Every now and again, I receive criticism from folks who believe saving 50% of one’s after-tax income is too onerous. With such little income left, one turns into an impecunious soul who doesn’t have enough “fun.” While I do appreciate my critics elegiac responses, rest assured my heterodoxy is not without merit.
For the past three years I’ve taken six weeks off. Five of the six weeks are spent traveling abroad and going to Hawaii and Lake Tahoe. Trust me when I tell you that taking two-week cruises in the Mediterranean and snowboarding off 11,000 feet mountains is a blast! The remaining days are spent taking a day off here and there to enjoy insouciant San Francisco. I could go on about the other fun things I’ve experienced with only 50% of my income, but won’t because that’s just annoying.
Everybody’s definition of fun is different, which is why opinions about how others should have fun are meaningless. I think being able to wake up every other morning in a different country by ship is a blast. Others can’t stand the abundance of good food, night time activity, and romantic moments on a deck overlooking a shining sea. Crazy, I know!
I’m not criticizing you for saving less than 50% of your after-tax income because it’s your money to do what you wish. So, why am I being criticized for my savings habits? Everybody’s circumstances are different. I just take the positive viewpoint that if you are saving a small percentage, it must mean that you love your job and plan to work for a very long time!
YOU CAN HAVE FUN WHILE SAVING TONS OF MONEY
Trust me when I tell you that you can still have fun while saving 50% or more of your after-tax income. To not believe is to deny my very existence and the existence of countless other people who save a good portion of their income as well.
* We get used to living within our means. After 5 years of living on 45% of my after tax income I decided to raise my after-tax savings rate to 70%+ for the last five years of work. It felt a little tight for the first couple of months, but then I got used to it.
* Most of us make more money over time. If you maintain a constant savings rate of 50%, if you get a 20% raise, you suddenly have 10% more to spend while still saving 50%! Not only do you save more, you get to spend more as well.
* Happiness stays pretty consistent. I was ecstatic studying abroad for six months with only $200 a month in spending money and I’m just as happy spending $10,000 a month. Given I am just as happy spending way less a month, I might as well save that money for a rainy day!
* Fun is cheap. I have the most fun going with friends to the beach or going on a hike. Last week, I laid out on Baker Beach for 3 hours and it didn’t cost me a dollar. In Hawaii, the beaches and parks are all free. Costs are minimal and Hawaii have the happiest people in America, surprise, surprise!
* Spending too much money feels bad. If I start spending more than a certain amount, I start actually feeling BAD. Everybody has the bad inflexion point, otherwise, we’d all be spending beyond our means and be broke. People don’t eat forever because their body eventually tells them they feel full. Same goes with spending.
WHAT’S THE REAL REASON FOR THIS NONSENSE?
The real reason why there are critics against those who save aggressively is because these critics don’t have the will power or ability to save. Whenever you see someone doing something you want to do but can’t, you make up picayune excuses.
“Oh, he’s not having a lot of fun”
“Live life now!”
“What a boring person.”
“Such a cheap bastard!”
“Way too frugal for my taste.”
Heard these criticisms before dear super savers? I have, and every time I do, I either smile or write a post to understand why others would want to impose their definition of fun on me. Whenever the critics are the loudest, you know they are going through their worst spending moments. It’s like blaming McDonald’s for losing your four-pack abs, or blaming Wall St. for buying too much house. Let’s ridicule them to make ourselves feel better.
What I recommend is for you to empathize with those who try and make you feel overly spendthrift. Forgive their mild peccadillo for they do not know better. Just ask them about their current financial problems or worries, and you’ll see why they are bothering you. They might be taking an expensive vacation which is giving them spending guilt deep down. They might be nervous about losing their jobs, or at least frustrated about being underpaid.
There is a story behind every critic. You just have to go find out. For those who like to criticize, just focus on saving more while bolstering your income. Doing both slowly overtime will lead to great results and a much more critical you.
Photo: Windmills of Mykonos, 2011. Eating frutti di mare on the coast and watching the sunset was a blast. Try it! SD.