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It's human psychology. Below a certain level, your mind will simply talk itself into spending your available money to make you happy. You don't need that car.
by wccrawford 8y ago
It's human psychology. Below a certain level, your mind will simply talk itself into spending your available money to make you happy.
You don't need that car. A car half the price would have been plenty good enough. But you did it anyhow.
You don't need fancy breakfast cereal that costs twice what the generic stuff at Aldi costs.
You don't need all those electronics and toys. You don't need to eat out that much.
If you made less money, you'd do less of the above right until you simply couldn't afford any of it.
And you'd continue to be about as happy as with all that money, assuming you were still paying for the necessities.
I'm not trying to convince you to give up those fancy drinks. I'm just explaining that you could choose to live more frugally without almost no repercussions, but you won't.
- ip26 8y agoThe "funny" part I think would be how rent, child care, student loans and medical bills tend to scale in cost to your locale, so despite your well paid job, your cost of living has gone up to match. It might be expected & natural for that to happen, but it's still kind of... "funny" if you look at it from a certain angle.
- supertrope 8y agoChild care, education, and medical are labor intensive. It's not like making widgets in a factory that can double in per worker productivity every two years. Industries that don't mechanize like a string quartet playing Mozart still command higher wages over time because they need to afford their bills too. Real estate is limited by the supply of desirable land. Location, location, location. I'm fairly sure that student loans do not scale with locale. That payment is the same no matter where you move to after graduation but it's easier to earn it in a high cost of living (unless housing costs are so high that your free cash flow is less).
- wutbrodo 8y agoI decided in college that a 40 hr workweek wasn't the optimal amount for me. I've since learned that for white-collar jobs, employers really really want full-time employees[1]. My way around this was: consume as if I made ~half as much and take extended sabbaticals. The final piece in the puzzle was ACA exchanges, as I can now get stable (though expensive and high-deductible) health insurance while unemployed. This obviously isn't a binary, but I've been consistently fascinated with the inability of the people I know (generally middle- to upper-middle class) to shift their consumption downwards to meet a goal. Not everyone wants as much leisure time as I do, but I know tons of people with all sorts of reasons they'd like to save more, and every one of them consumes more while making less than me (when I'm working). I used to think the issue was that I grew up without a lot of disposable income, but now I know people with similar backgrounds whose floor on consumption rises in lockstep with their income. That is to say, I don't disagree with your analysis here, but for God's sake _why_ do people do it? [1] Contracting is obviously possible, but it often constrains the type of work you can do.
- Aeolun 8y agoBecause there is a lot of things I would like to buy now that I have no money for? My ideal doesn’t change when my income rises, I’m just finally able to pay for the things I’ve wanted all along. At least, that was true before. I guess I’m finally at a level where something remains for saving.
- wutbrodo 8y agoWell, obviously. If what you want to spend your marginal income on is more consumption, that's completely reasonable. There's no accounting for preferences. That's not what I, the article, or anyone else in this thread is talking about though. Note that I'm also talking about a _floor_, not about discretionary income. What you consider "must-have basics" is different from what I would consider to be so, which is different from what a billionaire or a villager below the global poverty line would. To some degree this is normal, but the degree to which it gets in the way of the other goals of the people I'm talking about, I don't understand it. I'm specifically talking about the many, _many_ friends of mine who have goals other than immediate consumption, and for whom immediate consumption is preventing those goals even when those other goals are higher-priority. Yes, I know revealed preferences are a thing, but in extremis the concept relies on a completely unrealistic Homo Economicus model of people. Hyperbolic discounting, innumeracy, an innate desire to keep up with the Joneses even when you disavow any such desire: these are all surely contributors, but I guess I'm surprised at the degree to which their sum skews consumption behavior.
- tjr225 8y agoThere are a lot of assumptions about my decisions and my lifestyle in response to my original post. I am not angry at my situation, rather, I worry about my younger brother, and all of the other people out there who have yet to get as lucky as I have.
- mynameishere 8y agoI must not be human.
- walshemj 8y agoAldi and Liddle's cheap food is I would say a false economy.
- thelasthuman 8y agoI would like to know more, can you elaborate?
- barry-cotter 8y agoThey are a snob. There’s loads of good quality food in Aldi or Lidl. Plenty of crap too. Don’t buy the crap.
- walshemj 8y agoNot really you recall the adulterated meat scandal we had in the UK - and try tasting cheap orange juice vs the better quality stuff.
- barry-cotter 8y agoI did not deny there was plenty of crap. Do they have more than one brand of orange juice though? Is one of them good? Do they sell at least some quality products? It’s been a long time since I was last in an Aldi or Lidl but the answer to the second at least was yes. Their bread was great and they had tons of quite good Italian ham, cheese and preserved and condiments that were just not previously available at those price points.