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This is terrible advice, but it took a while for me to process why it's such terrible advice. I think the big flaw is in the assumption that you can spend an e

This is terrible advice, but it took a while for me to process why it's such terrible advice. I think the big flaw is in the assumption that you can spend an entire month's earnings in a single month. If you ever find that happening, it's a huge red flag that you're doing things wrong. A much better way of looking at finances is to adjust your lifestyle so that you require a tiny, insignificant fraction of your income to survive. As developers (and freelancers), especially as a young one, this is quite easy. Cheapest apartment available, same old car from college, roomates, no television or electronic anything, etc. Fit your life into $20k/year. If you do that (and if you're fresh out of college you'll have just survived five years of doing exactly that), it's pretty hard to get yourself into a spot where money is an issue if you have any sort of professional job. Even if you have the roughest year imaginable and only book $40k worth of work, you'll still sock away $10k into savings. The author touches on the concept of having a full year's worth of living expenses in the bank, but immediately dismisses it as if it were some impossible ideal that nobody could ever achieve. But he could, in a single year at the rate he seems to be billing, if he really wanted to. And there's no way of explaining just how liberating it is to have that sort of personal runway. If you don't have it, you need to drop everything and make sure your only goal in life is to get that $10k-$50k pad into your bank account.

andy_adams 12y ago
> But he could, in a single year at the rate he seems to be billing, if he really wanted to. I wish this were true. I'll just say that having 3 kids changes the equation dramatically. I make a good living and am fairly tight with my spending, and this is nearly impossible for me. I know plenty of families making far less, so while the advice works for single folks, I feel it breaks down once you add family in. I still believe you should be saving, but this is fairly unrealistic for many folks.
cecilpl 12y ago
Indeed! This line especially stuck out for me: > Your spending decisions should be tied to the money that’s already in your bank account, not to the contracts you’re signing right now. No! Your spending decisions should be based on what you need to buy, and you should work to reduce that as much as possible. My wife and I spend $35k/year and live very well. We currently make about $110k after taxes, but we would spend exactly the same no matter whether we made $40k or $400k. We have figured out that happiness isn't bought with money. The other nice thing is that every year we work, we bank two year's worth of living expenses. At that rate it doesn't take long until you don't need to work for a living any more.

andy_adams 12y ago

> But he could, in a single year at the rate he seems to be billing, if he really wanted to. I wish this were true. I'll just say that having 3 kids changes the equation dramatically. I make a good living and am fairly tight with my spending, and this is nearly impossible for me. I know plenty of families making far less, so while the advice works for single folks, I feel it breaks down once you add family in. I still believe you should be saving, but this is fairly unrealistic for many folks.

cecilpl 12y ago

Indeed! This line especially stuck out for me: > Your spending decisions should be tied to the money that’s already in your bank account, not to the contracts you’re signing right now. No! Your spending decisions should be based on what you need to buy, and you should work to reduce that as much as possible. My wife and I spend $35k/year and live very well. We currently make about $110k after taxes, but we would spend exactly the same no matter whether we made $40k or $400k. We have figured out that happiness isn't bought with money. The other nice thing is that every year we work, we bank two year's worth of living expenses. At that rate it doesn't take long until you don't need to work for a living any more.