The economy is designed for consumers to spend. Financial institutions look for clients to invest. The economy demands money velocity based on the prime rate. Some people cave to the whims of this system and say “I may die tomorrow. I need to live it up while I can.” Your future is a real timeplace and the spending habits of today do effect the you of tomorrow. Most people don’t understand the importance of keeping yourself from being backed into a corner from financial stresses. If the indulgence of one time purchase (think gas station or fast food item: soda, coffee, energy drink, green juice, burger combo, sugarbar) is multiplied by the 230 days a year spent working we are talking about a good chunk of change which could easily be a portion of an emergency fund. An emergency fund is a form of insurance, but I am not filing this under insurance because building an emergency fund is a function of being a good saver.
Think critically about where you are at in life and then gauge whether you should engage in hedonistic activities at all. Happiness is worth something yes, but have you put your future self who will have neither your vigor or your body to labor tirelessly first?
- Emergency Fund $1000 – absolutely no hedonistic expenses until this exists
- Full Emergency Fund (6 months expenses – keep in high yield savings account to mitigate inflation risk) – some expenses okay
- Dividends/Yields 20% of Your Goal Annual Income – have some fun but keep building until you MAKE IT
You don’t want to be behind a computer (or in the metaverse of whatever at that point) at age 60 asking Brave New World Reddit how you can retire with your $20,000 in savings and mostly paid off house.
Or do a balance transfer and keep paying high interest cards cause you might die tomorrow. Treat yourself to that Monster bro you deserve it.