Photo Credit: 401(K) 2012 || As that great moral philosopher George Harrison once sang: “It’s gonna take a lotta money, a whole lot of spending money…”

Here is a comment from a reader on my last post:

Hello David. Fellow actuary here. I usually love your posts. I disagree with this one. Or at least I disagree with the title. ?How much (or how little) should I spend?? may have matched the content better.
I?d love to read your thoughts on ?When have I saved enough so that I may now outspend my income?? Perhaps you have written such a post but I don?t recall it.

Thanks for your great content!

https://alephblog.com/2019/10/16/how-much-should-i-save/#comment-37283

Yeah, I get it. Here are four posts that describe my view on spending money:

• Build the Buffer
• On a Letter From A Younger Friend
• Problems with Constant Compound Interest (6)
• Don?t be a Miser in Retirement (Or Ever) [This is the most comprehensive one]

My main idea is encouraging spending that supports the well-being of the household in the long-run. I am trying to encourage a balanced point of view, which is the hardest thing to do. For many people it is easier to convince them to do just one simple thing than try to balance two or more unaligned goals.

That is why the “stoplight rule” is so useful. It is minimal, but balances saving and spending. Imagine telling a friend to enjoy life, but not too much, such that he compromises the future. The stoplight rule is a real help.

People have a hard time expanding their time horizons. It is easiest to live for the present, and hardest to live for retirement. The good of the present is tangible, whereas the good of the future is intangible.

I do not favor excessive savings. It usually leads to a trail of tears in relationships. God wants life to be enjoyed, because it honors the way he provides for us. God is not a miser; we should not be misers either.

As I said in the post Don?t be a Miser in Retirement (Or Ever):

The author of?the?book that I most recently reviewed, Carlos Sera,?gave one of his sayings on page 97 of his book:

?There is a fine line between over-saving and under-living.?

That particular story dealt with a couple that had been especially frugal, and after not earning all that much, at retirement had $6 million. ?They had a traditional marriage, and the husband handled the money entirely. ?He worked until 72, retired due to incapacity, and on the day of his retirement, he handed his wife a check for $3 million.

She thought it was a joke, so for fun she tried to cash the check. ?To her surprise, the check cleared. ?Then came the bigger surprise ? her amazement gave way to anger! ?All the years of self-denial, and they were this well-off! ?There were so many things she denied herself along the way, and now both of them were too old to truly enjoy their riches.
There?s more to the story? the point the author goes for is mostly abut how husbands and wives should learn to cooperate on the shared tasks of household economic management, so that both are on the same page, and they can be agreed on goals and methods.

I agree with that, and would add that the best approach on spending versus saving is what I would call a conservative version of the ?middle way.? ?Make sure that you are provident, but balance that with contentment and a happy enjoyment of what you have. ?Life is meant to be lived.

Yes, it is good to be prudent and frugal, but not to the point where you amass a lot of assets and never enjoy them.

https://alephblog.com/2015/11/03/dont-be-a-miser-in-retirement-or-ever/

I sometimes say in certain charitable contributions “What is the point of money if I can’t enjoy it being spent to a good purpose?”

Yes. There are some tiny-minded people who believe that “the one with the most toys at death wins.” These are people who want to delude themselves that selfishness is what is right, which is ridiculous.

If you are well off, God does not want you to be a miser. First, he wants you to honor Him. After that, he wants you to take care of your charitable obligations to society. After that, he wants you to enjoy what you have.

And that’s what I do, Lord helping me. I am sparing on optional items, but I take care of my home, the church, and other opportunities for charity that are in front of me. After that I relax, because I wait for other needs to be big enough to deal with.