from doing it, and I can't see how it will make you miserable.
I think this is a lie that people who are bad with money tell themselves, that the only two options available are to spend without restraint or live miserably frugal.
It wasn't until I created a simple monthly budget that I realized that I can pay myself first, pay my bills and I still have plenty money left over to enjoy today and 10, 20, etc. years down the line.
When did I say that? I have a 35% savings rate and still am able to spend happily. The point is that you don't need to aim to retire early. Set a target savings rate, spend the rest - enjoy your life instead of trying to maximize savings so you can retire early.
Aging is a nasty thing ugh, the way your bones get weak and your spine curls and you see old people hunched looking down at the ground when they walk
But I really think you're underestimating how active even the average 70 year old retiree can be.
Some people at 70 are in great health, some not so much.
Granted, both take focus and long term discipline which people who lack both chalk up to luck.
FIRE should really just be a continuation of what you are already doing, just with less responsibility and financial risk. It isn't about saving up for a permanent vacation. It shouldn't even be conceptualized as a "vacation".
Most people I know who are FIREd are busy living a mundane life they find personally satisfying. They aren't having an existential crisis.
"Permanent vacation" is permanent time off work, not a holiday. If you're continuing doing what you're doing, why quit? Why not just keep working and save 25% of your income instead of being frugal, saving 40-50% and retiring early to stay frugal? If you're the kind of person who is hard working enough to make good money, you're not going to enjoy retirement and living a "mundane" life - you might as well keep working on something you're passionate about and make money off it.
The only reason to FIRE is if your life's grand ambition somehow cannot be monetized at all, which in the current day is harder and harder to conceive.
This is a non sequitur. The ability to monetize something has no bearing on the optimal way to go about it unless money for its own sake is your sole objective in life. Being required to monetize an activity frequently produces a strictly inferior outcome by the standards of the person doing it. Not needing to optimize for monetization allows people to prioritize things like craft, quality, sustainability, etc.
The discourse around "enshittification" is almost entirely about the consequences of this dynamic.
I admit, I was probably more frugal in my 20's than I should have been, but 40 something me is very grateful to 20 something me, and honestly my life is so much more stress free now.
Why do you think so? Some people just have more/less expensive tastes and wants than others.
We managed to make the latter irrelevant or by no means a high earner.
Everything is expensive, tech took over all the jobs, now tech itself has found ways to end those jobs. You either have to be a medical professional/media person now to live without worry.
No, you just need to live within your means.
The internet is amazing, I like to watch videos from developing nations, where people live on a fraction of western budgets... what strikes me is the happy, free people I see. That's hard to fake.
Most of us, educated, are aware of the fact that we are one medical emergency away from being bankrupt.
> No, you just need to live within your means.
I politely disagree. Means for me personally includes not worrying about healthcare, losing a job, unexpected expenses, affording the facilities to participate in society rather than becoming a travelling nomad. It’s easy to be blind to your own blessings, even more so if you have already lived a life. These are life goals for people of my generation in my country.
People, educated ones, are no longer marrying. Guess why?
Maybe. Or maybe they are genuinely young, free, and happy.
> Most of us, educated, are aware of the fact that we are one medical emergency away from being bankrupt.
Yes, but being aware of your mortality is inextricably linked to the human experience. Not a bug, a feature.
> Means for me personally includes not worrying about healthcare, losing a job, unexpected expenses, affording the facilities to participate in society rather than becoming a travelling nomad.
My friend, I do not know your circumstances so I venture carefully. Your reply seems to be focused on risk, rather than what a person can control by their own behavior. Risk is a part of life - we all have different tolerance of risk. What I mean by "live within your means" is to spend less than you earn. I understand the difficulties, but it is not impossible. I have been in poverty in my life, and I feel fortunate that we were able to escape it.
> People, educated ones, are no longer marrying. Guess why?
I have my own theories, but I'd be happy to know yours
I see where you are coming from, I genuinely take it in good faith. There's just this constant pressure to be this or that at certain stages of our lives, especially in the asian culture I am part of. I've managed to avoid these all my life but lately I've been falling for it as well.
> I have been in poverty in my life, and I feel fortunate that we were able to escape it.
Genuinely happy to hear this. :) It gives a lot of hope.
> I have my own theories, but I'd be happy to know yours
It's a cultural thing, I have friends who haven't married yet because they feel they can't afford a family with their current circumstances. Here marriages are a family thing, so the parents need to approve. And no father or mother will send their daughter to such a person when they have more options available to them. You could live the frugal life or the glamorous instagram life people are brainwashed with. Everyone is running in a constant state of survive or die mentality because no one has a safety net to fall back to.
I am not saying all are like that, there are independent strong women/men but they are dime a dozen.
We are smarter than lemmings, we can see the danger, but we're also smart enough to convince ourselves that our eyes betray us there is no danger.
Marching forward while calling back for those behind to carry a rope, this is still the same madness, isn't it?
They aren't aware / afraid of their mortality. They are aware of the lack of financial safety net / social support. It is in effect everyone accepting a more primal state of affairs, where the weak die, as a virtue. Rather than a state of affairs that we are economically capable of: Universal healthcare. Many of us understand this is a political hurdle. But that is precisely what makes it so disheartening. If we were all too poor to afford socialized healthcare, we could at least take solace in our shared experience. But that is not the state of affairs. It is an invented problem. And most frustrating of all, we already spend more than people with universal healthcare. Maddening.
How much is the government willing to spend to keep it?
How much are you willing to spend?
What is healthcare, and how to distinguish that from simply prolonging the inevitable?
And what of those who refuse to eat well and exercise?
What of those who smoke, drink, and debauch themselves? Or ride motorcycles and jump from high places?
How do we prioritize our doctors' already strained schedules?
Unfortunately, from my perspective, universal healthcare sounds like it may require more draconian calculus than the imperfect system we now enjoy.
Do I empathize with my neighbor who struggles with the load? Of course I do!
But should I want to take his place when I've carried a burden of my own?
I do, and and I think that's part of the reason I feel guilty about not working. Why should I get an easy ride when other people did not? I suppose there's some small element of worrying that I'm wrong about my future needs . I know I have some skills that are still useful and I can put them to work now, but I'm less sure I'd be able to do that in five years. That part of it is probably not maladaptive, however, even though it probably comes from the same place of growing up with very little.
Devils Advocate: Why don't you feel guilty for continuing to work, continuing to absorb a salary that doesn't really matter for you but could be life changing for someone else who is looking for their chance?
Just a slightly different perspective
It's a weird kind of guilt because it's not like we individually created these economic conditions; we were just there at the right time to take advantage of them before they were gone. I tend to think of this as "useless guilt" (vs. guilt about taking a transatlantic flight or other high-impact activity -- which I still do, but I think that guilt is societally useful)
Civil Engineer here. Used to get clowned on by other STEM students for going into one of the "lowest paying" engineering majors. Post grad, I can't imagine a more stable job, and my generational cohort is having a hard time. Boy do I feel smart. And the bonuses after construction season? Forget about it.
Atoms >> Bytes.
not even any longer, unfortunately
I think even if you retire, you need a JOB. You can define it, but you need something to do, to engage you. You also need vigorous exercise and strength training.
great book: younger next year
I also continue to work because I enjoy it. And that will let me pass on this gift to my children.
Whenever I have something a little extra in my fridge, most often Italian prosciutto, I refrain from eating it, instead saving it for a "special occasion" even though it is, like, my favourite thing in the whole world. Eventually I have to throw the mouldy prosciutto away because I was too frugal to eat it.
I'm practicing though, learning to eat it. I don't know why it's so hard, I mean it's delicious! Should be easy!
Then I remembered I had these strong health potions I'd carried through most of the game. I burned through my entire stockpile but I made it! It felt like the devs were saying 'no, you idiot, we put those items in the game for a reason, use them!'
One could try to reframe it that having it sit in the fridge going bad is a waste of fridge space/electricity/food/mental energy and unnecessary personal suffering.
The maladaptive part is when you start regretting not saving money, because it has two knock-on effects: it makes the decision to spend much more emotional (which negatively impacts rational decision-making) and it can negatively impact the enjoyment of the thing itself. For example, the maladaptive part might take the form of being reminded of the cost every time you look at the repaired phone.
The reality for most people is that the trade-off is actually between time spent on looking for bargains, or time doing something else that doesn't make any money.
Things like, "Actually I will get an uber instead of the bus, so I can spend more time at the party."
Hell. Even other type of media consumption unless you really enjoy it might be balance you can question.
My wife and I both came from fairly frugal households growing up, so frugality is often our default. It's been a helpful exercise to periodically ask ourselves "what do we actually value, and what tradeoffs should we make", then update our plan to match.
[0] https://en.wikipedia.org/wiki/Jacob_Lund_Fisker [1] https://archive.org/details/earlyretiremente0000fisk
Any sort of morality like framing around it is likely to lead to issues imo.
The closer you can get to an analytical approach the better I think - can I afford it, is it good value for money, is it useful/furthers my goals etc
There are unfortunately a lot of people that base their spending and saving decisions not on what they actually value or what their goals are. Rather, they base them on fear of breaking the moral rules.
I think it is especially easy to overgeneralize frugality because, either because it is taboo or conventionally boring, parents don't always share the situational details that prompt their behavior.
In my life I internalized "everyone should rule the thermostat with an iron fist always" when the more complete picture would have been "because we're cash-strapped in the 2008 recession and our house is old and leaky we're ruling the thermostat with an iron fist for now".
If you value your time at, say $200/hr and you work with other people who claim their billable labor is also close to $200/hr, and you value it at $15/hr, then, no, you’re going to do it yourself.
At high income it can make you feel silly for doing anything other than working. You second-guess walking the dog even if you enjoy it because you can pay someone to do it for so much less.
You could consider that the higher the hourly worth in your profession, the greater the luxury :)
Though sometimes you may have to choose between being a slave to something less enabling than frugality :\
It really gets bad for those who can't even afford to reach as high as a truly frugal contemporary.
IOW below-frugal becomes a constant element regardless of its current value at any one time, and that leaves the only variable as whether or not any adaptability can be attempted at all, and how much might not be too much to ask :(
Stay focused on earning more money and don't spend any more time than you need to watching expenses - just so long as you save/ivnest plenty. You'll enjoy life a lot more.
This claim really requieres some kind of proof. Because I have never seen this in real life - a person who realistically could earn more if they spent less time trying to save money.
It sounds like a made up dichotomy or an extremely rare situation.
I met people who earn a lot and save absurdly lot. Or earn a lot and waste it all. Or dont ear and either save or not. But, there being realistic path to bigger earnings that is ignored because of spending too much saving is a corner case.
I have a low salary considering my experience in the tech sector. However I have a job that is low stress, has good benefits, and a very low risk of layoff or downsizing.
I don't spend money on a lot of things that other people do. I drive an old car. I have an old phone. My home computer is probably 10 years old. I don't buy expensive clothes. I cook at home, and rarely go to a restaurant or bar. I do not pay for entertainment such as movies, sports, theatre, travel. None of that is interesting to me.
I don't spend time "watching expenses" I just naturally spend very little. When I have extra money, I just save it. The idea that it is there "in case I need it" or ultimately for my kids to inherit is more rewarding to me than anything I might spend it on.
Not inaccurate, but you have "24 hours in a day". Even if you spend 1 hour on frugality, it's not like you spend 23 on "increasing your income." Why not both?
> Stay focused on earning more money > You'll enjoy life a lot more
Needs sources. We know that earning more is helpful up to a point, but it reaches a point of diminishing returns.
Similarly spending money can help you enjoy life, but we tend to be bad at predicting how happy any particular spending will make us. Learning this lesson and evolving our spending so that we do "enjoy life a lot more" can be well worth the time invested, even if it doesn't help us earn more.
I went broke ordering pizza 4 nights a week to fuel my 6-hour-a-night stretches of job searching and upskilling.
But after 3 months, I doubled my income, at the cost of a few pounds of stomach fat.
Why “few successful startup founders grew up desperately poor”
https://rickyyean.com/2016/01/22/privilege-and-inequality-in...
Poverty mindset is maladaptive because it teaches you only money is worth anything, so you hoard it. But in truth time is also worth a lot and sometimes it’s wise to use money to buy time.
This is something I've observed in overly frugal family. Stuff/money is worth too much to them.
You can't gift them anything "nice" because they will put it on the shelf and never open it (don't want to damage it).
Gifting them consumables with an expiration date also doesn't work as they'll "save it" until the expiration date lapses and then eat expired food.
Taking them out is weird because they'll insist on taking leftovers home off every other persons plate at the table, including stuff they don't normally eat.
They'll fill up 2 bedrooms in their home with 40 year old cheap clothes & furniture that is worth so little we'll need to pay someone to haul it away. They won't donate it because they think the people who receive it will waste it. So they'll pay money to ship some of the 40 year old cheap clothing to poorer family back home who it doesn't fit and could just buy cheap clothes there with the money they paid for shipping.
Owning multiple 30+ year old cars until the mechanic literally refuses to work on them anymore telling you they are too rusted out to repair or drive.
This from people who are wealth enough to own multiple properties, have retired early, have government pensions, etc.
I'm wondering at this point what are known methods of overcoming "mindset inequality". Any advice will be appreciated.
My extended family members use to trade stories of working dangerous jobs or getting mugged and laugh it off. That was until my aunt got shot in the head working the late shift at a convenience store. She was in the news and the community and the hospital paid all her medical bills; but she was never the same after that.
Growing up gambling was a mysterious force that ran through my family. They worked hard. Like their bodies were physically wrecked and they saved and saved. They would often spend so much time at work or at their side hustles, they would neglect their children who would teach themselves how to cook because no adult was at home. And yet, they would blow their entire savings in a weekend in Las Vegas. Or sometimes came back even in debt.
Now, I would say that frugality is not a moral imperative. Being poor is not a virtue. Sometimes fate deals it to you. But no job is worth wrecking your health. And it is not a sin to spend a little on something that makes life a bit sweeter.
So it is with spending. When you spend less, you can retire earlier, your finances are more secure, you feel less pressure and stress, etc. You have more flexibility in the kinds of jobs you can take. Perhaps best of all, you end up accumulating less stuff, and less complicated things, which makes your life simpler.
Frugality doesn’t get the flashy press that consumerism does, but it’s a winning life strategy.
(from your profile): "Live fast. Die young. Don't give HN an email."
I like the "Live fast", not so much the "Die young", but why not "give HN an email"?
It's a reminder not to grow too attached to the account and that all things are ephemeral.
Of course, these things aren't exclusive to the cheap plans, but I'd encourage you to compare your employer's plans to some of the marketplace ones.
Early retirement is absolutely attainable. To hear stories ( of questionable provenance), visit FIRE forums. I can personally attest to knowing people that have done it— married people with kids. It takes nowhere near the figure you’ve cited. Listen to retirement podcasts, you will hear from plenty of people that have done it.
To get real, actionable advice join the Bogleheads community. Good luck.
I hate working. The sooner I don't have to anymore the better.
The point being, in both cases, the virtue lies in finding the optimal balance: maximising the benefits of frugality without going too far and falling down the other side of the curve.
> When you default to the lowest cost option without considering the drawbacks, procrastinating or hesitating on spending[...]
This is terrible advice, one of the easiest ways to be frugal is not to be overly attached and to defer spending.
I've been feeling guilty for buying 2 red bulls (sugar free) at work everday and my salad... a salad that costs $5 (although I can put many toppings eg. meat on it) vs. buying a $3 bag of leaves and make my own salad. I should put every dollar I have towards debt that would be ideal... but it's that time thing too, don't have to prep my lunch/carry an extra bag. Also can just make more money.
Like my car, should I not have bought an $800 RD and $1K on tires or just put that towards the car loan... idk. I enjoy a fast car though.
this would he true if the wages kept up with inflation and of course that as we know well has not even remotely been the case
Well, what I noticed is that I go to great efforts to avoid buying me some stuff that would make my life easier (say an electric bike or a better computer). Month starts, I get my paycheck and every day I fend off the desire to buy the stuff I want/need. And then come the bills. Like some surprise "regularization" gas or electricity bill that costs more than the item I didn't buy. If it's not that, some darn thing breaks and needs repairs. And if it's not that, kid has to go in some school trip, there's some birthday or wedding we have to attend, someone asks me to lend them some money (coze they know I save) or some other event happens and requires a ca$h infusion.
By the end of the month, money's gone and I haven't got nothing. At some point working just to pay bills and expenses makes Jack a dull boy. So funk it, I buy that stuff AT THE BEGINNING OF THE MONTH. And when shit arrives demanding money I can truthfully say: "I don't have any money left". But at least I got the thing, opposed to neither money, nor item.
I turned into an income maximizer.. started working at 14.. post college left home, took a high stakes career and hopped to new opportunities proactively. Response to not wanting anyone to be able to control me via money.
For my spouse & I it was a reaction to 1) having a lot of childhood of consequences/regrets of over-frugality like frozen pipes bursting, parents lamenting not going back home for 10 years during which their own parents died, asking for a single $10 toy for birthday and having them buy a knock-off instead, etc.
2) a reaction to teenage parental control via money like when I was moving to the big city for my job and the housing deposit was due before the hiring company was going to wire me my housing stipend, and my parents refused to float me $1k for a month (and then gifted me more than this as a graduation gift a few months later).
So I think you want to instill a respect for money in your children but not a fear.
The most optimal thing to do in our world is to pick an age, say, 60, and until your 60th birthday, maximize your suffering via frugality to just under the tolerable limit so as to maximize your potential for compound interest. This leaves you with the most freedom and opportunity during the most fun part of your life, when you no longer have to sell your labor and can do whatever you want.
Within our current model, trying to slip in bits of fun through spending money before that age is getting a poor return: you're trading vacation time, which you could instead barter for more money on retirement, and you're carrying with you a bit of suffering because you have to worry about going back to work. The best thing to do is just push it all until retirement.
The limit of human suffering before suicide frequently happens is apparently quite high, so, you can really stretch yourself out here. Live in your car in the Walmart parking lot, eat beans and rice. You maybe trade a bit of the compound earnings to establish certain time constrained things you want to cash in on at 60 like having a partner or kids, but beyond that, maximize that compound interest!
I hope it's obvious that this is a criticism. It's just, the more I think about it, the more this seems the selective pressure and incentives in our society are set up. Mostly I think it's insane that we both have an idea of "retirement" and also that we set it at an age where a significant portion of the population won't make it, and for those that do, a significant portion will get to enjoy five years of it, and for the remainder, health is bad enough that maximum enjoyment isn't possible anyway.
This is the most depressing thing I’ve read in a while.
I don't think your advice is good "general advice" but if you treat it as a "this works for me, it might for you", then it might be worth reading.
You don’t need to be retired or a millionaire to be happy. Nor is being retired or a millionaire any guarantee of happiness.
Saving for retirement is just about making sure your needs are met when your health starts to decline and you may no longer be able to work. If you’ve got a little extra saved to travel around the world or whatever, even better. It’s important, but don’t wait until retirement to be happy. There’s no guarantee you’ll even live that long, for starters.
I understand I post big blocks but it is frustrating when someone misunderstands me because they read less than half of my post. There's always the option of "it's too long, I choose to not read it rather than engage with my misinterpretation of it."
It's the same for climate change, a lot of people want to feel good about themselves labeling them ecological when they're not capable to act on it (eating less meat, avoiding to take an airplane to travel, ..etc). They feel guilty not because of 'it' but because they don't want to act about something they reason is the morally good choice. It's performative virtue signalling.
As a general rule I don't think you can label yourself as anything (eg. a liberal, an anarchist, a frugal, a skeptic, a believer, a punk, ..etc). You either are or you aren't. Chasing a label and an identity is the best way to never be it like a perfume wearing you rather than you wearing it.
Ostensibly my job is to design construction projects to fix a problem, but most of my job is actually helping the community figure out how to pay for the fix.
My greatest frustration is Maladaptive Frugality. There are whole communities with this mindset, and it takes a lot of effort to communicate the reality to the town/village board that they're losing money by trying to save money. I've invested a lot of work into projects which come to naught because the decision makers can't imagine a future where spending money saves them money.
"Tripping over dimes to pick up pennies" observed one old farmer.
"I'm too poor to afford cheap tools" say the wiser tradesmen.
At my company, it’s always choosing the vendor who promises the most. The fact that they have extremely dissatisfied customers and leave a trail of shit is always ignored.
The reason is because the city charter mandates they have to take the cheapest bid. Of course the quality is crap and none of the fixes last! Fortunately, we just changed that, so hopefully it will get better.
Procurement policy in USA is usually "lowest responsible bid", meaning you can reasonably expect that the contractor can complete the work without going bankrupt.
With respect to the work itself, a competent civil engineer will provide for appropriate materials and handling to ensure the contractors are supplying a substantially similar product. Most repaving jobs in the city go no further than resurfacing - remove the top 1-2 inches and install 1.5 - 2.5 inches new.
This treats the symptoms, not the problem!
I'm assuming you're in a wet climate. The problem is the subbase is reflecting strain through the road surface, initiating cracks which are openned further by weather. To noticeably improve, you'd have to remove the subbase to great depth and replace with engineered fill, multiple layers of geotextile, storm drainage improvements, then a full depth asphalt section. Not only are the materials for this work expensive, but it represents a different order of magnitude of labor, the number 1 cost driver. Sometimes the tax base is so weakened that the city cannot even keep up with resurfacing and you end up with roads like you describe.
The economics on this are difficult to assess because everyone knows the roads are forcing more car repairs and accidents, and generally rob you of bliss... but the calculus to improve the roads via property taxes is not straight forward, i.e. it's political.
But I didn't know that about the sublease layers in particular and the greater cost (and I assume time in addition to labor and materials, which would in turn require the road to be closed for longer and increase use of other roads + cause angry constituents). Now I do! Thanks! Also explains why our higher truck weight limit fucks the state's roads so much: I'd known that but not the reason specifically.
Thanks for sharing.
I think it was Ramit Sethi who said something along the lines of "spending money isn't inherently moral or immoral", and that was something that resonated with me. I had to pull myself out of the implicit mindset of "spending money should cause guilt". It's been very nice.
And to clarify examples of this: I no longer hesitate purchasing a drip coffee on Saturday afternoon, or on getting a beer with some friends at the brewery.
It's one thing, without a spreadsheet, to have the emotion of "I'm not going to have enough and I need to save more to make sure I have enough." I'd argue it's even evolutionary; we want to make sure we have enough to get through the winter we know is coming.
It's quite another when your spreadsheet shows you saved X, your monthly cost of living is Y, and therefore you have enough money saved, even if your income went to zero and you made no changes to your lifestyle, to last you for Z years. Being able to take YouTube University rule-of-thumb advice like "of your take-home pay, use 65% for necessities, 15% for long-term savings, 20% for enjoyment" and seeing how much money that is per month for you in your personal circumstances, along with rules of thumb on things like what ratio you should have achieved by which age on net worth-to-income ratio (1x by 30, 2x by 35, 3x by 40, etc.) and seeing what your personal actual ratio is, to get a sense of benchmarking yourself.
I mean, the influencers could be totally full of shit, but it doesn't matter. Getting actual numbers for where you are, plus getting "generic" advice that you know wasn't directed at you personally, and seeing how those numbers make you feel, can do a lot to either tell you "you don't need to be so frugal anymore" or "yep, your emotions are totally justified, keep saving".
If you can buy 20, 1 is probably fine, don't stress too much.
But whenever I've tried to budget, I run into the same problem anorexics do with counting calories. I will literally hurt myself in order to see the savings number go up. I can live on $10/week for food. All it will cost is my health. I can be in pain for 8+ months out of the year (MS muscle spasticity + heat intolerance ) so I don't use my heat or A/C because those cost money. Etc. I will literally berate myself to the point of a panic attack over buying a $25 book from an author I've loved for decades, believing it makes me a horrible human being to be so 'frivolous'.
Thus it becomes a more difficult choice what proportion to bet on stability of the current living situation, and what on long-term savings for emergencies which look quite probable but still unmeasurable. And the latter is complicated by absence of reliable and relatively liquid investment opportunities. All in all, fun to be from a sanctioned country.
> So you need to consider the emergency of moving somewhere in a political and legal climate not known in advance.
Fair enough. So do the financial planning, and ask yourself, how much does it cost to fly/travel to X place that is far away? Put in a risk premium - what if the cost became 2X or 3X because of a sudden catastrophe affecting everyone? What is the actual number that you need to save? Can you keep the money in a bank account, or are you concerned that banks will be inaccessible, and thus need something more portable? If you need something more portable, how much will it cost to protect it (vault/safe, weapons)?
I sympathize that life isn't fair, and that financial goals for some people need to be concerned first and foremost with personal safety instead of luxurious "nice-to-haves". But my point is that there are still actual numbers involved, and that you can put those numbers into a spreadsheet, and that the spreadsheet can help you understand your progress towards those goals. Financial planning is valuable regardless of what your goals are.
It's not much different than a sales job where income can be highly variable, or go to 0 because the local market is dead.
So, what big spending is adaptive? Better to drive decisions objectively based on future value.
Some scenarios:
- It lasts a long time, and you'll need to do it anyway. Best to get it early and enjoy it longer - for iPhones, cars, houses, marriage...
- It lasts a long time and you use it daily. Always pay for what you'll be glad to have: good socks, a powerful computer, a nice view.
- Your beloveds needs to know if you care more about money or them. Choose them.
- Something expresses your values: you appreciate an artist's work, so you pay good money for it. Some panhandler is stoic, so you give him a hand. (Just be careful about posturing.)
Another mindset is to think of your money as family (writ large) money, and invest in the future of family or friends. It's as much a vote of confidence as an injection of cash, and it helps you detach from the needy instrumentality of the money to consider what's best for their future. That's the weirder phenomenon: trillions held by baby boomers until they die (just in case), while their progeny waste time in terrible jobs and narrow circumstances for lack of investment. That's maladaptive hoarding.
yes because as we've learned this year nothing bad ever happens when you have hundreds of dependencies
we're living in an obese society, metaphorically and literally, we should put everyone through a decade of whatever the equivalent of playing ping pong with a spoon is in every domain of life. Being concerned with too much frugality is like being concerned there's not enough corn sirup in our diets
What’s stopping you? Go ahead, live in a trailer and wash once a year.