Hope for your financial life and beyond

Can We Ever Step Off the Gas With Our Finances?

Sit at home or enjoy lifeI love competition. Better yet, I love to win. Doesn’t matter if it’s a marathon, a card game, or playing Horse with my 10-year old son in the driveway. (He hasn’t beaten me…yet.) I want to come out on top.

This competitive spirit also works its way out when I prepare our monthly budget. I love seeing if I can reduce the prior month’s spending amount for each budget category, thus being able to save more. I know, it’s a little sick. I’ve made budgeting into my own personal can-you-top-this contest.

Some may like that I’m this intense. After all, isn’t this level of passion necessary to win with money?

Well, yes…but not when the kids go naked because you haven’t purchased clothes in six months. That’s a little too intense. (Disclaimer to grandparents, family and friends and DFCS: Just using hyperbole here. No kids are actually going without adequate clothing in our house.)

The issue though is valid to consider.

When can we loosen the reigns on the budget? Do we have to drive hard all the time? When can we take our foot off the gas just a little bit? We free spirit spenders want to know.

My answer may be frustrating and seem like a cop-out.

It depends.

It depends on your situation. No one else can answer this question because it’s personal. And there are a whole host of factors that enter into the equation. For example…

It depends on the depth of your dreams. Perhaps you have a vision of going back to school, starting a small business or retiring at an early age. If the cost of the dream will require a deep financial commitment then you probably can’t take your foot off the gas yet. You’ll need every penny.

It depends on your level of unsecured debt. How high is it? $1,000? $51,000? $151,000? Two of these debt level scenarios require a hard press down on the accelerator. You will have to keep the budget tight to pay off those big chunks of debt.

It depends on your health. Major medical issues can be a killer to the financial picture. If these are immediately looming or anticipated in retirement due to genetic predispositions then keep driving.

It depends if there is a crisis. In the Old Testament of the Bible, Joseph collected and stored grain for seven years to save the Egyptian people from a devastating famine. He accumulated so much he quit counting. He never relaxed because people’s lives were at stake.

It depends on your emotions. If an overwhelming fear of the future is the driving force behind your money management, then you will probably never take your foot off the gas. I’m not sure that’s healthy.

It depends on your bank account. If there is a one followed by six zeros already showing up in the net worth column of the financial statement, then you can probably afford to take your foot off the gas.

However…

It also depends on your age. The 80-year old with the large bank account can relax. However, the 35-year old with the same situation still needs to maintain focus on long-term wealth building. Average life expectancy in the U.S. is 78 years of age so that money has to see them through another 40+ years. To have that much at such a young age is a nice place to be, but that money could easily be eaten up should one decide to become a spend-a-holic at 35.

I guess the open-ended question I’m asking here is “When can a person start to live a little and not be so intense with the budget?”

Share your thoughts in the comments below.

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Comments

  1. We are struggling with this a bit right now after paying of everything but our mortgages. Do we buy a few things we’ve been putting off or keep going until our last debts are paid off? It’s a balance I think, but I do believe you should always track and budget or we could fall back into old habits. No thing I could buy today is worth an installment payment ever again.

    • Agree 100% Kim. I’m not advocating neglecting the budget because that would bring back old habits like you said. I just want to know when I can spend more! 🙂 Seems like when all the non-mortgage debt is gone and there is a fully funded emergency fund in place then the spending could increase a little bit.

  2. It’s about balance as well. It’s very important to schedule in some time to relax as well as some time to go out with friends and family. The reality is that going out is going to cost something, so it’s better to bite the bullet once in a while rather than staying in every. single. night.

    • I agree DC that balance is key. I don’t want to live a reclusive lifestyle because I’m too worried about spending money and not having enough later on in life.

  3. I am working 2.5 jobs, and have a to do list longer that Jay Leno’s chin! I’m always booked, and don’t have much time to just chill out. When it comes to relaxing my time schedule, I have to be SUPER deliberate and schedule it in. When it comes to my budget, I keep it fluid, not rigid. A rigid budget might work for me, but not for my whole family, and demotivates us. We build in fun money, vacations, etc, but still have aggressive goals we want to hit. Every now and then, we *gasp* deviate from our plan and blow some money on some family fun. Might be a cardinal sin, but since I know where all my money is, I can make those decisions and not feel guilty about it. Sounds like you are in a similar place 🙂

    • Ha, ha…I’ve never heard anyone describe their busy schedule like that! We have money built into our budget as well for fun stuff. We even have a category called “Blow money.” My wife and I each receive a certain amount of money in the budget each month to spend on whatever we want without having to ask the other person. That helps create some freedom for purchases and not make the budget feel so rigid.

  4. Maybe it’s not so much a question of loosening your attention to budget, but the budget itself, as you so aptly point out. Best of luck!

  5. Thought provoking Brian. I try to not take my foot off the gas because I don’t wan to fall behind, but sometimes we do run out of gas. You can’t go full throttle all of the time because you were burn out and bad things happen when you do that.

    • Burn out…that’s what worries me a bit Grayson. I want a part of my wealth to be used to enjoy life now. The challenge is knowing how much to use now and how much to save for later.

  6. Great question, Brian. As you pointed out, it depends on your situation and goals. To an extent, I don’t know if we really ever step off the gas in the sense that we must always remain on top of our financial situation – even if we are debt-free. So people think once they are debt-free – it’s all lollipops and rainbows or fancy cars and designer clothes. And it can be – if they can truly afford it. But too many step off the gas and fall back into all habits. Of course, not everyone does this, but I think those don’t are the one’s who stay on top of their budget. Yes, they probably have more wiggle room and add some luxuries back into their life, but not beyond what they can afford.

    • I remember once listening to Dave Ramsey talk about how after all these years and all his financial success he still puts together a monthly budget, still invests money, still looks for deals, etc. Granted, he has been able to afford luxuries because of his diligence and hard work but he has not let go of his basic philosophical ideas about personal finance.

  7. Financial Black Sheep says:

    When do you loosen the reigns on your budget? I just spent my April budget on an iPhone right after becoming debt free. Probably not the best idea, but if felt very good. Other than that, I have fun money and never loosen my budget. I am always trying to put each and every dollar to use as I am going to school, saving for the future and trying to take care of things like life insurance, retirement, etc.

    • That sounds like an awesome reward for becoming debt free! I’m doing all the things with my money that you listed as well. I just don’t want to miss out on enjoying some of the present while I’m being stingy in saving for the future.

  8. Great post, Brian. But I think you’re right: there is no one answer. For instance, even if your consumer debt is paid off, you may not be able to lighten up on the budget if you still have a massive mortgage. This is a definite “different for everybody” answer, as you pointed out.

    • One of the reasons I was thinking about this is that we are about to pay our mortgage off within the year. When that happens, we will have money freed up to put towards other things. Do we keep our budget really tight and invest all the money that was going towards our mortgage? Or do we use some of the money for other discretionary spending like entertainment or hobbies that we haven’t been able to pursue as we’ve been paying down debt? I’m trying to process it because I see positives in both scenarios.

      • What about taking a percentage of that money, like 10 or 25%, and putting it in a “fun fund” or something similar, then if something comes up, like a vaca or something, that you really want to do, you’ve got the money set aside, but if it gets to be 5 or 10k, and there is no fun stuff that you really want to do, you could take half of what’s in there and invest it?

        • That’s a good idea. We have done something similar with the money we save for summer vacations. When the vacation doesn’t end up costing as much as we had thought, we take what’s left over and put it somewhere else.

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