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I’M ONE OF THE 30 writers who contributed an essay to My Money Journey. As the book’s publication drew closer, I found myself worrying about how readers would react to my story.
Will they see me as someone who saved a lot of money because I was thrifty—or because I was cheap? As I mention in the book, I was embarrassed about my spartan lifestyle, including the crummy apartments I lived in and the cars I drove.
In fact, when my boss gave me a generous raise, he asked me, “What are you going to do with the extra money? Buy a new car?” He knew that, at the time, I drove an old Toyota. But I didn’t buy a new car. I invested the money, like I always did when I received a pay raise.
I knew at a young age that people like me, who didn’t earn a lot of money, had to save a larger portion of their income to reach financial independence. As you read my story, you might think I went too far and denied myself some of life’s comforts.
I’ll admit I probably would have enjoyed life more if I hadn’t been so tightfisted. Saving and spending is a balancing act that can sometimes get out of whack.
In My Money Journey, you’ll read what path 29 other writers traveled on their journey to financial independence. That’s what’s so fascinating about the book—each of us has our own unique journey.
Now that I’m retired, you might wonder if I’m still living that same frugal lifestyle. I’m not. I wrote an article about how I was spending money left and right. At the time, I didn’t know what came over me. Why was I suddenly spending so freely? I initially thought it was because I was getting older and I was more willing to spend down my savings to have a comfortable retirement.
But now I truly know why. It’s because of my wife. No, she isn’t a reckless spender. No, she’s not encouraging me to spend money. She, too, has led a fairly frugal life.
Instead, what I realized is that I needed someone in my life to spend money on. I wasn’t going to spend it on myself. I’ve never done that. For me, it was okay to do without what many see as “necessities.” But I didn’t want my wife to live like that, and that made me more open to spending money. For instance, we remodeled our house to improve our quality of life by updating the home to some of the latest features.
I married late in life. Although we were together for a while, we didn’t get married until 2020, during the pandemic. We were supposed to be married at the Orange County courthouse. A few days before our wedding date, we were informed that the courthouse was closed because of the surge in COVID-19 cases and that we should report instead to the Honda Center. That’s where the Anaheim Ducks play their ice hockey games.
Once we arrived, I received a text message for us to report to customer service window No. 1. This is the window where you buy tickets to the arena’s events. Behind that window was a lady young enough to be my granddaughter. She went through all the formalities, and then said to me, “You can remove your mask and kiss the bride.” It was surreal. But I’d never been happier.
I’ve learned an important lesson during my financial journey: Money can buy happiness—but it can often buy more happiness when you spend it on others. There are many ways to do this.
For instance, in the comments section of some HumbleDollar articles, I read about people in their 70s donating to charitable organizations using a qualified charitable distribution from their IRA. Those in their 70s and older are allowed to donate up to $100,000 each year to one or more of their favorite charities. No taxes are owed on the distribution and the sum counts toward their annual required minimum distribution.
I also read about folks funding 529 college savings plans for their grandchildren’s education, and about parents giving money to their children by taking advantage of the gift-tax exclusion. I’m sure this is all done out of the goodness of their heart. But I also believe such gifts bring the givers much joy, as they watch their money help those they care about most.
Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor’s degree in history and an MBA. A self-described “humble investor,” he likes reading historical novels and about personal finance. Check out his earlier articles and follow him on Twitter @DMFrie.
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“You can remove your mask and kiss the bride.” ——- hahahaha!! A fond memory for the rest of your lives. Good write-up, and I’m glad you are evolving. I, too, am “frugal” or “cheap” or “tightwad”, call it what you like. But I’m not letting it lead me. I lead it where I want. (having a part-time fun job makes it easier to use “fun-money” and still keep my principal.)
Good story. Money can provide happiness if used properly, and it can provide peace of mind. Making and hoarding money doesn’t provide happiness beyond a certain level, as many studies have shown. All my life I followed the advice of the wise financial writers who preached the wisdom and value of treating money respectfully, and not frivolously.
While raising 4 kids and not having much excess money, we were conscious of wasteful spending. However, we bought a week long timeshare near DisneyWorld and went there every year, even when we had infants. Now our kids use the timeshare. We also traveled to many places, oftentimes on business trips/meetings. We’ve done family cruises and family trips to Vegas, Park City and elsewhere, paid by us so the kids could join us.
We’ve been fortunate enough to help our kids buy cars, and provided deposits for their home purchases. They all went to college and have no college debt. To us, that is better than waiting until our retirement to help them, when they need it while young and raising families.
Now retired, I use QCD’s to give to my college, which gave me the opportunity to get where I am today. We have certain charities we like to help, especially those helping children and animals.
We moved to a bigger house on a lake, so we did not need to get a 2nd home for vacation at the seashore, with plenty of room for family visits. We still do not spend wastefully.
It’s great to see that many others feel the same way. We can’t take it with us.
While I didn’t practice extreme frugality, I was probably doing something similar until certain events in our life happened. My father had a career in the US Army until he retired (as an E-7). My parents lived very frugally (although I wasn’t aware of it at the time). We never owned a home, always bought used cars, often got my clothes at thrift stores, and never traveled to go on vacation. However, we did travel the world and moved every two to four years until I left for college. This was just normal to me and some of my fondest memories were going to the drive-in theater, the beach, or the local carnivals. I paid for 60% of my college education (via a work-study co-operative plan) and got some assistance from my parents and grants/loans for the rest. We got married just prior to the start of my senior year. Her paycheck just covered our apartment rent. As such, we did live frugally during those first years. I think those early years influence our attitudes about spending.
The first event that started my attitude change (for spending) was my mother passing away at age 47 (during my father’s retirement party). They never got to do anything they planned (and it was all planned for after his retirement). As an adult, I had hardly taken any real vacations before then but it changed after that (embedding a message in my mind to not wait for retirement to enjoy life). However, while we did travel more, I still looked for bargains. After all, we had eight years of college education expenses to save (with two kids). The second event occurred when both my children “failed” to finish college (even after going three plus years – but at different schools without transferring their credits). After saving for years and seeing how they didn’t value the opportunity to go to college (they dropped out), I decided to spend what was left (from their college fund) and started to upgrade our travels. The third event was when my wife (two years after retiring) got cancer. When she was in the ICU (due to complications from the chemo), I was told she would not make it through the night (that was nine years ago and she is fine). That was the first time it dawned on me that time on this world was more finite than I realized. At that point, the question was how much more can we spend? That’s a different story. However, these days we take three to four vacations each year with each trip lasting a minimum of three weeks. Since my wife’s recovery (almost nine years now), we now travel business or first class and can’t see “turning back.” We’ve already funded eight years of college expenses for our two grandchildren. Hopefully, they will use it more productively. We use a portion of our RMD as QCDs and contribute to our children’s Roth as a gift. I’ve also learned to “ignore” menu prices and enjoy the meal. In the overall scheme of things, paying an extra $20 for a dish (or leaving a larger tip) is not going to break us.
A postscript on my children: while they did not finish college (their minds and hearts weren’t in it), they have managed to build successful careers. While they can’t quite afford the trips we take, we invite them to come with us once per year (all expenses paid). This is another great way to “splurge” a bit.
My parents came of age during the depression and never had much in savings until late in their lives. The apple did not fall far from the tree and I have been a saver my entire life. Paying all cash for a car (which I typically drive for 10-15 years), a zero credit card balance at the end of each month and finally paying off the mortgage on our house were important achievements. Looking back, its apparent that we could have spent more on luxuries and experiences, but its hard to know that when you are younger and planning for an uncertain future. At age 75, we are comfortable with spending more as our saving habits have provided a comfortable retirement. Do I have any regrets? Certainly, but absent wealthy parents as a financial backstop, who could provide free child care and pay for our son’s education, spending less and saving more when we were younger seemed the only option.
“we could have spent more on luxuries and experiences, but its hard to know that when you are younger and planning for an uncertain future.”
Exactly – only those who had to make it on their own, with no safety net or backup support, can really understand the importance of financial security – even at the expense of missing out on some adventures/experiences.
It’s easy to say “coulda, woulda, shoulda” about forgoing missed vacations or other wish list items decades afterwards. But you just don’t know what’s ahead. I am amazed at people who sleep well at night with a mountain of debt and living paycheck to paycheck. I couldn’t do it!
Medical, family and housing emergencies hit hard. There’s no undoing that early adulthood spending if your luck runs out.
“You can remove your mask and kiss the bride”. Sure beats a fist bump! Sounds like she has been a good influence on you.
In his book How To Get Rich and Stay Rich, Fred Young described going to his future brides apartment and stepping into the bathroom. When we washed his hands, he saw several old, worn out bars of soap that had been pressed together to save money. He said he knew right then that Grace was the girl for him. I think it was a case of thrifty meets frugal.
They were married for 60 years. Grace sometimes went with Fred when he gave his Get Rich speeches. She was asked by someone in the crowd if it was a burden living such a frugal lifestyle. She said, “No, because every year is a little better than the year before.”
I think being careful in those early years allows you to have those increasingly enjoyable later years, which is what you’ve done, Dennis.
yes, if you are married, it takes 2 on the same wavelength. or at least somewhere in the same spectrum. “worn out bars of soap that had been pressed together to save money. He said he knew right then that Grace was the girl for him.”
I look at it as moving from the delayed gratification phase of life to the gratification phase.
HD friends –
I mean no disrespect at all to Mr. Friedman and his, as usual, insightful essay but I can’t think of another venue to pass the word that Jonathan had a terrific interview posted yesterday with Christine Benz and Jeff Ptak on The LongView at M*. Give it a read or a listen here:
https://www.morningstar.com/articles/1151514/jonathan-clements-humility-is-a-hallmark-of-people-who-are-financially-successful
Now, back to Mr. Friedman!
Thanks for posting the link. I just read the interview with Jonathan and I commend it to all. Jonathan shares quite a lot of his personal investing philosophy and practices, and I found it very helpful as well as an enjoyable read.
I would add that checking the Humble Dollar tab About – Articles on Other Sites is always a good source for such articles. I find a strange enjoyment when I find such an article, like the monthly chat with Creative Planning president Peter, before Jonathan makes time to post a link on HD.
Thanks, Bill. Here’s a direct link to that page:
https://humbledollar.com/about/articles/
Glad to hear the extreme frugality virus has eased and for good reason. I feel the same way. I think it may be a getting old thing. As every year goes by, you get closer to beating the odds and the heck with Monte Carlo analysis.
This year I’m going to use more QCDs. We have been funding 529s since our first grandchild was born 17 years ago.
I’ve found another way to bring a little joy to people who often appear they need it. I have greatly ramped up my tipping, often to 30%. I also stopped putting it on the credit card and rather hand it to the server in cash. Whatever is in my wallet at the time there is a pretty good bet the young person or senior citizen working in a diner or small restaurant can use it more than I can.
Most of the time they take the rolled up cash and put it in their pocket, but sometimes as we are leaving the server comes after us thanking me profusely so I know those above average tips are appreciated.
Love this. I read so many mean-spirited comments on social platforms by people, (many tourists visiting from other countries) who pride themselves on stiffing cruiseline staffs, restaurant servers and tour guides because “no one expects to be tipped in my country” and “companies should pay their employees”.
They think they’re making a statement by punishing the front line folks taking care of them. Coming from a family who had to pay their bills by waiting on tables, I tend to always overtip to make up for all the losers out there.
My wife and I left a generous tip at a little “hole in the wall” restaurant while traveling in Italy and the waiter ran us down on the sidewalk as he thought we had mistakenly left too much money for a tip. Of course he was pretty happy when he realized it was intended for him, and it just comfirmed our decision.