There’s been a smarty pants leaving comments on this blog lately, and I thought I’d highlight one of them because the guy knows what he’s talking about :) And he’s also pretty damn good at conveying his message. (If you’re reading this sir, might I suggest you take up blogging?)
He was wrong in assuming I was about to lead a pauper’ish lifestyle — this comment below was a response to me mentioning I’m about to go on a mortgage pay-off binge, which I’ll be blogging about soon — but I think this guy nails the “balanced life” concept on the head. Any extreme in personal finance is usually NOT a good thing!
Here’s what my new friend Gene Roberts from Chandler, AZ wrote:
I can’t argue with the desire to get debt free as quickly as possible. After all, if I didn’t have to pay my mortgage right now, I’d have another $1100 a month to play with.
However, I would caution against going “hardcore.” That really makes it sound like you are thinking about living like a pauper to put every penny towards your mortgage.
I have read many comments about people that live this way (what I would call excessively beneath their means). And not to discourage fiscal responsibility, but I believe that you should seek balance in life.
I attempt to find a balance between planning for the future and enjoying my life in the here and now. I don’t have any debt except my mortgage. And I put 16% of my pay into my 401k (plus employer’s 6%). I have a significant EF if you include my gold and silver investments. And I’m starting to accelerate payments on my mortgage. But however much I love my future self and don’t want him to eat cat food when he retires, I also want my present self to live a full and enjoyable life. I mean otherwise what’s the point?
My major outlet for recreation is my motorcycle. I take several trips a year with multiple groups. I try to minimize the cost so I can take as many trips as I can and I don’t go into debt to go on a trip. But I probably spend $5,000 – $7,000 per year on this “hobby.”
If I sold my bike, put that money and the majority of my discretionary income towards my mortgage, I could have it paid off in about 8 years (versus the 14 years I have planned). But that would be 8 years of missing out on an activity that I derive a great deal of enjoyment from and share with many friends. And back of the envelope calculations show that I’d only save about $20,000 – $25,000 in interest over that period.
Overall, I do take the long view of my finances. But I don’t sacrifice everything now just to be richer in the future. Also, where does it stop? Once you pay off the morgage, you could put all that extra money right back into investments. After all, you are already used to living like a poor person now. At some point you have to find your balance. Otherwise you are just accumulating wealth for your beneficiaries. (Cue the family fighting over your estate)
My ex’s father is that guy. He had a 6 figure income while she was growing up (back in the 70’s and 80’s when it really meant something). Their house was paid off when she was a toddler. If he’s not worth at least two mil by now, I’m a chinchilla. They had a lot of money but you wouldn’t know it by his behavior.
He forced them to walk on the sides of the steps to make the carpet last longer in the middle! (she dislocated her finger when she fell once because of this). He bought all generic food and would actually sew the elastic band back into his tighty-whities when they fell apart (multiple times — I don’t know what his criteria was for finally ditching his old underwear, but DAMN! (Editor’s note – HAHAHA…)). From the way he treated money you would think that he was raised during the Great Depression. Why treat yourself that way? And especially why treat your family that way? It goes way beyond being responsible financially. (And who wants peanut butter you can pour out of the container?- Yuck!)
I look at it this way, how would I feel if right after I sacrificed everything, and reached whatever arbitrary goal I set, I got into an accident and was lying there dying. I know that I wouldn’t be thinking “Gee, I’m sure glad I got my mortgage paid off early” or “Glad I’ve got that $1,000,000 in the bank.” I would be sad that I didn’t enjoy the fruits of my labor more.
Given (what I consider) my balanced lifestyle, I of course would not be thrilled to be shuffling off my mortal coil. But if I died tomorrow, I wouldn’t feel like I cheated myself out of having a full and rich life either.
James Dean sums it up nicely:
“Dream as if you’ll live forever, live as if you’ll die today.”
After all, our financial planning is just a dream that we make happen.
BAM! Funny, well-written (especially for a comment, my goodness!), and a nice ol’ point in the end ;) The guy knows his stuff, eh? I know it’s easier said than done – especially when you have bills up the wazoo and everyone telling you to save-save-save or you’re gonna turn into a donkey – BUT these are good good words to live by. Or at least, think about every now and then.
I get into the habit of going hardcore a lot, but usually in little spurts here and there (you know those people who get crazy passionate about something for like, 2 months, and then stops on the dot and moves to another shiny thing? That’s me. Only with finance, I tend to hold onto things a lot longer than normal…) But, after alllll the money I’ve saved or spent, or invested over the years, etc etc — I have never given up my passions in life. I always need adventure spilling in and giving me breaths of air. Plus, I can’t ever get away with anything too crazy anyways due to Mrs. BudgetsAreSexy putting me in my place, haha…
I think it’s very important to have a little fun every now and then, or you’ll drive yourself bonkers. And worse, you may just GIVE UP on your goals altogether! (That’s the worst) The people that usually last are the people who take their time, and gradually reach their dreams with bits of breaks and revisions throughout their lives. We’re not robots, and we’re certainly not meant to focus all our energy on just ONE thing. Especially with finance. Without balance, we’re just asking for trouble.
Would you agree? What are some of the things YOU do to keep things evened out in your life?
(Photo by wolfsavard))