My Budget

Saving/Debt Repayment
42.8%= If you want to retire young, you have to make sacrifices, I have sacrificed buying a new car, a larger house, driving in to work, and going out to lunch among other things.

Spending
25.5%= There are areas here I could definitely cut back on, but I don't want my wife to feel like she is living under siege, so for our happiness I spend more than I need to. Roughly 59% of my spending comes from mortgages and home ownership fees.

Taxes
31.6%- Despite the fact that my wife and I pretty much max out our 401K, the Government takes nearly 1/3 of my income (not including sales, gas, or other taxes). I wonder what the percentages would be if they didn't use my money on pointless wars, farm subsidies, bridges to nowhere, and a social security program I won't get to take advantage of. By my calculations, if I didn't have to pay taxes, I could retire in 5 years.

Season Tickets: Incredible Waste of Money?

Today, I bought season tickets for my college's basketball team. The cost is $320 a seat for 15 games, since I bought two tickets that will be $640, which obviously is a significant amount of money (more than an IPhone).

This may be an incredible waste of money, but I hope that I can recoup around $300- $400 back by reselling some of my tickets. In addition, a friend of mine runs a ticket website, so hopefully he will come in handy.

Unlike other wastes of money, this waste, at least, is guaranteed to make me happy, so it has that going for it. Given what I could have blown my money on (fancy car, fancy gadgets) this purchase is more about making me happy, and less about showing off to other people.

I strongly believe in moderated frugality, where you make small little treats to yourself (according to your means) and avoid large purchases which will add little to your overall level of happiness.

Still, this purchase may have exceeded moderation, what do you think?

Lessons Learned From Tracking My Expenses

I never thought that tracking my expenses would reveal anything, and it didn't enlighten me by itself.

It was only when I started categorizing my expenses did I realize where I was spending relatively large amounts.

One Surprise Large Category: Gifts

Weddings, My wife's nieces and nephews bdays, my bday, my wife's bdays, Father's Day, Mother's Day, Get Well flowers, My Parents Birthdays, my In-Laws Birthdays, Christmas, and Baby Showers.

We spend a ton of money on getting people gifts. I am going to have to figure out what I can do to curb this spending category.

How to Avoid Lifestyle Creep

Due to my insane dream of retiring young, I save roughly 40% of my pre-tax income. Sometime it can be hard justifying denying myself things I could clearly afford, especially when my friends and co-workers have them.

It is also tough with the peer pressure from family members. Everytime my mother (who hasn't earned an income in 35 years) comes to my house, she tries to convince my wife that she should get 1) a new couch, 2) all new furniture 3) a china cabinet, 4) dining room table and innumerable other things.

It can be really tough to avoid lifestyle inflation. Here's my thoughts on some tips.

1. Keep your Poorer Friends- The instinct to splurge money on all sorts of conspicuous consumption would definitely be higher if I hung around my co-workers more. The same effect would kick in if I lived in a really expensive house.
2. Get Everyone on the Same Page- My wife and I are on roughly the same page, we have the same goals though I think we have different priorities, we both want a family and to retire early.
3. Buy ourselves some nice things- It doesn't feel like we are denying ourselves too much when we both have a few expensive things to appease us. She has a house and an expensive engagement ring, and I have a Tivo. She apparently needs more expensive appeasement than I. :)
4. Don't feel the Need to Keep Up With the Jones-I don't need to waste my money in order to show how cool I am.

I know other people allocate a certain amount of their paycheck automatically to Vanguard or something, and that could definitely work, though its not for me. My investments are being spread around a number of places.

The Non-Financial Costs of Weddings

A lot has already been written about how extravangent and over-the top weddings have become cost-wise, but there are other, less obvious costs to weddings.

Because they have become such big, important affairs with a bevy of unwritten etiquette rules which many guests and family members are unfamiliar with, they can cause tremendous arguments and social rifts between family members and friends.

Family Strain

My parents and I had a lot of incredibly nasty fights over their attempts to insert things and people into the ceremonies who my wife and I did not want. One of my family members did something embarrassing and awful at the reception when they thought they were being sweet.

Lost Friends

From a friendship standpoint: One of my good friends promised he would come, but never showed up (which still cost us the $300+ with the caterer and others). I called him when I got back from my honeymoon and left a voicemail, but I never heard from him again.

So the final cost: strained relations with many family members, and one really close friend lost. The high expense of the wedding made the ceremony's perfection all the more important, and also aggrevated the harm caused by people's etiquette blunders.

Are You Too Frugal?

Sometimes I read these bloggers who reccomend things like preparing your own detergent or drinking nothing but tap water, and it just make me wonder: Is It Worth It?

Don't Punish Yourself

Here's how I figure it: Being frugal but still being happy requires that you don't sacrifice on enjoyment and desires.

You can still be happy, even while you are frugal, if you eliminate those desires which are unnecessary for your happiness. Do you really need the big screen tv, the expensive car, the huge house, all of these keeping-up-with-the-Jones' items to be happy?

Eliminate Unneccessary Desires

One thing that helps me eliminate these desires is thinking about why people want them.

On this note, the economist Thorstein Veblen, writing more than a hundred years ago, had some brilliant insight which really pierces the illusions upon which our consumerist society is built.

In his book, The Theory of the Leisure Class, he wrote that our modern consumerist viewpoint is really an attempt by people to try to seperate themselves into higher classes. The highest class is the so called Leisure Class, those people who are so rich and important that they can afford to do basically nothing productive for themselves or society.

The Leisure Class spends money in an attempt to show that they are so rich and powerful that they do not need to spend money on anything useful and can afford to simply waste their money. For instance, the rich spent gob-loads of money on silver utensils, even though steel utensils in fact work better. A modern day example would be the fashion industry: rich, important people spend tons of money buying clothes which are far less useful than regular clothes, and then proceed to wear them once.

Looking at my own desires: I identify a lot of them which are built upon the need for others to recognize me as a success (for instance a car that can park itself) and these desires seem silly, now that I realize they are just an attempt for me to demonstrate that I am so statusful that I can afford to waste my money on useless crap.

What's Left Is What Makes You Happy

So, I do my best to eliminate those desires which are based on some insecure need to validate myself to others by showing that I too can waste my money, and I'm left with those (usually cheaper) things which really do make me happy. My wife, my friends, my activities and hobbies, and of course my beloved Tivo. I don't intend to get rid of these things, no matter how expensive, because My Happiness is Worth It.

Making My NYC Friend Cry

So, one thing about me, I'm a sucker for online financial calculators, and CNN Money just unveiled a new one that helps track cost of living disparities.

One of my friends is currently living in Manhattan, and having gone through a similar grad school experience as me, will be working in NYC after he graduates. He basically will be doing the same thing as me, only he will be getting paid 15% more than me to do it.

I don't know how realistic this calculator is, but according to it, I am making 15% more than him when you factor in the ridiculous expenses that constitute Manhattan. This will no doubt be aggravated by the extreme conspicuous consumption that makes up the NYC outlook on life.

Calculators like this make me wonder whether I should just pack up and move to Morgantown, WV, or analagous areas.