How do I know if I’m overspending or saving too much / being too cheap?

10 comments

1. If you don’t need anything and are happy then there is no such thing as to cheap.

2. Don’t just save it, invest it.

   That could be in the stock market, in real estate, or in your own business.

   If you have 6-12 months of expenses saved up, then any excess beyond that really needs to be making you money. If it’s sitting idle it’s losing purchasing power daily.

3. I would rather know I could purchase, than actually owning the object. I’m content with everything I have.

4. Get every dollar match from your employer, 401k, stock discount, HSA, etc. then 6k into a roth, mutuals are great. Then if you have money a dividend ETF; I likey SPYD; there are others more designed for income that will smooth the dividends or make sure you’re more diversified, or tax smart; but SPYD is the top 80 dividend paying stocks and thats good enough for me.

   I’ll never buy Blackrock; fuckem

5. We built up an emergency fund of 6 months worth of our monthly budget. Then we save 15% into retirement (first fully utilize the employer match then max our Roth IRAs, then back to 401k), extra into a savings just depending on whatever bigger purchases we know are coming up (furniture, car, tires, roof, vacations, etc.) based on how much those things will cost and how far out we plan to buy them. Then what’s left after bills and regular budget items we generally split between college funds, blow money, and bridge investing (money between retirement and when you can start drawing from 401k/social security). That ratio helps me, the tightwad to have a little fun, and my wife, the spender, to know she’s not getting out of control.

6. If you are able to save/invest 20% of your income you are doing great. Living below your means isn’t “being cheap” it’s being smart. Sounds like you are off to a great start.

7. Spending less than you earn is a good start.

   I don’t know how old you are, but given the conversation, I’d expect pretty young. Figure out what your retirement number is. It might take meeting with an investment advisor to get a good one. And the number is going to be big and feel impossible, but starting younger makes it easier. I did some routine stuff in my 20s, but got serious about it the last few years in my 30s.

   Look at investing. Learn the basics so you know what you’re looking at when you’re considering a stock. The stock market is down so far this year and I cringe every day logging into my account to check it, but timing the market is impossible and it does have a track record of consistent increase over multiple years. Even if we continue to go down for awhile longer, it’ll turn back around. A simple index tracking ETF and/or solid, established companies that give dividends are a good start.

8. Become financially independent from your job, then buy whatever you want without having to sink back into doing something you don’t want to do.

9. You are 1000% doing better than most people. The amount of people living outside of their means is scare. I tried to live cheap and save, but my wife fucks that up every fucking month.

10. There are no rules. The more you spend and invest (wisely), the faster your wealth will grow.