Monday, May 18, 2015


In my quest to become less stupid about money, I familiarized myself with a whole new corner of the internet---personal finance blogs. I was particularly drawn to the super-frugal, early retire in your 30s type of blogs. Not that I want to retire early (ha! I didn't even start a real job until my 30s, no interest compounding through my 20s for me) but the idea of financial independence and the freedom that it brings is enticing.

I could do the things being espoused on these blogs! Get cheap cell phone plans, shop at Aldi's, clean my own house, eat rice & beans every day, DYI home repairs, never eat out, go camping for our only vacations, keep it cold in the winter and warm in the summer, skip kid's activities, shop thrift stores, forgo pedicures and cut my own hair. Take that money and put it straight into our retirement funds and then...

And then what? Retire 2 years earlier? Revel in my account statements? what would be the purpose of cutting out every item of discretionary spending? Its not like I could retire in 5 years or even 10 even with the most extreme stinginess.

When you delve further into it becoming financially independent at a very young age requires either a really high salary or a really really high savings rate (actually, probably a combination of the two). Living way way below your means. To the point where it actually hurts. I'm Ok with a little hurt---for a limited amount of time. I can make sacrifices and tough it out to get to a goal achievable in the near future. But not indefinitely. Certainly not for the entirety of my kids' childhood.

It was really important and eye-opening for me to see how little others spend; I always thought we were frugal, but we really aren't anymore. I'm glad I read those blogs, because I needed that mindset switch to realize that a lot of what we used to think of us "necessities" are nowhere near. That our life is chock full of luxuries that we didn't even notice. That we could sacrifice a lot of things to meet a savings goal. That "retail therapy" is easy to fall into and frankly, doesn't help. We questioned our spending, cut some things that weren't increasing our quality of life, and are more mindful about where our money goes these days.

Obviously, I like saving money where it doesn't hurt. Like when we refinanced our house---I certainly don't hate paying less to the bank every month! I like bringing my own lunch to work, its yummier & healthier (and saves time!) in addition to the cost savings. We cut cable years ago and never missed it. There are lots of things I do not spend money on. But I also love paying to have our house cleaned every two weeks, and the one time we paid a guy to paint our house was amazing, eating at restaurants occasionally is a true joy in my life, and I want to go on more real (i.e. not staying with relative) vacations.

When to save and when to spend---its a line we all have to draw for ourselves and one that it makes sense to rethink every couple of years, as our lives & priorities change. And because its so individual, I really don't see the place for the type of judgement I saw often on those blogs*. Its called PERSONAL finance for a reason, right?

*Assuming not in credit card debt, saving reasonable amounts, not doing truly stupid things like gambling or getting ripped off, etc...


  1. I really needed to read this today. Thank you. I know that most of my money is going to things we don't need. In some areas we save more than others (one car, no real vacations (where we have to pay to stay or fly to get there), no house cleaner, no cable) and in other ways we indulge (mostly grocery shopping and eating out but also some clothes/toy/book shopping). We are just starting to really look at our budget and figure out what we want for ourselves financially. We are figuring out what is important to us. It's been interesting. We have done a lot but have a really long way to go.

    I was wondering if you could recommend any personal finance blogs? I think I might benefit from a change in perspective myself.

    Also, would you mind sharing with us what percentage (approx) you save every month? We are just starting to contribute to a monthly saving account and I have no idea what we should be striving for. I'm sure it's way more than we've been considering. ;)

  2. We read a financial planning book early in marriage, but 90 percent of the advice was impossible for us to do.

    Though I will say that I'm having rice and beans for dinner tonight and do at least once or twice a week. It's not just cheap -- it's for lazy people who only have 20 minutes to pull together dinner :-)

  3. I haven't seen your specific numbers, but based on the things you've said, I'm assuming that you're doing just fine.

    If you don't want to retire early and you're not likely to lose your job, then it makes sense to do a David Bach (X finish Rich series) or Elizabeth Warren (All your worth) set and forget kind of savings strategy and not sweat anything. The focusing on your savings method works a bit better for high income earners than the focus on your spending, I think (and vice versa for low earners). High earners don't need to waste all that brain power on minutia that don't have a lot of ROI-- they're better off focusing on higher ROI actions (like making sure their funds are low-fee and so on). They've got a lot more slack when unexpected expenses pop up too. (If you haven't read All Your Worth, I think it might be a good match for your money personality.) Though I do agree that it's good to look at the total picture and individual spending once every year or every few years and to think about new purchases to make sure you're not wasting money.

    We are financially independent now, though not to the point where we could retain our current mode of life if we both quit our jobs, but we wouldn't have to move into DH's parents' basement if we did. The neat thing about compound interest is that you don't actually have to sacrifice for very long (assuming you're reasonably high income, which, you know, is an assumption) before the money starts doing the work for you and you can loosen up the spending reins and spend like people in your same income bracket who never save. And even if you're just starting now, that's still a good 30 years of compounding before retirement, give or take.

    We did sacrifice to get out of debt (DH had high interest student loans) and we put off buying things for the house and put off fixing up the house and we've still put off redoing the kitchen (but I think it's going to happen when we get back from leave). But now we don't have to sacrifice anymore. It's very freeing.

    The heuristic is that if you start young, you only have to put in 10-15% of your income into retirement savings and you'll be good to go in your 60s. If you start later, you need more like 15-25% depending on your goals and so on.

    1. thanks for the information! I haven't read all the worth, i'll look into it. We sacrificed for a long time (well I did, on my own, and then for a few years after we got married). I got tired of it, and wanted all my hard work to be for SOMETHING. Also, I like the idea of this being an "expensive season" in life, because we pay a lot for time/convenience because we need to be constantly supervising our small children right now. those days are finite.

    2. I suspect that earlier sacrifice means that you're on firmer footing than a lot of people who make the same amount of money as you do who live in similar cost-of-living places. Not wasting money on interest from consumer debt is huge for your bottom line, just by itself.

  4. Yup. People's feelings about money, necessities vs. luxuries, are astonishing.

  5. We could probably be more frugal, but DH and I share the philosophy that the kids are only little once. Which means:

    a) I want them to have summer activities, and toys, and I memories of travel with us. That's important to us. (The three kids and all the pick-up drop off means we need the two cars. Also, the fact that it's snow here 6 months of the year. And the fact that DH is a night owl and I am a morning person, so he harshes my mellow in the morning and I hate that. Paying for my own parking is worth having peace on the morning ride.)

    b) Kids have to eat well and a balanced diet. Having a developing kid eat rice and beans ad nauseam to make a political statement when you can afford fresh produce and organic meat and dairy is really... You insert a word. Yes, I am judging. Plus my younger kids have food allergies, so I am even more appreciative of eating everything that you can in fact eat.

    I have tenure and a good track record of raising grants, so my job is secure and I am getting raises at a good rate, which is a big part of the equation. I also don't plan on retiring probably ever because work is fun. DH said he'd retire after the kids are out of college, and promised he'd travel with me to all my crazy conference venues.

    We are saving at a modest rate, we have mandatory deductions through the university and a little over, and we are saving aggressively for Eldest's college. By the time Middle Boy hits college, we will have paid off the house and it will be a huge relief and huge boost to our savings (we have another 8 years of our recent 10-year refinanced mortgage).

    The plan is to get the kids out of college and then we'll have plenty of time to boost the savings rate.

    I don't spend much on clothes or any luxuries (DH spends money on electronics, which I mostly don't begrudge). Our money goes on the house, childcare, groceries (you have no idea how much the family eats, I have a carnivorous husband and 3 boys and everyone at the grocery store teases me at the amount of meat and deli I buy every freaking week). We do takeout once a week. We do a big family trip for spring break once a week (went to N&M's paradise, I think, this April) and 2-3 short driving distance ones as well. Kids do daycare, summer camp. Eldest's swimming and instrument cost a ton (swimming alone ended up being probably around 3k this year; bought instrument for another $3k after it's become clear he's very serious about them) but he enjoys them.

    Anyway, I want my kids to have a happy childhood full of great activities and memories. We can afford it and it's a big priority. Another is saving for college, then retirement (which we can do because I have a secure job).

    1. I feel the same way about wanting to give our kids experiences. Can kids be happy without those things? Of course. But since we CAN afford it, I don't want to hold off simply so I can retire a few years early. Travel and activities are definitely important. We spend quite a bit on groceries, too, and our boys are young (but seem to eat their weight in food some weeks); we don't buy too much meat, but so so many fruits & vegetables & eggs and milk. I can't deny my 3 year old raspberries, even when they are $4/pint. Its just so cute how much we loves them (and I steal a few, too). Its absolutely a luxury, and if we had too, we could cut it out, but at this point, its in our "priorities spending" bucket.

    2. We have the same priorities. (Not just frozen yogurt!) The amount we spent on organic berries... (Of course, we also have some in the backyard-- my daughter's hunger for blackberries cannot be filled in mere pints.)

    3. So funny bc I noted that cameron absolutely ate $5 of raspberries for breakfast this am :). Worth it.

  6. I've had so much trouble posting! Anyway, just wanted to add that I share your interest in Early Retirement blogs even though I have no plans to do so. I often find new blogs via blog rolls.

  7. We plan to be able to retire - theoretically - by age 55. DH has put a lot of time and energy into researching finance stuff, but I told him that I didn't want to sacrifice a decent life now (beach trips, summer camp, clothes, etc.) to be able to retire early. It's a work in progress for sure.