Save your money or spend it?

debodun

debodun

SF VIP
Location
way upstate in New York, USA
A friend and I oft have a discussion about my money. The gist of her side is, "What are you saving it for? You worked 38 years and scrimped, now you should spend all that loot and make like easy for yourself!" She thinks I should convert the sunporch into a laundry room so I shouldn't have to make a 5 mile round trip to the laundromat when I need to do laundry, plus other amenities.

My feeling is, "Why piddle my life savings on luxuries I'd seldom use. I may really need that money some day for a big emergency, then I'll have it and not have to borrow money.

She also thinks I'm crazy not to have a credit card. She says she puts EVERYTHING on her credit card, even if she buys a pack of chewing gum. That way she has a record every month of how much she spent and on what. Well, so do I. I save all receipts for which I pay cash. Even if I buy gas for the car I ask for a receipt. If I write a check, I get a statement every month from the bank which also includes electronic transfers which I use to pay utility and service (like trash pickup) bills.

Are you more of a saver or spender?
 

We've always been diligent savers, but we didn't hesitate to spend on a good vacation or something for the house or each other. That said, the priority was always maximizing our 401k contributions over the years, and also contributing to IRAs when it was to our advantage. Bottom line now that we're retired is that we can now afford to build a new home, one that should serve us well in our remaining years. I keep close track of our money and spending, and consult with our financial planner on big purchases.
 
We look for a happy medium. She does the budget/finances. There is a certain percentage of assets that she feels is sustainable. When the stock/bond market has a very good year, we take a little bit more and restock the emergency fund, the new car fund, etc. But within her budget we have plenty to roam the US and Canada in our camper van and experience the beauty we love so much. There is also plenty to make an overseas trip every year or two. I am of the mind of spending while physically able to get the most out it and she is more conservative. It is a good partnership when in balance.
 

I'm frugal and I'm a saver but I'm not afraid to spend money on things that are important to me.

I avoid wasting money on things that are not important to me and continue to save to insure that I can be self supporting and independent until the end, that is very important to me.
 
They say you cant take it with you......

A stingy old man gives his doctor, lawyer, and priest a million dollars so they can put it in his coffin with him.
At the funeral, the doctor says "I only put in half, the rest went to needy patient treatments"
the pries said "I only put in 33%, the rest went to my needy parishioners"
The lawyer said "how can you disrespect an old friend that way, I put in a check for the whole amount"
 
We saved all of our working lives to reach our goal of early retirement. We spend on things we really want or need, never just threw money out the window. We try to assure that our money won't run out before we die, but if we want a new vehicle, vacation, good food, etc., we don't skimp, worked too hard to deny ourselves in our old age.
 
Like you Debodun, although I've been retired for nearly 20 years I'm saving and investing in case I have to go into a nursing home or in case of a catastrophic occurrence. I've read that 67% of people over 65 wind up having to go into nursing homes. Maybe not all for long term care but even so. New Jersey has one of the highest nursing home costs in the country. I'll be damned if I'd want to depend on Medicaid to get access to a facility because I doubt the choices under that circumstance, it would meet my standards. Even though I don't see the sense in piddling money away just because I have it, I never deny myself the things I want but my wants and needs are so much less than they used to be. Also, I'd really like to leave an inheritance for my son and a little for grandchildren and their mothers (whom I consider my honorary daughters).

Regarding the credit card. I agree with using the card for everything (well I use mine if it's an $8 or more purchase) IF and this is a big IF ..the person can refrain from overspending and pays the balances in full each and every month. I have literally used my credit cards to make money. Besides purchases, I put everything on the card that I'd normally write a check for, except for the utility bill because they surcharge for using a card and our co-op carrying charges because they don't have the system yet. I then pay the bills in full each and every month. I have three reward cards. One I opened back in October because they were giving $200 cash back on $1,500 purchases made within three months. Over the past about 6 years, I've garnered close to $3,000 in cash back rewards that went into my account, were used as statement credits or as discounts on my Amazon shopping. That's a benefit checking accounts simply do not offer. I'm not one to turn down almost $500 free dollars a year. And I do like that it helps me keep track of everything better. When I spend cash I often find myself saying "Where the heck did that money go?!"
 
We spend it. Always have. Through careful planning and some unexpected good luck, we have way more income in retirement than we did while working. No kids, comprehensive LTCi policies so nothing to really save for.

Next move is to senior living. Just have to decide where and what we want. We have so many options, it's hard to winnow them down to a manageable number. Gotta start doing the research, though. We did some, then stopped; haven't picked it up again yet.

Haven't decided whether to sell our house or rent it to some friends who could use some help in finding a stable living situation. Putting off taking SS as we don't need any more taxable income.

We love to do driving trips, so having the house empty when you live in the big city is a problem. Another positive to finding a nice senior condo space.
 
A choice between saver or spender when both are possible can work if some planning was done. Understandable that spending for something that has little or no use just to have it doesn't make sense. That kind of spending is why so many end up in poverty wondering how the heck that happened.




The part about paying cash for everything seems to me to be a little foolish. Use of a cash back credit card to pay for everything, then paying the balance works to a savers advantage. A printable record, once a month billing <----- allows money in an interest bearing account to be saved. Toss in the cash back [for us typically around $150.00 a month] works as a savings. Spending that $150.00 on wants that are better quality products, with free delivery & return depending on where can sometimes skip state taxes.




But to each their own on what they feel comfortable with. Our life lesson in finance management came early & never really left us. We began married life while I was in the U S Navy, total income was $198.00 a month. We didn't know we were poor. Beginning life together having to buy "needs" does something to the subconscious mind, it took quite awhile to feel OK with buying "wants". The "wants" still have to have to be useful.
 
We were lucky to have a good financial advisor, and we both had good jobs.
Now our children are independent, living good lives, so I am spending instead
of saving. Live in a lovely senior's residence, have my car, go out socially, buy what I want
when I want, but always within my budget. Lucky that my late husband and I were able

travel, now I am not interested. My life now revolves around the activities here and my family.
 
debodun said:
.................... She thinks I should convert the sun porch into a laundry room so I shouldn't have to make a 5 mile round trip to the laundromat when I need to do laundry, plus other amenities. .................................. "Why piddle my life savings on luxuries I'd seldom use. I may really need that money some day for a big emergency, then I'll have it and not have to borrow money. ......Are you more of a saver or spender?
Click to expand...
I'll make some assumptions here that converting a sun porch to a laundry will cost $10,00 to $20,000.Could be a lot more or substantially less.If $20K can potentially make the difference of having to borrow money for an emergency then I think you're doing the right thing.Otherwise I agree with your friend.As for credit cards, I also charge everything and ALWAYS pay it off at the end of the month.It does wonders for your credit score if you ever actually need to borrow money.
 
I am a saver but probably would spend a bit more on fun things if I didn't have the worry of medical bills in the future and upkeep on our home. We had our home built over 35 years ago and things are starting to go. Just replaced a bedroom window, need new side steps that are crumbling with a new railing. Our shed needs new siding and our appliances are quite old and one of these days they will need replacing. With that in mind I watch my spending very carefully. We do go out for dinner now and then and travel to see my daughter and family twice a year. That's enough to keep me happy.
 
Like others have stated, I also make good use of those cash-back cards. I know people who think it's a gimmick, but it isn't. It really works, and you really do get cash back. Comes in very handy and really is "found money."
 
Finding the happy medium is the key! I buy things when I want them, but I logic out how much those things are really needed before I grab my wallet with my credit card in it. I never finance anything, if I can help it. I had definite financial goals as a young man. I reached those goals, so I now lead a comfortable life. That is crucial, here: You need to make your plans while you are still young. Otherwise, you'll be playing catch up and running around in circles when you're older. I have no desire to hold onto my savings in case of catastrophic illness. In that case, all I'll need is a strong rope and a place to hang it. Why should I pay for a doctor's new Mercedes as he/she drains my bank account while I slip down the tube? Why hang greedily onto life if that life has no joy?
 
I use credit cards for the convenience but pay the total bill when it is due. As for spending, I take care of all my 'needs' and enough of my 'wants' to make life enjoyable. I've never been extravagant and truly dislike shopping. Amazon is great. Love not having to run from store to store looking. If Amazon doesn't have it, I probably don't need it.
 
I take out a certain amount of money each year for extra projects. I'm trying to fix up my house with it.
It's hard to find a way to save (at least readily accessible) money in a way that even keeps up with inflation.
I think having a nice house is more important. Then If things get to bad I can sell my house.
 

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