Moving from Being a Tight A*&e

[matto_]

For a large number of years we have been living frugally with the hope that we can retire early, through a mixture of paying down debt along with investing sensibly.

Question to those who have made it:

How did you move away from living a frugal lifestyle to one of being able to comfortably spend money?

We go through an endless cycle of budgeting in order to reduce our debt as much as possible.

We have worked through setting goals, and as we achieve them - "rewarding" ourselves, however it is still a struggle to justify to ourselves that we can comfortably spend the money.

Has anyone else got any ideas

 

[Bigtone]

For a large number of years we have been living frugally with the hope that we can retire early, through a mixture of paying down debt along with investing sensibly.

Question to those who have made it:

How did you move away from living a frugal lifestyle to one of being able to comfortably spend money?

We go through an endless cycle of budgeting in order to reduce our debt as much as possible.

We have worked through setting goals, and as we achieve them - "rewarding" ourselves, however it is still a struggle to justify to ourselves that we can comfortably spend the money.

Has anyone else got any ideas

Hi Matto,

From what I have seen for the vast majority it is

"once a tigha**e" always a tighta**e"

very few can make the transition. Thats why I believe u need balance along they way, no good living on bread and water to be wealthy when u r too old to enjoy, need to reward urself along the way as milestones reached.

the only exception to the above is women who partner into $$$ they quickly become adept at spending like the world is about to end but it is easier I guess when its not ur money to change habits. Harder if u have earned it and have a lifetime of being tight to overcome!

 

[kathryn d]

As the resident tight as* here,
you will decide to spend money, on something that you deem as having perceived value.

Your values will naturally evolve over time.

Someone wrote in a post a few days ago, they were travelling with their family.
Before they embarked on the journey, he had packed some supplies for a picnic, as he could not stand the thoughts of eating at anothe servo.
While preparing his meal, he looked down and "saw his father" in his image (paraphrasing, but you get the idea)
Contrary to what some people believe, it rarely has anything about price, it is about taste. It is about value for money.

I refer to this story many times.
At work I used to buy coffee from the vending machine for 65cents x 3 aday.It was not good coffee. After realising I was spending $468+ a year on something I didn't enjoy..I thought why am i buying this crap!!!
The next day I brought my thermos that was in my cupboard.

When in Canada we go to Tim Hortons for coffee several times a week.I like the donuts. I think I am getting good value for my money.
We also go to McDonalds (only in Canada) for coffee and muffins..same reason.

Spending money is not the problem.
Deciding you are actually getting a reasonalable value for it is.

Jaycee said something once, about not minding spending $14 on a salad, if the place had ambience. For him that is providing him value.
Ambience is meaningless to me.
The best place in our town for Chinese food, had the worst ambience.We ate there often. Their prices weren't any cheaper,but it sure tasted better.

More importantly, don't spend money on something just to impress others.
They are not worth it.

Another example:
You want to go on a cruise.
The top floor cabins are $3k
The middle floor cabins are $1500
You need to decide if the having the top floor is worth it.Maybe just being on the cruise is more important.In both instances, you are still getting the cruise.


If you have allocated $1000 for a weekend/week vacation
Sydney cruises cost more than just taking the ferry. (you see as much)
Budget hotels cheaper than 5*
rental cars more expensive than bus pass
Pizza is cheaper than 5* restaurants
How long before you run out of money...but you still did the exact same things

 

[AlmostBob]

we dont get out of debt, just the debt % goes down as we owe the same $amount on more property

 

[Aaron_C]

For a large number of years we have been living frugally with the hope that we can retire early, through a mixture of paying down debt along with investing sensibly.

Question to those who have made it:

How did you move away from living a frugal lifestyle to one of being able to comfortably spend money?

We go through an endless cycle of budgeting in order to reduce our debt as much as possible.

We have worked through setting goals, and as we achieve them - "rewarding" ourselves, however it is still a struggle to justify to ourselves that we can comfortably spend the money.

Has anyone else got any ideas

I don't think people change much at all. If you do end up spending more money you'll probably feel guilty about it anyway.

 

[BayView]

For a large number of years we have been living frugally with the hope that we can retire early, through a mixture of paying down debt along with investing sensibly.

Question to those who have made it:

How did you move away from living a frugal lifestyle to one of being able to comfortably spend money?

We go through an endless cycle of budgeting in order to reduce our debt as much as possible.

We have worked through setting goals, and as we achieve them - "rewarding" ourselves, however it is still a struggle to justify to ourselves that we can comfortably spend the money.

Has anyone else got any ideas

A lot of people simply can't, because it is a life habit.

My inlaws are like this; they are now retired, own their house, receive rent from a factory they own, and are still tight as. Just last week the FIL was crowing over these outdoor chairs they found in an op-shop for $4 each. He went on and on about it; proud as punch.

They don't even need to go to op-shops other than to donate stuff they've accumulated over the years.

I think a good idea might be to allocate a % of your nett income to a "spending account".

This is after all the other commitments (and investing funds - if any) are accounted for first, of course.

This spending account is then free for you to blow on whatever you wish, whenever you wish.

I reckon after a short time the mindset would change enough to feel comfortable doing it.

Haven't managed to get to this stage myself yet, of course.

 

[dajackal]

life is too short to be a tight ar$e!

i feel that as long i'm investing at least 20% of my working income into passive investments (for a comfortable & early retirement) then the rest can be freely spent on things considered value for money.

for me that means 2 overseas vacations with my wife a year

you just gotta define what you find as value for money.
aim to value experiences over material goods.

 

[pennyk]

I'm not sure that I've ever been that "tight" with money.... but I certainly have found it fairly easy to develop more expensive tastes!!
My job has probably been the biggest contributor to that in the past few years. Travelling business class, eating in fancy restaurants, staying in nice hotels.... it definitely makes it harder to go back to a "budget" lifestyle.

But I also think I'm more "discerning". eg in my earlier days, I would have eaten anything, just because it was cheap or plentiful..... now if the food isnt good, I dont eat it.

I think Bayview's idea of a "spending account" is a good one.. then you can spend money, without wasting it or feeling guilty. I always found compartmentalising my money into separate accounts worked well.

Having something you are savings towards is also a good idea.. eg saving for a holiday, or saving for a nice meal out etc. Obviously you dont want to flip into irresponsible spending.

 

[Tony3008]

Twenty years ago I was very nearly bankrupt and would go round the supermarket desperately hoping that there would be some end of date bread at a knockdown price. Now I am financially comfortable but still live a fairly frugal existence. As others have already said, this translates to a value for money approach rather than cheap and nasty. Virtually all the furniture in my flat came from IKEA but that's was because it's what I like, not because it was cheap. If I was buying another car it would be a Toyota or similar, not a Kia or an Audi, and then a Corolla not something unnecessarily big.

A few years back in the UK my brother and I were having breakfast at my mum's and I was mentioning some special deal at Farmfoods (small UK discount food retailer: not unlike Aldi). My brother said "Why do you shop at Farmfoods when you are so rich (his word)?". Then after a pause he said with realisation "You're rich because you shop at Farmfoods, aren't you?". Yes, thankfully, my finances have changed, but not my spending patterns and my personal balance sheet reflects this.

 

[VYBerlinaV8]

I'm tight with stuff that is unimportant to me (e.g. clothing), but spend a little more on stuff I get pleasure out of (travel, cars).

I deliberately avoided some things I liked when I was living more frugally as a younger man, simply so I didn't 'open the door' on those things.

 

[Ideo]

There is a huge difference between being tight and wanting value.

I spent well over $300 for a meal for 2 recently. Was it worth it? Without a doubt. On the other hand if I spent $65 for 2 for a shoddy pub meal and a drink or 3 I would feel ripped off.

 

[kathryn d]

There is a huge difference between being tight and wanting value.

I spent well over $300 for a meal for 2 recently. Was it worth it? Without a doubt. On the other hand if I spent $65 for 2 for a shoddy pub meal and a drink or 3 I would feel ripped off.

Agree.
There is a dinner theatre we go to occassionally.
Includes meal and 3 hours of entertainment.
Drinks are extra, and we use a taxi back and forth to the hotel.
For that, I have no problem paying the tab. Worth every cent.
I can hardly wait to return to Halifax.

 

[Rixter]

Its rather simple to move from being a tight a@ss.. Simply move your focus from how much you dont have to how much you do have. As long as what you do have outstrips what you spend your net weath is getting bigger.

 

[Ocean Architect]

I think the important thing is to live within your means sensibly and not be wasteful (yet still put some money away for contingencies). If you can't get out of the "I am poor, I must hide away more money" mindset when your circumstances have clearly changed, then I think you have a mental disorder.

Most of my elder family members are very well off, yet something I noticed about them was that their lifestyle has not changed for 30-40 years. They still come home, watch tv, eat the same food, go on the same holidays, drive the same car - the only thing that has changed was that the number of investment properties has gone from a handful to a few dozen.

While I understand that their culture demands providing inheritance for children, I think that their balance of income/wealth to spending is out of kilter, like a certain Adelaide tycoon who was worth hundreds of millions but would still buy discounted meat at the local supermarket. Mental problems, man. I resolved not to make the same mistake.

One of the only guys I have seen who has escaped this mindset is a relative of mine who drives the most diseased looking, AIDS infested, busted up Mitsubishi utility to work, and parks it next to his new Lamborghini. Quite hilarious actually

 

[MsAli]

I'm only starting out. But try to save 20% of what I earn for investments. Eat well...grew up that way and don't like the idea of cutting on food for the sake of investing. This is self care.

I am much more careful with my clothes/shoe shopping though in Australia and from now on intend to only shop overseas. At least when I see some people at work who can't go without shopping, wearing something once or twice and selling it on eBay as well as buying a Mac and selling it on eBay just because they want a newer model. My approach seems odd/cheap to them...but I dress well - just that I don't need to be at the shops every Thursday night. In fact, I just can't stand shopping centers .

The only thing that I think we could cut down is Foxtel, but that's for the family So don't mind. I've started to take lunch from home after realising I was spending close to $3,000 every year! (That's $15,000 over my 5 year working life!!). It takes a bit of an effort every evening but it saves so much time during the day and is much healthier!

We travel overseas to our native land to see our grandparents often but during Jan me, sis, bro and mum did a first overseas trip to a different country and from now on intend to do that every year or two years. I think if you can afford, it's absolutely worth it. I felt a tad guilty about spending so much, though since Australian holidays are so expensive, might as well go somewhere, where you can shop and holiday together.

Haven't yet thought of paying down the debt...I could be wrong, but it doesn't really worry me at this stage - I'm in my mid 20's. Often it comes to mind that I want to have my cake and eat it to (that's what the saying is I believe)...want to make the most of it all - why not? So we intend to live life on reasonable standards, eat well, invest, travel overseas. We live in a very blessed country called Australia .

We have a 4 year old car that me and my sis bought when I started working in the corporate world. It's paid off. We made the mistake of getting finance when we bought it. But learn't it the hard way. A $15k car ended up costing us more than $20k. But now we have decided, whenever we buy the next car it would be with cash. However, we can't get our head around getting a used car - but hey by the time we get it - we may be more mature and decide to get something slightly used.

Being a tighta*** is not necessarily a choice but could be a deep rooted belief from the development years. I find sometimes it helps to view all of your childhood and life through a lense of questioning WHY things are certain way? WHAT beliefs do you carry that you choose to be this way? I would make a list of those beliefs "I am a tighta*** because...." It may bring clarity. It's like a part of you is working so so so hard for it and it's not needed. Now is the time to just give yourself the permission to relax - even for just one week - and observe the difference!!! Not sure if this is making sense...but it's something that has worked for me.

Once you are done making that list - ANOTHER thing that has worked for me is RATHER than fighting how you are (in your case being a tighta***)...can you just allow yourself rather than JUDGE yourself for the way you are? Once you really honour who you are, the belief will start to shift.

Have you read The Richest Man in Babylon? It talks about saving 1/10th of your income, using 2/10th to pay debts and 7/10ths for your life....

Last but not the least, I believe that prosperity is a state of mind. It CAN be shifted. But may require some work. It has for me and I'm happy to do the work to change myself within so I can be more and more comfortable in my skin AND "attract" prosperous and happy experiences in my life. The world is a MIRROR of our internal world!

Cheers

 

[jaycee]

As the resident tight as* here,
you will decide to spend money, on something that you deem as having perceived value.

Your values will naturally evolve over time.

Someone wrote in a post a few days ago, they were travelling with their family.
Before they embarked on the journey, he had packed some supplies for a picnic, as he could not stand the thoughts of eating at anothe servo.
While preparing his meal, he looked down and "saw his father" in his image (paraphrasing, but you get the idea)
Contrary to what some people believe, it rarely has anything about price, it is about taste. It is about value for money.

I refer to this story many times.
At work I used to buy coffee from the vending machine for 65cents x 3 aday.It was not good coffee. After realising I was spending $468+ a year on something I didn't enjoy..I thought why am i buying this crap!!!
The next day I brought my thermos that was in my cupboard.

When in Canada we go to Tim Hortons for coffee several times a week.I like the donuts. I think I am getting good value for my money.
We also go to McDonalds (only in Canada) for coffee and muffins..same reason.

Spending money is not the problem.
Deciding you are actually getting a reasonalable value for it is.

Jaycee said something once, about not minding spending $14 on a salad, if the place had ambience. For him that is providing him value.
Ambience is meaningless to me.
The best place in our town for Chinese food, had the worst ambience.We ate there often. Their prices weren't any cheaper,but it sure tasted better.

More importantly, don't spend money on something just to impress others.
They are not worth it.

Another example:
You want to go on a cruise.
The top floor cabins are $3k
The middle floor cabins are $1500
You need to decide if the having the top floor is worth it.Maybe just being on the cruise is more important.In both instances, you are still getting the cruise.


If you have allocated $1000 for a weekend/week vacation
Sydney cruises cost more than just taking the ferry. (you see as much)
Budget hotels cheaper than 5*
rental cars more expensive than bus pass
Pizza is cheaper than 5* restaurants
How long before you run out of money...but you still did the exact same things

kathryn, I do remember the discussion and I did post on that thread but I didn't say that. Someone else whose name escapes me now said that.

 

[Angel]

I am the Queen of Frugality.

When we were first married, we really were as poor as church mice. We were NOT earning good $$$ and living frugally in order to invest, we were flat out making ends meet. My hubby opened his own business and basicly lost one hell of a lot of money over the three years before I demanded that he cut his looses. Mean Girl, was I.

Moving on a few years later and he was earning a full time wage, albeit a lot lower than the "average" wage, and he was mentored by the elders at his workplace. They owned investments and they taught us many things....

I am Australia's stingiest - sorry Kathryn - Finanacial Director, and he and his colleagues set out to convince me that there was life beyond just paying off the mortgage ASAP and getting the kids to school. This is how they did it.

Hubby used to phone me after he got to work and suggest that i meet him at a very classy Italian coffee shop near their workplace. I would drop the offspring at school and join them for coffee and cake. It took about two years to convince me that La Dolce Vita cake and Italian coffee was worth the price, but now I am addicted to the stuff. As others have said, we choose to buy life's little pleasures when we feel that there is real value involved.

Another fifteen years later and we have long since paid off the PPOR, been on a 5star trip to Canada and Alaska, budget-class travelled over much of Oz and I alternate my time between considering our third IP purchase and our next overseas trip.

I am still frugal, but no-where near the tight-a$$ I used to be. I actually aspire to house-sit our way around Oz, like Kathryn does, when we do the big grey nomad outback thing. No $100,ooo caravans and Range Rover Discoveries for this bunny.

 

[kathryn d]

kathryn, I do remember the discussion and I did post on that thread but I didn't say that. Someone else whose name escapes me now said that.

Jaycee,
I am truly sorry.
It was Deltaberry ..and it was $40 for a salad.
It was in the thread "weekly budget"

 

[The Y-man]

We go through an endless cycle of budgeting in order to reduce our debt as much as possible.

Need to question you mindset there - budgeting as a way to controlling costs AND building up means of income I can understand (even if that is by paying off debt). Words can play a surprisingly large part in your thinking and outlook.

For us - it's more about function over form (and function over frugality too).

I drive a Mazda 2 now - whilst I could get to the same work place in a much more expensive car, I just need something that doesn't burn much fuel, easy to park, and not a pshycological nightmare leaving it parked in dark streets or in some shopping centres where touch parking is the norm.

(I also used to drive a car that had spoilers 10 cm off the ground - the novelty of going up petrol station driveways and crossing speed humps at a huge angle wore off after a while...)

My job doesn't involve me wearing suit and tie (well no one has complained yet) - I occasionally have to go crawling under desks etc to find Lan points etc - so a pair of $4 pants from the salvos makes no difference to a $60 pair (that is probably made less sturdy anyway).

Having said that, I do love to spend on things like painting gear, power tools, etc (bonus! - tax deductible), exotic fruit trees (which may wife says is a waste of money coz they all die - I am begining to think she is killing them because I pay more attention on them than her), and musical instruments (now there's something where you do get what you pay for in many ways).

Which reminds me - I must try and make my keyboards tax deductible (guess I need to get noney for music?) - I just figured the depreciation on top end Synths are mind blowing - a $7,000 synth today is likely to be worth $zip in 5 years time....


The Y-man

 

[travelbug]

There is a huge difference between being tight and wanting value.

I spent well over $300 for a meal for 2 recently. Was it worth it? Without a doubt. On the other hand if I spent $65 for 2 for a shoddy pub meal and a drink or 3 I would feel ripped off.

Totally agree. I've always been good with money (grew up poor). Always saved and not wasted money on things I won't want a year later. But I spend money on things I enjoy. I'm not into material possessions (well- except houses)

I spend A LOT of money traveling. But it's my passion and I've waited 40 years to do it. I budget carefully, stay in cheaper hotels and travel local transport or budget tours.

Friends (who earn more than us) say "how do you afford it?" They like to go out to dinner several times a week, go top the movies, buy expensive food etc.
Everyone to their own.
I'd rather shop at Aldi and use the savings to travel.

We struggled while I was at Uni and lived on next to nothing. As you earn more, you spend more. We earn decent money and spend on things we want (rather than need) but I could never bring myself to pay for something I didn't feel was value for money (to me). As Kathryn said- if it's worth it to you, then it's value to you. Everyone views this differently.

Someone once asked me why I "waste" all that money traveling when you've got nothing to see for your money and you could buy new furniture or something you can keep. They obviously haven't traveled.

So getting back to the topic I think your attitude to money doesn't change. I have a VERY rich relative who is VERY lousy. Won't spend a cent.

Most people I think ease up as money becomes more abundant but don't change their core attitudes. If I was stinking rich I still couldn't spend $1000 on a handbag. But I would up my class of hotel and ship cabin.
And I always cross my fingers for Business class.
If you can't enjoy having money- what's the point of having it?

PS- Off to Hungary, Serbia, Montenegro and Croatia on Sunday.