Comments on: Increase Your Savings w/ Every Raise You Get

By: J. Money

J. Money — Wed, 16 Jun 2010 23:40:42 +0000

I like that! A LOT. Do you know how much wealthier we’d all be if we followed this? I can’t even imagine.

By: finallygettingtoeven.com

finallygettingtoeven.com — Wed, 16 Jun 2010 21:46:42 +0000

I was raised that you spend only the money your money made for you. Have a $1, you can spend that dime (okay, those were better days back then). The point is, don’t spend your principal, let it work for you, heck if you can, let the interest work for you too. But if you HAVE to have something wait until you money earns you the money to buy it.

By: J. Money

J. Money — Wed, 16 Jun 2010 20:46:00 +0000

Ooh la la, more comments to respond to! Glad you all are enjoying this :)

@The Dad – Hey! Haven’t seen ya in a while, nice to have you back :)
Jenna – I like that! “Gotta stay in control of your finances…bad things happen when you let them control you!” So true… also on quickily upping your savings rate before you start noticing it. If you go too long it’ll be much harder to start saving consistently again. Still possible, just not as easy. Esp if you forget!
Lauren – Thanks Lauren, I really appreciate that :) Agree that writing your goals down helps too! I’ll even sharpie them on my hands sometimes so I stay inline. I also know someone who writes them on a sticky note and sticks them in his pockets so whenever he takes stuff out he sees them ;)
Suzanne – Small treats are a definite! Can’t be hardcore all the time or you’ll go insane. Well said.
Money Obedience – Yeah, I go back and forth on having a car payment or not. for the last 2 years I haven’t had one (and loved it!) but at the same time I feel like I should finally treat myself to a nicer one where car payments are needed for a bit. Like a Benz ;) I doubt I’ll pull the trigger anytime soon, but it’ been on my mind a lot lately.
Ace @ aceofwealth.com – Well, my 401(k) matches are gonna go out the window soon so I gotta enjoy every last second of it while I can :) You’re rockin’ it out just fine my man!
@michelle – Did you see my giveaway yesterday? You bette check it out – giving $200 in SmartyPig giftcards away!
@Yana – Haha….indeed.
@Megan – “I have a feeling my fiancée is sort of that guy” hahaha…oh man, you crack me up. Maybe you can work on him ;)
@MyFinancialObjectives – And contrary to what lots of people like to say, “tomorrow” usually comes! And if not? Well, more money for our family.
@StackingCash – Hah! good timing, read the above comment ;) I think you can be happy with money saved up whether you live long or not. I mean, if blowing $200 is ridiculous to me I’m not going to do it no matter when I’m leaving this Earth – ya know? I say we just have to keep on living the way we feel is “right” and the longer we do it, the longer it will be better for us :)
@Retirehappy – You guys are rocking it! Well done!
@Sense – Haha….well, I don’t know if you got it from me or not, but I did link to it the other week ;) Great article!
@The Best Money Blog – Yeah, do it! I find this topic very very interesting…will be cool hearing more on it from another perspective. (although our perspectives will prob be around the same :) so, maybe in a different writing style then?)
@Kevin I – Financial Panic is so over-rated ;) Keep it up!
@Donna Freedman – Amen sister, that’s why I like ya.

By: Donna Freedman

Donna Freedman — Wed, 16 Jun 2010 00:07:14 +0000

Some people spend like there’s no tomorrow. But there usually IS a tomorrow — and a “next month,” too, when all the bills for what you bought will arrive.
If you’re already doing fine and allowing yourself some fun along with the frugality, why NOT save raises?

By: Kevin I

Kevin I — Tue, 15 Jun 2010 20:04:00 +0000

This was actually a key thing we learned when we started our financial adventure.
Any raise that’s not met with an unavoidable increase in our fixed expenses is immediately regulated to savings.

This plan worked out especially well because it was set-up when my wife didn’t have a lot of hours at work, since then she changed jobs to a big jump in hours, and we’ve banked the difference. If we waited, I’m sure our lifestyle would have just inflated to eat up that difference, and instead it’s been a hug help to us moving forward in a much more secure way.

That lifestyle inflation is a killer, without this set-up I know we would have ditched the junker car for another car payment, the junk phone for a nice one or upgraded the living space because that’s what all our friends at “our level” were doing instead of keeping our pretty sweet low-expense lifestyle. I just have to keep reminding myself the peace of mind and lack of financial panic makes it all worth it.

By: The Best Money Blog

The Best Money Blog — Tue, 15 Jun 2010 17:52:44 +0000

I think lifestyle inflation is one of the core problems with spending in America. Instead of increasing spending and eliminating debt, you should limit spending and pay things off. If you are normally able to save $500 a month but also have a $500/month car payment, by paying it off you are effectively doubling the rate at which you save. Each item like this that you can get rid of exponentially increases your saving and spending money!

I think I’m going to write my own post on the concept of Lifestyle Inflation. Thanks for the post!

By: Sense

Sense — Tue, 15 Jun 2010 12:26:15 +0000

have you seen this post on tim ferriss’s blog (below)? for some reason, i thought of you when i read it! It seems right up your alley:

http://www.fourhourworkweek.com/blog/2010/05/01/credit-card-concierge/

forgive me if you’ve seen it already, I can’t remember where I got the link. :)

By: Retirehappy

Retirehappy — Tue, 15 Jun 2010 10:21:42 +0000

My husband and I have become militant savers in the past few years, and I think one of the “curses” of that mindset is we always have more financial goals than money to fill them. Our current goals are to (1) max our retirement savings (we’re close on this one); (2) pay off $132k in student loan debt; (3) save for our (baby) daughter’s college education; and (4) someday save up a 20 percent down payment to buy a home.
With those lofty goals ahead of us, I look at every raise as a way to get us one step closer, and that’s what we “choose” to spend our money on. I’m not actively trying to prevent lifestyle inflation per se, but that’s a nice side product of this.

By: StackingCash

StackingCash — Tue, 15 Jun 2010 05:38:20 +0000

What happens when you die tomorrow?
What happens if you live till your 110th birthday?
Hard to find a good balance.
Sigh.

By: MyFinancialObjectives

MyFinancialObjectives — Tue, 15 Jun 2010 02:30:45 +0000

Glad you posted about this because I recently had a discussion with someone at work about this topic. I told them that when we got our raise (we all got the same very generous raise), I instantly raised my 401k contribution and upped my personal savings percentages. Why? So that before I get used to the new money, I sock it away in savings. If I don’t ever see it, I don’t ever miss it.

So far it has worked well! I’m Saving like there’s a tomorrow, and a tomorrow and a tomorrow….:)