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Does one has to be a spendthrift to live well?

  1. sofs profile image81
    sofsposted 7 years ago

    Does one has to be a spendthrift to live well?

    Isn't it time we learm lessons from The USof A

  2. MobyWho profile image60
    MobyWhoposted 7 years ago

    Speaking as an ex-Spendthrift, now recovering, no. However, it is a question of degrees. It's fun to have had the pleasures and treasures, but the cleanup is stressful. Example - gradually reducing storage lockers; digitalizing over 100 Kodak carousels of slides; selling on eBay for a few years; giving, giving, giving; and there's still a pile of junque. "Well" is in your head. The relief of simplicity is worth the pain of restraint. I know: been there, done that. In fact, I have a blog about growing poor gracefully. I admit, I probably added to the financial meltdown, but I'm not helping cure it by not buying. Which is worse? To buy or to save? (Old Yankee trick: answer a question with a question.)

  3. aspiretoinspire profile image61
    aspiretoinspireposted 7 years ago

    I've always been taught to save and be frugal. I feel I live pretty well for a 22 year old. Buy the things you need when they're on special, don't rely on credit cards, don't buy what you can't afford, take advantage of high interest savings accounts....

    Each person has their definition of living well. Mine is having what I need, a bit of what I want while saving for what I *really* want. Which is, my own property.

  4. Springboard profile image81
    Springboardposted 7 years ago

    Absolutely not. Actually, despite what people often believe, the more you spend the less you ultimately have, and the less freedom you have. Thrifty spending, as opposed to being a spendthrift is key.

    You spend 80% of your means, and you save the remaining 20%. That goes into the bank, into wise investment etc. You extend the 80/20 rule to your spending of large ticket items like houses and cars. I call that the compound 80/20 rule. If you can afford a $200,000 house, you look for a house for $160,000. If you can afford a $20,000 car, you look for a car for $16,000. The "compound" part comes down the road as you begin to realize that you are actually spending less than the 80% and saving more than the 20% you were originally.

    Couple things are going to happen. You will live better. You will have more freedom to choose what you want to do. If a recession comes along and changes your financial dynamic, including scoops your job away, you will have plenty in the bank to fall back on. When the credit card company (if you've used them) comes along and says "we are going to increase your rates like it or not," you have money in the bank to tell them where they can go with their terms.

    You will also retire far earlier than your spendthrift peers who think they are living it up. The only reason a person cannot afford to retire is because by the time they reach retirement age they are still paying things off, AND have not saved near enough.

    I should point out that being thrifty by no means means that you are, or that you have to live like a pauper. You can still have the toys. The difference is that the one who lives below their means can actually afford them...

    And enjoy using them by the way. How many people do you know with beautiful boats in their driveways that never see their way to the water for which they were intended? The folks who own them are often times too busy working to pay for them to actually use them. smile