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I recently dropped in to speak with my accountant (who is also a good friend). We chatted about my finances, and we spent a little time discussing Get Rich Slowly. Somehow the conversation turned to frugality, and he told me a little story about one of his clients.
A true story
Like many of us, Mr. and Mrs. Smith were careful with their money. Mr. Smith handled the family finances — the income, the investing, the budgeting — and Mrs. Smith managed the day-to-day affairs. By practicing thrift, they were able to enjoy life with a modest amount of money, but sometimes Mrs. Smith wished for more. She wished that she could buy a new car, or take a trip to Europe, or afford some expensive clothes.
When her husband died last year, Mrs. Smith went to my accountant to help sort out the finances. She had never played a role in them, but fortunately my accountant was familiar with their circumstances.
“The first thing you need to know,” my accountant said, “is that you owe $150,000 in taxes.”
“$150,000?!?” asked Mrs. Smith. “How could I possibly owe so much? Where will I get the money?”
My accountant tried to explain: “You owe $150,000 because of your investment income. You and your husband had over $4,000,000 invested. Didn’t you know that?”
Mrs. Smith did not know that. Mr. Smith had never told her about the $4,000,000. It had never occurred to her that they might have that much money. She was shocked. “I don’t believe it,” she said. And then she said, “I’m going to Nordstrom.” She wanted to buy the expensive clothes she’d always wished for.
This is a strange, sad story. What makes it even stranger and sadder is that within a month, Mrs. Smith had died too. Though she had seemingly been happy and healthy, she died only a few weeks after learning of her fortune. She never did get a chance to use that $4 million to help her enjoy life.
The importance of balance
I frequently write about people who scrimp and save to build their fortunes. Just last week, I wrote about the millionaire next door. Whenever I share these stories, a vocal minority of readers complain that it doesn’t make sense to save a million dollars if you’re not going to use the money to enjoy life. This is a valid point.
As you pay off your debt and as you build your wealth, remember the importance of balance. Money is a tool. If you use it responsibly, and you provide for your future, there’s nothing wrong with using some of it to enjoy life today. If you’re meeting your goals, then buy a Mini Cooper. Refinish a sailboat. Take a vacation to Spain. Buy season tickets to the Dallas Cowboys.
Fund your future, yes, but also remember today.
See also: How to be frugal without being miserable at Dumb Little Man.
This article is about Odds and Ends, Planning, Relationships Saturday, 9th May 2009 (by J.D. Roth)
May 9th, 2009 at 5:20 am
Amen. I hate it when I see people saving just for the sake of saving with no goals. Balance is the name of he game.
May 9th, 2009 at 5:38 am
Well we know what went wrong here, but do we know why.
The truth of the matter is that often people are hoarding money by any means available. My experience is that if you do anything for the many, you will have money but still be unhappy.
My advice would be to do things that you enjoy to make your money and you will also enjoy spending it.
If you have to save and I guess we all have to put away something for that rainy day or our old age be sure that you keep your wits about and ’save’ it in something we enjoy. I have a friend who loves fishing and he ’saved’ his money in a fishing cabin that he himself only used from time to time, the rest of the time he rents it out and lives on the income. Another friend loves paintings and invested in an art gallery. She now travels the world to find up and coming artists to exhibit in her gallery while the art gallery manager takes care of the tasks she does not like. Here income from the gallery is more than what she can spend.
May 9th, 2009 at 6:05 am
The key for me is getting down to what is really important in your life. Slashing everything that you do not love in order to really be able to spend on things that truly make you happy.
To many people get derailed by things that they think will make them happy. By spending all their money in that area they too go without balance, but they end up with no money.
May 9th, 2009 at 6:09 am
Finding the right balance of how much to spend and how much to save is the hardest part of managing money. We need to save enough money to live comfortably in the likely event that we will live according to what statistics say, and spend enough to enjoy life in the unlikely event that we will die before it is statistically our time.
May 9th, 2009 at 6:19 am
I think the other lesson here is that couples should communicate about money - their goals, desires, etc. How sad that he kept her so much in the dark.
May 9th, 2009 at 6:40 am
If I die while I’m saving money, I won’t be sad. I’ll be dead. Whereas if I spend my money I’ll never fully enjoy life anyways because I won’t be able to enjoy the financial independence I’m shooting for later in life.
I’m glad to be a miser. Pinching every penny makes me happy. It gives me a goal, it gives me an identity. If I die, I won’t care, because like I said, I’ll be dead.
May 9th, 2009 at 6:43 am
Like a previous poster, I think this is more about communication and relationships than about miserliness. But I would guess that certain things are left out–like didn’t Mrs. Miser have to sign joint tax returns? How could the accountant not have paid quarterly tax returns (or was the $150,000 the tax liability for the quarter)? Did Mr. and Mrs. Miser have children and how did this play into it?
These are just some of the questions this story raises.
Of course, everyone would agree with the basic moral of the story! At least I hope so.
May 9th, 2009 at 7:11 am
My husband and I are frugal for the most part…but when we splurge, we really splurge, and I do not feel one bit guilty when we do. We save for retirement, save by prepaying our mortgage, save for our daughters’ college expenses (which if all goes well should be in about 10 years, when the youngest graduates from college)and so, after that…we plan on living in a paid for house for about 10 years, and then..who knows? but we should have the money for whatever we want at that time, due to a lifetime of regular frugal choices. Some things that others might think are extreme frugal are second nature to me, and are a part of my everyday life.
And I know, for the most part, just about every penny that flows in and out of this house, so I don’t end up like Mrs. Miser.
May 9th, 2009 at 7:15 am
I think balance is the true answer. Yes you need communication also. I have watched many couples where the wife has not paid attention to the taxes, the checking, or credit card accounts. They very seldom even look at the tax returns they just sign.
Few couples end up with the situation above, most have the reverse where they are so far into debt the wife ends up owing money with nothing to pay with. I see many of the wives, having to return to work, in the attempt of paying the bills.
Medical bills, often occurred toward the end of life, can deplete any saving account rapidly even with insurance.
Give me a person who hoards and invests money any day.
I hope to end this with enough to just get by on.
May 9th, 2009 at 7:22 am
I rarely post here (I’m an email subscriber), but felt compelled to do so today.
Words to live by, J.D.
May 9th, 2009 at 7:30 am
If not a Mini Cooper, how about a Mazda Miata! In college I had a Triumph TR7, but marriage & kids put an end to that. I always told myself I’d get a sports car when I retired. But, last year (still many years from retirement) I decided why not now? I had the cash and bought a 2008 MX5 Miata. Great fun and it gets 33 mpg.
May 9th, 2009 at 7:48 am
Saying “balance” is easy, but practicing it is difficult. I worry about saving enough for retirement (we’re currently saving the max in 401k and two Roths plus other investments), yet because I am disabled and don’t know what the future might bring, I want to get out and travel now before I can’t. To that end, we just finished a walking tour of the Cotswolds, with the majority of the trip paid for with the rewards from our credit card. At what point, though, do I say no travel and just save the money? Will I regret that if I can no longer travel once we’re retired? Maybe it’s more a mindset–save now and be happy with what I can do later on rather than travel. I don’t know. . .
May 9th, 2009 at 7:57 am
I sometimes think of this when denying myself certain kinds of fast food (like Subways sandwiches) or cookies at the grocery store. When I’m old, will I miss the food or the money more?
May 9th, 2009 at 7:58 am
Very interesting story about something I have been watching and thinking about a lot. Its painful watching elderly who were frugal/cheap and saved/hoarded for the “golden years” and yet still won’t spend it at the end. One is dying and the spouse still won’t spend a little on extra things to make life a little nicer. Sadly I know the dying one, if she was able to comprehend, would actually be happy he isn’t spending any money. There are actually some adult children out here that would like to see their parents SPEND money on themselves because thats what it was saved for! Do people honestly think they are taking it with them somewhere???
May 9th, 2009 at 8:02 am
I’m glad to see so many people here emphasize important communication. My grandfather saved for years and left (he thought) everything in place to take care of my grandmother when he died - mortgage paid off, pensions, saving plans, etc. The one thing he hadn’t accounted for was the fact that she had never had to take care of her money - she just had her spending money each week. Within 2 years, she’d blown through all the savings, sold the house and spent all of that too. What should have been a comfortable old age is now reliant upon just a state pension and a nursing home.
May 9th, 2009 at 8:08 am
This reminds me of the story of Anne Scheiber, who invested $5000 in dividend stocks 1944 and lived like a miser for the next 50 years. She died alone, with no friends and no relatives, still wearing her old clothes from many decades ago. Because of dividend reinvestment and dividend growth, her portfolio amounted to 22 million dollars when she died in 1995 at the age of 101.
Now I call this crazy. You could be frugal all you want but saving all of your money while not having even a decent standard of living is no better than comparing with the Joneses by taking on a HELOC against your home and maxing out your credit cards to buy expensive clothes, gadgets etc when you cannot afford it..
May 9th, 2009 at 8:18 am
These days, most women (I hope) are more involved, but I recall that when my grandfather died, my grandmother had no idea how to pay bills or balance the checkbook. My father had to go over and balance her checkbook and pay her bills every month for the rest of her life. She refused to learn. It was unspoken but quite clear: as the eldest son,she felt it was his responsibility to step in and take care of her. She lived on a small amount of Social Security, and I doubt there was much more she had, so this was not a complex financial situation she had to manage, but she just would not even consider doing it. Anyway, there are sometimes cultural reasons for the wife being ignorant of the finances, and I think this still goes on to some extent, here and in other countries.
May 9th, 2009 at 8:30 am
I am a huge advocate of balance. This kind of story is exactly what I’m trying to avoid in my life.
If you have tons of high interest debt or don’t have an emergency fund then I think you should put balance on hold for a little while and work on those.
But once you get to that spend it now or spend it in retirement question, balance is key. Is it really worth saving all your money for retirement only to retire and discover that you have no idea how to enjoy yourself? I think not. Is it really worth missing countless opportunities in favor of saving a few bucks here and there? Again, I think not.
But achieving balance is really hard to do. It depends on your personality, your goals in life and your priorities. I do feel that finding balance becomes easier if you know yourself. But I question how many people truly know themselves. And even if you know yourself well, balance will never be so easy that I can sum it up into some kind of pithy aphorism like “Spend 10% of your income on your hobby.”
I think the reason I’m so obsessed with figuring out balance I failed miserably at it in my younger years. I spent too much time studying and working and not enough time socializing, enjoying life and experiencing new things. I missed out on a lot and I regret it. If by the time I’m old I have nothing else to talk about except my job and my education, I’ll have no choice but to consider my life completely wasted.
May 9th, 2009 at 8:31 am
There are many of us out here who work hard to be frugal because we simply can’t afford to be anything else. We strive each day to set priorities so we can enjoy tomorrow and today, but often there simply isn’t much money for either. We just do our best.
If you have acheived the kind of financial independence where you are saving well and still have plenty left over, enjoy it. It’s a wonderful thing to be able to enjoy the things in life that are important to you. Finding life’s joy doesn’t necessarily take a lot of money, but if you have money it can widen your range of choice.
Obviously you should always be wise with your money. But if you can afford to have money left over after being wise, then please be thankful for the opportunities that are now open to you!
May 9th, 2009 at 8:37 am
My grandfather always reminded me to “stop and smell the roses,”.life is to be enjoyed. It’s served as a nice reminder for me when I get a little overly frugal!
May 9th, 2009 at 8:53 am
It is a joy for me to save money. That in it of itself gives me pleasure. I like to lock up a big chunk of money, once a year, and start with 0 savings, so i’m always on my toes and disciplined.
May 9th, 2009 at 8:56 am
Give it away!
Charity gets a raw deal on this blog.
If you’ve lived frugally and aren’t possessed by desires for Stuff, and thus have more money than you need, don’t go finding something to want. Give it away! Along the way, plan in a way that meets your goals with a wide margin of error, and give the rest away!
I try to control my spending impulses as a lifestyle choice. Philosophically, I don’t want to want something just because it’s within my grasp. I want to live frugally because wanting Stuff is unattractive to me.
I want to live comfortably. I don’t want to have to work forever, and I’m not opposed to paying people to iron my shirts or whatever. But if I don’t need anything, and I don’t want anything I can buy, and I can reasonably anticipate meeting those needs and wants in the future, I can give the rest away!
May 9th, 2009 at 9:02 am
i always equated savings to buying property. Well that blew up on my a couple years ago. i’d either save my entire bonus, or buy a property. things were going so well until the downturn. but, at least i have a vacation property in Tahoe to go to from SF in the winters and summers, and i get rental income. too bad it doesn’t cover 100% of the cost, more like 50-60%.
in the end… would i be better to have $1million in cash in the bank now, earning 4% interest for me after 10 years of work? Or, would I rather have gone on an adventure, lived in a couple nice properties i bought, rent them for my future, and have 350K in the bank instead? i think i would choose the second option, b/c experience is what makes us rich, and not so much the money.
May 9th, 2009 at 9:12 am
It is all about finding a balance between money and life. There is no sense in depriving yourself of your dreams in order to hoarde away money. Money is a tool which is meant to be used. If you are preparing for tomorrow there is no reason not to enjoy today.
May 9th, 2009 at 9:47 am
@JD,
Thanks for the great post - this is an area of our financial lives that doesn’t get enough attention, so thanks for bringing it up.
Many commenters have hit on the communication issue, and that’s a part of the problem - but I think what would have helped in the situation is if Mr. & Mrs. Smith had had a discussion of and agreement on values - individual and shared - and then attached those values to life goals…
By taking the time to understand one another’s true values and then lifting those values toward goals we’d like to accomplish, then we have truly developed a purpose for our activities, be they saving, spending, or as @UnderstatementJones says, giving it away.
Many have mentioned balance, and perhaps the values conversation is something they’ve had and consider a given. But if not, it’s tough to figure out what you’re “balancing” between.
jb
May 9th, 2009 at 10:33 am
Does someone have to bring up charity after every post? This is not a story about charity. The woman in this story DID have things she had always wanted and wanted to do, and would have, had she and her husband communicated more and enjoyed a little of their money. THAT’S the point.
I give money to charity every month, but I get tired of people harping on JD about it all of the time and the superiority complex (not talking about post above, just in general) of some who chastise others about giving. Do what you want with your own money.
That said, I’m the one in the marriage who handles the finances, but I print a report and review it with my husband every month, so he always knows where we stand financially. I saw how my parents handled money (separate accounts, Dad doesn’t know to this day what Mom makes), and I love ‘em, but I’m not doing that in my marriage. Everything is joint, and we’re a team working toward common goals.
And travel is high on my list. When I asked myself what my regret would be if I were on my deathbed, the only thing I thought of was not seeing Italy. So I went, and now I’ve caught the travel bug, big-time. We spent two years getting our finances are in great shape, and this month we started saving for the next big trip.
May 9th, 2009 at 11:10 am
I too take care of all the finances but make sure my husband has a hand in all of the investment decisions and knows where all of the money is and where it goes. We have always advocated balance…and frugality. Why can’t they go hand in hand? We live without debt (OK, we still owe on our house, but should have it paid for in 2yrs) and love to travel. We make vacation a priority for us, and we can afford to pay for it by not owning all of the electronic gadgets that someone else might prioritize. And I guess that’s what it always comes down to…what each person values and makes a priority in their own life. JD wants a mini cooper, I prefer a caribbean cruise : )
May 9th, 2009 at 11:22 am
Interestingly enough, I just did an ESL lesson with a student about “regrets”. They pointed out that studies show that most people aren’t sorry at the end of life for “wrong decisions” (like investing in the wrong stock), they are regretful that they “didn’t do” something, or failed to make decisions which resulted in inactivity.
IOW, they “didn’t take that trip they wanted to, or they didn’t take sky jumping lessons.
I thought it was interesting.
May 9th, 2009 at 11:22 am
The point of the blog entry is well taken.
The moral of the story to my ears is that money questions are emotional questions. Personal finance writers spend enormous amounts of energy discussing all sorts of topics. How much of it really makes a difference? Those who get emotional satisfaction from saving save, sometimes too much. Those who get emotional satisfaction from spending spend, sometimes too much. All of the millions of words directed to logical analyses of the pros and cons don’t necessarily amount to all that much.
I think we need to spend more energy analyzing the emotional side of things. That’s hard. It calls for a different set of analytical techniques than the ones we are accustomed to thinking of as the techniques appropriate for people writing in the personal finance field.
Rob
May 9th, 2009 at 11:42 am
I really liked this article because it focuses on the importance of achieving balance. As with anything in life, there must exist a degree of moderation. If you choose to live a frugal life, it should not be at the expense of the present moment. The now is the only time we have, so we must take every opportunity that arises because we do not know if it will come again, but at the same time, you must take into consideration the future. Balance the happiness of today with the security of tomorrow.
May 9th, 2009 at 12:16 pm
Some of us traveled the world and got it out of our systems before settling down to the seven-to-five job and got a mortgage.
May 9th, 2009 at 1:22 pm
This reminds me of another story. There was a guy who never really had much money, would go days without eating sometimes and had 5 possessions total. He lived like a bum. After he died, someone got a hold of those 5 possessions he owned and sold them for $2 million! How sad is that! The guy could have bought a Ferrari, yet he lived completely broke. You know, Gandhi? Isn’t that so sad his life was completely unbalanced?
My point is that this story is inconclusive. If this said guy always dreamed of a Porsche but never bought it, ok maybe that’s sad. But maybe he made one good investment early on, then cut back his work schedule, found a job he loved, had cheap things he loved to do like fish or hike, and spent tons of time with his family. It doesn’t really tell you if he lived his life exactly the way he wanted to. If your goal is to buy certain things and those things are expensive, then that’s fine, but if your goal is something different, that you don’t have to spend money, then that’s not sad. I guess like the posts above say, she obviously wanted to spend the money, so that might be sad, but it doesn’t really say if she was happier after she went on her spending spree. I guess she died too quick to find out.
May 9th, 2009 at 1:41 pm
That is a sad story. Reminds me of someone’s quote: “It’s ok to save for a rainy day, but if that’s all you do, then you’ll be spending your money on rain. Take time to enjoy the sunshine too.”
I agree with JD that the point is balance. It doesn’t feel good to obsess about money all the time. Yet we need to have it under control, or it controls us.
Also, it’s sad that the husband and wife didn’t even have good enough communication to talk openly about their finances and spending habits. What you give you receive, and any extreme on one side will give birth to its opposite on the other. This story seems to be a good example of that.
May 9th, 2009 at 4:38 pm
THANKS JD! This is such a true story that shows a good point — BALANCE is what we really need to be focusing on. I get so much flak for being a 20 year old that loves to spend money on my car… But you know what? That little car gives me more happiness per penny than anything else that I know. Oh, and I still save for retirement too while I’m still in college. (Last year about 7% of my gross income went into my Roth IRA, which is currently beating the S&P 500; all the ETF’s were picked by me.)
There is NOTHING wrong with spending money on things you enjoy. Now, spending without restraint and beyond your means is still a bad idea, but what’s life without living a little? (Yes, this includes having STUFF. If you surround yourself with things that make you happy or remind you of happy times, then everyday, even the rainy ones, seem a little brighter. I keep a wall full of hotwheels cars to remind me of the cars I’d like to own one day and am working towards.)
I’ve always felt that money is a good means to an end, but never a good end in and of itself.
May 9th, 2009 at 8:10 pm
“it doesn’t make sense to save a million dollars if you’re not going to use the money to enjoy life”
The people who say things like this are the same people who are never going to have any large amount of money and who are going to be still working into their 60’s and 70’s. You have to ask yourself, would you rather scrim and save and be able to retire at, say, 50, or would you rather take that trip to Disney and buy that new car but have to keep working for the rest of your life?
I don’t save my money just because I like to see a big number in my bank account. I save because I hate having to work and want to be able to quit as soon as I can.
May 9th, 2009 at 10:50 pm
This article made me wonder a few things.
How much money do I need when I’m retired, will I really need $3-4 million bucks or will $1-1.5 suffice?
Will I have the energy/health to spend that much money before I die in my retirement?
What is the difference between saving and hoarding?
Ah, to find that ever elusive balance…
May 10th, 2009 at 1:59 am
Hi
I couldn’t agree more. The worship of money for its own sake is a sickness. Money should be viewed as a tool to enrich your life, the lives of your friends, and the community.
May 10th, 2009 at 2:05 am
There’s really not enough information in that story to draw any conclusions. Just consider age, income and dependants:
case a) if Mr & Mrs Smith were fit and healthy 65 year olds, who could reasonably expect to live another 20+ years in retirement, and were used to living ‘frugally’ on a pre-retirement salary of $200K. They had four kids and 12 grandkids, and Mr Smith wanted to pay for his grandkids college education costs.
In that case, having $4m of investments may not have been excessive. And given Mrs Smith’s immediate reaction of wanting go out and start spending the money, Mr Smith may have had good reasons for keeping the exact amount of money they had accumulated confidential.
case b) if the couple were in their eighties, had been spending around $50 per year, and had no kids. In that case, having $4m squirreled away and not telling his wife seems pointless.
May 10th, 2009 at 5:01 am
I think you can find balance in enjoying today and saving for tomorrow, by making smart purchases. A few years back my husband and I decided to sell a bunch of investments and take out a mortgage on a beach home. If we hadn’t bought the house we’d certainly have a whole lot more money in the bank, but then again we’d have missed out on amazing family vacations there. Now some folks could say we’d have just as much fun renting someone else’s house and that might be true, but that house brings our family together in ways I never imagined. Right now the rental income doesn’t cover the expenses, but it will one day. In fact, the rental income will eventually help fund our retirement.
May 10th, 2009 at 5:52 am
Someone implied earlier that her husband should have kept the money from her since her first reaction was to spend. Keeping such a large secret from your spouse is positively adulterous to me and so an emotional reaction was to be expected. Mr. Smith is the only one who received comfort from money that should have benefitted both of them.
I’m not talking about spending here. What Mr. Smith cheated his wife out of was the security he felt as “his” investments and savings grew while she probably worried whether she was wasting pennies putting too much peanut butter on a sandwich.
As others have said, this is about communication not simply spending or not spending money. Consider how it feels to realize your spouse never trusted you before you do something you see as being for his or her own good behind their back.
May 10th, 2009 at 7:27 am
@ One Frugal Girl - I am in the exact same boat. Bought a place at The Resort at Squaw Creek in Lake Tahoe a couple years ago. I thought I was getting a deal when I bought it for 10% less than the person paid, or about $90,000 cheaper. Boy was I wrong!
That said, i proposed to my wife up there. Have had amazing hikes. Went up there many times during the summer… something I never would have done. I love it! The place is priceless, and in 15 years, it will be paid off and the rental income will cover everything, and then some.
RSC
May 10th, 2009 at 7:42 am
That got me so depressed.
Did Mrs Smith ever asked about their financial situation? This is crazy, and sad.
May 10th, 2009 at 10:25 am
Well, i thought this story had a different ending. The woman bought the nice clothes, she bought a Mercedes and she booked a round the world cruise. While on deck looking at the setting sun, she started to talk to her dead husband’s ashes that she brought along on the cruise. She said “remember when I always wanted nice clothes and you said No, remember when I always wanted a nice car and you always said No, remeber when I wanted to take a cruise and you said No” As she was pouring his ashes into the palm of her hand, she asked him one more question, “Do you remember the BJ that you always wanted? well here” as she blow his ashes out to sea. Happy Mother’s Day!
May 10th, 2009 at 3:34 pm
I agree this story is 1/2 about miserliness and 1/2 about communication and having both spouses involved in the finances.
Lesley - your comment made me laugh!
May 10th, 2009 at 8:10 pm
So I’ve got to know — who did the $4mil go to? Children/heirs?
…the accountant?
May 10th, 2009 at 10:37 pm
Well said, thank you.
May 11th, 2009 at 6:18 am
They practiced thrift, nowhere does that say they lived in a shack and drove a twenty year old beater. Nowhere does it say she suffered, just that “she” wanted/wished for more things than they currently had. What’s missing is that maybe “he” didn’t want those things (isn’t that part of “balance”).
It also doesn’t say how old they were, how long they’d been retired or even if they were retired, it doesn’t say what their current income or expected retirement income ranges were. What the husband’s thoughts and goals may have been are now lost. Given we don’t know them, to him $4M may have just cut it (how much will our accounts be in future dollars when we retire, and will it be enough in our minds?).
I will say given her immediate reaction of “I have to go out and buy something to make me happy” potentially says a lot about her personality. Based on her reaction I’d think she could sadly end up like those lottery winners who go out and buy all the material crap they “dreamed” about and a few years down the road end up broke, unable to pay the property taxes on their new homes or afford insurance on their new cars.
Finally, everyone talks about balance, but I’ve seen no real proof they didn’t have it. She accepted the balance of their relationship by chosing to be ignorant (and it had to have been a choice since, as others pointed out, she had to sign certain documents). Everyone just assumes that he was a penny pinching tightwad and she was the poor woman at home with bleeding fingers from cutting out too many coupons and sitting in her burlap sack because she couldn’t afford those $800 dresses and $500 purses. I know a couple who live much “wealthier” lives (based on home, cars, travel, furnishings, etc.) than my spouse and I, but she always wants more and he’s always talking her down and keeping tight reins on the budget. They fit the above profile to a T in that to this day she seems more concerned about how much she’s “allowed” to spend (even though they’ve worked a budget for twenty plus years of marriage) than what they’re saving. I doubt anyone looking on their current lives would think she’s suffered or “missed” out, yet I can see the above scenario mirroring their relationship perfectly if he were to pass away first.
The morals I see from this story are about communication and financial understanding (she really shouldn’t have been in the dark about the money and should be informed enough not to consider it a lottery win and know why her husband wanted so much saved).
May 11th, 2009 at 7:16 am
Did she ever ask her husband to do these things - travel, but a new car, etc?
Did she bother to look at her tax returns when she signed them? A $150,000 tax bill means they were making at least $450,000 in investment income, probably more. If I saw numbers like that and didn’t know about it I would certainly ask.
Seems like there was a huge communication breakdown here, and that’s probably the saddest part.
May 11th, 2009 at 11:26 am
Balance is an area I have a lot of difficulty with. The main problem is that my husband is 16 yrs older than me and has always been a spender. He has never saved for anything. He is 51 and has no retirement and is still in the paying-off-debt phase.
I want to enjoy life with him as much as I can. But I will probably be taking care of him at some point, and I will probably live to be 100, and I need to prepare for these things. I’m contributing to my 401k but not maxing it out; I’ve started an emergency fund and a home-repair fund, but both are small. We owe a visit to my aging grandmother in Montreal, whom I haven’t seen in 15 years and who has never met my husband. We both have other places we want to see, but where does that money come from?
It’s a great challenge.
May 11th, 2009 at 12:00 pm
i can’t believe no one has made the obligatory “why would anyone want to buy Cowboys season tickets?” joke yet.
May 11th, 2009 at 8:38 pm
YO! Having established and followed a zero-balance budget for 2 months, last night I blew $11.50 on a ticket to see Star Trek! It was great! I needed it! Thats it until the next paycheck……
May 11th, 2009 at 8:47 pm
Interesting post and it really makes you consider. I’ve recently been frustrated with myself for not having more in savings and going over budget. I know I have the tools and capabilities necessary to stick to my budget, I’ve just been lax. However, this post reminded me that money is simply a tool. It is meant to be utilized just as any other tool would be. And while I’m still saving for the future, I have to live my life today as well. I don’t wish to leave this Earth with the regret that I never truly lived. Very thought provoking post! Balance in saving and spending is important to our overall well-being.
May 11th, 2009 at 8:50 pm
Balance is critical in more than just personal finance– diet, exercise, and relationships . . .
December 13th, 2009 at 1:17 pm
If people want to be misers, that’s their business.
When will people in this country learn to mind their own business and stay out of other people’s affiars?