Why spend less than you earn?
There are the obvious reasons. Spending more than you earn isn't sustainable, of course. You can't build your net worth unless you spend less than you earn. And spending less than you earn decreases your stress level.
But is there another reason to spend less than you earn … something that doesn't benefit you at all?
Keeping up with the Joneses is a concept frequently mentioned on personal finance blogs. In fact, not keeping up with them is often heralded as one of the first steps toward turning your financial life around. And keeping your life headed in the right direction.
I had never thought about that concept in the opposite way — decreasing my own expenditures so that someone else didn't feel pressure to keep up with me –– until I was hanging out in my aunt's cozy, '80s-era kitchen a couple of years ago. In her mid-50s, she and my uncle seem to be financially comfortable. I assume the mortgage is paid off on their nice house, and they take a lot of frugal vacations. To be honest, she forgot more about frugality than I'll ever know.
“We could afford to take more vacations, or stay in hotels instead of tent-camping. I could even remodel this kitchen,” my aunt said.
“Well,” I asked, thinking a fresh coat of paint would be an improvement, “why don't you?”
“Because, I don't want my family members who are just starting out to feel pressure to overspend.”
What does your kitchen have to do with other people? I wondered.
“If we remodel this kitchen — ” (and the cabinets and wallpaper are in fine shape, by the way) ” — maybe I would cause my son and daughter-in-law to be unhappy with their kitchen. And they aren't in a position to spend money on a kitchen.
“It's all about how you start,” she continued. “If you start out with nothing, you can end with something that is still living within your means. But if you overextend yourself financially at the beginning, it makes your whole life more difficult.”
As I finish up writing this article, my family and I are visiting my sister on the west coast. She and her husband rent a small apartment in a large house (three-hole golf course in the back yard!) with beautiful gardens. And we're staying in the guest house above the four-car garage. It's an awesome place.
But it's also large and ostentatious. When you have such a great place, where do you go from there?
And then there is my community. I live in a rural area with small towns scattered along the state highways. Along Main Street in any of these small towns, you'll usually find a coffee shop with some farmers and retired people catching up on the local gossip.
When you build a house or get a new vehicle or buy some land, people notice. I don't know if other communities are like this, but in mine, flaunting wealth isn't done by most people. I mean, there are luxury cars, but for every BMW, there are ten older sedans or beat-up trucks. Maybe people don't flaunt their wealth because they don't want to become the topic at tomorrow's meeting in the coffee shop. Maybe it's because the community wants to promote simple living. Maybe it's to prevent others from spending more than they have.
One of my relatives was car-shopping years ago. The car salesman said, “You know, you can afford a Cadillac. Nice cars, those Cadillacs.”
My relative ended up buying a Buick, because he didn't want to “show off” with a Cadillac. That is admirable, but I was left scratching my head. The price of the two cars? Almost identical.
Part of me thinks this is all kind of ridiculous: If I am living within my means, why should I adapt my spending to prevent someone else from having the urge to overspend? After all, I don't look at other people and think that I need their car, house, or boat. And should I really care what other people think of the stuff I choose to spend money on?
But all these stories illustrate — at least to me — that we don't spend our money in a vacuum. To varying degrees, our spending choices affect others. And no other relationship is more important for this lesson than how our spending may affect our children.
Since we've had children, we've thought about which financial lessons we want to teach them. As we gain more experience with parenting and really consider how what we teach our children now affects their futures, we've come up with two concepts that we want them to learn.
Being content with what you have. And just because you have the money for something doesn't mean you should buy it.
For example, our car is reliable and has been paid off for 4.5 years. It's not worth much to anyone except us, but now that we have a third child on the way, our friends have been not-so-subtly suggesting that it's time for a larger vehicle. Even though I am sure a larger vehicle would be more convenient, our car seats five. It will work.
And we could technically afford a larger vehicle. Once we paid off our car, we kept saving $300 a month for several years until we had enough for a replacement vehicle. So, when our kids (and friends) asked when we were going to buy a new vehicle, we didn't say we couldn't afford one. Instead, we said we didn't want to spend our money in that way at this time.
When we decided to discard our previous kitchen remodel ideas and just freshen up what we had for much less cash, I hope that our kids not only realize they don't have to have amazing houses, but that spending less gives them — and their neighbors? — more options.
So what do you think? Is this idea that we should spend less so that others don't feel pressured to spend more a little … crazy? Maybe something restricted to my country-bumpkin lifestyle?
Author: Lisa Aberle
Lisa Aberle is a college professor by day and a freelance writer by night. Always an aspiring writer with an interest in money, she once ironically misspelled “mortgage” during a spelling bee. Most of her current adventures take place on the four-acre mini-farm she shares with her husband in the rural Midwest (where she writes with gel pens whenever possible).
Hmm. I can see both sides of this story. On the one hand, I do think it’s ridiculous to not do things because someone else might be envious. By that logic, you should never get married or have kids either because singletons like me feel the pressure to keep up with that as well! And I certainly shouldn’t have been chasing promotions because my stay at home friends aren’t pursuing their careers. On the other hand, I sometimes feel self-conscious about my purchases when people make unfounded assumptions about me. For example, when my married with kids friends buy new… Read more »
I say to H*LL with what other people think. Do whatever feels right for you and don’t worry about how people judge you.
I like to wear jeans and a T-shirt or sweatshirt when I go around town. I could drive in with a leather suit and a Lambourghini (sp?), but that’s not me. I don’t care what others think.
Can you really afford a Lamborghini if you can’t spell it? 😛
I enjoyed the article and it really made me think. I do get overzealous sometimes and mention to my friends how much I save (percents not dollars) and how much I’ve paid off. I find it inspires some but also makes some more envious, in the way a new purchase does. So I find myself walking on eggshells around some and being very open to others. (E.g. some friends are still under the impression I have student loans while others know they are paid off) I’m 24 now and honestly can say it’s always been like this though. You have… Read more »
“overall just be considerate.” — YES!
I think sometimes we imagine judgment that isn’t there. Just because I got a new coat, doesn’t mean I’m looking down on my friend’s older coat. If I were to brag about my new coat and point out how my friend’s coat is out of date — well, that’s a different story! (Frankly, I don’t care that much about coats…)
I think we tend to assume that what others do is somehow reflects on us, and that’s not always the case. How we make others feel is really important.
After covering the basics, where you spent your money reflects what you care about, your values if you will. You can spend money on fashion (tween girl), on a fancy car (20-something man), experiences (e.g., retirement trips), or saving for your kids’ education. The trick is to figure out ahead of time what’s important to you so you’re the one in charge, instead of the Jonses, who probably don’t care if you’re keeping up or not. Another trick, especially early on, is to differentiate between needs and wants and take care of the needs first. I foresee a retirement full… Read more »
I really don’t base my spending decisions on what other people might think. They are responsible for their own thought process and how those thoughts evolve into their personal spending decisions.
Yes! Thanks for the article! In the past few weeks I’ve been really obsessing about the social aspect of “success” (or whatever), and this goes right to that. The individual is not the end-all be-all. The social environment is important, and this is another piece of the puzzle. For those who’ve read “Outliers”– do you remember the story of the Italian immigrants in Pennsylvania who lived very long and healthy lives? How researchers kept trying to pinpoint things to diet or some other “individual choice”? Turns out the key factor was low social stress. And one of the main traits… Read more »
I do remember that account in Outliers, I think. Sardinia, right? Reading through the other comments, I can see that this individual vs. social impact is different for everyone. A large part has to do with my social network. My aunt and uncle, I believe, are genuinely happy to spend their money in the way they’ve chosen to. And they are considerate of others (as Sean so succinctly mentioned above) in ways beyond money.
I am currently in France, and it has occurred to me that in the US we have no sense of “fraternite.” The idea of creating shared spaces, and shared values, for the benefit of all is sort of un-American. We are all about liberty and equality, but that includes the liberty to be selfish, too. In good and bad ways.
We are very hesitant to make individual sacrifices for the sake of the group. I think that comes across pretty clearly in the comments here.
We have public parks and playgrounds and libraries in the US, you know.
Although I agree with not flaunting wealth, I am not going to base my car choice, clothing choice or housing choice,etc., on what I think other people might think and how they will react. Doing so , to me, seem to be a recipe for unhappiness.
Not doing something for fear of or intent on influencing others is borderline codependent or some other manipulative behavior it seems to me. One of the nice things about being financially independent is that you have the freedom and money to make choices on how you want to spend your money, without going into debt and all the stress that comes with that. It seems there is a very fine line between not flaunting your wealth and living on the ‘down low’ even after you’ve met your financial goals and using any sort of logic as an excuse to not… Read more »
You bring up some good points, but the people I have talked about in the article care less about money than they do about the people in their lives. Money is just a tool to them, so after they meet their savings goals and obligations, I am almost positive that they give a lot of money away. Not that everyone has to do that, of course, but I just wanted to point out that they aren’t spending it to keep as much as they can for themselves. They really genuinely care about how they affect other people.
Once you start caring about what other people think about things like this (or parenting, or anything else where your actions could influence or be influenced by others), there’s no way to win. Whatever you do is going to make it worse somehow for somebody or invite negative judgment from somebody.
So sure, you can pick the side that justifies the actions you prefer. Or you can realize that there’s no point to caring about either side and no need to justify those actions to anybody but yourself and your family.
This article resonates with me. I am very much a believer in not contributing to mutually assured financial destruction. Thirty years ago as a poor college student surrounded by much wealthier classmates, I made the promise that if I should ever be blessed with good fortune, I would never live better than the median American no matter how tempting it may be. Now that I’ve crossed into rarified territory by income and net worth, I am gratefully keeping this promise. I believe that all of our actions set an example, and this is a significant part of how I want… Read more »
Great article!!! I particularly loved her very true statement that “if you overextend yourself financially at the beginning, it makes your whole life more difficult.” I think a lot of us may get caught up with that with paying for college and kids and their expenses all coming when we’re young. As to influence, I think she is absolutely right. I also wonder about the influence of TV. When I was growing up, there were a lot of shows where the people didn’t have the nicest homes and were poor but happy. Now, most of the shows marketed to younger… Read more »
I think (some) people are always going to find a reason to be envious or even try to keep up with me and its not my responsibility to curtail that. They are adults and I have enough to obsess over on my side of the street!
I have chosen to live in a relatively modest neighborhood and drive unassuming vehicles than I can afford not only to live well below my means, but to avoid having my children growing up in a “privileged” environment. So, I do agree with the premise of this article.
Me too. Growing up, our family income was highly unstable, and we moved a lot. I don’t think it was good for us to be the poorest kids in a neighborhood, or the richest. I picked a place where, living well within our means and meeting all our savings goals, our lifestyle is right in the middle.
Great article and I’m glad it made me think on my effect on others. I do think media, and our accessibility to it, also have an effect, but maybe not in smaller towns like the one you speak of. Wouldn’t it be crazy if mainstream rap suddenly shifted to talking about their Roth IRA bling and economy car savings. Seriously though, I was personally struck by your Aunt’s statement about overextending while young. While I agree, it is harder to overcome, it seems to have one of two effects on most people. It either makes financial freedom a top priority,… Read more »
I’m going to give this a college spin. If you have kids going to college, if that is the right calling for them, there is a major impact either way of what and how you spend or if you choose not to and how you allocate your money. I have done extensive research into college process and essentially depending on your situation you may receive no assistance and thus need to have plenty of money set aside. Its way too involved to go into in one comment. But if you have kids that might go to college and you want… Read more »
We were able to save 66% of our net income last year because of this reason. We have a simple lifestyle, we don’t show off and neither do our friends. It makes for a really fun but also really unpretentious environment. Can’t wait for those summer BBQs again. Both inexpensive and a lot of fun!
At the core, this illustrates the joy of community, something that often has little value in our society today. Community only works when those in it value it & place the value of the common good above individual interests. Consciously choosing to minimize conspicuous consumption for the reasons referenced are about placing more value on the overall health & well-being of the group.
It takes maturity & humility to see things through this lens. I hope I’m wise enough to take into consideration my community, when faced with financial choices.
I’ve always been fascinated by the concept of community and its impact on others. Months ago, I wrote about how my social network helped my family through some rough times. I think that those experiences have made me more aware of what’s really important to me, how my money could be used to have the same impact on others, and how grateful I am that other people have helped me…especially when I have seen the challenges of others who don’t have the same strong community.
Great article, Lisa. With this topic, there seems to be a split between those who spend less because they don’t want to show off (Buick guy) and those who spend less because they want to set a good example (your aunt). Of course, I think the latter is pretty admirable–thinking about how your purchase will affect the spending habits of your loved ones? That’s pretty great. On the other hand, I’m not sure about not spending out of fear of showing off. I do this, sometimes–I don’t buy certain things because I’m afraid of being judged. And while I don’t… Read more »
My country bumpkin lifestyle is pretty low-stress, but it would probably take a city girl some time to get used to the empty space (both around us and on our entertainment calendar). Lambing season is a whole different kind of entertainment ;).
Really interesting perspective. It makes total sense, especially in certain cultures and communities. In some areas standing out can actually be dangerous too which would be another deterrent for some people. Don’t get me wrong I spend money, but apparently in a way that I probably look like a pauper to some on the outside. I still have my $15 pay as you go flip phone that I bought from the drugstore 4 years ago, and my car has only about 30% of the clearcoat left on it as apparently on Honda’s the paint fails after 10 years, my 8… Read more »
So the real lesson of the perfume is that people, as social entities, either encourage you to come up and “fit” into their level (e.g. the corporate job) or they want to tear you down and ensure you know you’re threatening their comfort level by making you feel guilty about stepping beyond their level (the part time job).
In both cases, the attempt is to get you to fit the “norm” of the area in which the majority are comfortable.
This may be a little off topic, but I cannot understand the ‘kitchen remodel’ thing. We have a nice 70’s era house in a nice development with the original kitchen. It is a nice, classic design even though the cupboards are dark, which I understand is ‘out’. Most people in our development are in ‘competitive remodeling’ mode and have redone their kitchens, along with other rooms. I cannot see spending the money when our kitchen works just fine. I don’t know our neighbor’s financial situation, but for all I know, they are up to their ears in debt. We are… Read more »
An old kitchen works for you now, and that’s great. But if you ever plan to sell your house, you will probably have to remodel it. Or take a steep cut in price when you list.
ETA: you don’t know your neighbors financial situation, so maybe they are paying for their kitchen remodels with cash, while continuing to max out their 401k plans, their 529 plans, and maintaining a 9 month emergency fund.
Thanks for pointing out the other side. I very much believe that the individual is not the end all be all, greatest good, highest whatever. It doesn’t take much for an I don’t care what people think attitude to go from healthy self-assurance to hurtful overconfidence. I think empathy, which is at the core of the article, is a positive trait. We don’t live in a vacuum and it wouldn’t be emotionally healthy if we did. Does this mean that your spending or saving decisions must always benefit your community? No, I don’t think so. They are your decisions. However,… Read more »
I have to admit, I probably consider other people’s opinions too much, in both directions. Especially when it comes to clothing and accessories. In general, I’m not a big spender. But often when I buy clothing it’s because I worry that I’m starting to look shabby, or too out of fashion, especially at work. On the other end, several years ago I got a big promotion at work, and decided to buy myself a pair of diamond stud earrings. I’d never owned a “real pair” of earrings. I had the cash, and could have spent much more, but I ended… Read more »
Yes, it’s crazy. Just as you shouldn’t care about the Jones, they shouldn’t care about you. It is not your responsibility to worry about whether others might be pressured to do things because you did them. You have enough to worry about. Make sound financial choices for you and your family and your children will be fine. If that means you go on nice vacations, as I do about once a year with smaller ones two times a year, fine. As long as everyone understand that vacation was in our budget, not put on a credit card, did not interfere… Read more »
Well said. You save money so that eventually you can spend it on something. Something serious, like education, nutritious food, a reliable car,etc. Or something more frivolous, like a fun vacation or a reliable AND sexy car or…jelly beans. Never forget to splurge on jelly beans!
Why does this remind me of a Seinfield episode (the one where Seinfield buys his parents a cadillac, which causes suspicion and friction with their condo neighbors to the extent they get kicked out. Pretty funny.
My son and I once had an argument about money. He was living in an apartment 350 miles from home and trying to figure his life out. I regularly gave him 200-300 dollars to help out and I did not realize that he was making assumptions based on my gifts. I argued that he was poor because of bad decisions and he suddenly argued that I was rich and could afford to help him. It was a slap in the face. I pointed out that I drove old cars and lived in an old house and never took vacations so… Read more »
I think this happens a lot, and I don’t think a lot of parents realize how skewed their children’s perspective can be. Many parents want to give their kids every advantage in life, and never talk to their kids about what sacrifices are being made for those advantages. I see this with my boyfriend’s two sons. They both are of the opinion that “Dad makes great money, he can afford it”, but they don’t see the sacrifices that Dad is making. They’re both in their 20’s now, and their unrealistic expectations have stretched Dad to the limit, and are ultimately… Read more »
I have a friend who does the same thing to his kid. No matter what the kid demands, he’s provided. Kid quit a high paying job because he was bored and wanted to go back to school for a masters. Didn’t bother to check if the job would have paid for it, just quit. After quiting, he signed up for the classes and then called his father and said he needed $25K in two weeks for the first semester and to make sure he had enough to “live on”. My friend screamed and moaned to me, but paid it. That… Read more »
I see it a lot with parents in his age range; they parent with a sense of guilt. It’s as if they somehow failed as a parent if their kid can’t immediately attain the lifestyle that they raised them in, or if their kid ever has to suffer, or work hard. The expectation that your child should start off at the same place it took you 30+ years to attain is completely ridiculous. Of course, every time I say anything, I get the backlash that “You don’t have kids, so you don’t understand!” But the reality is, something has to… Read more »
I’ve made this comment twice before and it keeps disappearing, so here is my third attempt :)!
Anyway, I just wanted to say I feel there is a difference (a subtle one) between caring what people think of me and caring how my actions affect others. I meant for this article to be about the latter part of the previous sentence. I don’t know if that makes sense to anyone else, but it’s something that I have been considering in the non-financial aspects of my life as well.
Lisa, I appreciate your thoughtful consideration that turns the idea of keeping up with the Joneses around. I grew up in suburban Dallas, a culture driven by the measure of others based on what they own (or seem to own.) My family did not have the latest & greatest, and memories of my growing up years are all colored by the feeling of not being enough because of money. That’s one reason why money has such a painful sting for me — and I’m sure for many other people. I wrestle with my desires for more financial security. Is this… Read more »
I think the people most likely to judge you or be influenced by your spending are the people who don’t know you well and are likely to take your spending out of context. Those who know you well know how you saved for years to afford something. I do think a lot depends on your priorities for spending also. For example, I’d always buy a very basic car because I just don’t care. I wouldn’t get additional enjoyment out of a BMW compared to a Civic, provided neither car had mechanical problems. But if the BMW was my dream car… Read more »
I disagree with the second part of your statement. I think the people most likely to be influenced by your spending are the people closest to you. In my own life I’m not concerned with what car the guy down the street drives or that a woman at the local coffee shop has a beautiful designer suit. However, when my mother-in-law has us over to for brunch and her house is impeccably decorated for Christmas or my good friend from college is taking an international vacation I internalize that. I start thinking about running to the mall to get some… Read more »
I think you make a very good point here. Combined with this is the point someone above made, that we make a lot of assumptions about the people closest to us’ finances. Money is a very taboo subject for most people. If we don’t talk about it, we don’t know if the friend who travels internationally is paying cash for their trips, or has mountains of credit card debt. If the parent is supplementing the child’s lifestyle, but not discussing the sacrifices they’re making to do so, the child may just assume the parents have plenty of money, and can… Read more »
One time I have considered others in my spending is when I knew a friend was and still is not in good financial shape and was and probably still is living off credit cards. Once I clearly understood her family’s financial status, I made it a point not to invite her out to things that cost money. I’d invite her to the park so that the kids could play together and we could talk, but never out to anything that required money.
This article was very interesting. I’ve been subtly doing this on a small scale for a while now. Including inviting a friend out for coffee, ice cream, or a walk, instead of an expensive dinner out that she may feel pressured to spend. I’ve also made it a point, when friends say “I love your new outfit!”, to tell them it was second hand and exclaim we just have to go thrift shopping together! Little things like that make a big difference when there is an income disparity – I certainly don’t want to feel I’m making a friend uncomfortable… Read more »
Sounds like good money sense to me. I’m all about saving wherever you can. That’s why I do what I do.
I regularly shop thrift stores, garage sales, and Craigslist for just about everything I have. Often I stumble upon something brand-name for cheap. So I have an expensive-brand coat, an expensive-brand purse, nice-looking shoes, etc. It occurred to me that last time I was in my thrift store that the people around me might be judging me for being “too rich” to shop there. Maybe not, but I puzzled over that for a while. Also, since everyone around me knows I will only buy stuff for cheap, no one actually believes I paid full price for my brand-name stuff. Which… Read more »
Also, since everyone around me knows I will only buy stuff for cheap, no one actually believes I paid full price for my brand-name stuff. Which sort of negates the purpose of having brand-name stuff, which is to make people think you have lots of money. Doesn’t it? So I’ve been puzzled about that as well. Have I advertised myself as a frugal person so well that I can’t possibly look “luxe” to anyone anymore? No, not for me. I buy certain items and certain brands (mostly thrift/used/clearance) because I like the item/brand, not to advertise that I own it… Read more »
Living below your means because that’s part of your value system (and you have goals for that extra money)is one thing. Depriving yourself of something you can afford that would improve your life, under the guise of not wanting other people to overspend is…I don’t know what. Co-dependent? If you have children still living at home, or even if they’re young adults, and you are still trying to teach them about money, I can see explaining why you’re not buying the latest greatest Thing or remodeling the kitchen. But to continually deprive yourself because you think other people are going… Read more »
Co-Dependent? I’m not sure if that is exactly right, but it is along the lines of what bugged me about this article. I think not spending money in ways that you would want to spend it and can afford to spend it under the guise of not wanting other people to overspend is … if not co-dependent, then certainly exhibiting a serious lack of proper boundaries in your relationships with others.
Thing is, I think we’re all dependent to some degree on the people around us, whether we like it or not. No man is an island, blah blah blah. While I can’t put my hands on one right now, I think there are studies showing that we do spend more when our friends spend more. Or if our friends are overweight, we're more likely to be overweight. http://www.health.harvard.edu/blog/how-your-friends-make-you-fat%E2%80%94the-social-network-of-weight-201105242666 I probably live in a different world than the commenters who focus more on the individual, but I still maintain that it's extremely difficult, if not impossible, to not influence (or be… Read more »
I think there needs to be a balance. I do think we can be good role models for others by being good stewards of the resources we have and living with a strong value system. Anyone who is a writer, educator or parent should be having these debates! At the same time, I don’t think we should maintain the status quo just because we might upset someone. Should I have held back in school because my siblings didn’t get the same marks I did? Should I not advance in my career because my stay-at-home parent friends might feel pressured to… Read more »
If the aunt wanted to seriously remodel the kitchen the way to sell it and create a teachable moment at the same time is to let folks know you’ve started saving for it and expect to be able to pay for it next year. Then do it.
People understand you had to save and watch pennies to get what you wanted, you get your new kitchen. Anyone envious of the “money” you used isn’t likely to be open to learning to be frugal.
I think it speaks to one’s character when they have the means to buy whatever they want and they choose instead to use their money to help others or save for the future. That really impresses me. If you’ve got the money, there’s nothing wrong with spending it. It’s just important, I believe, not to be “showy” about your wealth. That’s not right.
Spending “less so that others don’t feel pressured to spend more” is irrational, fear-based and has no evidence-based social science to prove its assumption.
Sorry, I had to laugh when I read that your car has been paid off for 4.5 years. Mine has been paid off 11 years. Sometimes I don’t know if I should be happy or sad about that fact. I’ve been hoping for a major breakdown so I could put it out to pasture, but it just keeps going with no major repairs needed. I have to admit though, I love the fact that I’ve had no car payments for 11 years! Spending less than the Jones can be hard in some neighborhoods and even some workplaces, but keeping your… Read more »
I think not spending money in ways that you would want to spend it and can afford.
I think the major problem with “The Jones'” envy is that people can only see the tip of the ice berg. They don’t see the hard work, the saving, the prioritizing that happens behind the scenes. They see the upgrades and new cars and feel the need to keep up with the Joneses. Another issue is that people compare themselves to where you are today and where they are today, instead of comparing the similar stages in life. Even then people *should* be comparing themselves to where they were year ago and not worry about what the neighbors are doing.
My brother has just started eating red meat again for the first time in twenty years so as not to impact the tastes / growth or opinions of his first born.
I think we can apply a similar logic to our finances, and set a much better example than the one’s portrayed in media and “The Jones'”. Unfortunately financial literacy does not come naturally to all and I know I would have loved more assistance and more positive financial role models in my upbringing.
Great Lesson!
You should never base your spending decision on what others think of it. Never . Personal finance is a very personal matter where decisions are based on your current financial situation and goals. Once you let someone else’s opinion affect you decisions , you’ve started down a slippery slope that you’ll regret.
I think the aunt’s attitude is rather condescending and a bit arrogant. Why assume that everyone out there wants what you have? Nothing wrong with deciding not to spend money on something that you don’t want or need — just don’t justify it as savings other from themselves.
I agree with Darce – the Aunt comment seemed really arrogant to me as well. Under the same scenario, wouldn’t her son be jealous of her plentiful vacations? Anything you spend money on could be seen as something someone else would want, and could inspire them to work harder/make better decisions to be able to afford the same niceties later in life. I would hope to raise my children so that when we redesign our kitchen in 20 years they say “wow, mom, it looks great! You guys really deserve it!” and have no correlation into their own lives. I… Read more »
“spending money is about personal value”
The Aunt is being true to her value. She could redo the kitchen, but I guess it’s not that important to her. Considering other people in your decision making isn’t the same as being arrogant or controlling, you’re being considerate. Something that a lot of people can learn.
When my parents did some renovations for their home, I thought: “they’ve worked hard and waited a long time to do this – and they’re doing it debt-free. That’s amazing.” not “Oh poor me I don’t have a nice porch like this, I need to go into debt to get one.”
It’s one thing to see your parents/family/friends going out and buying everything they want when they want it — I don’t think any of us would argue that’s a bad influence. But seeing someone work hard and save for something they want — is that such a terrible thing?
I still remember making a move into my current city and facing this same issue with my fiancé. The cost of living was significantly more than it had been in our smaller college town, so we found us in the classic scenario where we would have to make some sacrifices early on in order to ensure that we were living within our means. This can be tough, especially when you are brand new to city living, but it is very important for your long run stability and growth.
Most millionaires are high savers in the 15-20% range of income.
That’s a very interesting point Jamie, but I’m not sure what aspect of my comment prompted you to relay this statistic (aside from the general theme of saving where it counts). Don’t get me wrong though, because I’m always happy to learn something new!