Sunday, January 13, 2013

Sold On the Excess, Chasing Their Tails to the Cage

David Cain:

This is a pretty normal financial position for me. My life, the way I live it, is affordable, except when unpredictable expenses overlap. Just a little bit more income, say 10% more, would theoretically stop this from happening. But I’ve been thinking that for years, and my income is nearly double what it was seven years ago.

Parkinson’s Law is mostly responsible for this. We have an almost automatic tendency to increase our standard of living the moment our income increases. If you’re like most people, when your pay increases by another $500 a month, the first thing you decide is what additional $500-per-month thing you can now afford to enjoy, which is the same as deciding what additional $500-per-month expense you now wish to take on.

Every time that happens, your financial situation doesn’t really change, even as you climb through tax brackets. Ephemeral details of your life — what you are wearing, where you are eating, the sleekness of your furniture — do change, but the feeling of your financial situation doesn’t, and it is this feeling that determines whether your financial situation feels stretched, or ample.

My parents set a good example of being frugal, for which I'm grateful. I had plenty of time to deeply absorb the understanding that it was the height of madness to spend money you don't have on things you don't need. But I'm also grateful for what appears to be an accident of fate: a congenital need to keep my life determinedly spartan. As with honesty, so too with belongings: I want as few moving parts involved as possible. Thoreau famously said "Simplify, simplify." I think, Yeah, well, you could have expressed the same message while slashing your verbal expenditures by 50%.

Some of it is due to a combination of laziness and extreme caution. I still use an ancient desktop from 2003, the only improvement to which was the addition of a wireless keyboard from Kmart. My pants have to put me at risk of arrest for indecent exposure before I'll consider replacing them. I waited for six months last year before shelling out $50 on a pair of shoes I wanted. But some of it is also the conscious realization that you can only do so many things in a day, at least if you want to do them well and enjoy them. The vast majority of my free time is taken up merely by reading, writing and watching soccer games. I really don't know where I'd find time or energy to do much else.