Sunday, March 16, 2008

Can you stop the worry?

When will you stop worrying about finances? Is there an income point or net worth point where you will stop worrying about finances? Or when you will not be so concerned about every dollar?

I got a horrible look tonight when DH says to me "If I make $xxk, will you stop coupon shopping and being thrifty?" I could only look at him and stare. He asked, "When can we stop being concerned about money?" And we can spend all our time doing what we want without worrying how it will affect our bottom line. Example, cooking because we like it, but eating out because don't feel like it. Not restricting ourselves based on cost.

Or is being frugal and thrifty and ingrained habit? Can you really give up your habits because you have more money? Is it important to do so?

What do I mean by that? Well there is a point where your time becomes more important than money. Where rather than trying to pinch every penny and shop every sale, you might value spending more time with your family. Maybe retiring early, or not saying "I have to work this weekend". It could mean saying "sure we can afford to have steak for dinner instead of non-meat meals or ground beef." It could mean buying better quality clothes and food, instead of the cheapest. It could mean buying things you want instead of necessarily need.

It could even be affording a pet, which is a true luxury item. But is there a point where you can let of all your frugal tricks and truly enjoy life? Where you aren't worry about what everything will cost you? Where you aren't clipping every coupon, chasing every sale?

Are you there yet? When will you get there?


johnstonteam said...

Great question and an answer that doesn't seem to have a cookie cutter answer.

How many times have you read of the someone who lived like a pauper all their lives, pass away and leaves a huge sum to a university or religious institution? They fretted over every penny and never learned to let go once they were secure.

I worked for a family run business, and while they could be extravagant in certain things, they could also be credited for inventing copper wire from a penny from stretching it so often for so long. They fought tooth and nail for any freebee such as credit card miles, free handouts, whatever. Yet they drove some of the finest luxury cars, owned some of the finest real estate in our area and dressed to the nines.

I believe many of those who came from nothing and obtained something always fear that that being penniless is just around the corner.

Finally, people are what they are and change little unless some significant event happens in their life to change it.

Anonymous said...

Great question. I don't think there is a number you can pinpoint and say, "that's it, not going to worry about money at all anymore". But there are definitely milestone numbers. As you reach the milestones, you can worry a little less.

I am 30 years old and this year my husband and I reached a net worth of 400K. That's a milestone and we have stopped worrying about certain things. I finally felt comfortable hiring a cleaning lady. We eat out several times a week without feeling any guilt at all. Hubby indulges in his video game habit without any guilt.

There are many more milestones to be reached and we remain frugal until we die. Vacations are now more frequent but still plain jane and within budget. It will be many years before hubby can buy his dream car. Things like that.

It's important to set small goals instead of the "final number". It's important to reward ourselves accordingly when reaching those goals. And it's important to be thankful for what we have and know that anything can happen at any time and we must be prepared. The key is to find a balance and never take your eye off your goals.

"Future Millionaire" said...

I think I'll stop worrying about being frugal when it costs me more to stop and pick up a $20 bill off the street than to keep working. There recently was an article about this being the case for Bill Gates - I wish I could find it so I could share but I can't remember which news company featured it.

DogAteMyFinances said...

Great post. I only recently dumped coupons because I had no time to use them. But I still only buy the meat/yogurt/canned stuff on sale. I'm not sure that will ever change.

Mom said...

I think that point will come easy for us. Our tastes are not extravagant. When I am paying cash for my cars and maxing out retirement savings I will feel much better about money.

Living Almost Large said...

Mom, I used to think that. BUT even with saving for retirement and paying cash for cars, I don't think it's enough.

DH and I thought it was enough when we made $20k/year. But now it's a different matter. We see true financial freedom as earning at least $500k/year because we need to be able to walk away and say "I quit".

We can't do that now, and won't be able to do it until we make enough that we're saving 75% of our income.

I think the problem is that when you start making more, you realize you need more to be truly free from everything. Not just debt, but making all your own choices.

And how many people can do that? Even if we moved today to a cheap COLA and bought a house cash we couldn't survive. We don't have enough saved. And even if we got lower paying jobs, we'd be struggling to save every penny to get there.

So I guess it depends. I have no idea when the worry will stop, maybe that will be the day the blog ends.

MEG said...

tI don't think it matters what your income or net worth number is. You can stop the worry one you are saving enough each month to reach your goals (which should include financial independence from your parents, children, and the government). You don't have to REACH the goal to quit worrying (a 25 yr old need not lose sleep over her retirement fund balance); just be ON TRACK to reach the goal, given your time horizon.

If you don't have much left after saving what you need to save each month, then you'll need to focus on frugality in order to make ends meet. If you have plenty left, then you don't HAVE to keep being frugal.

Of course some people never lose the frual habits they picked up when those habits were necessities. Consider Depression era folks who are now wealthy but still stockpile grocery bags and reuse dryer sheets.

However if you are one of those people who continues to be frugal even when you can afford not to be, then it might be good for you and/or your relationship to loosen up the purse strings a bit - especially if your partner isn't as inclined to penny-pinch. Relationship harmony is worth a LOT of pennies.

The question really becomes "when am I saving too much?" Saving can become obsessive, and you have to find a balance. If you have no debt, a stable job, and are still saving 20% or more of your income for some undetermined future purpose, then you might want to relax a little if you're still sacrificing your desires for the sake of your savings.

Fabulously Broke said...

I may be less frugal once I get out of debt.

In fact, I'm almost certain.

But I'll still keep SOME frugality, but I really think the values learned in frugality make me a better person in general and less cluttered because now I'm starting to really evaluate what I buy, what I bring into the home, and I'm starting to walk away from purchases that I previously thought I NEEDED.

I don't want to end up like a pauper eating cat food out of cans only to leave millions to a university. :(

So maybe my money should really be spent on a vacation fund or something.

But only once I'm out of debt, with a healthy EF fund and a healthier mortgage downpayment fund.

Anonymous said...

no matter how much money you make you always have to eat, food will always be a cost you have to deal with, Saving money ongroceries will always be a possibility. Johnstonteam is right, those who came from nothing always fear that their former way of life is right around the corner and that they will always be a little careful. You may not count pennies then but you will still count dollars.

No Debt Plan said...

Tough, tough question. We always harp on lifestyle inflation, but if I'm making $250k per year, you better believe my lifestyle is going to inflate -- just not the whole amount!

There isn't a cookie cutter answer. Some people choose to live a frugal lifestyle even if they have millions in the bank. It comes down to what you are personally comfortable with.