There’s a recent blog post by Abandoned Cubicle detailing how he’s lost a million dollars over the last 20 years in unnecessary spending. It’s a very insightful article, and I strongly encourage reading it. He highlights how much little money drains can cost you over the course of many years. He also highlights our collective unnecessary spending as consumers. His conclusion is that had he not made all those unnecessary expenditures, he could have retired richer or earlier.
Although the post makes a valid point, the idea is easily taken to the extreme. After all, who really needs to eat delicious meals, even if they are cooked at home? It would be far cheaper to eat ramen noodles every day for dinner. You would shave off about $3 per day that way! That’s $1,000 a year! And if I cut out the 12 times per year that I go out on a date with my wife, I’d save another $500 a year. For big savings, I’m going to move my family of 5 into a studio apartment and save about $15,000 a year. Oh, and I can kiss vacations goodbye! You get the point. Before long, I’d be living the life of Ebeneezer Scrooge.
This idea of minimalism isn’t new. It’s actually becoming quite trendy, with suggestions ranging from ‘practicing poverty’ (with a great rebuttal here) to living with no possessions at all. And there is definitely an appeal to paring down your consumption. Because we do have too much consumption in our society. But when the pendulum swings away from consumption, don’t let it swing to the point that we hoard our money and forget that it is a tool to be used, rather than victory points to be collected.
So yes, examining our spending is definitely important. You do need to make sure that certain priorities such as emergency and retirement funds are being funded. And it is definitely wise to cut down on spending to knock out any debt. But if there’s room in your budget, you’re allowed to splurge on things that are important to you, whether its going out to lunch with your co-workers, taking your kids to the amusement park on occasion, or deciding that the cable subscription is worth it to you. And yes, you may need to make cuts to balance your long-term goals with your ‘frivolous spending.’ Perhaps you’ll only go out to eat with your co-workers twice a week instead of daily. And that amusement park trip might be something you save loose change towards over a few months. But recognize that there is a place for discretionary spending. As Desirae over at Half-Banked puts it, “Yes, You Can Have Your Latte and Your Money Goals.”
So read Abandoned Cubicle’s post. Contemplate your spending. But don’t become a miser. And learn to celebrate ‘the best money you’ve spent.’ But also eliminate your worst expenses.
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- While I do strive to only write accurate information and dispense valuable advice, I am not a licensed financial adviser. All information is based solely on my personal experience and personal research and should be treated as such. Find out more.