As a personal finance blogger, guy with two finance degrees, former banker, stock market enthusiast, and someone who once enjoyed rolling around in a big pile of money, you might call me a finance minded individual. Most of the Yakezie members, like me, think about money a lot. We think about earning money, we think about saving money, we think about frugal use of money, we think about spending money, we shudder at the idea of wasting money, and we are sickened at the idea of losing money to fees and credit card interest.
My Focus on Spending vs. Saving
I am a big saver. If you look at my net worth chart, you can see that I am steadily paying down debt and putting money into my savings, retirement, and investment accounts. I am a saver. I think hard before I spend. However, I am not an extreme frugalist that lives on forty-eight cents per day and hates to spend money on myself.
I work hard during the day to ensure I have enough money to live. Like Chris Guillebeau at The Art of Non-Conformity and Ramit at I Will Teach You To Be Rich (this one is an April fool’s joke), my philosophy is not to save every penny for the sake of it. I don’t save just to save, I save for a goal. And I don’t spend frivolously, but I don’t mind spending to improve my quality of life.
For example, over the last year, I have spent thousands of dollars on travel. I have been on a trip almost once a month for the last few months. I jumped on a plane to Tel Aviv over the summer. I flew out to Chicago and Orange County for weddings. Including hotel, those were not cheap. In between jobs, I took a last minute trip to Squaw Valley, Lake Tahoe. I have another trip planned later this month. I have spent over $3,300 in travel so far this year and have no regrets.
Pick Where You Spend, But Don’t Go Over Board
Now, just because I spend thousands on travel doesn’t mean it is the right thing for you. If you are in serious debt, pay that down before spending on anything. But if you are comfortable and have enough money going into savings and investments, it is okay to spend a few bucks on a hobby. To me, that hobby is travel. To my old boss, it was sports cars. To another friend, it is photography. To you, it could be anything.
The key is to spend intelligently to enjoy your money without sacrificing your future. Be responsible, but have fun. Life is intended for living. What’s the point of going to work every day if you come home to an empty life? Money can’t buy happiness, but it can buy things and experiences that make you happy.
What is Your Style?
Many of us blog about our style, but let’s try to get it down to Twitter length for the comments. In a couple of sentences, tell us how you manage your spending and, if you have a weakness or hobby, what is it?
Updated on 2/10/2015
[Photo by Goldberg]
I think my style is very much the same. My wife and I are digging our way out of debt, and once we’re out, it’s time to travel!! I don’t even think it really matters where – we just love to explore! I do enjoy thinking about money, but I hope that I never find myself loving money – I think this would lead to a downward spiral of hoarding every single cent and never using it to help others.
What is the first place on your list? What is the big goal when you make it out of debt?
Since we live in South Florida, we’re pretty sure we’re taking a cruise in the Caribbean for a week. After that, it’s time to buy a house! :)
I have cruised out of the port in Fort Lauderdale a couple of times. Make sure to search around. You can find super cheap cruise deals if you know where to look.
Eric, I share a similar opinion about spending. I like Ramit’s approach that there are a variety of things you can do to save (like avoiding silly fees, watch where you spend, and build good credit). But I don’t mind spending extra dollars on something that provides me with value. In my case, entertainment. I indulge myself on the occasional night out, a little annual travel, and of course a very big TV and my DVR!
Sounds like we have some of the same vices. I love a good night on the town and I have been trying to figure out how many trips I can go on this year. (Vegas is in the mix)
Hi Eric, You clearly articulated a sensible approach to money. Spending in accord with one’s values affords the greatest amount of pleasure. My husband and I also prioritize travel as a high value activity. But, each of us has to decide for ourselves where we want to focus. Well written article, I liked it!
Glad you like it Barbara!
Hi Eric,
Im going to assume that this was written in 2010, but it sounds like you’ve had a great time traveling (you left out your 4 14er hike!). I also share your same sentiments – While I think finances a lot, I’m not afraid to spend money on things I know I’ll really, really enjoy (like taking trips or the every so often far too expensive meal). I save in other areas that I dont care about, like not having cable tv.
Yes, I wrote it last year.I didn’t include the six 14ers I hit over the summer, which were free day trips. I have been meaning to cut my cable to get an extra $60 per month in savings, but the lazy card has kept me from doing it. I’m glad to see so many of us spend on what we value rather than act over frugal for the sake of it.
[…] This post was mentioned on Twitter by Yakezie, Jim Smith. Jim Smith said: Yakezie – Personal Finance and Lifestyle Blog Network – Yakezie.com http://t.co/2YiZJ9A via @Yakezie […]
I see it the same way, life is to live and to be enjoyed. Spending intelligently and responsibly (and yes, being frugal) can still allow for one to have happiness with personally important experiences and material things, without sacrificing one’s financial future and peace of mind.
Glad you are enjoying life! I agree, some frugality is important. I like to think of it as being thrifty. Use your resources wisely.
I couldn’t agree more. I like to enjoy life by camping, hiking, and biking. Thankfully, these hobbies are low-cost and fit within my budget for now.
It feels like I am preaching to the choir!
Our weakness is also international traveling. We love traveling and have gone to many countries, but would never borrow money to do so. If we have unlimited resources, we would travel A LOT more, but maybe this is better because we appreciate every trip so much.
Travel is not a weakness! I agree, never borrow for something fun. Save for it so you can go stress free.
I agree with being frugal and also allowing yourself some money for fun. I wasn’t able to do that when I first started working as all my money went to pay bills and a small portion into 401k. Even though I make more money now I still always make sure to “pay myself first” by using auto pay for my 401k and putting a set amount of my disposable income into savings each month.
I pay myself first too. Money goes to my 401(k) and Roth before I ever see it. I learned that tip from David Bach in my pre-blogging days.
My style: Take care of retirement, work towards paying off a home (both are particularly important to building massive wealth), save for short term goals, go through life debt free, and spend money your scare resources only on the things you value most.
Great manifesto Romeo.
I’m very similar in that I consider myself to be thrifty, but not super frugal where I do nothing. I’m focused on paying off my last student loan and my house. BUT I still enjoy going out to eat with my wife weekly. We have a nice dinner, and it adds up, but its a part of our lives that we enjoy. We would not do it if we couldn’t afford it (well, steakhouse would probably change to McDonalds).
It is important to find those things you love. A weekly dinner sounds great.
We make a lot, but we also save a lot in total dollar terms – maybe not as much in relative terms, as others, but we like living in a nice house, in a nice suburb and send our kids to a private school. I wouldn’t consider us frugal in anyway (we spent a month travelling 5-star through Europe). But we don’t accumlate much stuff. We donate a lot to charity. While our mortgage may seem large in total dollars, we still manage to max out our pension funds and save a bit extra.
Just make sure to save enough to keep living the lifestyle you are accustomed to an have a cushy emergency fund.
I’m saving up an emergency fund + a few thousand to go to Spain in 2012. It’s hard for me to tell myself “$2000 of that is for Spain” when I think about taking it out though! I think when I get to a financial position where traveling is part of my budgeted expenditures, I’ll have to open a separate bank account for my travel money, haha.
Sometimes it is tough to keep mental budgets within your bank accounts. Have you looked at doing multiple savings accounts at your bank?
I would do this, but I am keeping my emergency fund in a high interest checking account, because it seems like a waste not to earn something sort of decent on it. This means I run some of my daily expenses out of it, and if I want to save for multiple big things, I just have to mentally keep track.
using money to live the kind of life i want is why i earn it to begin with – just trying to keep it within Twitter guidelines (140)
No need to use 140 characters here, lol
I think the same thing. Life is meant to be lived. We work hard at saving and making sound financial decisions but we don’t hoard all of our money away where we can’t enjoy anything. We spend a good portion of our money on traveling because we enjoy what we experience and what we learn about ourselves in the process. What good is all that money if you aren’t pursuing your dreams.
I don’t like to waste on things, but I am happy to spend on experiences. You are right on Miss T.
I loved Ramit’s video! That was hilarious!
It’s a fine balance, working/living/loving/spending. I feel that I’m sometimes now NOT living it up as I should and could. That said, I did go abroad twice in 2010 and went on some amazing vacations for my 6 weeks. I am splurging a lot more on last minute travel, and I love it.
As for things, I just don’t care to want to buy much of anything. It’s weird!
Ramit is a great guy. I got to meet him right after his book came out. He is the most straight forward person I have ever met. He is dead on and honest.
I think I am a combination of both. I save and invest consistently. I do splurge on big purchases like a car, electronics, and when it’s really something I want. I feel like these are rewards for myself for living within a budget.
If you don’t ever get any rewards, it is hard to stay on budget. You need to feel like you are getting something out if it all.
I hope to achieve the same goal. I want to save and have a hefty emergency fund, but I like to splurge now and again. If I’m going to spend money, I usually always think about the alternatives.
I take my father’s philosophy: “Money is a tool. If I use it to buy something, it’s currency. If I wipe my butt with it, it’s toilet paper.” Thankfully he didn’t do the latter but it taught me that money is nothing in itself, it’s how you use it. I try and balance it with spending money to make things (like travel, and our upcoming house purchase) happen, but keeping a bit as a safety net. It’s the best tool when you know how to use it!
I agree. I learned a similar lesson from my Grandpa.
I also believe that money is a tool. It should serve a valuable purpose in helping us to achieve our goals and dreams. In the end, money needs to be used in order to serve one goal or another. The reason I am saving a lot now is so that our lives can be that much better down the road, and besides, I won’t get that much additional enjoyment from spending $3000 on a TV instead of $800!
My TV was only $500! lol. I agree completely. Don’t waste if the marginal benefit is not worth the marginal cost.
Great post! I see my money as a tool for travel experiences. I’m happy to buy a flight half-way around the world but I rather walk than take a cab!
Same boat as me. Save where you can, and cabs are not cheap for what you get.
I’m very compartmentalised and probably a little ADHD. Right now I am piling savings to pay off debt (and then time to save up for taxes!). 2012 will be the year I get some serious net worth and financial support for myself.
However I do enjoy travel too but try and keep it budget. I have no idea what country I will be living in the 2nd half of this year though!
Living abroad is even better than a vacation!
I have extreme spending aversion so I simply let my personality disorder run my budget. Seriously I have committed to never purchase a status symbol because I believe Madison Avenue types have already corrupted enough minds to ruin this planet. Commercials are the real weapons of mass destruction.
Brilliant post – I used to feel so guilty about spending money on my hobbies (my biggest purchase to date has been a beautiful digital piano for my tiny apartment). But a life without the joy that I generate my indulging in my hobbies is not a life worth living, even if I do have a couple extra bucks in my pocket.
Look forward to reading even more of your posts :)
I am glad you liked the post. Be sure to stop by Narrow Bridge to get even more.
I love your honesty in this post! I completely agree with you that I work very hard for my money and if I want to do something I love to do, then my hard earned money should be spent on what I want. I also have a weakness for travel and would much rather save my pennies to visit a city that I have never seen before than go out and buy another pair of shoes or something material. I totally get the need to pay bills and get yourself out of debt as being priorities in our lives, but I truly believe that everyone should have a travel account that they can use to take a break from reality. Almost everyone can say that a weekend away is good for the soul!!
You have to be honest to do well in the blogging world. I am always 100% transparent. I don’t believe a travel account is right for everyone, but it is certainly a good idea for many people. There is no one size fits all mold for everyone.
I agree with you about using money as a tool to enhance life and not being so frugal that you can’t enjoy it. I’m in the process of paying down debt, investing and saving but I also take time to enjoy my hobby of traveling as well. I just had to scale down my travel budget and find more creative ways to getaway. Instead of flying to Puerto Rico, I might just drive down to Florida for the weekend.
I wish I lived close enough to head to Florida for a weekend! One of my favorite vacation spots in the world is Key West. But Key West is boring compared to San Juan.
Being frugal is relative to each person using the term…. that being said, we are going to spend money on our “wants” regardless of who we are. We want to enjoy our lives, obviously being debt free adds to that enjoyment, but then again so does spending on the things we like! I think a strategy of “spending smarter” is the way to go. If you know you are going to buy something, make sure you get it for the lowest price possible… I have some tips on this in my fledgling personal finance blog
http://www.moneyistheroot.com
I use money to live..
Money is there as a tool, so I need to make it work as hard as possible to get the maximum value from it.