How much of your money do you spend on what things and what impact do these things have on your life? What things would you like to do or have but can't because you don't have the money?
If you don't mind telling for context, how much income do you have?
Income is $450k / yr, engineer, 39 years old, no kids and no plans to have them. I have a chronic illness and retirement seems a distant and not very pleasant prospect. I like working and like to enjoy life.
* $5k / month on rent. (Nice apartment in a high cost of living city).
* At least $7k month goes into savings (I’m not totally financially irresponsible!)
* One pretty ordinary car, expect to drive it for 10 yrs, usual costs.
* $5k / month average on travel. My biggest luxury. I fly international business class sometimes but only when it’s “cheap”.
* $2k / month on groceries, wine, dining out. I enjoy fine dining.
* $3k / month on clothes and accessories. I’m a woman and I have a weakness for nice things, worst of all for designer bags. Yes I know it’s frivolous but the marginal utility is there for me.
* $1k / month on a personal trainer. Could I have the same level of fitness without it? In theory yes, in practice no.
The thing I wish I had more of is time, not in the sense of “retire and don’t work” but in the sense of “it would be nice to take a slight pay cut and work only 9 months of the year and travel more and spend the rest of the time reading, studying math again, and doing interesting projects.” Unfortunately that option isn’t really open to me, outside of consulting which I have no appetite for.
I didn’t get into engineering for the money, but out of love. I’d have done it anyway. But the money is nice, for sure. I save some and don’t feel the need to be unnecessarily frugal with the rest. I know I’m incredibly fortunate. Your mileage may vary, and especially if you have kids. Make your own choices according to your values.
My wife and I are both short so business class is not a big deal for us. But we do spend $2000 a year for lounge access to airport lounges via 2 credit cards and we are both Platinum Medallion on Delta which gives us automatic C+ regional upgrades.
But I just can’t care enough about First class flights. I’ll take regional free upgrades but that’s about it. While we travel a lot domestically as a hobby post Covud and post kids. We don’t look forward to long international flights and are doing our first 10 hour+ non stop flight in a couple of weeks and we aren’t looking forward to being in a metal tube that long.
We are at most going to do two or three long flights a year.
As far as the personal trainer, my commitment device use to be teaching fitness classes as a hobby and running races with friends. Then it was having a home gym with cardio equipment and a big screen TV on the wall.
Now at 50 it’s I never want to be tired running through the airport with a 50 pound book bag on my back and walking around a city when I travel. I bought my current condo purposefully to be right above the gym.
But as far retirement? It scares me more than I look forward to it. With my working remotely, work is not the gating factor for anything in my life.
But on the other hand, while my wife travels a lot domestically by herself, I don’t think she would ever want to fly economy as a single woman internationally. I get it.
No one would ever call us frugal when it comes to travel, lounge access, month long stays in different cities. But I’m very frugal when it comes to fixed expenses.
Every 2-4 months, I spend some money to go to the next country, could be anywhere from $20 for a bus to $700 for long distance flights.
I don't really buy things anymore, I have everything "I need" for a comfortable life, anything more at this point would just be annoying, I only buy to replace. I buy new shoes every 1-2 years and usually for $200+. I think nice shoes are worth it.
> What things would you like to do or have but can't because you don't have the money?
I think I would need an insane amount of money to make meaningful differences in my life. My partner has a "weak" passport, so being rich enough to "buy" one for her would be nice. Other than that, being able to buy a house or getting a pilots license would be nice.
Having enough money to buy "almost whatever" allows for real happiness to happen. Money doesn't buy happiness, but it opens the door for it.
Family, friends, love, hobbies.
- Financial hardships are one of the top reasons for divorce.
- Building and keeping loving relationships and friends is a lot harder when you have to work 60-80 hours a week.
- Funds to have hobbies so you can do what you truly want to do rather than what pays the bills.
A good fulfilling life is simple (but usually not easy).
I would summarize your point as: we need some money to be happy.
DougN7 said "[I] have finally discovered those [costly] things don’t bring happinessis".
I think lots of money doesn't make you happier. I strongly suspect that most people don't really understand that, because they don't have lots of money and therefore they have not learnt about the lies we are taught about money by our money focused societies.
Let's view your divorce argument from https://flowingdata.com/2021/05/04/divorce-rates-and-income/ :
I suspect your assumptions about divorce money and unhappiness are incorrect. And you were definitely ignoring the confounders mentioned.It gives me enough to know that I could be out of a job for a year without being homeless and hungry (not counting retirement assets)
It means that even though we live in Florida, I can still say “let’s go to Costa Rica and Panama City for the entire winter”. And even locally when I want to fly back to my former home for a weekend every quarter just to play cards with my friends and hang out I can or if we just want to rent an Airbnb back home for a couple of months during the summer to spend time with friends and our adult sons.
When our friends suggest we get together and go on a cruise during Christmas we don’t think about it, we just say “yes”.
When my younger adult son calls us and tells us he is going to be temporarily laid off during Christmas we just ask how much he needs and don’t think about it.
Notice I didn’t say “buy things”. We live in a 1200 square foot condo and everything we own besides our car can literally fit in four suitcases and we have actually traveled around the country with everything we owned in suitcases. Even the furniture in our condotel came with it and if we do sell it, it stays with it. We threw away or gave away everything but the clothes we actually wear and our electronic devices and we even downsized those. If you can’t tell - we really hate “stuff”. Our one car is the cheapest thing that we could buy that was the base level of comfort we could deal with.
We use money for experiences, spend time with friends and family to allow my wife to pursue her passions and do her volunteer work. Even before she retired she was able to get a lower paying job (with the benefits we needed then) working with special needs kids.
I told my wife the same. I'm currently on a $97k/year salary as a CS teacher with very few hours; I make about half of what I normally do, so I can have a lot of time with our firstborn. We're not pressed for money, but we also save less than $1500/mo. We spend most money on food, and second-most on travelling to my wife's home country.
I'm 39, and she's 32. My point is that you don't have to be very well off to make that choice.
> We threw away or gave away everything but the clothes we actually wear and our electronic devices
Wow. Just wow.
That sounds so liberating, but I could never do it.
I have a laser printer that I use a few times a year. I have two kind of belt sanders, even though I hardly do woodwork, because I imagine that I will, and I don't think I'm wrong. I have fitness equipment for a dozen sports. I have a collection of wires so that friends and family can ask for any kind of wire, and I can give it to them. My wife has three moving boxes of shoes that I've never seen her wear. I really wish it didn't take up so much space in our tiny apartment, but I wouldn't want to lose any of it.
I see lot of retirees buy ski condos and live skiing lifestyle
I think saying "money doesn't buy happiness" is too reductive. The crap from Amazon certainly makes no meaningful difference and actually I feel slightly embarrassed when I see a new package arrive. But the relief from stress of having no debt, living in a good area for schools, having a large runway and not worrying about the cost of groceries is a real life improvement that I would be sad to give up. Having said that, none of the great memories from life so far involve spending huge amounts of money.
Same, but even more so when 6 different packages arrive staggered throughout the day. I have never understood how that is more efficient than 6 boxes at once, or 6 things in 1 box at once.
As an engineering it's fairly simple to understand.
So, for example, I drive a cheap used car because a nice expensive car doesn't actually make my life better, but I won't think twice about buying an expensive tool that I'll use every day, or going out for a lavish meal every so often, etc. There is nothing I want to do but I can't because of a lack of funds.
I make six figures, and I'm not in SV or NY, so that can provide a very comfortable standard of living. I actually spend about 25% of that and put the rest into charitable donations, savings, investments, etc.
I don’t really spend a lot of money on “things” per se. Mostly tools, materials, and other consumables for my hobbies.
High power rocketry basically has no upper bound on expense. You can build a rocket to reach the karman line with commercially available components and launch it in Nevada with minimal oversight. The certifications required to purchase the propellant and launch with Tripoli insurance will take about 1.5 years to reach. The limiting factor is just $$ spent on propellant and testing. It’s a ridiculous hobby expense wise.
Are you happy?
I've travelled lots, but raising kids and fixing and building shit around house is so rewarding.
Traveling with kids is the ultimate flex tho.
Why on earth would you find that depressing?
IMHO, income is logarithmic [0], so in terms of things I might like to have but don't (an apartment with a shared pool?) it would probably be a big jump up in income to get them. If I got a $10K raise tomorrow, it wouldn't really make a difference.
If I ever have kids, I'll either have to give some things up or climb the income ladder.
[0] https://ofdollarsanddata.com/climbing-the-wealth-ladder/
For instance, here's $3500 for a 4 bedroom/1.5 bath that's on a quiet street but near a lout one https://streeteasy.com/building/171-east-8-street-brooklyn/3...
https://www.zillow.com/homedetails/216-E-93rd-St-2L-Brooklyn...
Obviously not the most ideal circumstances, but it can be done.
New book from the writer (his second):
* https://www.penguinrandomhouse.com/books/770215/the-wealth-l...
That’s surprising as that’s about the same tax as in the U.K., but people claim the U.K. has high tax.
But since I was old enough to actually look at paycheck (paycheque?) calculators online, I've found that the UK tax rate for livable wages is actually fairly low.
To compare NYC to UK, £66k/yr = $90k/yr. In the UK, you would be taxed £17k ($23k), but that same salary living in NYC would be taxed $26k (£19k).
So NYC + Fed + NYS taxed together at a higher rate than the UK government (INCLUDING NI).
And $90k in NYC feels like WAY less than £66k somewhere Zone 4-6 in London with a similar commute.
Low income tax states tend to make up for it in other ways (sales tax, property tax, or both) but basically UK taxes would look extortionate to an Alaskan, painfully high to a Texan and probably pretty normal to a New Yorker or Californian.
Would love to buy some top-of-the-line compute for my homelab and a few machines that just don’t exist yet and a house in a country town to retire to. None of that is ever going to happen.
Am in South Europe so my income is way less than it should be considering what I do for a living, have somewhat made my peace with that by just enjoying my free time.