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How do you justify big purchases?
Posted: Thu Dec 01, 2022 11:27 am
by Gareth
Not quite sure what my question is. But am reflecting a little tonight!
Since turning 40, I’ve been really aware of not spending too much, saving more, whacking money into T-NISA and iDeCo, thinking more about the future.
And I thought I had been doing pretty well. I don’t have huge day to day expenses. I don’t spend much on crap.
But I do love a bit of travel and adventure. I had chance to go to Pakistan this week for the cricket. I um’d and ah’d for ages before eventually deciding not to go, entirely for money reasons. And with England romping on the first day, I have pretty big regrets for not going. I could have afforded it but chose not to spend the money.
I guess what I’m trying to ask is, how have you justified big purchases? Like a week in Pakistan watching cricket! How are you finding the balance between enjoying life and not wasting money? I don’t think I’m asking the question very well but I think you’ll get the point of what I’m trying to ask.
Re: How do you justify big purchases?
Posted: Thu Dec 01, 2022 12:26 pm
by goodandbadjapan
Personally, I just spend what I want on two conditions: I don't have to dip into investments to do so and I have the money on hand without leaving myself short on my next month's investment installment. I've never really budgeted or watched my spending but am not a massive spender anyway and I've never regretted spending on travel! Even when it is a big amount, when the money is gone it's gone and I don't think about it as long as those first two conditions have been met.
Re: How do you justify big purchases?
Posted: Thu Dec 01, 2022 12:34 pm
by TokyoBoglehead
Gareth wrote: ↑Thu Dec 01, 2022 11:27 am
Not quite sure what my question is. But am reflecting a little tonight!
Since turning 40, I’ve been really aware of not spending too much, saving more, whacking money into T-NISA and iDeCo, thinking more about the future.
And I thought I had been doing pretty well. I don’t have huge day to day expenses. I don’t spend much on crap.
But I do love a bit of travel and adventure. I had chance to go to Pakistan this week for the cricket. I um’d and ah’d for ages before eventually deciding not to go, entirely for money reasons. And with England romping on the first day, I have pretty big regrets for not going. I could have afforded it but chose not to spend the money.
I guess what I’m trying to ask is, how have you justified big purchases? Like a week in Pakistan watching cricket! How are you finding the balance between enjoying life and not wasting money? I don’t think I’m asking the question very well but I think you’ll get the point of what I’m trying to ask.
Spending on experiences is definitely worthwhile! I don't imagine Pakistan is too expensive as a tourist, but you would have to pay me to watch a cricket game!
Memories and times with friends and family are all we'll have in the end. Gadgets and clothes with being gathering dust decades from now but memories will last (though I usually need to be promoted by a photo).
Re: How do you justify big purchases?
Posted: Thu Dec 01, 2022 1:01 pm
by Tkydon
You should budget for such items as part of your planned spending.
Big Ticket Item budget items might include:
Car Maintenance (expect annual or bi-annual spend)
New Appliance Maintenance or Purchases (expect a major failure every 10 years or so)
Travel and Leisure
If you budget Y10,000 for each per month, the amount will build up and cover these planned items.
This should be distinctly separate from your Emergency Fund, which is for real unexpected, unplanned, un-budgeted emergencies...
So long as you have planned and budgeted for it, then, as part of your plan, it's perfectly justified.
If you want more Travel and Leisure, you have to increase the allocation in your budget.
Do not put it on revolving credit... That way it will cost you double.
Plan - Save - Spend.
Re: How do you justify big purchases?
Posted: Thu Dec 01, 2022 1:16 pm
by RetireJapan
Read Die With Zero and Four Thousand Weeks.
Re: How do you justify big purchases?
Posted: Fri Dec 02, 2022 2:14 pm
by runmanTX
RetireJapan wrote: ↑Thu Dec 01, 2022 1:16 pm
Read Die With Zero and Four Thousand Weeks.
I agree. Just finished "Die with Zero". What an interesting concept and total twist for me. Here I am totally fixated on saving for retirement (which is good) but possibly missing out on experiences. Good book which made me rethink some stuff.
Re: How do you justify big purchases?
Posted: Fri Dec 02, 2022 10:43 pm
by Tokyo
In the days when I was saving up for retirement, money went to investments first. After that we spent money freely on our priorities which were the kids (mainly education) and regular family travel, but always from leftover cash. Life has to be enjoyed too.
Now that we are retired, we spend on what makes us happy. Big purchases since retirement (manshon, foreign travel) are all justified by the effort of saving together over 40 long years. We earned it, so we enjoy it.
Re: How do you justify big purchases?
Posted: Sat Dec 03, 2022 3:56 am
by mikele3
I scream YOLO and laugh.
It works for me.
Re: How do you justify big purchases?
Posted: Sun Dec 04, 2022 11:32 pm
by AreTheyTheLemmings?
Gareth wrote: ↑Thu Dec 01, 2022 11:27 am
Not quite sure what my question is. But am reflecting a little tonight!
Since turning 40, I’ve been really aware of not spending too much, saving more, whacking money into T-NISA and iDeCo, thinking more about the future.
And I thought I had been doing pretty well. I don’t have huge day to day expenses. I don’t spend much on crap.
But I do love a bit of travel and adventure. I had chance to go to Pakistan this week for the cricket. I um’d and ah’d for ages before eventually deciding not to go, entirely for money reasons. And with England romping on the first day, I have pretty big regrets for not going. I could have afforded it but chose not to spend the money.
I guess what I’m trying to ask is, how have you justified big purchases? Like a week in Pakistan watching cricket! How are you finding the balance between enjoying life and not wasting money? I don’t think I’m asking the question very well but I think you’ll get the point of what I’m trying to ask.
I have done that exact thing before, i.e., spent a week overseas attending all five days of a Test. It was costly, of course, but it was such a good experience that I still think of it and enjoy the memories even now, more than a decade later. Which means that the money I spent is STILL paying a dividend (i.e., happiness) after all these years. I am really glad I did it, and although it was a substantial chunk of our household budget at the time, it hasn't ruined us; we're doing okay, trying hard (and mostly succeeding?) to put money aside for retirement like most of the people on this board, and although money has been really tight since Covid and we relied
heavily on that government payout at one stage, not once have I thought, "Damn, I wish I didn't spend all that money on going overseas to see the cricket!"
Re: How do you justify big purchases?
Posted: Mon Dec 05, 2022 12:18 am
by RetireJapan
AreTheyTheLemmings? wrote: ↑Sun Dec 04, 2022 11:32 pm
it was such a good experience that I still think of it and enjoy the memories even now, more than a decade later
This is how I have started to explain the value of spending money on experiences, self-development, or relationships when I talk to young people.
My experience of spending money on things has not been great. It's the typical anticipation, brief period of happiness, then you get used to it, then it makes no difference.
But experiences/learning/relationships can be different, and actually compound.
I took a six week trip to Thailand with a couple of friends at university, and it was one of the best investments I have ever made. I still think about it and talk about it regularly.