I know mostly directed at Zamfir, but hey, I'll toss in my two cents. Lemme know if you want more details. I'm less fussed about money privacy than most folks.
sardia wrote:Can you elaborate on "too small" on a house? What would happen if the house you got was too small?
Related question, how important is it to you to keep up with your neighbors/ the Jones? Like if your neighbors go on a nice vacation, do you also expect to go on an equally nice vacation?
Apologies if I guess wrong. Due to the time restricted nature of forums, I'll have to burst fire my questions and make assumptions as to where this conversation is going. If this was face to face, I'd ask them one at a time.
Why I think it's important. I've spent more on x,y,z like vacations, goods, properties, etc etc, just because it's what everyone else claimed they were getting. I had a hard time separating what makes me happy from what other society says should make me happy.
I personally, don't put importance in that. I don't know where my neighbors vacation, or when they go. Sure, I'll notice if papers are piling up outside, but I'm not really counting to see how often that happens, or inquiring as to where they are going. I also habitually live in a neighborhood that's somewhat cheaper than I could afford. I like spending a lower percentage than average on housing. Less than 25% of net take home.
I figure very few people actually care about how nice of chairs I have, or how awesome my car is. If they really don't care, save for "keeping up" purposes, why should I care about their opinion on the matter? What actual value will I derive from their opinion? Sure, anything functional is taken care of(grass is cut just frequently enough to not get fined by the city, for instance), but I can't be bothered to care about the treadmill for it's own sake.
sardia wrote:I'm on vacation so I'll try to make this brief.
I'm not happy with this advice below. Would you consider living in the small house to Save money even if you risked being unhappy? It's the equivalent of telling a claustrophobic person to stop being whiny. As an alternative, how about sweat equity. Eg you buy a small or rub down house and build an addition. It's like getting a second job, riskier and the income goes into your house.
It's a tradeoff for the former. There's always things in life that make you unhappy, it's a question of how much. I mean, sure, in a perfect world, I could skip going to work or whatever, but that's not on the table. In general, I find that too large of a house just results in a lot of crap piling up in storage spaces, and it not contributing greatly to happiness in the long term, whereas feeling constantly tight on money is wearing. I CAN manage money very efficiently, but I find it relaxing not to have to stare at the price on the gas pump while filling up, or consider if I can afford to go out to eat. Having some cushion lets you do that. There's value there, and once you've gone to the trouble of building that cushion, it's less trouble to maintain it. For me, happiness seems to come mostly from improved capabilites. The fact that I can afford to drop a grand on my car if it breaks down with zero notice is nice, even if it doesn't actually happen. If you optimize out the daily frustrations, you can tackle bigger goals.
Sweat equity is the best. I am *very* good at building things, and routinely save money by building things myself. I've actually shifted over to doing less recently...don't do my own oil changes anymore, for instance. It's sort of a time/money saved/how much I dislike it tradeoff. But it's almost always considered when making significant purchases.
I do not budget personal spending whatsoever, really. I have budgetted(and mostly automated) saving that happens up front. At this point, I'm used to spending comfortably under what I have post-bills, post-savings, so it requires no real planning. Automation helps with this. Monthly paychecks also helps, because, after the initial adjustment, it's really nice to schedule all your bills to hit just after payday, and have zero concerns about planning for money from the good paycheck to flow over to the bad. I have certain practices I engage in to minimize wasted spending, but it doesn't revolve around a schedule. If I spend three times as much at the supermarket this month compared to last isn't actually important if I'm merely stocking durable goods at low cost.
On the flip side, for my business, I know exactly how the money flows in, out, etc, it's firewalled from my personal finances, and I can pull up very detailed, up to the minute metrics on basically anything. Even with automation, it's a lot more work. However, due to how taxes work, it's basically required. I did track personal finances in greater detail when I had much less money, and was building my personal finances to this state, though. At some point, I suppose I'll have to optimize credit score for homebuying again. I find that much less enjoyable for some reason, not sure why.
Spending a lot on something means you don't have that money to spend on something else when you get tired of the thing you were supposed to love.
