At your level of income, you can afford to buy almost anything, but not everything. Candidly, that isn't likely to change. Even at double, triple, quadruple the income you have now - it would still apply.
Loved this book! Still update my "wall chart" every month.
At its core, the book points out that money is simply what we get in exchange for our time. In that sense, what we spend money on can also be measured in our "time".
Using $307,000 gross income, assuming single income, 40 hour work week, that's roughly $148/hour. (Adjust as needed for hours worked.)
When looking at an expense, say an extra $200,000 on a bigger house, you can put that into your "time perspective". That $200,000 could be "measured" as 1,355 hours - or nearly 34 weeks (@ 40 hours) of work. Viewed this way, you can decide if working an extra 65% of a year is "worth" it to pay for the bigger house.
This also works for smaller expenses, and you might think differently about what's "worth it" to you viewed this way. I've noticed some things in willing to "spend more of my life hours" on then I am others - even if the "cost" is the same - their "value" isn't.
Back to the "you can afford nearly anything, but not everything", with tracking your expenses - you might notice that some things aren't worth the "time" they cost you. That frees up "time" (money) to go elsewhere.
As to "pedal on savings", arguably goes back to the same "time" question. The higher your expenses, the more "time" of your life you need to "spend", which means the "less" you get to save, which means you need to save "longer" to reach enough to be able to retire. Conversely, the lower your expenses, the more you save, the less of your time you need to spend working.
That said, it's definitely a balancing act. None of us are guaranteed a "tomorrow" - don't forget that. But if you want to "retire" at some point, you need to eventually save enough to support your expenses. (I like the books "Wall Chart" to help visualize your progress).
It's ultimately a judgement call on what's "right" for you. If you can meet your retirement goals by saving less, do so. If there are expenses that aren't worth your "life hours", consider if you can reduce/eliminate them and redirect that "time" to things more important. When struggling to think about where you should prioritize spending your money, reflect on that you are spending your "life" on - maybe that helps you decide what's more important.
+1I recommend the book Your Money or Your Life. This book describes a simple methodology where you regularly and deliberately go over every expenditure and rate how much happiness it brought you. The idea is that you're likely to discover at last some expenses that you can remove with little to no grief. And on the flip side, you get a better sense of what brings you joy, and you can feel good about allocating either more spend towards those things, or possibly even optimizing them to enjoy them at a lower cost.
Loved this book! Still update my "wall chart" every month.
At its core, the book points out that money is simply what we get in exchange for our time. In that sense, what we spend money on can also be measured in our "time".
Using $307,000 gross income, assuming single income, 40 hour work week, that's roughly $148/hour. (Adjust as needed for hours worked.)
When looking at an expense, say an extra $200,000 on a bigger house, you can put that into your "time perspective". That $200,000 could be "measured" as 1,355 hours - or nearly 34 weeks (@ 40 hours) of work. Viewed this way, you can decide if working an extra 65% of a year is "worth" it to pay for the bigger house.
This also works for smaller expenses, and you might think differently about what's "worth it" to you viewed this way. I've noticed some things in willing to "spend more of my life hours" on then I am others - even if the "cost" is the same - their "value" isn't.
Back to the "you can afford nearly anything, but not everything", with tracking your expenses - you might notice that some things aren't worth the "time" they cost you. That frees up "time" (money) to go elsewhere.
As to "pedal on savings", arguably goes back to the same "time" question. The higher your expenses, the more "time" of your life you need to "spend", which means the "less" you get to save, which means you need to save "longer" to reach enough to be able to retire. Conversely, the lower your expenses, the more you save, the less of your time you need to spend working.
That said, it's definitely a balancing act. None of us are guaranteed a "tomorrow" - don't forget that. But if you want to "retire" at some point, you need to eventually save enough to support your expenses. (I like the books "Wall Chart" to help visualize your progress).
It's ultimately a judgement call on what's "right" for you. If you can meet your retirement goals by saving less, do so. If there are expenses that aren't worth your "life hours", consider if you can reduce/eliminate them and redirect that "time" to things more important. When struggling to think about where you should prioritize spending your money, reflect on that you are spending your "life" on - maybe that helps you decide what's more important.
Statistics: Posted by SnowBog — Sat Mar 02, 2024 1:00 am — Replies 59 — Views 6543