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Wednesday, April 26, 2017

Deep Snow and Thoughts

Posted by Tim Stobbs on January 25, 2010

So it’s been a blizzard here in the last few days, so there is lots of snow and blowing snow.  I dug my driveway once already but I’m not even sure if I can drive my car to work this morning because the roads are so deep.  I wonder if my kid will have a snow day? Well regardless all this snow kept us in the house all day Sunday so I did some thinking.

I won’t lie to you having a six figure income helps with your ability to save easily.  I’ve been there now for the last few months because of the second job and yep it’s damn easy to save.  Yet what really makes the saving so huge in my case isn’t just the income, I would say a bigger part of it is being frugal.

You see I make six figures, but I’m still spending less than $35,000 a year.  The fact I haven’t raised my spending with my salary has made a huge difference in where I am today.  I’ve never felt the need to spend everything I make.  I know a higher income isn’t a license to spend more.  Yes I can if I want, but why bother?  Am I not just as happy as I was before making this money? Yes.  Am I still buying those things I REALLY want? Yes.

So what’s the other part of spending so little when you make so much.  It’s going to sound cheesing, but: I know myself.  I’ve spent a lot of time over the years getting to know myself.  How I think? Why I think that way and what my emotional response is to many things? So this offers me many valuable saving options.  Like the fact I know I’ve never becoming a VP of anything anywhere.  I have no interest in the job.  I’ve seen the demands they place on those in senior positions and often the salary to go with and in my mind it’s a poor trade.  So I don’t feel the need to wear a suit to work each day or suck up to those in high places.  I just focus instead on doing my job and answer questions truthfully.

So ironically that has actually helped my career in spots (I tend to just give senior management what they want and treat them like everyone else) and saved me a small fortune of money that I don’t spend to keep up appearances.  I’m happy and generally so have most of my bosses once they realize my quirks.

So that’s my deep snow induced thinking.  Now where’s my shovel?

Comments

7 Responses to “Deep Snow and Thoughts”
  1. jacqjolie says:

    First of all – welcome to the 6 figure club! It makes saving gobs of $ much easier and if you know yourself and what makes you happy, it will mean a lifetime of not feeling deprived, or envious.

    Good for you for living WELL below your means! Both the living well part and the below your means. Every single person I know personally that makes over 6 figures (but me) has experienced a lifestyle inflation to go along with their increased income over the years. I think we don’t give ourselves enough credit sometimes for this achievement. It’s a great feeling to know – yes, I could have that – but I need it to make me happy.

  2. jacqjolie says:

    Oops – meant to say DON’T need it to make me happy!

  3. Robert says:

    I’m impressed. You’ve pointed out the exact two ingredients I believe it takes to be rich: spending less than you earn and knowing how to be happy. Being rich is as much in your head as in your bank account. Although I don’t earn six figures, I live on about the same as you. How can I be rich? Because I have everything I need, and still have money left over. I bet most of the executives you referred to aren’t rich in that sense.

    I think jacqjolie has pointed out the secret to saving: as your income increases, don’t change your spending habits. I’m guessing many people spend more because they think it will make them happy. If you can’t be happy without money, you’re unlikely to be happy with money.

  4. Jon_Snow says:

    My wife and I know we are very fortunate to have a combined household income well into the six figures. Unlike alot of couples, we don’t use this as an opportunity to elevate our lifestyle – if anything, it has made us tighten our belts even more. Alot of people might view this as strange… indeed, more than a few friends and family are scratching their heads. This past summer, after our marriage, my wife and I came to the conclusion that working into our 60’s was to be avoided at all costs. Further examination of our situation revealed that if we kept our year expenses to around $35000 we could probably retire sometime in our 40’s. Once our mortgage is paid off in a couple of years, our yearly expenses will be less than $25000( in Vancouver no less! ). For us, watching our savings grow exponentially is far more rewarding than buying a new Lexus SUV, or moving into a 3000 sq ft. house.

    Sometimes, when we desire to buy material THINGS we don’t need, we imagine ourselves retired at 45, sitting on the deck of our island cottage here on the west coast… it really works. :)

  5. Caitlin says:

    This post is spot on!
    Knowing yourself, and how you think and feel, plays a huge roll in whether or not lifestyle inflation creeps up on your when you get a raise.
    Some things are worth spending money on, though these things will vary from person to person, and so will the things that are not worth spending money on. You don’t need the same things that “everyone” else has in order to be happy if you know yourself well enough to give yourself the things you really need, a few things you really want, and avoid all the “extras”.

  6. deegee says:

    The only part of my budget which consistently grew as my income grew was the taxes, mainly income taxes, due to the progressive nature of the income tax relative to income.

    Otherwise, I did not spend more as my income grew, and it never was 6 figures (except for 2008 when I took a lump-sum payout and retired). If I exclude the years I bought a car (cash, never with a loan), my personal spending excluding taxes (income, Social Security, and property) and paying down debt rarely exceeded $20k. Meanwhile, my income was generally 2x to 3x that, sometimes a little less, sometimes a little more.

    All the while, if I needed to buy something such as a car, a new piece of furniture, a PC, or a big appliance, or take a plane trip out of town, I just went ahead and did it. It wasn’t going to bust my budget or greatly interfere with my savings or my early retirement plan.

    And it didn’t, as I was able to retire in 2008 at age 45. I am quite happy.

  7. Canadian Dream says:

    @jacqjolie,

    Thanks! You know I didn’t figure we would join that club for years yet, but life is full of surprises.

    @deegee,

    Yes taxes do tend to increase as income goes up. I’ll manage to shelter some with with the RRSP but that will only work for while until I’m out of contribution room.

    Everyone,

    Oh, update on snow. Snow day for the kid yesterday and today, but I did get to work in the afternoon after everyone on the street got together to help clear a path out to a main street.

    Tim

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