The Well-Off People Who Can't Spend Money(theatlantic.com) |
The Well-Off People Who Can't Spend Money(theatlantic.com) |
The thought and the behavior, for me, isn't to be noble for noble's sake. The article felt a bit short for me as often financial woes are not mostly in our heads. Our individual bank accounts might show that we as individuals are ahead but the financial woes are still quite real with many of our parents. (Western) Society, and this article, disconnects the financial situation of the financially successful immigrant children with that of their aging and often financially modest parents.
Spending and saving is wrapped in the guilt and the dreams of our the upbringing. I do go out, but I know my parent's are still cooking the proverbially ramen at home because they are behind on retirement. It is having room mates but still having rent in an average apartment costing more than my parents mortgage. It's having more money than your parents and siblings combined, while seeing that your parents worked twice as hard being limited by their lack of network and English skills. All while home ownership is getting harder so for our generation. Secure our own future feels like a zero sum game with sharing and give financially to our parents, and, as importantly, giving the luxuries society says we can afford to ourselves.
David Fox may be making the right decision here.
The question for me is whether I have enough saving to sustain a decent lifestyle in an adverse, yet possible, scenario (getting laid off, declining stock market, inflation, reaching an old age, high medical expense...). And incidentally, will the $60K car make me that much happier than the used one for half the price?
Even with a high salary, it may not be a very good decision to buy the expensive car.
So whatever the "good decision" may be, this is clearly not healthy. This is really what the article is about, not whether a $30k or $60k car is better.
I think there were a few exceptional places/people that lacked both normal scarcity and social norm pressure, but even the wealthiest people worried like these things mattered in most towns.
You can't just erase the entire cultural context of people and expect them to have no worries because there's a few more years to various peaks. They are experiencing the stresses of developing decision skills for a life that probably spans after peak petroleum, etc.
For example, a brand new Toyota sienna XLE is a little over fifty grand. Carvana have several 21-22 siennas XLE, 40-60k miles, most over forty grand. I do not understand this.
* Many people who spend well below their means experienced financial precariousness earlier in life.
* They may no longer be poor, but the stress of deprivation is never far from their memory.
* Concerns about spending are a preemptive response to make sure they never find themselves overspending.
Ironically, they're often keen to tell me to spend my own money and enjoy my life, but aren't good at taking their own advice. Easier to spot flaws in others than in yourself I suppose.
I seriously can't find anything that is worth buying that actually makes me happier. Travel is great, and probably where the bulk of my money goes. But it's temporary, and the expense is limited by my vacation time and doesn't scale that much.
So I save.. and eventually I will be able to buy time. Maybe with more time I can figure out something to make me happier.
- can't enjoy a meal if it is "overpriced"
- must get 30% discount at the grocery store
- will buy an inexpensive electronics with all kinds of spyware/crap/ads/interruptions even though they could afford 10% more for stuff that won't behave that way
- driving used cars guzzling gas even though a newer efficient car or ev would pay for itself in fuel (or safety)
I think people are in this inverse boil-the-frog situation where things are getting more comfortable, but they don't notice.
It's why doomsday preppers are a growing market and a rising industry (https://www.newsweek.com/doomsday-prepping-246-billion-indus...), it's why rich people are building bunkers and securing citizenship in multiple countries so that they can jump ship if the one they're in starts sinking.
Once people's anxieties are alleviated by confidence in their security there should be fewer people with lots of money worried about spending it.
https://en.wikipedia.org/wiki/The_Millionaire_Next_Door
A "tightwad" here would be called a "Prodigious Accumulator of Wealth" in the book, a fancy name for a person who continually spends much less than their income.
Most of the rich didn't get there by spending money.
I'd imagine evolution is (metaphorically) carefully monitoring the situation and working out what it needs to do to take advantage of these new options. It isn't actually crazy to expect people to develop twitchy panicked feelings at the though of spending money. The opportunity cost of being a spendthrift is very high, a lot of people came through the greatest wealth expansion in human history and had an opportunity to buy in to it and then spent the money on idle luxuries. Understandable but probably not optimal choices.
Just to add another anecdotal data point: I kinda have that problem, most likely out of growing up through family financial difficulties.
I did amass a significant amount of money out of caution, should anything bad happen. I had way more money than I was indebted for, and a nice enough paycheck.
And... Something bad happened. I won't go into the details (I don't really want to share) but my house was on the line and I had to spend pretty much all of my savings to save the house and many years of work and sacrifices.
Now I'm in debt again, but thankfully only by less than ten thousand euros over the balance in my bank account, so it's pretty reasonable and manageable.
Still, I feel vulnerable and it's not at all a nice position to be in.
So yeah, "irrational stinginess" isn't that bad after all. Somebody else in my position would have either lost the house or gone back into living paycheck to paycheck (or both).
So just because some articles paint it as a not-optimal condition, don't assume it's automatically "bad".
And trying to paint living below your means in a negative light.
Here's the problem in buying "luxury" and enjoying life in 2024 - many things are just marketed as luxury, and impose a hefty markup for the seller. They aren't actually that much higher quality than something 1/3 or 1/4 the price.
These kinds of goods embody the worst parts of capitalism - withholding surplus value from the person producing the good in the maximum amount possible and also creating an item that isn't needed, this creating waste and putting pressure on already scarce resources.
Maybe these "tightwads" just don't care about this kind of negative signaling? Of course such a thought doesn't even occur to the author. Instead it's labeling and trying to somehow tie it to immigration.
Note: this doesn't mean complete aversion to spending money. I have no problem with people or myself spending thousands of dollars on their tools of the trade for a hobby they enjoy like woodworking/photography/sports, whatever.
... people that resist marketing!
Oh, the horror.
> But the tightwads I spoke with have very real agita—panic, guilt, stress—over their financial situation, even though there’s no real reason for them to worry. They drag around a phantom limb of poverty, burdened with the sneaking sense that something isn’t right, no matter what their bank account says.
You can see yourself the language used to describe saving not spending as that used to describe abnormal behaviour driven by unreasonable delusions.
It's an article crafted to normalise spending.
"marketing works, even when you know how marketing works.
if you think you're immune, then you'll be tagged as the 'thinks they're immune' demographic and hit with alternative methods, which usually work"
But last year, I bought a "nice" car. Not a Lambo, nothing that makes people turn their heads on the street, but 3-4x more than I'd ever spent on a car before. I'm not a car guy, but I remain astonished by how much I continue to enjoy driving it and how much the little luxury fripperies like a really quiet ride, driver seat automatically adjusting to my preferred position, heated steering wheel, adaptive cruise control with lane following etc add to the experience. Maybe I've been underestimating the value of well-made things after all.
I might be in the minority but I dread having to replace my car because I specifically don't want little "luxuries" found in new cars these days. I don't want a car that forces me to use touch screens, or will brake or accelerate on its own, or jerk the wheel under my hands, or ignore my input if it doesn't like what it thinks I'm doing, etc.
I can't complain about quiet ride, and a heated steering wheel might be nice in the winters (for what's left of them anyway), but generally I don't want anything more advanced than a backup camera and warning indicators when someone is in my blind spot or there is rear cross traffic. I suspect it'll be near impossible to find new cars that don't come with anti-features and the push to end sales of gas-powered vehicles is only going to make it harder.
That's been enjoyable.
I know that things don’t make us happy, but the usage of them, the memories we create and the time we spent using them, many times makes us happy ;-)
Recently I got rid of my bed, entirely. I had an expensive latex mattress, but I realized I enjoy sleeping right on the floor. It's firmer, cooler, and easier to maintain. It's just one of the many cases where I realized that less was more.
For instance if you're into photography, better gear can give more pleasant results. But if you already have a decently good setup, buying something better will require extensive research, comparison, probably a trip or two to a store to see the gear in person, potentially rent it for a few days to see how it handles etc.
If you enjoy the whole process you'll be happy to buy new gear, but if you only cared about actually taking photos, the time you spent to get incrementally better gear might not pay off in actual enjoyment of the hobby.
The best purchase I have made in the past few years was a subscription to my rock climbing gym. But I can only go climbing 2-3 times a week since my body needs to recover.
I have a terribly difficult time allowing myself to spend on travel, shows, experiences and so on, because these things leave you with nothing but fleeting memories, and you can't re-sell those later on eBay when you're tired of them. I don't really feel the inherent value of the experience.
I'm in the same boat, however lately I've been realizing that the time you can buy at 40 or 50 is not the same quality of the time you can have at 20 or 30.
I'm still saving anyway (again, same boat) but as soon as I get some wiggle room (money-wise) I'm going to restructure/rebalance my priorities around that concept.
Nothing makes you put time in the right frame except for realizing all the time you wasted.
I don't think it's maintainable for a society long-term.
Not that I don't understand your emotions around it, it's logical.
https://www.abc.net.au/news/2021-12-08/wealth-transfers-and-... discusses the situation in Australia.
For children, it would generally better if you could give them money while you are still alive and while they are at a stage of life they will benefit. Yet over here we tend to have tax and financial laws that discourage that. Or for the more radical socialist mindset, if financial security of your children is what you are after it may be better to massively tax wealth and fund proper social security.
On thing I noticed is that acquiring an object call for more objects. Let's say buying a new phone. It then need a case. The charger norm changed so an adaptator is need. We are already at 3 new objects instead of one, and all of that need to be stored somewhere (with may require a new box). I find myself more often than not taking pleasure into not buying things.
I get the emotions behind wanting to leave inheritances, but we'd be better off as a society long term if we had better safety nets and systems instead.
We don't know how much future planning anxiety is warranted without knowing the future. We certainly know that past societies have a strong survivor bias for people who worried about the most significant life decisions they had.
A very flexible person and a turnip may both be well tuned to the economy at the moment but a less flexible person should be anxious as much for the behavioral effects of making decisions lightly on making future decisions in different circumstances.
> “I have this feeling that the bottom is gonna fall out,” Fox told me.
Take this quote for example. If we take even a mildly evidence based approach, this is rational. Sometimes the bottom does just fall out of the economy. It happens around once a decade. It is entirely healthy to consider spending large amounts of money as potentially risky and consider the possible consequences.
This is flat-out false.
This seems more an error of attribution than flat out wrong, but sure, take a performative extreme by all means.