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Conjure up big savings without sacrificing your quality of life

Saving hard can hurt, but you can turn it into a psychically sustainable experience by aligning your budget with your values.

True, if you have the values of a Russian Oligarch or the cast of The Only Way Is Essex, then this prescription is not going to work.

But if like 95% of the human race you know that bling is not the bedrock of true happiness, then you stand half a chance.

Frugality is the fastest route to our financial goals for most of us. Yet many who are not natural savers think that cutting back is impossible, or will be the end of life as they know it.

Not so. You can make huge savings by experimenting with lifestyle shifts that enable you to live a fulfilling life for less.

In such a scenario, disposable income is laser-focussed upon the areas of life that really matter to you. All frippery is cut. The cash you save is diverted to meeting your financial goals without daunting sacrifices.

Once your budget is harnessed to your well-being, it can perform a new and vital function. It becomes a beacon that guides your quality of life. Overspending becomes a warning signal that you’re losing sight of what really matters, and financial discipline becomes a way of staying true to yourself.

And that’s a more powerful incentive to stay the course than saving a few quid will ever be.

Ditch the things you don't really need

Saving yourself

Discovering what your values are in this context is a personal journey that requires reflection. In the Accumulator household, all spending is viewed through the following lens:

  • We spend on the essentials.
  • We spend on things we really enjoy.
  • We spend on things that really make a difference.
  • We don’t spend on things just because we want them.

I want so many things! A fancy new TV, a new bathroom, a faster car, a fine dining experience every night.

I can chase all this ephemera to the point of financial ruin or else I can recognise that none of it moves the happiness needle very far, or for very long, or provides anything like the mental nourishment of a long walk in the countryside with the promise of a pub or teashop at the end of it.

Saving in line with your values does not rely on entirely rejecting all status symbols and the consumerist components of your identity. It’s not about living in the boondocks and eating berries for supper (although it can be).

Everyone has their must-have items that are central to their idea of themselves. The plan is to strip those back to an essential core.

For example, I need quality work clothes. It’s important to my sense of self-confidence that I feel that I look the part when operating in a politically charged office space. So I splash out on brands that make me feel good when I buy, and I wince when I drop curry down my front.

But the time is coming when I think I can challenge my lavish expenditure in this arena. Recently someone complimented me on my shirt. It’s years old, from Burtons, and was only pressed into emergency service due to a laundry crisis.

Perhaps all that other fancy stuff isn’t needed at all? Perhaps I’m a victim of the spotlight effect (our innate tendency to overestimate how much others notice us) and no-one else gives a stuff about my nice threads?

Happiness replacement therapy

Once you begin to challenge your notions of what you need to live the good life, you can turn the drudgery of budgeting into a game that replaces the expensive with the inexpensive but similarly fulfilling.

You can apply Money Saving Expert’s downshift challenge to your entire lifestyle.

  • I used to race go-karts at the weekend. Now I play football. This substitute is just as much fun but the difference is I’m not burning fistfuls of cash in exchange for the memories.
  • Challenge everything you do. Confront especially ritual behaviours that have remained unquestioned for years. There’s a good chance that diminishing returns have long since eroded most of the gratification you once got.
  • If you’re wedded to expensive experiences, try halving the frequency and see whether the novelty value boosts your pleasure meter upwards.
  • Challenge all your spending that’s for show. If you’re up against the implacable Jones’, then narrow down the number of arenas you feel you must compete in. Win the important battles, don’t try to win every battle.
  • Keep a spreadsheet if you need to and rate the alternatives. Just how much fun was that foreign holiday in comparison to a staycation?

Too far, too fast

A word of warning: Don’t try to change too much at once.

Saving is like dieting, only you’re trying to put pounds on. Take a crash course and the pace of change will almost certainly break your resolve.

By taking it slowly, Ms Accumulator and I have managed to up our savings every year – even in the face of inflation and a period of stagnant wages. I’m like a corporate hatchet-man: constantly cutting costs by trying cut-price alternatives.

I still get doubts. At low moments it’s easy to think that the savings being squirreled away are denying me fun I might otherwise be having today. But mostly that’s because consumer society is so strong. It’s constantly trying to put me in a psychic headlock, bullying me into thinking that an iPad is a cure for feeling down.

Regular reflection upon and discussion of our true values are necessary counter-measures to materialistic pressures. This strategy can make a big difference to your saving while maintaining your quality of life.

But first you have to work out the difference between what makes you happy, and what you’re told makes you happy.

Take it steady,

The Accumulator

{ 45 comments… add one }
  • 1 Alan September 27, 2011, 7:50 pm

    Wise words. The last paragraph summed up the posting very nicely. If we can bring ourselves to give up our obsessions about material things we’d be a lot happier. I’ve decided not to bother with an i Pad:).

  • 2 Moneyman September 27, 2011, 9:07 pm

    Yes this is the key – most people will gain wealth mainly through saving and hopefully protect that wealth from inflation (and then some) by sensible investment.

    But that first change of mindset is essential. One trick that might be helpful is to use a spreadsheet to aggregate savings over the year and then over the next 10 years (assuming a reasonable rate of return). When you see how the numbers add up it begins to look more impressive – and therefore desirable.

    Another trick is to ‘pay yourself first’, sending the first slice of your income off to your savings account when your salary hits your bank account. Less to spend, meaning more budgeting required.

  • 3 DPJ Suter September 27, 2011, 10:29 pm

    You have firmly hit the nail on the head here. It is really sad to hear people say how an expensive pair of shoes has made them ‘feel good about themselves’ or to see people queuing all night outside an Apple store, so they can be one of the first to own the latest i-gadget – surely they can find something more fulfilling to do with their lives?

    I have a lot more respect for people who, rather than just buy an ‘achievement’, actually go out there and do something creative, useful or helpful.

  • 4 The Accumulator September 28, 2011, 7:27 pm

    @ Alan – Good for you. I’ve tried to convince myself I need one, but I just don’t.

    @ Moneyman – after you wrote that I beelined to an online savings calculator and had a play with savings rates and returns over the next 10 years. Wow – certainly seems like it’ll be worth it when I get there.

    @ DPJ – the all-night queuing thing is surely about carving out some sense of identity and belonging, but absolutely it seems like energy that’s tragically misdirected. Harnessing our allegiances to brands rather than causes or communities does suggest that something has gone terribly wrong somewhere.

  • 5 Adam September 29, 2011, 2:26 pm

    I have been trying to cut back on my spending and attempting to save more money. But, it is difficult for me to figure out which areas to cut back on, without cutting back too much on the things I really enjoy in life. Thanks for the tips.

  • 6 John August 9, 2012, 12:24 pm

    I am blessed as I saved during my working life; you really have to make saving important. I now make more in retirment than I did when I worked. Track your expences each month.

  • 7 FI Warrior May 17, 2016, 12:13 pm

    I hooked up with a friend recently who’s finances are a perma-disaster area and in desperation he asked me how I’m always relaxed about money. I’ve tried to interest him in investing in the past, but gave up because he has no patience, even though much smarter than I and a high earner. So I said he should start off on a set up and forget, relatively safe option like a low-cost, Vanguard-type, Index tracker. This was just to get him initially used to the concept of paying himself first, given he’ll waste whatever reaches his hands anyway for sure.

    When he understood it was like owning a tiny part of many good companies, he suggested upping the game by buying into those same companies through a spread-betting platform to get the higher returns. I explained that the risks are then equally magnified and 98% of spread-betters lose it sooner or later, so although slow and steady is decidedly unsexy as a strategy, counter-intuitively, for most people it really will work out better.

    His eyes glazed over and I saw I’d lost him. He has thousands in various debts he can just about keep up with the interest payments on, a terrible credit rating, no equity left in his house and then lashes out with quite big impulsive buys to feel better when down about the inherent insecurity of employment as a consultant. The ancients were right, patience is one helluva virtue. We carried on drinking our coffees.

  • 8 William III May 17, 2016, 12:41 pm

    Big Phood has become extremely succesful in inciting indulgence by magically tailoring the experience of eating, down to absurd details such as the smell a Phood produces after one, two and four seconds in your mouth. As Akerlof & Shiller argue in ‘Phising for Phools’, corporates in many other areas have become similarly sophisticated when it comes to pushing their products. No wonder we struggle to resist temptations and save.

    Until last year I was a Phasion victim much in the sense that Accumulator describes (for which I partly blame the status pressure that permeates the Big Smoke, although this is of course not a valid excuse). I recognised that my Phasion spend was rather ridiculous but couldn’t face going cold turkey. So about a year ago I decided to no longer buy any new clothing but only purchase from eBay as a strategy to bridge the gap between high and low spend. I could practically sustain my previous habits at a vastly lower cost (a highlight was the purchase of a brand new, top of the line pair of Edward Green shoes for £200).

    But I knew I could push it further. Since January this year, I have stopped purchasing new clothes and other non-essential stuff altogether (admitteldy after splurging on a £4.5k set of speakers, as a symbolic good-bye – and which is frankly worth every penny). It has, unexpectedly, been very easy for me. Not only does minimal consumption free up a heck of a lot of time and money, but also, for lack of a better description, it frees up RAM memory in my brain that would previously at all times be filled up with a scary amount of information on the precise characteristics of the item(s) I was desiring at that moment, next steps on research to expand this body of information, financing plans etc. Looking back, I think these were the symptoms of quite a destructive addiction, if we define health as financial independence.

  • 9 The Investor May 17, 2016, 2:15 pm

    @FI Warrior — Indeed. Story of about about half my life. (I have had luck with a few of my friends, and more especially some exes before they were exes!) At least you tried, right?

    @William III — Cheers for some interesting thoughts, and I empathize with respect to your mental overload comments, although to be honest I’m still occasionally partial to nice clothes. (Hey, I’m not so young anymore, and I’d argue it’s older people who need them. 😉 ) But I buy sporadically (every few months, and as often as not 75% off some particularly nice clothes via TK Maxx, which I pop into for 15-20 minutes every week and typically buy nothing… The best retail therapy!)

    A similar great incentive not to spend is I find whenever I buy almost anything, there’s nearly always a dreadful window of tediousness tacked onto the end where you have to go online because it doesn’t work, or you have to read the manual for an hour, or you have arrange for a collection, or you have to post it back, or you got the wrong size, or you need to call some engineer to change your telecoms provider… I could go on and on!

    I find it all so frustrating, it makes saving even easier for me! Yet I have friends who’d I’d class as hardcore consumers for whom 2-3 hours on the phone to customer services or schlepping back and forth with returns almost seems to be part of their working week.

    Finally, I pray this “ph” spelling doesn’t catch on (and can guarantee it won’t around here, because I would start grouchily nuking it! 😉 ) I can see you’re tying it into the book you mention, but I’d still file it in my special bucket of salt reserved for similar phrases like “sheeple”….

  • 10 Dave May 17, 2016, 2:46 pm

    I’d say William III could do with at least parting with some money for a dictionary. What on earth is going on with the PH?

  • 11 John B May 17, 2016, 3:34 pm

    Ironically, I’ve just qualified for an ipad by adding £30k to my Funding Circle savings, as they had a promotion. I’m too frugal to pay £320 for one, but I’ll fiddle around with peer-to-peer loan parts for ages to get one free!

  • 12 Paul May 17, 2016, 3:34 pm

    I’ve been semi-retired for a year now and one thing I’ve noticed about not working is my desire for “retail therapy” has disappeared completely. When I worked full time I felt that I deserved to splash out on material things as a reward for my hard work. At the time I thought I was saving and investing plenty of money already but it is easy to see in retrospect that I could have saved a lot more. Retail therapy meant I had to keep working full time for longer than otherwise. I’m spending a lot less now than when I worked full time but I don’t think my quality of life has fallen at all.

  • 13 dearieme May 17, 2016, 3:59 pm

    If you find walking past shop windows an incitement to spend, then cycle past instead.

    It should be easy to save in Britain given how lousy customer service often is.

  • 14 The Rhino May 17, 2016, 5:38 pm

    I’m with ermine on this – I’m on the other side of the fence having to force myself to spend more, but hopefully in a very intentional way. Its the inverse problem to the one this article outlines that is rarely, if ever, mentioned in the blogs, i.e. the lot of the miser. I can confirm that the condition exists, its just rarer. Its not in any way damaging to your bank balance but it can be damaging to your life.

  • 15 William III May 17, 2016, 6:09 pm

    @TI. Great insights, perhaps I should allow for some constrained little bit of shopping just to keep the urge in check. Maybe one afternoon a year in the summer sale, with £100 in my pocket.
    @TI, Dave. The use of ‘Ph’ nearly made me put that book down, but now I have accepted in and I am used to it so got carried away writing this, forgetting about the impact it might have on readers who haven’t seen it before. By the way, it’s the same Shiller from the Shiller CAPE as you will probably know – still a brilliant metric, just now I came across it on p43 of the latest Robeco expected returns 2016-20 report (https://www.robeco.com/images/expected-returns-2016-2020.pdf)

  • 16 Sharpespur May 17, 2016, 8:05 pm

    I try and apply a dual strategy. I do the old ‘pay yourself first’ trick and have a minimum amount that simply has to go into my longer term FI fund at the start of the month without fail. This includes overpaying my mortgage (incidentally something I’m often told not to bother with in this low interest period, but personally I like the opportunity to take more off the capital while the interest is low).

    Secondly I try and apply some frugal living during the month and aim to end it with a surplus that then gets invested as well. Holding back on something provides some satisfaction when you can top-up your savings

    The challenge for me is the wife….now she is no snob and certainly not spoilt, but she certainly does not give, what I would call, due care an attention to what she is spending. Individual spends are all perfectly reasonable but she does not really think about the cumulative effect. This makes for some interesting conversations, and has been known to cause the odd argument.

    In seriousness though I like to think we have a fairly good balance. We enjoy a good holiday at least once and I don’t scrimp on that – we both work hard and its worth it. We like a good meal out every now and then and a few other luxuries, however at the same time we are saving well and dont waste money. I know some people who live only for today, consuming their income and then more, and others who put nearly everything they earn away at the expense of what they could do now. Its horses for courses I suppose. We think we have a balance that suits us although I accept that I am sacrificing a few years until I hit FI.

  • 17 electrometa May 17, 2016, 9:24 pm

    If i could only give up on hazelnut lattes from Costa Coffee…

  • 18 Kraggash May 17, 2016, 10:31 pm

    One thing I tend to find missing in ‘cut down spending’ blogs such as this is any encouragement to invest in oneself. By this I mean lifelong education, especially courses, skills and qualifications that will enhance you ability progress in your career, increase your income or even just appreciate the world more.

    When cutting down, dont forget to grow…..

  • 19 MyNamesEccles May 18, 2016, 3:20 am

    That disaster we all dread and plan to avoid very rarely if ever strikes. It is of course possible and should it ever happen, God forbid, it seems almost inevitable that you will come out the other end a changed person. Very changed. In my case, it changed my whole approach to money, investment and spending for ever. And all to the good. In the late 90s, in my 50s, I found myself broke with no assets and unemployable in my profession. My immediate rescuer was my teacher wife who kept food on the table.
    Fortunately, I have never been materialistic so never accumulated “stuff” so there was no hardship there. I’m not mean, just not very interested. However, we did spend generously on experiences such as frequent expensive holidays and eating out and my wife liked to spend money on clothes, her only vice
    . We felt we could afford it so why not? Of course that all came to a grinding halt and suddenly we were paying close attention to prices in the supermarket and cutting down on everything, even the small stuff, we had previously taken for granted. It obviously wasn’t a choice.
    As things do, it all passed and we are now comfortably off, mainly thanks to the stock market. However, many of the careful habits that were forced on us have remained. We have budgets for most things when most people would probably say it’s no longer necessary. We find that it brings surprising contentment to know that our spending is all covered. You spend from your budgets with happy abandon. We are happier now in our organized world than we ever were before spending without thought. We budget for 3 decent holidays a year, for example, so not exactly a hardship.
    The moral is. I think, spend a little time analysing your income and creating budgets. Every month put cash automatically into each budget account and don’t fool yourself that you really don’t need to do this given your adequate income. It requires very little effort at the outset and then goes on autopilot. Do it and you will never regret it. You will feel happier. Trust me!

  • 20 MyNamesEccles May 18, 2016, 3:42 am

    In case anyone is interested, our monthly budget funds are:
    1. A set sum into our savings account for daily use. It is based on our average expenditure over the previous year plus inflation.
    2. A sum for investment.
    3. A dividends top up allowance. We mainly live on divis.
    4. An emergency fund.
    5. A relocation allowance. We are expats.
    6. A household fund for redecoration, repairs, new appliances, etc.
    7. A holiday allowance.
    Am I obsessive? Probably! But happy.

  • 21 L May 18, 2016, 10:43 am

    This topic has really hit home for me over the last couple of days as we’re renovating a house while raising a baby.

    Said house is in a very nice area and I’m ashamed to say that lifestyle inflation has most definitely reared its ugly head. Annual trip to posh food store is now monthly, occasional bottle of affordable whisky is now award winning single malt or bust and funded staycation or two a year is now stay in 4* hotel as a minimum.

    We now spend more than we earn and the red lines in our budget (contractual obligations like the mortgage) mean that there is only so much that we can tweak. We’ve gone with the usual things (gone is the lottery DD, we’ll be paying to replace mobiles from our own pockets in future, SIPP payments will have to be scaled back until wife returns to work full-time).

    I suppose that we’ll need to get more creative. Now I understand why my parents always had a house in an area with good schools, but no money!

  • 22 The Rhino May 18, 2016, 11:39 am

    well reading L’s sorry tale I guess I’d rather be tight, but flush – looking to spend more in the future, rather than the other way round. Although neither position is good, L’s looks a bit more chaotic and scary

  • 23 Financial Samurai May 18, 2016, 11:46 am

    I’m addicted to saving! But ironically, during a downturn, I try and force myself to SPEND b/c it’s better to spend it on experiences and stuff rather than see all my money go down with the market.

    I’m currently on a sweet train ride from Prague to Vienna with 100% Wifi! Whoo hoo! It makes me happy to spend, spend, spend right now rather than try and save money to try and make more money.

    I’m trying to decide whether to invest in a 2nd venture debt fund w/ a target IRR of 12-15% for 7 years lockup… and I just can’t get enthused. I want to spend!


  • 24 L May 18, 2016, 11:51 am

    Chaotic and scary sums it up nicely I think!

    We will address the lifestyle inflation stuff, because we have no other option. It has been a short term development and I intend to slam gears into reverse as soon as possible. When we were DINKYs in London, a good day out was a coffee and a doughnut after a walk in the park and a trip to the local library.

    Unfortunately I can’t address the biggest hobble in our financial lives, which is having a (small) house in a nice area.

  • 25 Jaygti May 18, 2016, 11:59 am

    Never underestimate the devastation to ones finances, that having children can cause.
    Just as your expenses sky rocket, you also lose a income.It was far worse than I’d imagined.
    In fact the only thing that was cheaper were holidays, because the’re rubbish with small children in tow, so we didn’t really bother too much until the youngest was about 4.

  • 26 John B May 18, 2016, 12:02 pm

    Other tips

    – Choose luxury in areas where prices rise slowly with quality, so beer over wine.

    – Visit museums to see art, don’t collect it. Borrow books and dvds, don’t buy them.

    – Would you really rather be at your desk working to pay for a gardener and gym membership when you could get both exercise and satisfaction doing it yourself?

    – Why pay for a restaurant or hotel with a view, when you can find a scenic bench to eat fish and chips on.

    – Go for longer holidays to avoid travel time and expense. South America is very cheap once you’re there.

    – Wear things out.

    – Agree to stop swapping little gifts with friends. Real friends want to see you, not trinkets.

    – Try to avoid for paying for your round down the pub…..

  • 27 cat793 May 18, 2016, 2:42 pm

    @Paul. I have had enough of working a 60 hour week for the time being even if it means postponing FI. I have gone part time on half hours/half pay (more than half net though so more efficient.)

    I now have plenty of time off as I work remotely in the resources industry so 14×12 hour shifts in a row and then 28 days off and so on. I used to compensate for little time off by taking a bit of a money no object view of my leisure time but now I can trade off money vs time and be very frugal and have a far superior life.

    I think the FI devotees need to be careful not to get stuck in a rut whereby they are completely fixated on the future at the cost of actually having a life in the present.

  • 28 ermine May 18, 2016, 3:02 pm

    I’d say the one big hit that’s easy to fall into is buying too much house, and it’s a hit you do young which is a gift that keeps on taking. It bleeds you in so many ways for so many years. I screwed up getting into the housing market in the late 1980s, but looking back getting a lowly house taught me that I only needed so much house, living in a ordinary three bed semi in the better part of town was a win, compared to living in a four bed detached house in some bijou village and having to drive everywhere and getting a long commute and paying a big mortgage and more house maintenance and more council tax for 20 to 30 years. Nearly all my colleagues lived in better houses. But most of them are still at work and I have been retired for nearly four years…

    One should always try to spend intentionally, but when you get to the other side of FI it’s also good to remember you can’t take it with you, the whole point of this saving lark is to get off the treadmill rather than aim for subsistence living. The art to spending well is avoid anything which is likely to result in knock-on aggravation unless you really need the function (most gadgets and mobile phone gizmos fall into this category through the Diderot effect), and also vary the types of your hedonic decadences over time – don’t do the same sort of thing too often or even consecutively.

    And as always, tip a hat to that Micawber fellow, integrated over about three years, preferably by having the cash buffer before you spend it 😉

  • 29 AmericanFool May 18, 2016, 5:24 pm

    Well said. There are puts and takes. We also squeeze every source to improve cash flow year after year, and have built savings aggressively. We owned the same very practical long-lived cars for 20 years (bought them both new shortly after we were married.) I’m not into things so much, but my wife wanted a 4Runner to replace the Sienna that finally gave up the ghost. I justified it on the basis that she drives the kids around locally, and it will handle the snow & ice pretty well if I keep the right tires on it – safe, capable, and reliable. My wife was sick of minivans, and loved the 4Runner, so there you go. That plus we can handle the hit to net worth / cash flow. I have to say though, just climbing into that thing is fun – rolling down all the windows and the sunroof, going anywhere feels like an adventure. That feeling is definitely worth something. My Camry is about to click over 300K miles, paint is peeling, A/C needs $800K or more of work, inside looks it’s age – but the engine still purrs and it’s in good operating condition. When we finally do select a replacement for the Camry, it will have a higher ‘fun’ factor, and I’ll probably pay a little extra as a result, and I won’t regret spending the cash.

  • 30 FI Warrior May 18, 2016, 6:01 pm

    The next biggest one might now be the car, a relative just bought one outright and was told by the surprised salesperson that ~9/10 people these days do a monthly payment deal that ends up running forever like a mortgage. This has steadily become normalised as in the US; when did that happen?

    My neighbouring household comprises a multi-generational family of 2 couples and a toddler, with a total of 4 cars crammed outside on the road. None of the 4 adults drive to work, yet in the several years I’ve lived adjacent I’ve never seen more than 2 of those cars away at any one time.

    Given that the insurance for young adults at up to £1500/year could be the price of an average starter car, 2 of them are paying the full value of both their vehicles they don’t even need, every year, in insurance costs alone. The total savings they could make on transport costs without any change to their lifestyles would be significant and they’re not wealthy by any measure.

    Educational debt, vehicle debt, accommodation debt just to get to the cusp of adulthood is now such that you are effectively forced to take any work you can to meet the monthly payments. So given that the choices have been severely reduced if not removed, for many who don’t have family help from historical wealth, doesn’t this amount to a lifetime of bonded labour?

  • 31 Planting Acorns May 18, 2016, 10:13 pm

    Loved this article…some of the TA articles I swear are written with me in mind ;0)

    H&M do ridiculous shirts for the price, I can’t imagine shopping elsewhere. I wear a T-shirt underneath (also H&M) so I don’t have to wash the shirt every wear, and find they last a season …£10 well spent.

    I’m starting to cook more rather than have takeawy or heavily processed foods… The savings are in cutting out the takeaways and it has the double whammy of tasting better and being better for you… I had a takeaway with my other half last Friday and it was such a treat ( gone from a good two a week to once in a blue moon) but I’d never go back to spending £200 month on takeaways

  • 32 Paul May 19, 2016, 2:13 am


    I think some FI devotees (it was true of me) put more emphasis on earning money than saving money for investing. As the saying goes a penny saved is a penny earned so I could have had a better work life-balance by working fewer hours and reducing my spending instead. That way I could have still invested the same amount for my future and had more free time. Reducing spending (without reducing quality of life) is equivalent to a tax free pay rise we don’t have to work for. I saved about £3k last year simply by switching to good supermarket own brands and getting better deals on internet/mobile/utilities/banking etc.

  • 33 cat793 May 20, 2016, 5:25 am

    @Paul. I agree. This is exactly what I am trying to do now. I am still saving despite earning a lot less. However there is no getting away from the fact that earning as much as possible makes it much easier to have a comfortable, low financial stress lifestyle while simultaneously saving lots.

    I have been saving hard and overpaying the mortgage for 10ish years. However I fell into Ermine’s trap due to high house prices so a lot of my effort has been absorbed by buying having to pay an awful lot for a modest home. Another 4/5 years of flogging myself and I would be mortgage free and have a decent amount saved up but I have had enough for the time being and am going to prioritise time off work doing interesting things over FI.

    I am in my 40s and it has occurred to me that a year in your 30s is generally going to be worth more than a year in your 50s or 60s etc and so on and so forth. If you like active outdoor hobbies and travelling as I do then you need to do this when you are still fit and resilient. My father had huge trouble and expense getting travel insurance when he retired due to health issues. I have just come back from a trekking holiday in the mountains and you see very, very few people in their 60s or older. Better to spend money on these pursuits when you are young(er) and have a more modest retirement. Pottering around Ermine style is more likely in your 60s and 70s and isn’t going to be hugely expensive.

  • 34 Sharpespur May 20, 2016, 6:49 am

    @cat793 It depends on your definition of FI but it sounds to me what you are doing is very much aligned with FI and not sacrificing it. The fact that you can prioritise taking time off work means in some respects you have already achieved a certain level of FI – so well done! Just for info my definition of FI is the ability to not have to do my current job (or equivalent). When I can afford part-time, or even to select contract work with time off in between, or even take a much less paid job with much less demand, then thats FI for me (of course fully retired would be nice too!)

  • 35 cat793 May 20, 2016, 4:01 pm

    @Sharpespur. Good point, there can be degrees of FI. I hadn’t thought of FI like that for some reason. I suppose for me it has ideally been total independence from earning a living. However even that is a flexible concept of course as the amount of income needed to reach that point is variable according to circumstances, needs, desires and so on.

  • 36 Nick May 20, 2016, 4:12 pm


    interesting you raise the property point, if you were in your late twenties today, what do you believe you’d do with regards property?

  • 37 Planting Acorns May 20, 2016, 7:14 pm

    @Nick… I think they’ve all got it wrong re property, at least your domestic one…I bought at 272 nine years ago and is over 480 now… All capital gains free and can rent a room tax free to boot…

  • 38 ermine May 21, 2016, 11:30 am

    @Nick largely the same, with the exception that if I were to put my old head on young shoulders which one should never do, I would rent and/or move country, if we are still in the EU next month ;). Many things have changed adversely for homebuying in one’s late 20s early thirties over the last thirty years – jobs are less stable, most career progression happens between 25 and 35 rather than a steady progression (in IT and engineering). If I had to buy I would still move out of London, because the only reason buying a house at the top of a market was survivable for me was that it was in the sticks so it was an excessive 4.5x multiple of my low start earnings that improved, and I was lucky enough to keep a job, because the cycles of the property market are much slower than the stock market – I was in negative equity for ten years. Doing that in London would have been impossible in 1989.

    Big houses are nice. But they are dear in many ways. I would have loved to be able to afford a detached house when I was a young pup with no experience of the costs, but now that I could afford to buy one cash, I don’t want the aggro and the expense, not at current prices.

  • 39 Moongrazer May 21, 2016, 2:39 pm

    Seven years ago, when I bought my first house, I got into the habit of carefully tracking my income and expenditure on a yearly spreadsheet, budgeting for what I was going to spend on mortgage, bills, food and petrol, and then tracking the types of frivolities I was spending on top.

    I have been totally disciplined about doing it, to the point where I run monthly “checksums” to make sure my spreadsheet exactly matches my real finances.

    That may seem like the realm of insanity to some – and perhaps it is a tad anal for my own good. The truth is, once I got used to record keeping as a regular thing, I just don’t think about it any more. Every time something pops up on an online bank statement, it goes in the spreadsheet, categorised, there for posterity. It takes me 15-30 minutes each week, tops.

    And, now I have the data to back it up, I firmly know what I’m saving out of my monthly pay, on average. I can see each month what I’ve been spending on frivolities – days out, takeaways, holidays, books, games, films, DIY… anything. I can even do a retrospective each year to see how much my cost of living was, and how much I was spending on each type of nicety I perhaps didn’t really need after all. It made me realise how much I was spending on things that didn’t move the pleasure needle for me.

    More recently, with much more data to draw on, I’m also able to gauge rather precisely how much I would need to be financially independent. Maybe I could have gotten that with much rougher calculations, but when you also have data on the ‘unexpected’ spends (major car repairs, life events, etc.), it increases one’s confidence. I know precisely what it takes to be financially comfortable, rather than a guess that may or may not prove to be right. The more data I gather, the more my confidence about my situation increases.

    Now I just have to get to financial independence!

  • 40 The Accumulator May 21, 2016, 7:33 pm

    @ all – what a wonderfully thoughtful thread. Very enjoyable. I’ve been working stupid hours this week so unable to contribute until now.

    @ Sharpespur – I think there are a few things that are always worth it because they offer so much pleasure. We’ll go on a 4 day cycling holiday this year. There’s no way I’d cut it in the name of frugality. Last year’s was one of the highlights of our year and we probably get as much pleasure from planning and looking forward to it as we do actually roaming around lost lanes.

    I can’t imagine spending £4.5k on a pair of speakers like William III but I do believe it’s worth investing in quality when that value is amply amortised over your lifetime i.e. I’d rather own a few quality items that provide years of utility/pleasure than a heap of tat accumulating like landfill in the garage.

    @ MyNamesEccles and Moongrazer – Amen to budgeting spreadsheets. Like you, I’ve tried it both ways – spending on impulse in my youth and then taming my inner Kardashian later in life with Excel. Amazing how the knowledge that I’ll be spending time on data entry later acts as a subliminal brake on spendiness.

    @ JohnB – good set of tips. I hear you on fish and chips + beauty spots = the good life. The Investor has even written a post on that very theme.

    @ Cat793 – wise words on not sacrificing all for the future. I grapple with this all the time. I’ve gone the other way in a bid to definitively declare independence as soon as possible. I do worry that journey’s end may not be all that or that I’m losing too much life now. But… my industry has been massively disrupted and I hear the clock ticking… so I’d rather do the bulk of the work now while I still can. My (im)balance is partly situational, partly in my nature, I think.

    @ Planting Acorns – With you on the t-shirt trick! And cutting out the £200 per month takeaway habit.

    @ No one in particular – I think much less about not spending these days than when I first wrote this post. I used to be a spendthrift but now frugality is second nature and I’m happier for it. The best budgeting tip of all is ‘not spending’. I don’t mean that facetiously. After a while, spending money ceases to be the solution to the good life across the board.

    Alain De Botton’s book ‘Status Anxiety’ is pretty good on this theme as is this post (and subsequent comments) from The Investor: http://monevator.com/how-to-enjoy-life-like-a-billionaire/

  • 41 Moongrazer May 22, 2016, 1:13 pm


    I can completely identify with the prior impulse-spending lifestyle. Mine came very much from suddenly earning a reasonable salary for a living and not really caring what I was spending on besides making sure my bank balance was healthy.

    But now, I grimace at the thought of spending on anything unnecessary that will later drop the savings balance, once I have to formally record it.

  • 42 L May 23, 2016, 11:00 am

    @ The Accumulator –

    I know that ‘Status Anxiety’ is mentioned quite a lot in the small circles of the PF blogging world, but I found it to be a literally forgettable book. I read it at the start of the year and honestly couldn’t tell you a single one of the takeaways from it! I think that the author’s tendency to ramble lost me.

  • 43 ermine May 23, 2016, 3:45 pm


    I am in my 40s and it has occurred to me that a year in your 30s is generally going to be worth more than a year in your 50s or 60s etc and so on and so forth. If you like active outdoor hobbies and travelling as I do then you need to do this when you are still fit and resilient. My father had huge trouble and expense getting travel insurance when he retired due to health issues. I have just come back from a trekking holiday in the mountains and you see very, very few people in their 60s or older. Better to spend money on these pursuits when you are young(er) and have a more modest retirement. Pottering around Ermine style is more likely in your 60s and 70s and isn’t going to be hugely expensive.

    Hehe, couldn’t resist it, though it has nothing to do with finance 😉

    There is an assumption you are making, and that is that you are invariant and unchanging, apart from losing sensory acuity and physical fitness.

    That is unlikely to be true, and if you live your life well it is almost certainly not to be the case – you should be transformed by living life. As Carl Jung said

    “Thoroughly unprepared, we take the step into the afternoon of life. Worse still, we take this step with the false presupposition that our truths and our ideals will serve us as hitherto. But we cannot live the afternoon of life according to the program of life’s morning, for what was great in the morning will be little at evening and what in the morning was true, at evening will have become a lie.”

    Now that’s not to say you should live your youth as a miser and eschew all pleasures. I would have more money if I hadn’t drunk so much beer and partied and gone on expensive holidays and spend on other things I wouldn’t dream of doing now. But I don’t regret it one bit.

    But I would challenge your assumption that your future years are necessarily worth less than the ones you have lived. I enjoy a year of my fifties (and particularly more the years post retirement) than the years in my forties, and I would never want to live my angsty twenties again. Of course that may change, who knows what the future holds, and I am lucky to have good health.

    Some of what Carl Jung referred to was the first part of life is outward focused, I identified much more with what I did rather than what I am, and some of that changes through midlife. There are studies that show human happiness is roughly U-shaped. That’s the average, but it’s so far been my experience. So don’t be do hasty to consign your future self to a one-bar electric fire and beans on toast, while of course not impoverishing your current self from those treks. Balance in all things and all that.

  • 44 goldghost May 24, 2016, 9:54 am

    @Ermine. You are right. I was being a little bit cheeky. Also I enjoyed my 30s more than my 20s too and as we change we enjoy things that we wouldn’t have valued so much previously.

    I think the hiking example was a quite specific, personal one that is more dependent on physical fitness than most other activities.

    One of the reasons I raised the issue was that my inclination like many of those interested in FI I would think, is to save as opposed to live in the moment. My concern is being a few years down the line and regretting getting the balance between financial prudence and living an interesting and satisfying life wrong. There is no correct answer but it is always something to keep in ind I suppose. And as you point out who knows what our outlook will be in the future anyway?

  • 45 John July 19, 2016, 11:38 am

    @goldghost: It’s definitely a case of a problem that’s good to have but I genuinely think the issue of knowing when and what to spend on is a big thing for those wealthy enough to have saved but not wealthy enough to not consider cost.

    As a 30 year old I have to project 70+ years into the future the likely course of world events, government policy, economic performance, our life decisions, our priorities, our health, and potential earnings. How do you approach that?

    The easiest, and by extension most common, option seems to be ignore it all and live in the moment. Those of us who avoid that decision seem to typically go with an incredibly conservative strategy of saving aggressively and likely well beyond our need.

    I know, rationally, that we are saving more than we need to. I know that my income is likely to increase considerably before it peaks. I know that I am being irrational, and pushing the decision back, when I tell myself I’ll spend more when I -know- we’re secure because I’ll never -know- and yet I keep doing it!

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