To Thy Own Splurge Be True

 

I am frugal.

You are probably frugal too. (You are reading a financial blog, after all).

But here’s the magical thing about frugality. It is personal and everyone’s version is different.

I can choose to cut my own hair, wear my clothes until they are worn through, and cook from home most days.

You could do your own car maintenance, staycation, and keep the thermostat at 55 degrees in the winter.

Our fellow frugal compatriot could bike to work, split rent with 4 randos from Craigslist and drink Folgers coffee.

There is nothing wrong with any of these versions of frugality. Each is a different manifestation, highlighting different comfort levels and skill sets.

Inherent in each variation of frugality is a different thread of splurge.

I love to vacation in not so economical places.

You many love your coffee shop coffee and have a maid service come every two weeks.

Our fellow frugal compatriot has a super sweet gaming PC.

That’s all great! I refuse to throw shade on other people’s splurges. Frugality is a conscious choice to cut back in certain areas of life. To save where we can save. That opens the door to have the ability to spend where we choose to spend.

This is your life.

To thy own splurge be true.

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A Retired Bachelor and Finding my Money Mentor

I didn’t expect to come away from a Christmas dinner with a financial independence story. Somehow I managed to leave with two. The first story is short. The second story is important. I’ll start with the easy story. ūüôā

My cousin is 35 years old and single. ¬†He’s the youngest of three boys and has always been a bit of a floater. He used to work maintenance or grounds crew or something for the local university. At Christmas, I found out that he quit his job in June. He’s been unemployed and proudly not looking for new employment since. He called himself a Retired Bachelor.

I asked my mom about it, and she says he’s been living off his parents. His parents don’t have much money, but his family doesn’t seem weird about it and my cousin has a soul, so I can’t see him mooching too hard. My guess is that he’s living rent free, eating for free, but otherwise living a small existence. I told him to write a blog about it. I¬†proposed RetiredBachelor.com. Maybe he’ll write.¬†I’m excited to watch how it unfolds.

The more important story is one I was surprised to hear. Somehow after dinner, after all the guests had left, my mom, sister and I got to talking about real estate. Feeling more confident in FIRE inclinations, I told them about my interest in buying a multi-unit building. Depending on the timing, we could live in part of it and rent the rest out. House hacking, so to speak.

I thought I was being unique in my endeavors.

Then my mom chimed in, “That’s what your Grandpa did. He owned several multi-family units.”

Um, excuse me, what?

She went on to say with a smile, and a hint of long since forgotten annoyance ” He made his children clean the units between vacancies.”

I had no idea.

A little backstory…

Born in 1913, my grandpa carried with him a deep rooted trauma from the Great Depression. He was a true to life hoarder in every sense of the word. He also had a tough time parting with his money. From that came a money smarts that makes me smile.

He used to start savings accounts all over the country. While driving through, he’d drop into the local bank and open¬†an account. The family had a heck of time tracking down all the accounts after he died. They seemed to keep appearing.

One blessing I will never take for granted is he paid for most of my college, and for many of my cousins’ college. He liked savings bonds and purchased¬†them as gifts for what seemed like all occasions. He also liked to give cash. In fact, the only written momento I have from him is one of those envelopes meant to give cash.

The funny thing about all this is that he never had much money. Or at least, that’s how the world remembers him. He was a tradesman. He owned his own small business. He lived modestly. He was the millionaire next door.

Without knowing it, I’m following my grandfather’s footsteps. I save like him. Unfortunately, I hoard like him. And now I want to grow wealth like him.

I couldn’t be prouder.

I hope you had a very Merry Christmas!

Demystifying University. It’s only a thing.

Higher education in America is expensive. It’s not even a little bit expensive, it can be incredibly expensive.

I felt it was time to take a moment to step away from Higher Education as what we’ve all come to know. Instead I propose we¬†think of Higher Education in the abstract as a thing.¬†Nothing more, nothing less.

Let’s look at this thing with economic eyes. What do we have.

The thing is good. Because it is good, people want to buy this thing. There is increased demand for it.

With increased demand comes an opportunity for the seller to charge more for this thing. Over time it becomes more and more expensive.

Before the demand for this thing¬†went way up, people could buy it¬†with cash. They would work and save up for it or their parents would pay for it. People didn’t borrow to pay for this thing because you didn’t need to borrow for it. But borrowing also wasn’t much of an option. People couldn’t borrow because they didn’t need to and people didn’t need to because they couldn’t really borrow.

People kept liking this thing¬†and the price kept going up. As prices for other goods increased, it also cost more to provide this thing. Some people couldn’t afford this thing. In 1965, President Lyndon Johnson signed a bill into law saying “Hey! We need people to have access to this thing. Let’s start offering low interest loans to people who want to buy it. ¬†It’s a good thing and they should have more money after buying it, so the Government guarantees that everyone will pay the Government back for this thing.”

With loans, more people could access the thing. ¬†More people bought it and places kept selling it. No one really cared about how much it cost because buying this thing effectively came with a guarantee you’d have a better life. If you owned this thing, you’d make more money, have more success and damnit people would like you!

The trouble was the Government money to buy this thing was guaranteed to the sellers. With guaranteed payment, the sellers could charge whatever they wanted. They charged more and more and more and more and people kept buying it.

After 50 years, the price of this thing is out of control. And unlike the days of yesteryear, owning this thing no longer guarantees you the life it did 30 or 40 years ago. In fact, so many people own this thing, it doesn’t differentiate you at all from anyone else. It seems everyone owns this thing.

Sure, having this thing is still great for some. Maybe it turns out fine for many. But what about everyone else?

Do you think you should still buy this thing?

This thing is so expensive it could potentially ruin your life.

Once you buy it, you can’t return it.

If you can’t pay back what you borrowed to buy this thing, there’s not much you can do about it.¬†It will follow you around until you die or become permanently disabled.

It’s time we buy this thing differently.

The cost of this thing needs to be important.

The color of this thing barely matters any more.

Yes, this thing is probably still great in the long run, but that doesn’t mean you should trade your future for it.

Be smart when you buy this thing.

  • Work more to save up to pay for it.
  • Talk with people about why you want this thing. They may give you money to help you buy it.
  • Buy half of the thing in your community, near home. Then you only have to pay for expensive parts when it matters.
  • Learn about yourself before you buy this thing. The last thing you want to do is buy the wrong one, because they won’t let you return it.

This thing is shiny and I know you want to buy it. But remember, there are no refunds. Think before you buy. It’s only a thing.