Do you save?

That method scares me.

Seems to me it would be easy to overrate that "one thing", and then spend your whole life saving for it, and then getting it and realizing it wasn't that great after all.

A lot of regrets, then.

 

I've looked everywhere and I've finally found the world's most joyless person.

 

A second car, a lot of small restaurant trips, my cell phone, some online video game subscriptions, cable TV.

The small restaurant trips are a huge budget killer for the middle class. I don't mind spending a decent amount on a nice, evening meal as a family once in awhile. But grabbing Subway/Quizi

It doesn't have to be "one big thing" that you save for.

For us, the biggest thing it's meant is that I can afford to be a stay-at-home parent while only working part-time. That one-on-one time with my toddler is something that's very important to us.

It has meant a couple of bigger vacations, but mostly it just gives more breathing room to do small fun things. I'd rather travel to six weekend chess tournaments a year than have a cable TV subscription, which adds up to about the same cost. The best, most enjoyable way to divvy up our food budget has been to do a lot of cooking and a small amount of "nice" eating out, i.e. taking the family out for an evening to a moderately priced restaurant. The in-between stuff (ordering a pizza, buying everyone lunch from a sandwich place, grabbing a burger) simultaneously destroyed our budget and wasn't that enjoyable, so we mostly cut it out.

 

Echo Rick on the small restaurant trips. We got into a habit of just stopping off for something when our schedule got too busy or we got too lazy to make dinner. Add it up over the course of a month and it's at least $150 to do that three times a week.

Now our rule of thumb -- not hard and fast rule but a rule of thumb -- is no takeout. If we're going to a restaurant and enjoying the time, OK. But if we're just gathering up takeout boxes, no thanks to the $20-40 it will cost.

 

Interesting. And by interesting, I mean WHAT THE FUCK IS WRONG WITH YOU?

 

I haven't had cable TV in five years. With most shows streaming on Netflix or Hulu, I don't really see the purpose.

 

Yeah. I was just busting his balls.

 

If it came down to it, I could live without cable except during college football season.

But there's a whole lot else I could live without before it came to that.

 

I pretty much gave up TV, too. I don't miss it.

 

See, that's the school of thought, and it makes sense in theory, but the practice is all based on what you have.

If I were coming out making $50,000 or so at a different job, then yeah, I'd probably use a bit more money to play around with and take more risks. But since my job pays roughly half of that, and gas prices are absolute ass, the last thing I want to do with this money is take a chance on it - if I lose that, would it have been better served seeing friends or getting something at the grocery store I was withholding from myself to use that money in investments?

You all know that one person - the one who makes fun of the person who doesn't have the money to burn on the lottery, but still does in hopes of having that one big payout and a lifetime of security. "Wouldn't that money be better saved, or used on more practical things?" they think. And no, I'm not DIRECTLY comparing more risk to the lottery — which is laughably against you — but the premise is still there. There is no secret formula to stocks. The good looking ones can still be susceptible or held up falsely.

I get the "you have plenty of time to earn it back" logic - I really do. But in today's world, I also think it's not as black and white as it once was.

 

This is so right.

When I left for college, my parents were really struggling. And although my dad's business was tight, he was able to survive, pay off our college loans (still owe him a trip for that, too — MORE to save for!) and still save a little bit.

I'm not saying it was JUST killing trips to restaurants, but when you're spending about $8 a person on a family of four ($32) three times every two weeks or so ($192/mo), it adds up. Even once a week would come to $128 a month, which could instead be two trips to Chili's (not a NICE restaurant, but you get the point) that turns into about $45 per trip twice a month if that 2/$20 thing is still there ($90).

There's ways to cut and still have fun, and food's one of the biggest culprits.

 

You're right. And nothing is foolproof, of course.

But dollar-cost averaging pretty much cushions you as well as you are going to be cushioned. Put the same amount in every week (to a balanced fund of mixed investments). When the market goes down, you are buying more shares at a lower price. When the market is high, you are buying fewer shares at a higher price. Over the long term --- even if the market average drops as a whole --- you will make money, because you would have bought more shares at the lowest prices than you did at the highest prices.

At the depths of the 2008-09 market collapse, when stocks were down about 40% from their 2007 highs, my 401(k) was down only 11% from its 2007 high --- thanks to 20+ years of dollar-cost averaging.