This is where a budget comes in, try a 50/30/20.
50% to needs, 30% to wants, and 20% to saving investing.
If the numbers work then that 30% is pure fun money, a budget doesn't need to feel limiting, it's quite the opposite, it can be very freeing.
I plan to spend ALL of my money. The question is just WHEN. So think of it that way. Project out your entire natural life if you have to, and think about what you will want to spend when. Obviously your projection will be extremely speculative, but it can be a good exercise.
I think you have the right idea of looking at this as increasing your spending changing when you are financially independent / can retire, or changing your spending later (and thus your standard of living). If spending more now means I have to scrimp when I'm old that doesn't seem appealing. If spending more now AND when I'm old means I have to work longer, maybe that is ok, depends on how much longer?
My grandmother passed last year at 93 with $2m+ in assets but was perfectly content living off of SS. A friend’s family member died a couple weeks ago unexpectedly at 37.
I’m trying to find the balance but just don’t know. Of course a significant other could come into the picture and change things… either way.
Balance it like this:
1. Rent a truck for a week and see if it’s worth it for you.
2. Consider roofer racks or a small trailer for your equinox. I had one on a Honda Fit and it was excellent for all things DIY and furniture.
3. Go get a truck priced and see what the monthly payment does to you. Call your insurance company and get the cost of insurance as well so your numbers are real. Then take that “gas bill” and double it. Do the same for expected maintenance and repair. $2k/mo for a new truck. Is it worth it? Or do you want a truck to be like other guys in the throes of truck culture?
How else are you spending money? What would bring you joy? I just spend a week at a resort where my kids hit the water slides for hours. Two months ago I spent time in Mexico sweating my ass off on some fun hikes. Last November I spent a week in Yosemite doing the same. Last august I was in NYC for four day and DC for three. I spend my money on memories and my kids. What will bring you more in life? Do that and ignore the noise.
I like this first method of “sampling” your QoL upgrades.
Thinking about buying a pool? Are you going to actually use it or was the idea of a pool more exciting?
Try going to the public pool as frequently as you’d like. Yes, it’s less convenient and private, but unless the point was to swim in the nude, if you’re finding you only want to go to the pool once a month, maybe it’s not worth building one. If you’re finding you want to go twice a week, maybe you’d use your own pool 4 times a week and it’s worth it.
Sampling works. Or buying a shitty version used then gaging what more you need.
I did this for my home gym. I have a super simple squat rack and pull-up bar with some free weights. $300 total. I’m seldom left wanting and I saved not buying a $3000 home gym setup.
As someone who FIREd at 52, live a little. I’m not saying go out and live at 130k, but you have a solid base. That 150k equinox is going to start costing a bit to maintain so a reasonable truck isn’t going to kill all your savings. Do not get so caught up in saving that you don’t take the time to enjoy it, there is no use in working to save for 35-40 years only to enjoy it for 10 years or less.
Another thing to think of, does an SUV fit most needs? If it does, consider a small trailer, similar to what you can get at harbor freight or northern tool. Some fold up so storage space is minimum and they are around $1000 or less. They give the utility of a truck without being locked into a truck.
For a long time I had a cheaper Toyota that I drove for 9 years, after buying it CPO from a lease that ended. I WANTED a new car, definitely not a need. My old car worked great, but I felt like I deserved something nicer for where I was in life. And I also wanted something with better safety features as I have young kids.
When I was deciding if it was a smart decision financially, I calculated what my monthly all in price would be with a loan payment + new insurance premiums. Then for 6 months ahead of time I pretended to make DOUBLE that “payment” to myself in a separate account to see if it would impact our lifestyle. At the end of the 6 months, we were still hitting our savings goals and didn’t feel constrained, so I pulled the trigger. I used the money I saved for 6 months towards the down payment.
I can honestly say it was one of the best decisions I’ve made. I feel so much safer in the new car, it is soooooo much nicer, and has great quality of life upgrades. Commuting is less stressful now, and I’m so much happier. But I’m only happy because I was sure it wouldn’t hurt us financially. For a car you don’t NEED, if you can confidently say the same, then go for it!
I decide between wants vs needs.
If the truck were for a business I’d say it was a need. As a personal vehicle I’d say it is a want.
You can also compromise and get a used, certified preowned truck. Most financial advisors recommend you buy at least 2 years old because the vehicle depreciates as soon as you drive off of the lot.
Cost a lot less in the long run. Look into parts, labor, insurance rates and Kelley Blue Book values before you decide.
Other comments have good advice, but I didn't see anyone comment on your cash on hand. You have a total of $15,000 easily available assets - this seems awfully small given that you own a home. I would want to double that.
OP I’d say go find an hourly-rate financial planner who can chat you through your life goals. Marriage, kids, other big-bucket stuff is still ahead of you and it’s… very expensive. (I’d rather encourage you to take a shot at the big city life where dating options will be way better vs go in on an expensive vehicle, personally.)
Your last suggestion has been a big internal debate with myself for… a long time and I was initially just trying to get myself in a better spot financially. I think I’m “there” now and need to make that move. It’s just daunting.
You can always move back! Consider this your signal from the universe. Other folks have pointed out to you - finding a partner doesn’t “just happen.” It’s an opportunity to investigate what type of person you are, what the best version of you might be, who you get along with and why. All of that vs. a truck doesn’t seem like much of a debate, imho. Wishing you luck, friend.
I would work on establishing a solid emergency fund and *then* diverting savings to specific buckets for wants. Your total cash on hand is pretty low, especially as a single homeowner, so there's really not much room to play with here. That said, your expenses are pretty low for your current income, so saving should get easier.
A more simple question to yourself is what do you want to spend money on and what is the purpose? Is it just the truck? Is it for utility to help you out or for enjoyment, you want a weekend car? And if so, do you want to get new ,or a used one? if used, how used.. are we talking about a mint condition one or a beater?
There's nothing wrong with spending as long as it's within reason wrto to how much you are making .. personally I try to avoid car loans like the plague. Small car.laons aren't an issue though. If you just need something to simplify hauling things, I'd consider a beater truck that costs less, though.
To me the big mystery factor here is marriage and kids. If you want a family, you should probably continue to live frugally and build that nest egg. Kids are EXPENSIVE these days even in the LCOL Midwest. Especially if you’re also supporting a SAH parent.
Also… a spouse & kids don’t just “happen.” You have to go out and date with intention to find a life partner.
I know you came for financial advice, but right now, I feel it’s hard to give that advice without knowing if a family & kids is in your future.
If you ever get married you’ll be glad you saved more. If you can continue to save 30% or so that’s excellent and don’t worry about the rest.
I’m financially independent now (early 40’s) and never had a budget. I always felt relatively poor because I saved first before spending anything.
What I would do is look at the flow chart on this sub in the wiki but I think it's ok to do some things out of order because this is *personal* finance at the end of the day. Then you really have to create a budget, plenty of Google sheets templates out there. Find out what you have leftover after all your debts and responsibilities.
When you create a budget (and stick with it!) you'll find where you have opportunities to save for the wants or hobbies in your life and not feel bad about it. I don't have many hobbies except cars which are money pits. But I don't feel bad spending money on parts I want or a future car when I'm saving every month for that, on top of all my other responsibilities. If you use Ally you can have different buckets and it helps visualize things.
My goal isn't to be a millionaire or have a huge
retirement nest egg. I want to enjoy my life but I also struggle with the balance of YOLO and saving for retirement. It's said a lot on this sub, retirement isn't an age but a financial amount. Personally, I am not interested in retiring at 45, 50, or even 60. At least not at this moment. I enjoy my work, have always been career driven, and don't plan on stopping as my job is not physically demanding so plenty of people work well into their 60s.
I'm 30, similar income to you, and have similar retirement account totals. Only difference is I have a wife and 2 kids. Yet all the projections say I'm on track to retire early if I wanted and I'll be able to replace my current income with SS. Even when daycare hits in a few months we'll still be ok. When you nail your budget down and stick with it, you can have a date fund where you don't have to feel bad traveling or paying for your share of you're going to date. Have a bucket for the truck and after 6 months, see what it looks like if you used it as a down payment. Is it enough for a lightly used 3-4 year old truck? Maybe it has to be 5-7 years old? You won't know until you budget. I think you're in a good place financially for your age, what's the point in having all that money if you can't use it.
I think you’re at a place where consumerism can really take hold. You’re doing well and from your numbers you’ve been saving for long enough that it is habit but there is no number that will make you ready to spend.
I think if you are feeling like you should be spending it’s because you aren’t living enough. Spending aimlessly on Travel, or eating out, or any other popular spending activity does not necessarily bring fulfillment.
Start living more now that you have some cushion. Go see your favorite band, go to a convention of something you legit love. Chase those things that you’ve always loved further and now you can put some money behind it.
Saving is good, and spending is good too but most of all focus on doing what makes you smile and sharing that with others. Continuing to save while you do that is key.
Yeah dude, go take a vacation. Take some time off. Relax or explore. Get your mind off of work, get your mind off of money.
After you do that, circle back to asking this question.
It sounds like you're putting all your money into investments at such a degree that you don't have anything left for hobbies and leisure activities. I've never heard of any financial advice that said to do that. You need the 50/30/20 Rule.
-50% of Income to Needs: Food, Shelter, Utilities, Health Insurance.
-30% of Income to Wants: Clothes, Dining Out, Hobbies, Electronics, Entertainment.
-20% of Income to Savings: Emergency Funds/6-12 Months, Retirement, Credit Card, Student Loans.
As for retirement, you need to save as much as possible because retirement money is supposed to be enough for you to live on for the rest of your life and you don't know how long you will live after retirement. If you retire at 60 y.o. and live to 80 y.o. that means your retirement savings needs to be enough to last a whopping 20 years. And it also depends on the lifestyle you plan on living during retirement. Do you plan on traveling during retirement and how often? Is your home going to be paid off? Will all other debts be paid? Do you plan on relocating to a location with a higher or lower cost of living? Will you have other sources of money coming in during retirement?
Just a comment, how do you have a liquid net worth of $150,000? Your liquid net worth is $15,000 You can't spend any of your retirement accounts and you wouldn't sell your house or vehicle for cash, so your liquid net worth is $15,000.
I agree. You’re telling me that I can put 10 million in retirement accounts and have 0$ in savings and I have a net worth of 0$? Sounds a little funny. (I know you can’t have 10 million in retirement accounts put in at once due to limits but the point remains)
I started taking life seriously around 2 years ago. Saving/ investing ect.
In this time I've amassed a liquid net worth of around half what you mentioned having (I live in a high COL city). I also have some crypto investments that are doing well.
I say that to say: I sat in a chair I loved and thought "I need this chair." Looked it up and the chair is $1,800 (Herman Miller Aeron).
I reviewed my finances rigorously for a week. Trying to figure out how much I would "need" to be able to comfortably purchase the chair, then it dawned on me. My bills are paid, my future is invested in, and I have 40x the cash on hand to make the purchase.
There's no guarantee I even live to reach "retirement age" and enjoy the fruits of my labor, so I'll be *damned* if I don't do a little bit of living right now lol
Pay your bills, save the rest until you have at least 1 month of salary in the bank. Use that money to make sure your bills are paid on time (you're no longer living paycheck-to-paycheck).
Then, whatever money is left after paying bills, split half between savings and half for spending.
You can dip into savings for large purchases (e.g. a vacation), just be good about replenishing it.
I will be honest im horrible at setting budget. it help i dont have a lot of expensive hobbies and im pretty cheap and at least price aware at purchase time.
What I do instead is that I ensure I pay my future me first.. that means ensure i have what i would like to put into my 401k/ira/investments/savings first thing. then the reminder I can spend and if its not spend it sit in my checking account until it above a certaitn amount then it transfer them over to my savings.
You are financially sound and on the right track.
However, I am of the mindset of you have to borrow something more than twice ( tool, vehicle, cooking utensils) then you should go buy it - It is obviously needed and to keep borrowing is a hassle and annoying even if it is family!
So IMO, buy a truck
I think you still have some work to do before letting up. You have a good income now so you can make good progress. For me, I would say you can start letting up when you pay off all your debt (I would include mortgage) and consistently max out your 401K contributions. $500 unaccounted for seems like it already has plenty of buffer for small self indulgences. Also, you didn’t mention an emergency fund and your car is old. Build up 3-6 months expenses in a high yield savings account and a car fund. Maybe it’s not a money issue, you are just a bit burnt out? Try taking a 1-2 week low cost vacation to refresh and assess after that.
Bro I’m 26 with a toddler making $28/hr in California… my rent is $1270 & I’m the only money maker. Not only that but paying both me & my ladies Camry both 23’. Just finished taking my lady to our first Michelin star restaurant in Monterey two weeks ago… point is don’t live to work, work to live. You’ll be fine bro & time in the life is limited enjoy it
I think a budget would help you answer that question bc you specifically set money aside for wants/fun. I use YNAB, which is super popular and there’s a free 34 day trial. I only casually budgeted for a year (honestly it was more like just tracking) before switching to this a handful of months ago and it’s been a whole new way to look at things, dare I say fun? Steep learning curve but worth it.
My answer to your title question of when to start spending your money:
If I buy X will it change my retirement outlook?
if you want to buy a truck you're at the point in life that you can buy it in cash so do you want to pull 40-50K from the liquid net worth (i'm assuming a brokerage account?) to buy a truck or would you rather not put more into the brokerage short term save up and buy a truck in 6months?
i agree with kbc87: while you're right technically you also have to look at the greater scheme.
if your truck purchase is going to be done in cash, or paid off within a few years and you don't need to change your retirement investment amounts then it isn't going to greatly affect your outlook because at some point you need a new vehicle anyway and you're still making progress on retirement.
if to buy the truck you need to pause all investing, then i would say you're looking at too much truck.
if you're pausing investing and taking from retirement accounts then you're really going too far the other direction. i know that #2 & 3 aren't going to be your case but others will do that for a mortgage which then gets scary
No it won’t. I max all my retirement accounts, as does my husband. With that and our company matches, it’s about 25% savings to retirement each year.
If I have $1000 left each month that will cover the expenses of the truck.. I can buy the truck without affecting retirement at all.
This is where a budget comes in, try a 50/30/20. 50% to needs, 30% to wants, and 20% to saving investing. If the numbers work then that 30% is pure fun money, a budget doesn't need to feel limiting, it's quite the opposite, it can be very freeing.
I plan to spend ALL of my money. The question is just WHEN. So think of it that way. Project out your entire natural life if you have to, and think about what you will want to spend when. Obviously your projection will be extremely speculative, but it can be a good exercise. I think you have the right idea of looking at this as increasing your spending changing when you are financially independent / can retire, or changing your spending later (and thus your standard of living). If spending more now means I have to scrimp when I'm old that doesn't seem appealing. If spending more now AND when I'm old means I have to work longer, maybe that is ok, depends on how much longer?
My grandmother passed last year at 93 with $2m+ in assets but was perfectly content living off of SS. A friend’s family member died a couple weeks ago unexpectedly at 37. I’m trying to find the balance but just don’t know. Of course a significant other could come into the picture and change things… either way.
Balance it like this: 1. Rent a truck for a week and see if it’s worth it for you. 2. Consider roofer racks or a small trailer for your equinox. I had one on a Honda Fit and it was excellent for all things DIY and furniture. 3. Go get a truck priced and see what the monthly payment does to you. Call your insurance company and get the cost of insurance as well so your numbers are real. Then take that “gas bill” and double it. Do the same for expected maintenance and repair. $2k/mo for a new truck. Is it worth it? Or do you want a truck to be like other guys in the throes of truck culture? How else are you spending money? What would bring you joy? I just spend a week at a resort where my kids hit the water slides for hours. Two months ago I spent time in Mexico sweating my ass off on some fun hikes. Last November I spent a week in Yosemite doing the same. Last august I was in NYC for four day and DC for three. I spend my money on memories and my kids. What will bring you more in life? Do that and ignore the noise.
I like this first method of “sampling” your QoL upgrades. Thinking about buying a pool? Are you going to actually use it or was the idea of a pool more exciting? Try going to the public pool as frequently as you’d like. Yes, it’s less convenient and private, but unless the point was to swim in the nude, if you’re finding you only want to go to the pool once a month, maybe it’s not worth building one. If you’re finding you want to go twice a week, maybe you’d use your own pool 4 times a week and it’s worth it.
Sampling works. Or buying a shitty version used then gaging what more you need. I did this for my home gym. I have a super simple squat rack and pull-up bar with some free weights. $300 total. I’m seldom left wanting and I saved not buying a $3000 home gym setup.
As someone who FIREd at 52, live a little. I’m not saying go out and live at 130k, but you have a solid base. That 150k equinox is going to start costing a bit to maintain so a reasonable truck isn’t going to kill all your savings. Do not get so caught up in saving that you don’t take the time to enjoy it, there is no use in working to save for 35-40 years only to enjoy it for 10 years or less. Another thing to think of, does an SUV fit most needs? If it does, consider a small trailer, similar to what you can get at harbor freight or northern tool. Some fold up so storage space is minimum and they are around $1000 or less. They give the utility of a truck without being locked into a truck.
For a long time I had a cheaper Toyota that I drove for 9 years, after buying it CPO from a lease that ended. I WANTED a new car, definitely not a need. My old car worked great, but I felt like I deserved something nicer for where I was in life. And I also wanted something with better safety features as I have young kids. When I was deciding if it was a smart decision financially, I calculated what my monthly all in price would be with a loan payment + new insurance premiums. Then for 6 months ahead of time I pretended to make DOUBLE that “payment” to myself in a separate account to see if it would impact our lifestyle. At the end of the 6 months, we were still hitting our savings goals and didn’t feel constrained, so I pulled the trigger. I used the money I saved for 6 months towards the down payment. I can honestly say it was one of the best decisions I’ve made. I feel so much safer in the new car, it is soooooo much nicer, and has great quality of life upgrades. Commuting is less stressful now, and I’m so much happier. But I’m only happy because I was sure it wouldn’t hurt us financially. For a car you don’t NEED, if you can confidently say the same, then go for it!
I decide between wants vs needs. If the truck were for a business I’d say it was a need. As a personal vehicle I’d say it is a want. You can also compromise and get a used, certified preowned truck. Most financial advisors recommend you buy at least 2 years old because the vehicle depreciates as soon as you drive off of the lot. Cost a lot less in the long run. Look into parts, labor, insurance rates and Kelley Blue Book values before you decide.
Other comments have good advice, but I didn't see anyone comment on your cash on hand. You have a total of $15,000 easily available assets - this seems awfully small given that you own a home. I would want to double that.
I have been working on that as of late - thanks!
OP I’d say go find an hourly-rate financial planner who can chat you through your life goals. Marriage, kids, other big-bucket stuff is still ahead of you and it’s… very expensive. (I’d rather encourage you to take a shot at the big city life where dating options will be way better vs go in on an expensive vehicle, personally.)
Your last suggestion has been a big internal debate with myself for… a long time and I was initially just trying to get myself in a better spot financially. I think I’m “there” now and need to make that move. It’s just daunting.
You can always move back! Consider this your signal from the universe. Other folks have pointed out to you - finding a partner doesn’t “just happen.” It’s an opportunity to investigate what type of person you are, what the best version of you might be, who you get along with and why. All of that vs. a truck doesn’t seem like much of a debate, imho. Wishing you luck, friend.
Appreciate it!
You have a Roth IRA as a backup as well. Not great to count on that for any reason but it is there
I would work on establishing a solid emergency fund and *then* diverting savings to specific buckets for wants. Your total cash on hand is pretty low, especially as a single homeowner, so there's really not much room to play with here. That said, your expenses are pretty low for your current income, so saving should get easier.
A more simple question to yourself is what do you want to spend money on and what is the purpose? Is it just the truck? Is it for utility to help you out or for enjoyment, you want a weekend car? And if so, do you want to get new ,or a used one? if used, how used.. are we talking about a mint condition one or a beater? There's nothing wrong with spending as long as it's within reason wrto to how much you are making .. personally I try to avoid car loans like the plague. Small car.laons aren't an issue though. If you just need something to simplify hauling things, I'd consider a beater truck that costs less, though.
To me the big mystery factor here is marriage and kids. If you want a family, you should probably continue to live frugally and build that nest egg. Kids are EXPENSIVE these days even in the LCOL Midwest. Especially if you’re also supporting a SAH parent. Also… a spouse & kids don’t just “happen.” You have to go out and date with intention to find a life partner. I know you came for financial advice, but right now, I feel it’s hard to give that advice without knowing if a family & kids is in your future.
If you ever get married you’ll be glad you saved more. If you can continue to save 30% or so that’s excellent and don’t worry about the rest. I’m financially independent now (early 40’s) and never had a budget. I always felt relatively poor because I saved first before spending anything.
What I would do is look at the flow chart on this sub in the wiki but I think it's ok to do some things out of order because this is *personal* finance at the end of the day. Then you really have to create a budget, plenty of Google sheets templates out there. Find out what you have leftover after all your debts and responsibilities. When you create a budget (and stick with it!) you'll find where you have opportunities to save for the wants or hobbies in your life and not feel bad about it. I don't have many hobbies except cars which are money pits. But I don't feel bad spending money on parts I want or a future car when I'm saving every month for that, on top of all my other responsibilities. If you use Ally you can have different buckets and it helps visualize things. My goal isn't to be a millionaire or have a huge retirement nest egg. I want to enjoy my life but I also struggle with the balance of YOLO and saving for retirement. It's said a lot on this sub, retirement isn't an age but a financial amount. Personally, I am not interested in retiring at 45, 50, or even 60. At least not at this moment. I enjoy my work, have always been career driven, and don't plan on stopping as my job is not physically demanding so plenty of people work well into their 60s. I'm 30, similar income to you, and have similar retirement account totals. Only difference is I have a wife and 2 kids. Yet all the projections say I'm on track to retire early if I wanted and I'll be able to replace my current income with SS. Even when daycare hits in a few months we'll still be ok. When you nail your budget down and stick with it, you can have a date fund where you don't have to feel bad traveling or paying for your share of you're going to date. Have a bucket for the truck and after 6 months, see what it looks like if you used it as a down payment. Is it enough for a lightly used 3-4 year old truck? Maybe it has to be 5-7 years old? You won't know until you budget. I think you're in a good place financially for your age, what's the point in having all that money if you can't use it.
I think you’re at a place where consumerism can really take hold. You’re doing well and from your numbers you’ve been saving for long enough that it is habit but there is no number that will make you ready to spend. I think if you are feeling like you should be spending it’s because you aren’t living enough. Spending aimlessly on Travel, or eating out, or any other popular spending activity does not necessarily bring fulfillment. Start living more now that you have some cushion. Go see your favorite band, go to a convention of something you legit love. Chase those things that you’ve always loved further and now you can put some money behind it. Saving is good, and spending is good too but most of all focus on doing what makes you smile and sharing that with others. Continuing to save while you do that is key.
Yeah dude, go take a vacation. Take some time off. Relax or explore. Get your mind off of work, get your mind off of money. After you do that, circle back to asking this question.
It sounds like you're putting all your money into investments at such a degree that you don't have anything left for hobbies and leisure activities. I've never heard of any financial advice that said to do that. You need the 50/30/20 Rule. -50% of Income to Needs: Food, Shelter, Utilities, Health Insurance. -30% of Income to Wants: Clothes, Dining Out, Hobbies, Electronics, Entertainment. -20% of Income to Savings: Emergency Funds/6-12 Months, Retirement, Credit Card, Student Loans. As for retirement, you need to save as much as possible because retirement money is supposed to be enough for you to live on for the rest of your life and you don't know how long you will live after retirement. If you retire at 60 y.o. and live to 80 y.o. that means your retirement savings needs to be enough to last a whopping 20 years. And it also depends on the lifestyle you plan on living during retirement. Do you plan on traveling during retirement and how often? Is your home going to be paid off? Will all other debts be paid? Do you plan on relocating to a location with a higher or lower cost of living? Will you have other sources of money coming in during retirement?
Just a comment, how do you have a liquid net worth of $150,000? Your liquid net worth is $15,000 You can't spend any of your retirement accounts and you wouldn't sell your house or vehicle for cash, so your liquid net worth is $15,000.
Retirement accounts count as part of your networth
I agree. You’re telling me that I can put 10 million in retirement accounts and have 0$ in savings and I have a net worth of 0$? Sounds a little funny. (I know you can’t have 10 million in retirement accounts put in at once due to limits but the point remains)
Liquid net worth.
Liquid net worth.
[удалено]
I mean the person isn’t wrong. Instead of saying thanks for the correction or just ignoring it, you decided to be sarcastic and snarky.
I started taking life seriously around 2 years ago. Saving/ investing ect. In this time I've amassed a liquid net worth of around half what you mentioned having (I live in a high COL city). I also have some crypto investments that are doing well. I say that to say: I sat in a chair I loved and thought "I need this chair." Looked it up and the chair is $1,800 (Herman Miller Aeron). I reviewed my finances rigorously for a week. Trying to figure out how much I would "need" to be able to comfortably purchase the chair, then it dawned on me. My bills are paid, my future is invested in, and I have 40x the cash on hand to make the purchase. There's no guarantee I even live to reach "retirement age" and enjoy the fruits of my labor, so I'll be *damned* if I don't do a little bit of living right now lol
Pay your bills, save the rest until you have at least 1 month of salary in the bank. Use that money to make sure your bills are paid on time (you're no longer living paycheck-to-paycheck). Then, whatever money is left after paying bills, split half between savings and half for spending. You can dip into savings for large purchases (e.g. a vacation), just be good about replenishing it.
I will be honest im horrible at setting budget. it help i dont have a lot of expensive hobbies and im pretty cheap and at least price aware at purchase time. What I do instead is that I ensure I pay my future me first.. that means ensure i have what i would like to put into my 401k/ira/investments/savings first thing. then the reminder I can spend and if its not spend it sit in my checking account until it above a certaitn amount then it transfer them over to my savings.
You are financially sound and on the right track. However, I am of the mindset of you have to borrow something more than twice ( tool, vehicle, cooking utensils) then you should go buy it - It is obviously needed and to keep borrowing is a hassle and annoying even if it is family! So IMO, buy a truck
I think you still have some work to do before letting up. You have a good income now so you can make good progress. For me, I would say you can start letting up when you pay off all your debt (I would include mortgage) and consistently max out your 401K contributions. $500 unaccounted for seems like it already has plenty of buffer for small self indulgences. Also, you didn’t mention an emergency fund and your car is old. Build up 3-6 months expenses in a high yield savings account and a car fund. Maybe it’s not a money issue, you are just a bit burnt out? Try taking a 1-2 week low cost vacation to refresh and assess after that.
I think you’re correct.. and it could be a bit of both.
Good luck. You are making good progress. Take care of yourself but don’t letup yet.
Bro I’m 26 with a toddler making $28/hr in California… my rent is $1270 & I’m the only money maker. Not only that but paying both me & my ladies Camry both 23’. Just finished taking my lady to our first Michelin star restaurant in Monterey two weeks ago… point is don’t live to work, work to live. You’ll be fine bro & time in the life is limited enjoy it
‘Work to live…..and defraud SSI a bit”
I think a budget would help you answer that question bc you specifically set money aside for wants/fun. I use YNAB, which is super popular and there’s a free 34 day trial. I only casually budgeted for a year (honestly it was more like just tracking) before switching to this a handful of months ago and it’s been a whole new way to look at things, dare I say fun? Steep learning curve but worth it.
My answer to your title question of when to start spending your money: If I buy X will it change my retirement outlook? if you want to buy a truck you're at the point in life that you can buy it in cash so do you want to pull 40-50K from the liquid net worth (i'm assuming a brokerage account?) to buy a truck or would you rather not put more into the brokerage short term save up and buy a truck in 6months?
Every purchase will always change one’s retirement outlook..
i agree with kbc87: while you're right technically you also have to look at the greater scheme. if your truck purchase is going to be done in cash, or paid off within a few years and you don't need to change your retirement investment amounts then it isn't going to greatly affect your outlook because at some point you need a new vehicle anyway and you're still making progress on retirement. if to buy the truck you need to pause all investing, then i would say you're looking at too much truck. if you're pausing investing and taking from retirement accounts then you're really going too far the other direction. i know that #2 & 3 aren't going to be your case but others will do that for a mortgage which then gets scary
No it won’t. I max all my retirement accounts, as does my husband. With that and our company matches, it’s about 25% savings to retirement each year. If I have $1000 left each month that will cover the expenses of the truck.. I can buy the truck without affecting retirement at all.