Striking the balance between spending and saving?

Tyler Durden · 6 August 2011

On one extreme, there are people who pick up five cent coins off the street and live life to a minimum, putting away as much cash as they can, probably in preparation of a 'rainy day'.

On the other extreme, you have people who say "life is short! Live in the present! You can't take your money with you if you die tomorrow".

I can see the merits of both extremes, but just wondering how others attempt to strike the balance here?

waimate01 · 6 August 2011

Tyler Durden said:
On one extreme, there are people who pick up five cent coins off the street and live life to a minimum, putting away as much cash as they can, probably in preparation of a 'rainy day'.

On the other extreme, you have people who say "life is short! Live in the present! You can't take your money with you if you die tomorrow".

I can see the merits of both extremes, but just wondering how others attempt to strike the balance here?

Do one then the other.

In particular, paying your mortgage off should be priority #1. Sit on ****ty furniture and watch an old TV. Drive an old car, but not one that's so old you've always gotta have your hand in your pocket. By all means go on a holiday each year, but maybe it's only Coffs or the gold coast, flying economy and renting an apartment one street back from the beach. Do that and pay your mortgage off with religious fervor.

Once you've done that you can relax a bit. Buy a few toys, international business class holidays, Hotel on the beach, etc, etc.

But you've really gotta put the hard yards in first, then relax a little ... doesn't work the other way around. You also gotta make sure you don't get hit by a bus before you change modes, coz that'd be kinda annoying.

Smurf1976 · 6 August 2011

waimate01 said:
Do one then the other.

In particular, paying your mortgage off should be priority #1. Sit on ****ty furniture and watch an old TV. Drive an old car, but not one that's so old you've always gotta have your hand in your pocket. By all means go on a holiday each year, but maybe it's only Coffs or the gold coast, flying economy and renting an apartment one street back from the beach. Do that and pay your mortgage off with religious fervor.

Once you've done that you can relax a bit. Buy a few toys, international business class holidays, Hotel on the beach, etc, etc.

But you've really gotta put the hard yards in first, then relax a little ... doesn't work the other way around. You also gotta make sure you don't get hit by a bus before you change modes, coz that'd be kinda annoying.

Agreed.

There's a significant non-financial benefit of owning your home outright that only those who do can appreciate. In short, it's a great way to avoid stress.

The RBA put interest rates to 10, 15 or whatever %? Boss just cut back your hours? Car just broke down and needs major repairs? Some other crisis?

Those renting or with a mortgage will be in a panic, those without won't. Pay it off as soon as you can in my opinion.

sptrawler · 6 August 2011

waimate01 said:
Do one then the other.

In particular, paying your mortgage off should be priority #1. Sit on ****ty furniture and watch an old TV. Drive an old car, but not one that's so old you've always gotta have your hand in your pocket. By all means go on a holiday each year, but maybe it's only Coffs or the gold coast, flying economy and renting an apartment one street back from the beach. Do that and pay your mortgage off with religious fervor.

Once you've done that you can relax a bit. Buy a few toys, international business class holidays, Hotel on the beach, etc, etc.

But you've really gotta put the hard yards in first, then relax a little ... doesn't work the other way around. You also gotta make sure you don't get hit by a bus before you change modes, coz that'd be kinda annoying.

Thats exactly the way we did it. You have to do without untill you have money working for you.
Funny enough I still pick up the 5c pieces my kids leave all over the place because they can't be bothered picking them up.
I bought the youngest daughter a newer car(she is paying me back) and while cleaning and tidying up her old car readying it for sale i found $10.50 in loose change on the floor and under the seats.LOL
Just shows times are changing, there is no way you will find loose change on the floor of my car. Actually I don't have loose change, any spare money is invested or spent on toys.LOL

joea · 6 August 2011

Hi.
Old time values are good!!

Was at my son in laws place doing some work to help him with 880 mango trees.
At tea time he asked me if I wanted to be paid. I said no.
5 minutes later his 6 year old son came back to the table with a "dollar" he had taken out of his piggy bank.
He said "I will share with you pop". Interesting how some people can bring up their children with "true values".
Oh yeah. I instructed the 6 year old to buy some raspberries and share with his two younger brothers.
joea

starwars_guy456 · 6 August 2011

I'm personally one of the "pick up 5c from the street" type of person. Coming from a pretty poor country, every cent counted and we never wasted any food.

Anyhow, I think you need to figure out yourself what your goals are. Travel? Living a socially rich life? Experiencing the world and different cultures? Living a stress-free life?

Mine is to save up to buy a house, so I've reined in my expenditures quite a fair bit in pursuit of that goal. Even though I'm tight, I don't mind so much because I feel like I'm moving forward every fortnight when I check my bank balance.

Regards
Ed

Striking the balance between spending and saving?

Tyler Durden

waimate01

Smurf1976

sptrawler

joea

starwars_guy456

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