Work in progress…
- Let’s say you are 20 and for years you start saving. You don’t go out much, make your own lunch, don’t do take-out coffee and save for deals on buying shampoo in bulk. By doing this you manage to save up 6k in a couple years. Pretty impressive for a student.
- But now the hedonistic treadmill comes. You spent according to the money you have or think you have. Not what you need.
- Now the money you saved years for and caused 1000x mini life happyness decreases.
- Mental accounting. When buying a car, 12k doesn’t feel that much different to 14k. But those 2k can be the result of 1000x times saving on shampoo, coffee, not going out etc… All those times. Instantly gone..
- The same I see when people are buying a house. Oh we have to put in 35k instead of 15k no problem. But they rarely see the opportunity cost of it. That 20k could you take all over the world for half a year (thuisblijven is duurder) and you choose to just ‘throw it away’.
- What I’m trying to say it that people trade so much time which they worked. (Traded their best hours and brainpowers for money). And spent this on a couple big purchaces.
- It’s the same people who won’t buy 2 euro shampoo, but use 20k eigen geld when buying a house.
- Our brains are very bad at seeing this, we use all kinds of mental shortcuts to avoid having to do these kind of hard thinking. Even if we do we’ll
- So the money basically got robbed from you…
- I feel this myself. So much time spent saving on things or not doing it 1000 of times for years. Only for it to be gone in one finger snap by buying a slighlty fancier car. You could have gone to diner with family and friends so often, but instead you want all the options on car B instead of car A.
- Saving on small things doesn’t make that much sense. Sure, being critical helps. But there is only so much you can save before it starts taking your free time by coupon clipping or travelling across town for a deal. The money you make is unlimited. However harder.
- Also inflation is eating away at your money. In a perfect world you trade your labour for money. The money is a store of value for the labour you provided. But over time the value of the money drops… while the amount of labour you put in doesn’t change. The value of the labour you did is dropping… Which is why the rising inflation is troubling. It steals your capital.
Be careful of saving for tomorrow if that only leads to a bit bigger car or house.