[TrackDay]

Originally Posted by Sudarshan42

When it comes to matters of the future, I'm a hopeless worrier. I worry about saving up enough to be able to do what I want
I try and attribute it to being minimalistic, or a vague attempt at being less materialistic in this never-ending cycle of consumption that we all find ourselves in.
What else is it then? Could it be my middle-class grooming that teaches me to squeeze value from everything I own to its absolute hilt?

Originally Posted by GTO

- I am also VERY conservative with money. If I can buy a Honda City, I will end up with a Hyundai i10. If I can afford a Rolex, I'll buy the high-end Titan. That's just me. Our family did go through a very rough patch in the late 80s
It's all about balance and I guess you are looking for that. Unlike say, smoking or gambling or alcoholism etc. Driving is good for the mind, body & soul .

Originally Posted by Jeroen

Whereas I believe it is good to have ambitions and plans for the future I do believe it is equally important to live in the present.
Don’t be like that man who had a dream from at twenty and was still dreaming about it at 85.
new morning might never come.
Jeroen

This topic is something that is always there at the back of my head. Most of the replies and posts have mirrored my own perspectives on the matter. I grew up in the middle east in the mid 90's and early 2000's and led a pretty good middle class life. We did have some financial crunches in the early 2000's and that did affect me in some way or the other. Up until recently I would describe myself as a mild miser. Trying to save each buck and penny. Sometimes I feel it could be the ripple effect of the experiences of the past. But some years back I started to notice that in the long term certain financial decisions have to be made taking in the larger picture rather than short term benefits.

For instance until a few years back all my savings were tied in Fixed Deposits without any investment. To simply put it out there, that was dead money. Without any risk, I stood to gain nothing out of the ordinary. I started taking small risks and dividing my portfolio to get more returns for my money. The same also stood for my expenditures. It is worthless to buy something absolutely cheap all the time. In the end you end up replacing the same ten times over rather than having purchased a single item that would have lasted more. But I also draw the line somewhere too. Like GTO said, I too would go for a Titan, If had the money for a Rolex ! It doesn't help that these days everyone is on a wild spending spree and buying things mainly to show off or more than they can afford. In the end, I know what I need and what makes me happy.

It is also important to share time and money to enjoy with your loved ones & friends. This in no way means over the top luxury extravaganza. But something that we can look back at and cherish. I do recollect 'A Christmas Carol' in which Mr. Scrooge sees his employee Bob's family having Christmas dinner and several other experiences that changes him. A wonderful novel by Mr. Charles Dickens that explains love and money are meant to be shared. It is ok to show a nice time to your family and fellow human beings. I have also learnt to be compassionate to those in need and not save my money in such instances. The smile that you can put on other's face can reward you more than what any other Worldly experiences can offer you.

[Mountainman21]

This is such a relatable thread! I am least conservative in my family when spending money but most conservative in my friend circle (tells a lot about my family isn't it?)

I do have a taste for finer things and do splurge on them every now and then, however, if I have to say buy something now, I will easily move that purchase by one or more years. I did this when I wanted to buy Omega Sea-master watch (Decided to buy it in 2012, purchased in 2014, lol). Also, similar to what GTO mentioned

Originally Posted by GTO

I am also VERY conservative with money. If I can buy a Honda City, I will end up with a Hyundai i10. If I can afford a Rolex, I'll buy the high-end Titan.

I will never buy what I can afford, rather purchase 2 to 3 segment below item. Just can't help it.

[locusjag]

The entire month of January this year has been spent by me in hospitals and clinics and laboratories to get my daughter out of danger, healthwise. Medical and health expenses are a grim reminder of what's really important in life...to save our very lives. I'm convinced that the biggest expenses middle class Indians face (where we sink our life savings) are real estate, medical/healthcare expenses, education, marriages and automotive expenses in that order. That should put things in perspective when it's time to decide if you want to spend on a car.

When my daughter was in the Pediatric ICU (PICU), I met a man who was laid off from his B2B sales job and his daughter was also in the same PICU. I could only wonder if he had set aside enough money to tide over his living expenses and those huge medical bills.

And this morning, I came to know of a batchmate whose 2 year old son needs Rs.16 crores to get a rare drug called Zolgensma (made available by the UCLA) to treat his life-threatening condition called Spinal Muscular Atrophy. With the Rs.16 crores, the drug may save his life. Without it, his life expectancy won't last beyond a few more years. And he has spent his limited life in hospitals the whole time anyway.

Now, a spanking new car costing 20 lacs doesn't seem relevant to me at all. A car has its own place and utility in our lives to meet our needs and desires but it has to be way down there in the pecking order of things.

[Chetan_Rao]

I remember having aspirations when I got my first paycheck.

'I will buy/do that with the next increment'.

Several increments later, I still think that every time.

Aspirations are a perpetually moving goalpost, and the 'not enough' feeling will NEVER really go away. Spend and save what you can afford, but don't let that feeling become the dominant force in your life experience.

[charanreddy]

Following some simple rules of personal wealth and expense management help. I think it is important to not be held hostage to irrational fears or irrational spending urges.

Few rules :

1) Spend 2X - 3X of your gross salary on buying your house and at maximum 0.5X for your automobiles. The Net EMIs should not be more than 40% of your net take home. The ratio can vary a little bit, but if you are earning 30Lakhs per year gross don't spend 2 crores on a apartment or 50 Lakhs on a BMW.

2) Life events like marriage, kids, kids education etc cost a bomb. These are not visible in our youth, but need to be planned for.

3) Spend at max 30% of net Income on your monthly expenses. If your net take home is 1 Lakh per month, spend not more than 30K. The rest is EMIs and savings.

I am sure there are a lot more qualified members who can share their insights. My key point is as long as there is some thought on how much your current income and future earning potential is, and where your money is going, irrational fears can be avoided.

[rhsakarp]

Very relevant topic, in today's times especially !

Been in this dilemma many a times too.

Speaking from personal experience here...had a health issue couple of years ago, close call, with a long, many month recovery period. Was fortunate to have family and friends that did everything possible, to pull me out of it.

During the whole time, lying immobile on my back, staring at the ceiling for many months together, dependent on someone for even the basics, the only thing that kept me going, was all the memories of fun times, riding my bike on various trips with friends, of awesome driving holidays with family and friends, over the years ! I wanted to do whatever it takes, to recover, to get back to creating more memories, to drive more, to ride more !

Bottom line, when it comes to spending on what gives you joy, if you have the money, do not think twice, go for it ! You Only Live Once ! Like the folks at Nike say, Just Do It !!

[PatienceWins]

Money is an option to buy good and services and each one of us would have our own priorities. Some would sleep better by having enough emergency fund or financial security whereas for some living in the moment is more important and do not care much about financial security. For the average joe, it is a conflict between present and future and it is better to delay the big purchases to see if you really need it.

My father died when I was in teenage and we did not suffer financially as he had left enough assets with regular income. So my childhood and conservative spending of my father had an effect on me. He used to make me do household chores, work in our land and pay me a wage to make me realize the value of money and hard work. My mother still persuades me to compromise on my rules, for e.g. upgrade car now by taking a loan rather than wait a couple of years, which I try not to violate though it is tempting to violate. So I would not attribute my rules to my mother.

Here are some rules that I try to follow so that short term vs long term is properly balanced.

1. Avoid debt unless it is necessary, for e.g. an unplanned hospital expenditure not covered by health insurance. Debt is basically borrowing from future and future is uncertain.

2. Have enough assets/ savings for your retirement or untimely death. It helps to have multiple sources of income, term insurance/ health insurance etc: Indians have the mentality of spending on children unconditionally (marriage, furniture for new house etc) without any retirement planning with the expectation that children will fully take care of them financially during old age. When the expectation is not fully met, it results in heart break and may spoil the relationship.

3. Buy the best that you like or can afford, but make full use and do not upgrade unnecessarily.: The modern system is to make us upgrade, comparing us to peers do not help either. Indians are usually good at extracting full value (especially our older generation), we try to make the best out of what we have as the thread mentions. I have bought all my vehicles with saved money and completely debt free, works better for me. As I said in the beginning, it is all personal preferences - do what works for you emotionally.

4. Practice gratitude and value freedom/ experiences more than material pleasures: Most of the good things I value in life are free/ cheap - quality time with family, sleep, watching tv, reading, taking long walks etc. The pleasure from material items usually diminish after some time (read on red queen effect) and not exciting as originally envisaged. I spend more on travel/ experiences than on material items.

[PatienceWins]

Originally Posted by locusjag

Now, a spanking new car costing 20 lacs doesn't seem relevant to me at all. A car has its own place and utility in our lives to meet our needs and desires but it has to be way down there in the pecking order of things.

I can fully relate to what you are saying as I spent around 5 months in pediatric hospital when my son was critically ill with many close calls. Though it is very difficult for us to handle such experiences it completely changes our outlook of life. We start valuing our regular healthy mundane stressful life more.

[shobhit.shri]

Originally Posted by Hayek

When I think about my spending decisions, while each of these cars was affordable, it does put you on a different trajectory for overall spend.

This is called the Diderot effect: https://en.wikipedia.org/wiki/Diderot_effect

[Sudarshan42]

Thanks for all your wonderful replies folks. I think the overarching theme of most of your views is that yes, saving is vital but so is living in the moment and spending on what you like. Some of you also echoed the role our upbringing has on our relationship with money.

@locusjag- so sorry to hear about your troubles, I had read your original post and it was heartbreaking. Hope your daughter is fine now. Agree with you on medical expenses being first and foremost, especially when a recent trauma is still fresh. No way we can justify not planning for the future when one has been through that. Hope you come out of it ok.

@Hayek- amazing post sir, thanks for that. Think the Diderot effect (as @shobhit.shri pointed out) is another barrier to truly spending money on what you want. Eg.- a high-end motorcycle always has to come accompanied with a better helmet, full riding gear, boots, and other accessories. Maybe even some structural mods to your house to keep it safe!

[PrasannaDhana]

I just want to quote a few quotes here

"Live like no one else so that you can give like no one else later. Drive like no one else so that you can drive like no one else later"

"When you have money saved, an emergency is just an inconvenience, if you don't have any money saved, every emergency will become a tragedy"

"Live below your means"

I think a lot of us should understand that living to impress others is an utter disastrous waste of money and energy. Sadly most of us do that.

No one gives a rats arse about what car you drive, about how many bedrooms your house has, about the mobile phone and gadgets you use, about how extravagant your last vacation was.

Everyone else is worried and occupied with the vain thoughts of how they are being perceived by the others in the society.

Once you get out of that childish mentality of buying stuff and doing things to impress others, to show your status, you will realise you need very less. We want a lot but we need less.

Once you need less, and act accordingly, you will magically find savings creeping up magically into your life.

I have made two fundamental changes in my financial behaviour this year

1. Living below my means

2. Never getting into debt again. If I can buy something outright with cash, I will, else it's unaffordable to me. There is no urge/need to upgrade to the next segment automobile. If I cannot afford a C2 sedan, I am happy with a hatchback. There is no vain image to how I wanna be seen by others

3. Just own only the stuff I need. I just sold 1 of my 4 cars (which I thoroughly loved) because, as a family, we did not need 4. Detaching emotions from cars and motorcycles is a bigdeal and I am happy I did that. My motorcycle (unused) is going away too .

It feels amazing to be debt free, and it feels even better when you are in a position to help others in times of their emergencies.

[SnS_12]

Workout and follow a balance that works for you is what one should follow.

As other members have said each person has a different way of looking at things in life. So don't fall for the trap or peer pressure where one would tell you to live for the moment and not worry about the future. You don't want a situation where you spend on something expensive and lose your sleep later thinking about the amount of money you spent and doubting your own financial decisions.

Case in point is my father, who has seen poverty in his teens and even though today he is financially stable he still saves and avoids spending as much as possible as he doesn't want to see those days again in his life. And even If I spend on something expensive for him he still losses his sleep and peace of mind thinking about the money spent.

On the contrary I am the quite opposite when it comes to spending. As I had mentioned in an another thread in my mid 20's I used to spend over 90% of my monthly earnings, which I eventually improved upon and started saving more than I spend over the years. So, with over a decade of good savings today I can say I have a decent saving although my father would not agree and will say I can do better.

But, I could get to this point only by delaying certain purchases that I could have done a few years earlier and I rather worked towards building up a respectable bank balance, which has today put me in a position, where I can buy stuff which I always desired to own without looking at finance options and still have a decent amount left in the bank.

Live a life you can afford to live not what you want to live..

[smooth indian]

Everyone before me has said something credible!

I feel it is key to evaluate what one really likes and/or needs. I suppose when we make big purchases like cars, computers, property e.t.c, it is important to think about the long term benefit/utlity of the purchase.

I wouldn't hesitate to spend Rs 80000+ on apple MacBooks since I have found them to be smooth, intuitive and they have given good service for several years (8+) for not much in terms of running costs.

However, spending tens of lakhs on luxury cars is not appealing since maintaining such cars is also expensive. However, a used luxury brand car like BMW will interest me if the price is attractive and maintenance is not a money drainer.

It is also worthwhile to spend good money on essentials such as decent clothes and healthy food i.e. fruits, leafy vegetables, cereals.
Everything that isn't essential or aspirational item or is a long term money drainer can be avoided or minimized.

[Vegitocat]

Talking from personal experience, I follow a simple rule.

If it's something I can afford, but don't need, I'll probably postpone the purchase.

But I also believe in buying big and holding onto it for a longer time. My HTC One M7 bought in 2012 lasted me for 5 years, my OP5 bought in 2017 lasted 4 years(still works) and I moved to an iPhone now. All of these were flagships at their respective times.

My desktop PC is now more than 8 years old, has a 8 year old i5 processor but works like a charm thanks to upgraded RAM and Graphics card.

As others have pointed out, we just need to find our balance. It's about what works for us mind vs heart.

[ashwinprakas]

I thought I'd rock a thread like this with the kind of money I save with my automotive choices and DIY mentality but when considering the money spent on fuel and the time spent pursuing this passion of mine I do wonder if I'm really on the right track.

The most recent acquisition is the Alto, the cheapest 4 Wheeler out there meant that there'd be no hassles of Loans and EMI's what's bought is mine and mine alone, no liability linked to it, or so I thought.

Maintenance I opt for the DIY route and that sets me at 1.5k every 10k km's and that's including twice the number of oil changes the manufacturer recommends, a tyre change would come up at the 50k mark since I'm on stock tyres and would set me back by around 12.5k for 5 Tyres, they're dirt cheap being 12'Inchers.

Awesome savings right? Now consider the money put down on fuel, the Alto alone has been gulping down around 10k of fuel every month since the time I got her in November. Now these aren't essential miles I keep clocking, I have a thing for clocking miles and whenever I get the chance I get behind the wheel or handlebar, it is a compulsion I have developed from the time I started riding/driving.

So if I reallocate funds and then cut down to only essential driving then opting for a car that costs 3~4 times of what the Alto costs is manageable considering I put down the money paid for the Alto as down payment and cut down on joy drives and direct it towards paying EMI's for a 7 year term.

Would I resent the decision? Of course! As an enthusiast there is no bigger turn-off than a stagnant odometer!

So am I happy with the Alto? Most of the time but not always, when participating in social events and the likes the lack of space in the Alto is evident and so is the way society evaluates you, which in all honestly isn't a bother for me but it does bother the womenfolk at home and that indirectly rubs off on me.

So then why not a middle position, saw a Swift/Polo? Well, in all honestly there isn't such a thing, at least for me. There really is no solid win here if you come to think of it. I do not get to enjoy the frugality I get with the Alto and hence won't be driving to my fill and at the same time there isn't much social weightage on offer to justify the sacrifices made however insignificant they might seem in the short run.

So In the end I say screw it! There'd always be a tinge of remorse even when considering best case scenarios so I say be selfish with your happiness, provided it really is your happiness that is at stake.

Nooow! Coming to motorcycles, call it pre-wedding jitters or whatever my CT100B clocked over 20k km's in the last 3~4 Months, she usually does about 20~30k km's a year and isn't the only motorcycle I ride.

So should I even be getting into the same line of revaluation with my motorcycles?

Cheers,
A.P.