The first, future goals. What is most important to you? When would you like to retire? What are some bucket list items that would require money down the line? What are some major expenses you see coming up (down payment, car, big vacation etc.)in the next 5-10 years? What would you need to guard against emergencies? I would then put a dollar value on each of these goals and work backwards to see exactly how much I need to save today. This helps minimise anxiety that often comes with non-specific saving, whether the amount will be enough or not.
The second part is figuring out what's important to you today. What brings you true joy and happiness? Contrary to some of the advice in this thread, I don't think spending for its own sake is healthy. But spending to add lasting value to your life is. And the goal then would be to be as frugal as possible in areas of your life that matter less so than you can direct your spending to those areas that bring you the most lasting fulfilment and joy.
A couple of book recommendations: The Psychology of Money (Morgan Housel) and Your Money or your Life (Vicki Robin).
amihappyornot t1_jabyl3i wrote
Reply to When does saving become unhealthy? by Narrow-Imagination96
To be honest, I'd approach this from two angles.
The first, future goals. What is most important to you? When would you like to retire? What are some bucket list items that would require money down the line? What are some major expenses you see coming up (down payment, car, big vacation etc.)in the next 5-10 years? What would you need to guard against emergencies? I would then put a dollar value on each of these goals and work backwards to see exactly how much I need to save today. This helps minimise anxiety that often comes with non-specific saving, whether the amount will be enough or not.
The second part is figuring out what's important to you today. What brings you true joy and happiness? Contrary to some of the advice in this thread, I don't think spending for its own sake is healthy. But spending to add lasting value to your life is. And the goal then would be to be as frugal as possible in areas of your life that matter less so than you can direct your spending to those areas that bring you the most lasting fulfilment and joy.
A couple of book recommendations: The Psychology of Money (Morgan Housel) and Your Money or your Life (Vicki Robin).