Saving vs. Spending

SHE SAID WHAT?!
Posted By Wendy

When it comes to money and marriage, the topic is always sensitive. When you share each other’s dollars and you each have different ideas on how to save and spend them, well, there’s bound to be tension. So I’m going to approach this as delicately as I can, because I’m not interested in having an incendiary debate.

The issue is saving money. We both want to save, that’s not a question. We’d both love to put away a reasonable amount—not just for Lucas, but also for ourselves—to help with a future down-payment on a new home, to be prepared for any emergency expenditures, and to be able to travel a little bit outside of visiting family on the east coast.

We’re (mostly) in agreement about what we’d like to save for. What we can’t agree on is how much to save. To Alex, there is a magic number he’d like to achieve. If we reach this magic number, then he believes we can relax a bit. Once we save that amount, we can maybe invest in a few big-ticket items, like a trip or new TVs, but first the magic number must be acquired.

In the meantime, as we follow his plan, we sometimes have miserable months when we supposedly can’t even afford to go to Subway and get sandwiches for the evening, so I end up scrounging together a very basic meal of egg and cheese on one slice of toast (so as not to use up all the bread for the week). I understand we are lucky that we can pay all our bills and put away money to pay for our visits back east and own a home and send our child to an excellent daycare. And we are lucky that we can afford to buy ourselves video games and I can go out to lunch about once a week and sometimes treat myself to reflexology to help my back. But when I think about the months when we do scrape and scrounge, I get upset that things are so tight because we put away a couple hundred dollars in savings.

My feeling is this: I would still like to put away money, and have a set amount of money as a goal to save each month. But if we find ourselves in a situation every once in a while where funds are so tight that we are stretching our food to make it last, then I don’t think it’s a problem to not save that month. And if we want to treat ourselves with a fancy dinner once every couple months, that shouldn’t be impossible either.

What it boils down to is a difference in philosophy. He wants to save hard now so we can relax (but still save) later. I want to just relax now (but still save), keeping in mind that we certainly can’t break the rules every month, but a few times a year of less-than-stellar saving won’t kill us. I think if we treat ourselves a bit in the here and now, it’s not a problem, especially since I’m not advocating we stop saving altogether. I know it’s never going to be “easy” to save. So why not just do the best we can and forgive ourselves for splurging a little from time to time?


HE SAID WHAT?!
Posted By Alex

Once you get to the point of being a responsible adult and most especially a homeowner, everybody wants your fucking money. I am not kidding when I say that. Once we were lucky enough to call ourselves “homeowners,” we received no less than three extra bills in our goddamn mailbox informing us of new charges we would be having to pay. Shit like this is why saving is so important.

Now, I come at this from a balanced point of view. I don’t want to live paycheck to paycheck (in case I die tomorrow), but I also don’t want spend all my extra money in savings (in case I live to tomorrow) because with life, you just never know. I’d like to be able to enjoy my hobby monthly and not overextend myself but I won’t kill myself saving more than I have to.

Wendy’s form of saving would work if the real world wasn’t, well, real. You see, I am not just aiming to get to a certain amount in our savings and then call it a day. No, this number would give me some breathing room in case some big shit hits the fan. Just last year for example, we had a small termite problem along with a broken boiler that ended up costing us in the thousands. That was just one year and granted, not every year will be like that, but I’d like to be able to pay for shit like that without worrying about emptying our savings.

Her form of saving would work if we knew that nothing would ever break. This just simply won’t work because fixing stupid crap around your house very rarely costs $50. No, whoever comes by to quote you a price will ask for your manhood, your next unborn child, and a check upfront for $1,000. Also? That amount will likely change once they look into the problem and SURPRISE, it actually costs even more than that. Fuck you very much asshole because that change is never less than the amount quoted, it’s always more.

The amount of money I would like to reach is a goal that I would feel comfortable with in case of an emergency. But I won’t stop there either because Wendy eventually wants a piano and we want to take family vacations that aren’t just to the east coast. We want to do the Disneyland thing, Italy, Japan, etc. and I will eventually want the Playstation 4 and Xbox 720. And the sad truth is, we can’t do all that by saving here and there. Those things cost a lot of money. Seriously, plan a trip somewhere and you’re looking at a minimum of about $1,500, depending on where you want to go.

Saving for us is already difficult. We are at a disadvantage because we have a big daycare cost, student loans, and our twice a year flights to the east coast. Those do not come cheap (especially now that we are buying a 3rd seat), which makes saving on a month-to-month basis a giant hassle (but a manageable one). Now, I know there are many other people in the same situation we find ourselves in (paying off student loans and daycare). Some of those families probably also have to pay for travel to see family but simply cannot afford to. Luckily, by my rigid saving method, we are able to afford these flights. How, you ask? Because we are constantly saving but never to the point where our checking account is sitting at $0.00.

During our “miserable” months, it’s not that we can’t buy Subway, it’s that I choose not to. Some people can’t afford to see their family once a year. Who are we to complain? Wendy might think that my way sucks, but throwing a couple of hundreds of dollars at savings here and there will put you in the red FAST because most things in life won’t always cost just a few hundred dollars. They will cost more, and being prepared for these will take a huge load of stress off of you if and when they happen. Saving won’t always be possible but once you get to a point where you can, it’s a good habit to get into, even if it sucks at times.


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13 Responses to “Saving vs. Spending”

  1. Gaby

    I have read in several articles that it’s important to have about 3-6 months worth of savings in the event of a job loss. At one point, before we bought a house and had kids, I think we were there. Nowadays, we aren’t saving as much as we’d like, but we do have money set aside for things we need and for emergencies like when our heater busted. Alex is correct in saying that once you own a house, you need to be ready to pay up for things you wouldn’t worry about otherwise, like termites. That’s what you have savings and a rainy day fund for. At the same time, however, you can’t sacrifice so much that you can’t go out to eat a Subway sandwich. If you’re scraping an open-faced egg sandwich for dinner because you don’t want to dip into your savings, that’s a bit much. I understand that some of us experienced that in our childhood, but I’m sure that was more about need (i.e. really living paycheck to paycheck) than about making sure the amount on our saving’s ledger didn’t go from $5,000 to $4,980.

    The reality is that you don’t know if you’re gonna live to 80, hell, even live to 35 or 40, so you shouldn’t be a miser. You shouldn’t be like the grasshopper in that old fable either. A balanced approach of having money in savings, being able to do most of what you’d like to do and knowing you’ve got money in case your heater busts is, in my opinion, the way to go. If that means you have Subway but no Japan, then that’s they way I’d go. But my priorities are different. If Japan or Italy are trips you want to take soon, then you’d be forced to reassess your spending and cut out on other things.

    Reply
  2. echavez

    A balance to both is important. Growing up my parents had tons of cash saved up in the bank while all my cousins where taking trips to Hawaii and Vegas. In the end, the money they saved paid for my entire college so it is hard to knock their choice. One thing we did start was a college fund for our kids, so it does force us to save as it deducts from our bank account very month. As for trips, we are pretty busy and i do think that if we had to fly out to Boston two times a year, i would consider that all. But, going to NY or somewhere close by is totally cool since your close by. But trips to Japan and Italy are out of the window unless you win it big on Jeopardy =)

    Reply
  3. Rick

    I’m with Wendy. Being miserable will eat away at a person, and if its as simple as eating a delicious burger rather than cheese and crackers now and then and perhaps a movie then do it. I enjoy.. enjoying life whenever I can. Perhaps have a default amount you both agree on saving, then separate fun funds (an allowance of sorts). If Alex chooses not to spend his for the good of the family. Awesome, if Wendy wants to have some in & out and a new pair of shoes great. The way it works is.. you don’t get to see what the other person is doing in that account until retirement. You can’t comment on new things that show up either. Just be happy the spouse is happy.

    Reply
    • wtg22

      The idea of separate funds is an interesting one, and one I’ve entertained. It’s just so hard to divide it all up in a way that’s fair. We each have a budget for personal spending, but so many times that budget gets sacrificed in the name of bills and saving. So perhaps creating separate accounts for that would be a step in the right direction.

      Reply
  4. Ravi

    You should always have good portion of saving, if it is difficult, but suck it up and cut down the expenses. I agree with Alex.

    Reply
  5. Michael

    I think if you make a plan and stick to it then and then revisit it every year and see if it needs any adjustments. As long as you stick to that plan, you should feel confident that you’ll be good in the future and have money to have fun in the present.

    Reply
  6. Michael

    and saving is very important because of inflation. i know when i went to hartnell units were $11 each and now that nick is going there its $55 each unit. Plus the money in your retirement account isn’t going to last you as long as you think when the time comes.

    Reply
  7. Sisyphus

    Some thoughts:

    Money saved now is worth far more than money saved later. In the name of retirement planning, every $1 saved now is worth like $100 at retirement, if you invest in something as basic as an index fund that tracks a certain market like the S&P (like SPY for example). That also works in your favor for savings for college.

    The more money you put away, now the less you have to put away later, for the obvious reason and because the money you put away now is worth far more than the money you’ll put away later.

    That said, one way I save money in small ways is I never get soda. When I’m at Subway I get a sandwich, and if I’m feeling extravagant I get chips but never a drink. Each drink runs you like $1.40-$2.50 or some ridiculous shit. I ask for a cup for water and I just drink water. It’s better for you and it’s cheaper. If you eat out every day for lunch at work, that translates into $2 a day of savings, $10 a week and $500 a year. It adds up. All that just for soda at one meal.

    Additionally, the emergency fund everyone refers to above is very accurate. You have one health scare, even while insured and you’re out hundreds if not thousands of dollars. House repairs … it’s cold as shit lately and if your heater went out and you didn’t have the money to fix it, life suddenly goes from “eggs on toast” miserable to “let’s all huddle together for warmth” miserable.

    So I think establishing an emergency fund is important (once established it’s much cheaper to maintain than it was to build). I’ve been putting $100 each month into savings for years now, and I’m just getting to where I think I can pull some out of that every year since I haven’t had any emergencies. It’s like an end-of-year personal bonus.

    I also think there’s a middle ground. If you feel like you’re pinching it a bit too much and it’s making you unhappy or uncomfortable, assuming you have the leeway to do so, maybe back it off a smidge so that doesn’t happen and make little sacrifices elsewhere as a concession. Like not getting cheese on a burger, not getting chips, or drinking water instead of soda.

    Another thought, you could save a large chunk of money if you reduced your travels to once a year for a while.

    As with everything, I don’t think either extreme is right, and where you fall in the middle depends largely on your agreed upon priorities.

    Reply
  8. wtg22

    Thanks everyone for your input! All very good strategies, and all good, healthy contributions to the debate. We do already have a fairly sizable nest egg, but it’s not at the number that Alex would feel most comfortable. Perhaps if we can make some kind of a chart that says “If we save x amount each month, it’ll take us x number of months to get to that number” that will help both me and him have an understanding of the scope of our saving. And we haven’t even really started investing for Lucas’ college (though we have money put aside for him). All of these important steps will help us get to that golden place of financial security! (Right? Right?)

    Speaking of financing, does anyone have a good accountant they could recommend? Or even a good financial advisor? I’d love to look at ways we can save by making our money work smarter for us. (For example, instead of a savings account, should we be putting our $$ in a CD? Investing in the market?)

    Reply
    • Sisyphus

      I’d be happy to talk to you guys and explain what I know about investing. I’m no financial advisor, but I do have some education on the matter and I’m happy to talk to you about things.

      A trusted friend of mine is also a financial advisor down in your area and I’d be happy to offer a recommendation if after learning about stuff you end up wanting to go that route.

      Reply
  9. Carrie

    In our household we have separate accounts and separate savings, then one joint and one savings for the minimum expenditures. That way we can save and spend as we wish.

    I have to say I applaud Alex’s discipline. But at the same time, you should be able to buy groceries every month even if it means dipping into savings.

    If we dip into savings, we come up with a plan to repay savings back in addition to the amount we put in each month. Even if it is just $20 extra a month.

    Reply

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