We work to pay the bills. Or at least that is the philosophy of many Americans. That philosophy seems to be about monthly payments, endlessly refinancing 30 year mortgages without ever paying it off, car loans, etc. So many people don’t realize that they don’t have to spend all of the money that they earn or that they don’t have to wait until age 60 or 65 or whatever the retirement age is today to stop working because no one taught them to save.
I alternate a lot between “savings is more fun than spending money” and the issues of lifestyle inflation. I have spent a lot of money this year for a single person – it will probably be close to $50,000 by the end of the year. On the other hand, I estimate that I will have saved about $65,000 this year.
Some days, it feels like it’s not a race to financial independence. Other days, I dislike getting up and going to work enough that I don’t want to keep doing this. Other days, I just like seeing my mortgage balance go down and my savings and investments balances go up.
My spending plan right now is around $3,800 per month. If I cut out most of the wants, that could go down to $2,600 including the mortgage! So…there’s definitely a fair amount of lifestyle inflation in here, to the tune of $1,200 per month. Taking that extra $1,200 out of my budget each month would shave 6 months off the mortgage, bringing it down to just under 3.5 years.
I think I’ve done a somewhat reasonable job of enjoying today (expenses) versus preparing for the future (savings). I max out my tax-advantaged accounts, plan to pay off my mortgage within 5 years, and hope to be financially independent within another 5 years after that.
Why do I work? Most days, I like my work for the intellectual stimulation. I would say that I enjoy the socialization, but then I realize that it’s forced socialization with people that I don’t necessarily like or get along with well and this crazy corporate feel. I could probably find good intellectual stimulation by reading good novels, by playing with spreadsheets, and working on personal coding projects. Sure, with personal coding projects, you can’t get as much done as quickly, but you have the freedom to work the hours that you choose.
Some days, I look at the higher level management and wonder if they need the money or if they are just at work for fun. I wonder how they’ve made the trade-offs between time and money and what they do with the, I’m assuming, even larger amounts of money than what I make each year. Do these people enjoy the politics of the office work environment? It’s certainly not for everyone. I’m not sure if it’s for me long-term. Personally, I’m not someone who needs a TON of socialization – work is definitely way too much socialization for me.
Readers, why do you work? How do you strike the balance between now and the future?