Advertisement
savings

When Frugality Affects Quality of Life

What happens if you follow all the smart money rules to get ahead, but find you're not getting anywhere at all?You pay off credit cards every month, pay extra toward your mortgage and fund two retirement accounts, plus a 529 and an emergency fund. You rarely spend on new clothes; you always pack your lunch and work extra hours every week to fund your savings goals. This is the situation one frustrated reader over at Get Rich Slowly describes.

What happens if you follow all the smart money rules to get ahead, but find you're not getting anywhere at all?

You pay off credit cards every month, pay extra toward your mortgage and fund two retirement accounts, plus a 529 and an emergency fund.

You rarely spend on new clothes; you always pack your lunch and work extra hours every week to fund your savings goals.

This is the situation one frustrated reader over at Get Rich Slowly describes. Even in good times, when you can watch savings compound and debt dwindle away, this nose-to-the-grind lifestyle is challenging to sustain and best linked to an end goal. In a bad market (as we've had), it can be crushing to watch everything you save disappear. Those market conditions do not make an extreme, savings investment plan worthwhile.

So what to do instead? JD at Get Rich Slowly recommends a balanced spending formula from All Your Worth. It suggests that 50% of income should be spent on needs, 20% on savings, leaving 30% for wants. Try our online budget worksheet to see if your expenditures can fit this formula.

Also, our savings calculator estimates how long it will take save a million. You can see for yourself:  It's not going to happen overnight ... So how about budgeting  for a little breathing room? 

How do you keep financial burn-out at bay?

 

Advertisement
Advertisement

Most Popular

What Trump's Payroll Tax Cut Will Mean for You
Tax Breaks

What Trump's Payroll Tax Cut Will Mean for You

President Trump issued an executive order to suspend the collection of Social Security payroll taxes. How much will it save you?
August 10, 2020
What a Payroll Tax Cut Would Mean for You
Tax Breaks

What a Payroll Tax Cut Would Mean for You

If Congress can't pass another stimulus bill, President Trump says he will initiate a payroll tax cut by executive order. How much would that save you…
August 8, 2020
Drawing Down Retirement Savings in a Pandemic
Coronavirus and Your Money

Drawing Down Retirement Savings in a Pandemic

Tapping the right accounts at the right time matters. Knowing how much a retiree can spend each year without running out of savings in old age is even…
August 7, 2020

Recommended

6 Money-Smart Ways to Spend Your Stimulus Check
Tax Breaks

6 Money-Smart Ways to Spend Your Stimulus Check

If you don't have to use your stimulus check for basic necessities, consider putting the money to work for you. You'll thank yourself later.
July 30, 2020
Emergency Funds: How to Get Started
Making Your Money Last

Emergency Funds: How to Get Started

There’s no one-size-fits-all formula for how much you’ll need.
July 30, 2020
The Finances of Homeschooling Your Kids: What It Costs, Tax Breaks, More
spending

The Finances of Homeschooling Your Kids: What It Costs, Tax Breaks, More

If you're contemplating homeschooling for the 2020-2021 school year and beyond, consider these 10 things -- from surprising homeschooling costs to pot…
July 30, 2020
10 Ways to Save On Your Cell Phone Plan
family savings

10 Ways to Save On Your Cell Phone Plan

We’ve rounded up 10 techniques to cut expenses on both your cell phone plan and your device.
July 20, 2020