In this article, we explore a thread from an incredibly popular "subreddit" called Financial Independence ("r/financialindependence"). The thread provides unique insight into the mindset of a group of individuals working hard to achieve financial independence.
For those subscribed to the forum, financial independence means achieving the freedom to retire as quickly as possible by maximizing savings, either through less spending or by making a higher income. It's important to understand that these individuals are incredibly passionate about saving money. So, when these frugal people have a guilty spending habit, it must be worth it.
Spending less and saving more is all about keeping a balanced perspective! We're all human, and we can't be perfect all the time. Even diehard saving fanatics fall off the wagon once in a while and treat themselves to a little slice of luxury. And in a way, little pleasures help these savvy savers keep their eyes on the real prize down the road.
1. Living Alone
Oh, the memories! A bad roommate can ruin your life. You can have your own space and still stay within your budget as long as you don't overspend by living in the most trendy neighbourhood or paying for more space than you need. If this is important to you, and your sanity, go ahead and do you!
One of the biggest money-wasters is eating out all the time — and it follows that one of the best ways to save money is to buy ingredients and cook them at home yourself. You can save literally thousands of dollars every year this way. That being said, saving isn't about denying yourself everything that makes you happy. If you absolutely love Chinese dumplings and Italian pizza, then go ahead and order those dumplings or that pizza, but remember that moderation here is key.
3. Scuba Diving
A fun hobby that doubles as market research! How can you even call that a guilty pleasure? It's definitely worth it to divert some of your spending towards keeping yourself mentally balanced, enjoying life, and meeting new people. Just make sure to divert money from your cash flow in this direction rather than spending more overall.
"In 2014, we spent 18% of our total budget on travel (28% on rent for a benchmark). We will spend about 17% on travel this year as well while increasing our savings rate to from 50% to 55-58%. We could reach FI sooner by cutting out travel, but then just spend time on the couch? Travel is budgeted now and will be for our entire lives." — reddy40/permalink
Travel is good for the soul, and these redditors have hit the nail right on the head. Being financially responsible means working constantly to save money on basic and daily expenses — but also identifying your greatest priorities, then spending your extra money on these things that make you the happiest. Luckily, there are plenty of ways to travel on the cheap. Keep an eye on tripadvisor.com and food blogs to stay on top of the best food festivals, trade shows, restaurant deals, and street foods locally and at your favorite travel destinations.
Things that keep you sane aren't really guilty pleasures, especially if you budget for them. Plus, taking a lunch break will always be less expensive, less deadly, and more satisfying than taking a smoking break. Lunch is an excellent excuse to get some air, to go for a walk or to clear your mind if you're having a difficult day.
"Anyone who says 'oh you must save so much money sewing/knitting/weaving your own clothes!' has no idea how much yarn and fabric cost, at all. You can buy a shirt for less than you can buy the fabric to make a shirt." — macoafi/permalink
Crafting isn't the cheapest hobby, it's true. But if you feel the need to justify the spending, then why not start selling some of your work? It's all about Etsy, friend.
Knitting, as one example, can also be a practical hobby. If you live in a cold climate, home-made hats, gloves, scarves and blankets for your family and friends will be gladly received. They make for great and thoughtful gifts, and can save you money during the holidays — if you're purchasing the right materials and you're not spending too much time working your craft.
7. Music Lessons
"I have wanted to learn guitar and piano for a while now, and after saying that for 5+ years I decided that those goals are just as important as my financial goals. They bring me far more joy than growing my bank account and shaving a few years off of work. I figure that lessons cost $40 a week most people spend on food or entertainment that lasts for no more than a meal or an evening. I'm spending it on a skill that will continue to provide entertainment and satisfaction for years to come." — thompssc/permalink
Harvard Medical School says that learning a new skill can slow cognitive aging, which leads to debilitating diseases like Alzheimer's in later life. The greatest effect comes from skills that push you out of your comfort zone, like language classes or learning a new instrument. Spending money on music lessons isn't splurging, it's a health insurance policy!
"I spent a couple thousand on Magic the Gathering (over several years) and at the time thought that was discretionary spending, but it ended up being a really good investment instead." — randomechoes/permalink
I bet this person had a good laugh at people who said they were wasting time with their computer games. There are plenty of ways to make money by gaming: live streams (you'll need a big audience), writing game guides, creating podcasts or videos, game testing, and of course competitive gaming. If you're spending the money anyway, why not use your gaming hobby to make some of that money back?
Drink well and in moderation. Enough said.
"Just about every new project necessitates the purchase of a new tool (in my mind at least). Slowly I've accumulated a good amount and I'm fairly self-sufficient because of it, so it's something of an investment as well." — EventualCyborg/permalink
Depending on how often you use your tools and your level of expertise, it can absolutely be a cost saver to own hand tools and do the work yourself. If you're renovating to put more value into your home, it's definitely an investment! You might be surprised at how many simple fixes can be done DIY-style and on the cheap. Check out ifixit.com the next time a gadget (or car, or clothing, or any thing) needs some TLC.
"If it's anything it's my kids. It's hard to resist buying them new clothes or toys (my wife is worse) and I send my daughter to $500/month preschool which is probably unnecessary in the long-term. But there are worse things to waste your money on." — KnightOfTrondheim/permalink
When it comes to kids, it can be hard to draw the line between investment and splurging. This gets even harder when they can voice their insistence on getting the Disney backpack over the boring no-name one! Just stick to your guns to avoid spoiling the kids: you decide what's worth spending on. Clothes, healthy food, education, experiences, travel — these will all add up to creating well-rounded little humans.
Damn straight. It's your money, you should use it on what makes you happy! Clearly, someone who's saving that much money has their priorities straight and has earned the right to their fancy coffees.
For those of us who can't afford a daily latte, if you use a single-cup brewer at home, a good tip is to use the reusable filter insert that came with your coffee maker. Purchase fresh beans at a bulk food store, grind them at home and wash your reusable filter every few brews. Depending on how much coffee you drink, this will potentially save you hundreds of dollars over the course of the year.
The road to Financial Independence is a long one, and it can be hard to find a balance between living frugally and enjoying life. We hope you'll take inspiration from these examples and that you'll find a way to spend money on occasional luxuries or hobbies that will keep you happy and sane.
The main takeaway is clearly that it's essential to keep financial independence as your end goal. Like these redditors, you can make the choice to save money every day and to use some of that hard-earned cash on the little things that make life worth living. By diverting money from your cash flow rather than overspending your budget, you'll be able to avoid credit debt, pay off any existing debt you have, turn your money to savings, and keep working towards a brighter, lighter financial future!