4 ms·

Spending is eating your savings? you might be experiencing 'lifestyle creep'

7 points by fairytalemtg 4y ago

theandrewbailey 4y ago
> If you have the option, ask your employer to make a direct deposit into your savings account so that the saved money is automatically set aside. About 8 years ago, when I transitioned from a contractor to a full time employee, there was space for 3 accounts on the direct deposit form. I asked about it, and decided to use one for automatic savings. Since my salary has gone up significantly in the past 2 years, I should probably up that deposit, too. > To avoid impulse purchases, make yourself what de Leon calls a "buy list." Put the items you desire on a list. Then, after a predetermined time (like a week or a month), if you still want that thing, go ahead and buy it. I use a similar idea: if I think about buying something discretionary 3 times in 2 weeks, I'll probably buy it and I won't feel guilty about it. (see also the "Know that it's OK to treat yourself sometimes" point) I also ask myself "Will this make my life $100 (or whatever the price happens to be) better?" I'm particularly sensitive about that when it comes to subscriptions and other monthly bills. Sure, gigabit internet would be cool, but I don't think it's worth an extra $30 a month over my ~250 mbit service that never gives me a problem.
- nradov 4y ago
  Maintaining a bank savings account is rather pointless for most of us. A better approach is to set up automated periodic transfers from your checking account into an investment account where you can earn higher returns.
  - theandrewbailey 4y ago
    Pointless? Savings accounts are often emergency funds. Maintaining them are incredibly important, and everyone should have one with tens of thousands of dollars.
    - nradov 4y ago
      Nah. You can keep emergency funds in a money market account. Interest rates are still so low that bank savings accounts have a negative real return.
powersnail 4y ago
Here's my question: for people who have successfully retrenched in real life, what kind of things have you cut from your life? When I look around, I don't find many things to subtract. Some things have cheaper and lower quality alternatives, like food. But I don't feel like that's what the article is about.

7 points by fairytalemtg 4y ago

> If you have the option, ask your employer to make a direct deposit into your savings account so that the saved money is automatically set aside. About 8 years ago, when I transitioned from a contractor to a full time employee, there was space for 3 accounts on the direct deposit form. I asked about it, and decided to use one for automatic savings. Since my salary has gone up significantly in the past 2 years, I should probably up that deposit, too. > To avoid impulse purchases, make yourself what de Leon calls a "buy list." Put the items you desire on a list. Then, after a predetermined time (like a week or a month), if you still want that thing, go ahead and buy it. I use a similar idea: if I think about buying something discretionary 3 times in 2 weeks, I'll probably buy it and I won't feel guilty about it. (see also the "Know that it's OK to treat yourself sometimes" point) I also ask myself "Will this make my life $100 (or whatever the price happens to be) better?" I'm particularly sensitive about that when it comes to subscriptions and other monthly bills. Sure, gigabit internet would be cool, but I don't think it's worth an extra $30 a month over my ~250 mbit service that never gives me a problem.

nradov 4y ago
Maintaining a bank savings account is rather pointless for most of us. A better approach is to set up automated periodic transfers from your checking account into an investment account where you can earn higher returns.
- theandrewbailey 4y ago
  Pointless? Savings accounts are often emergency funds. Maintaining them are incredibly important, and everyone should have one with tens of thousands of dollars.
  - nradov 4y ago
    Nah. You can keep emergency funds in a money market account. Interest rates are still so low that bank savings accounts have a negative real return.

powersnail 4y ago

Here's my question: for people who have successfully retrenched in real life, what kind of things have you cut from your life? When I look around, I don't find many things to subtract. Some things have cheaper and lower quality alternatives, like food. But I don't feel like that's what the article is about.