Money consciousness

[fiby41]

People wanting to FI have to be infatuated about their personal finances or in other words conscious of their money.

It is my guess that this habit does not go away even when FI is reached as shown by the 'One More Year Syndrome.'

I do not want money to be a factor dictating my choices in life. One way to do that is to have enough of it. Which is why I want to FI.

So this question is mainly geared toward the members who have FIed, but feel free to say how you'd go about solving it regardless:

How do you stop thinking about money post FI or once managing monthly expenses become a routine?

[vexed87]

Edit: Re-read the opening post and realised I went a bit off topic,
TL;DR version of my meandering post was...
Learn to live well without spending money as much money and you've cracked it.

[IlliniDave]

In my view simply being "money conscious" is a form of self-respect. We give up part of our lives to earn the money, so being conscious of how the money is stewarded and expended is the same as being conscious about how we spend our time. I view that as a lifelong thing.

I think maybe what you're concerned about is obsession with money. I think that is linked to what place money has in a person's value hierarchy. If your end goal becomes having wealth for the sake of wealth, or if identify your self-worth with your financial net worth or money-derived possessions, then you set yourself up for a life controlled by money. For some people that might be their "thing", and that's fine for them. To me money is more like a tool I'll use to free up some of my future time. I'm sure there as many variations on that as there are people.

On the path to early FI it's not hard for the lines to get blurred. The phrase I use on occasion is that I have to remember that in the end the pile of money is meant to serve me, rather than me serve the pile of money. In the interim I have to cultivate the pile and in a sense the roles are reversed for a time--not terribly different than a farmer that cares for his livestock or crops for a time until they become his dinner.

I'm FI on paper but not retired. Once I got a sustainable accumulation plan in place and grew used to it, the details started to become boring/routine so it just naturally became of less ongoing interest to me. I've tried to keep my accumulation lifestyle comfortable and matched to my future retirement lifestyle so there's a smooth transition. The benefit is that even though I'm an aggressive saver, I'm perfectly content with my ongoing lifestyle, and don't feel deprived nor need to constantly monitor my behavior, and have a reasonable basis to expect that to continue in retirement. I just check in on my finances occasionally to see how I'm doing. (One caveat is that I record my spending weekly just because it gets to hard to remember/reconstruct at intervals much longer than that, but I only add it all up/assess quarterly).

One of the things I did that was helpful (though it's applicability is limited to others I'd guess) was to dip into the pile and buy a cabin for my seasonal retirement dwelling in the Northwoods. It was a fairly large expense (for me) and putting some of the pile towards my future enjoyment and quality of life was an exercise that reinforced the real purpose behind the money. By that act I proved to myself that I had not crossed over the line to pathological in my frugality.

[cmonkey]

+1 for IlliniDave's response, I could not have said it better.

Right now I enjoy tracking expenses/investments but I think its because I have come into the time in my life when I realize how much freedom money can give you if you handle it right. You are what you think about on a daily basis and I am becoming more free with each passing day. Once I'm completely FI, I think it will have become so routine to be responsible with money that I won't have to expend so much effort. I can actually feel this starting to occur already.

[susswein]

I've been FI/ERE for eleven years now. I guess I'm different than most on here in that I never obsessed over money: my desires were always less than my income, and I simply saved the difference until one day I realized that I didn't need to work any more. Now that I'm retired I do pretty much the same. I have a regular income transferred monthly from my investment account to my checking account. The amount is less than a 4% SWR and it meets all my needs/wants, so I don't bother tracking expenses. I still check my investment account daily and make occasional trades, but that's more of a hobby than an obsession.

[Ego]

In my view simply being "money conscious" is a form of self-respect. We give up part of our lives to earn the money, so being conscious of how the money is stewarded and expended is the same as being conscious about how we spend our time. I view that as a lifelong thing.

Self-respect for future-me. I like that.

Another superb response. You've been killing it lately Dave.

[Hankaroundtheworld]

Perspective from a "career" person: I think this focus on money is a phase in life, especially when you realize that you do not live forever, and want to do more than just sitting in cubicles all day. In the beginning of my career, I was full of ambition, did not think about money at all, just looking for experience and adventure, but after 15 years or so, you started to ask yourself different questions, and then this obsession with money starts to grow (FI focus), and you start making decisions towards this. It is a bit of a shame, because you lose this innocence or pureness that you had in the beginning. It is a bit of a trap, you want to be FI, but then money-based decisions become more dominant (for instance, making career decisions that enhances your pay instead of following your heart). This is never a black-or-white situation, but a shift happens slowly nevertheless.

So, I do feel the need to unwind from this once you have become FI, and start focusing on your heart again, and take out this money-focus in life.

[steveo73]

In my view simply being "money conscious" is a form of self-respect. We give up part of our lives to earn the money, so being conscious of how the money is stewarded and expended is the same as being conscious about how we spend our time. I view that as a lifelong thing.

I really like this idea.

[Dragline]

In my view simply being "money conscious" is a form of self-respect. We give up part of our lives to earn the money, so being conscious of how the money is stewarded and expended is the same as being conscious about how we spend our time. I view that as a lifelong thing.

I really like this idea.

Indeed.

And the opposite, "Money Unconsciousness", doesn't sound so good. Because our baser instincts are simply to want what we see other people have, regardless of the impact on our future lives.

[jacob]

Money/cash is but a mere claim on present productivity.

So if you have money, you have a claim. You have power. You have a part in deciding the future of the financial system.

If you have such a claim or exert your power, you can either punt on it and just buy the index, which is the equivalent of wandering into walmart and buying one of each item according to shelf-space... the market-cap weighted index fund ... or you can assert some value judgement--- a preferential decision----and buy a different composition if you think the supply-curve is somehow wrong and you know better. What you do is up to you.

IOW ... being FI is a lot like being awarded a vote in a democracy. You can choose to vote ... or you can choose to stay at home. All the usual political excuses apply now. You can say that one vote doesn't make a difference; that you're too busy with your play stations; etc... And so on. Fact is, with FI, you do have some potential impact; as much as any democratic voter anyway.

[Sclass]

How do you stop thinking about money post FI or once managing monthly expenses become a routine?

I am not sure I'll ever stop thinking about money. The thresholds of pain have gone up as I can more easily spend larger amounts but I still think about it.

I more than respect my future self. I take care of my future self like a healthnut who minds what they eat today. I want to be better off tomorrow than I am today and I don't really feel the sacrifices anymore while I'm making them.

Most of the things I really want cannot be bought. Most of the things I haven't bought yet won't do me any good.

Time to go catch the sunset.

[7Wannabe5]

IlliniDave wrote:
In my view simply being "money conscious" is a form of self-respect. We give up part of our lives to earn the money, so being conscious of how the money is stewarded and expended is the same as being conscious about how we spend our time. I view that as a lifelong thing.

Ego replied: Self-respect for future-me. I like that.

I completely agree, but I think the critical word in the first sentence is "a." Brain activity scans indicate that when we plan for our future selves, we use the same part of the brain that considers our interactions with other people. So, it is a rational altruistic practice to think about what gift we might give to our future self. As in, wouldn't it be thoughtful if I engaged in behavior that would grant future me the gift of $250,000 in the bank? However, here is the question I have. How do we know that is the gift future-us would appreciate the most?

Like maybe there is a set of identical quadruplets who are all 20 or 40 years old. Quadruplet 1 decides to focus on gifting his 5-years-from-now-future-self with financial independence. Quadruplet 2 decides to focus on gifting his 5-year-future-self with maximal physical health,fitness and attractiveness. Quadruplet 3 chooses development of social relationships, and Quadruplet 4 chooses mental erudition. These would all be forms of respect for future-self, and there are obviously many more. So, given limited life-energy to expend, how does one choose how best to respect one's future-self? And should whether the quadruplets are 20 or 40 make a difference in that choice?

[Ego]

So, given limited life-energy to expend, how does one choose how best to respect one's future-self? And should whether the quadruplets are 20 or 40 make a difference in that choice?

This is really an excellent question. It seems to me that there is no right answer but there are plenty of wrong ones.

I tried to use my experiences managing the senior apartment complex Soylent Towers as a way to pick out the seniors I admired and those I disliked or pitied. I tried to tease out the characteristics that made them admirable or pitiable, then I adjusted course with the goal of maintaining or cultivating the characteristics I found admirable and steered away from those I found pitiable.

Now we are managing a different building, this one full of high-earning millennials, where I find myself puzzling out the workings of a hundred-year-old cage-shaft elevator (like a kid in a candy store) and contemplating the course we took to get here.

While we are responsible for much of the reason we are here, a lot of things, both good and bad, happened to us rather than us making them happen. Some of the bigger challenges might have blown us into the doldrums had we not make a conscious effort to use them, tacking back and forth, as wind in our sails.

I suspect the millennials will have as great an influence on our future course corrections as did the residents of Soylent Towers. I guess rule number one is that I've got to be willing to steer rather than be steered. And maybe rule two is to keep in mind that I should enjoy the trip no matter how far off course I get.

Now back to that elevator.

[steveo73]

Quadruplet 1 decides to focus on gifting his 5-years-from-now-future-self with financial independence. Quadruplet 2 decides to focus on gifting his 5-year-future-self with maximal physical health,fitness and attractiveness. Quadruplet 3 chooses development of social relationships, and Quadruplet 4 chooses mental erudition. These would all be forms of respect for future-self, and there are obviously many more. So, given limited life-energy to expend, how does one choose how best to respect one's future-self?

You have to make some form of a choice however I see no reason why FI has to negatively impact all other goals. I admit that being a social butterfly might be a little harder if you have to miss out on social events to save money. For instance you may choose not to fly overseas for a wedding. On the whole though I think FI, fitness and health, positive social relationships etc are aspects of your life that do not have to significantly negatively impact each other.

[IlliniDave]

IlliniDave wrote:
In my view simply being "money conscious" is a form of self-respect. We give up part of our lives to earn the money, so being conscious of how the money is stewarded and expended is the same as being conscious about how we spend our time. I view that as a lifelong thing.

Ego replied: Self-respect for future-me. I like that.

I completely agree, but I think the critical word in the first sentence is "a." ... However, here is the question I have. How do we know that is the gift future-us would appreciate the most?

Like maybe there is a set of identical quadruplets who are all 20 or 40 years old. Quadruplet 1 decides to focus on ...

Yes, believe it or not I do occasionally think about what I say and I chose "a" on purpose! Many roads to Dublin.

The future focus was Ego's (though it's valid and interesting, I can't claim that insight), my original intent was sort of time-independent, but nearest the front of my brain was ongoing decisions in the present.

As far as the quadruplets and superabundance of choices and the unknowable future; who says it's an optimization problem with a single solution?

I'd suggest that by being your best self (based on your best good-faith assessment of what that is at the time) during each step of the way, you will have been more than duly respectful of your future self when you arrive as her.

There's probably more both/and than either/or in the decision space of where to focus. You'll never really know the future until you get there

[7Wannabe5]

Ego said: This is really an excellent question. It seems to me that there is no right answer but there are plenty of wrong ones.

It seems to me that the older I get, the fewer relevant positive beacons I have in examples set by others, and the more I am left with train-wreck avoidance, and very personal exercises in values clarification. For instance, I would say that right now, I am Quintuplet 5 who is primarily focused on creative project completion/mastery.

steveo73 said: On the whole though I think FI, fitness and health, positive social relationships etc are aspects of your life that do not have to significantly negatively impact each other.

I agree that this is true in general terms, but not at the margin. If I am working 40 hours/week to earn money towards FI then I will still have time to exercise in the evening and talk to my SO. If I am working 80 hours/week, maybe not. I think that there is some rational way to solve this problem, along the lines of creating a bunch of s-curves on transparencies and then stacking them on top of each other, but my brain don't work that good.

[7Wannabe5]

IlliniDave said: I'd suggest that by being your best self (based on your best good-faith assessment of what that is at the time) during each step of the way, you will have been more than duly respectful of your future self when you arrive as her.

Very wise. I am right now going to erase my current mantra of "I am a doer. I am a finisher. I will actualize my ideal!!" off the pink dry-erase dot on my bedroom door and change it to "Are you being your best self?"

[ThisDinosaur]

"Pathological in my frugality" very likely describes me. This thread reads like a lot of wise, well-adjusted people reassuring each other that its okay to stop obsessing about money. My perspective on whether "Money Consciousness" is good or bad feels very different than what's being discussed here.

Before I discovered "FI, FIRE, ERE," I obsessed over making more and saving more money. Discovering the early retirement community only crystalized the problem for me by giving me a mathematically definable/quantitatively attainable solution. Invest 25-50x annual expenses=>no mo problems.

My parents rarely had any money, or, more to the point, never kept it. I grew up terrified of being broke, and some of the people now closest to me tell me that I have an unhealthy relationship with money as a result. That I work my ass off and pinch pennies. I should note that none of these people have any savings, but I am, in fact, the weird one as far as society is concerned.

I'm relatively new to this community, and so I have spent my first year as a wannabe FIREee shouting from the rooftops about this awesome idea of Financial Independence. Its taken multiple unproductive conversations to learn that I should probably just keep my financial plans to myself. Yes, I am "infatuated" with my personal finances. I now think about them more than almost any other single topic. I think that habit will continue long after I'm retired. I hope not. I probably will suffer 'One More Year Syndrome,' because I will never have "Enough."http://www.amazon.com/Enough-True-Measu ... 0470524235

[IlliniDave]

Dinosaur, for a time I had the same exuberance and fixation as you. It did wane.

I started from a position of fear--a very reasonable one that I might be laid off as an almost-50 "technical" person in the depth of the recent recession. It really was a close call. So I built a numerical plan and started turning the crank with all my energy, like I was fleeing a scourge of demons. But I couldn't quite escape this one question that kept popping up: "Okay, so then what?"

Having resources (combination of money and skill) to support ER is only half the battle. You should also begin to cultivate ideas for what you might do with your time and energy after FI, and as much as possible start weaving them into your life now. That might pull you away from framing the entire concept in terms of money. The money part will begin to operate on autopilot, and you can channel your energy on finding as much contentment as possible in your pre-FI life, and hopefully a smoother transition into a financially independent lifestyle.

[penny]

You should also begin to cultivate ideas for what you might do with your time and energy after FI, and as much as possible start weaving them into your life now.

I find this really difficult. My job absorbs 70+ hours a week and has done for many years with an adverse impact on time for my family, interests and just head space to think of much beyond.