Investing for the future vs enjoying today

consciousobservation

I know this is all completely subjective but I am interested to hear how other people make this decision or what their experiences have been.

Over the last couple of years me and the wife (both early 30's) have become quite comfortable by our standards. We have a low mortgage, no financed cars, loans, credit cards etc and enjoy cheap hobbies such as hikes and cycling.

Neither of us are from wealthy backgrounds, so we have never been frivolous with money, and I feel like due to being teenagers (no money), then a student (and poor), then paying rent and saving for a house (and poor) has ingrained the habit of not spending money so that now that our salaries have increased it is hard to relax and spend a bit. 
We've been overpaying the mortgage, pay reasonable amounts into pensions and S&S ISAs, have a good cash buffer, all that sensible stuff that realistically probably puts us "ahead" of 80% of the population. 

I do have other hobbies where I could easily blow through £5k on a few indulgences, and I have the "spare" money. Obviously you only live once, and these things would bring me enjoyment, but at the same time future me might value that money to use on something else.

I think the problem comes down to three things:
1. I keeping only being willing to spend on "essential" items and when it really comes down to it, the only things that are essential is bills, mortgage and food.
2. Very rarely will anyone say you are saving too much, so once you start saving £300 a month, you think "could I save £400", then £500 etc.
3. My salary has increased quite a lot in the last couple of years, but our core outgoings have remained steady, so even with increased savings I still have this "extra" money each month that I feel like I should be enjoying but instead it's just sat there (or more likely I put it in the S&S ISA).

Does anyone else find themselves in a similar dilemma? Did you think stuff it and blow some savings on some treats? Or on the flip side, anyone saved away too much and then regretted not enjoying the money whilst they could due to ill health or similar?

thegentleway

Yep we’re very similar: remember our parents worrying about money when we were growing up so we both have always saved a lot. Have increased spending with income but still saving about 50% of income. Spending money on yourself is surprisingly unsatisfying: you only get very short lived enjoyment then crave the next purchase due to hedonic adaption. I’d suggest looking into give some of your income to effective charities: take a look at giving what you can. I found the book Happy Money useful as well. Enjoy, it’s a nice problem to have!

strawb_shortcake

Yes, and it's really starting to annoy me not to mention my Husband. 
I'm the only breadwinner and we have 3 school age children, I'm not on a huge salary a bit above average.
My Dad is very tight with money, and spends what he needs, he ties most his savings into ISA's so when something big comes up it's my Mum's savings that often go towards paying for it - it isn't quite as bad as it sounds.
After struggling in the past financially I used to wish to not worry when the electric bill came in,  we have that now and we are more than comfortable. 
We have a small mortgage, minimal bills and no debt. We have nearing on 6 figures in savings, I still save around £600 a month; some of which is earmarked for Christmas and holidays.
I budget for what we need, this month has thrown a few small curveballs mostly additional school items that we didn't know we'd need until now. 
I don't really set aside any fun money, though that's not say we don't treat ourselves but it's usually spur of the moment rather than planned. 
But I know I need to make some adjustments just not sure how to start...

RG2015

Hedonic adaptation? I like it! There are some gifts that keep giving though.

I am writing this on an iPad which is a grossly overpriced indulgence but continues to give pleasure as well as utility.

DireEmblem

Is the answer you are looking for the right ‘balance’.

If you don’t need to spend all your income, then it opens up to you multiple options. 

1) You could retire earlier as you require less funds to work on.
2). You could work on reducing your fixed expenses(mortgage) to further lower costs in the future.
3) You could invest to generate passive income.
4) You could cut back your working hours.

There are multiple options open to you, and only you know what would be best for you.

solidpro

Invest in a hobby to feel good and maybe create something someone wants to buy for your profit.

Invest in holidays to enrich your soul. No return but you're investing in something to look forward to, look back on, and therefore your wellbeing.

Invest in renewables to save the planet. Could save you money, could make you money, could break even, definitely helps your fellow human being.

thegentleway

RG2015 said:

Hedonic adaptation? I like it! There are some gifts that keep giving though.

I am writing this on an iPad which is a grossly overpriced indulgence but continues to give pleasure as well as utility.

Yes indeed. Purchases that change the way you spend your time can provide continued enjoyment. E.g. every time you use your iPad, you are enjoying not being sat at your computer then it will continue to make you smile. Treats are also satisfying but too many of them soon erodes the treat effect. Treats for that change the way you spend your time = double whammy!

Albermarle

I think it is largely down to your personality, so difficult to change , whether you are a saver or a spender.
If we went out for a meal ( even a celebratory one ) and it was really expensive , we just would not enjoy it . So no point doing it .
Also there is a big benefit to having a lot of money saved up , it means you do not have to worry about money!  Something that blights many peoples lives .
As I have got older though , I have loosened the purse strings a bit and will not stay in cheap hotels , or fly Ryanair if I can help it ..

kangoora

That is something only the individual(s) themselves can answer. Jam now or jam tomorrow, with the proviso that taking the jam now means you delay getting it tomorrow.

In our case we always had a low mortgage relative to income (very good combined salary) and never aspired to that 'executive' house we could have afforded on our salaries (Northern England which helps), we bought 1 'new' car in 30 years (pre-reg at 40% off list price), always maxed out pension contributions (just because Dad said it was a 'good' thing to do), designer clothes - none ever crossed our doorstep etc

We did spend a lot on holidays, e.g. cruises, Disneyland, California etc but that was our (and our kids) treat and my specific 'blowout' was a new gaming PC every few years but even then I'd buy 2nd tier and never the latest and greatest. We wouldn't buy cheap for the sake of it and would spend money if warranted e.g. bought a Delsey suitcase set in 1985 which was horrendously expensive at the time, I still use them occasionally 35 years later and they've had to survive being thrown in the back of Hercules and Chinook aircraft. Our Hi-Fi cost £1000 in 1989, apart from a second hand tuner replacement off Ebay that still works fine at 30 years old

End result, I retired at 54, which was 4 years ago. DW wanted to do a few more years to boost her pension but she's retiring next year at 52. If we'd gone for that executive 4 bed and the new BMW in the drive every 3 years I can guarantee I'd still be working now and probably not be looking to retire until well after 60 years old. I actually asked my wife recently if she had any regrets over the last 30 years and she said only not quite being able to afford to put both kids through private school (it was both or none). They've still turned out OK, one will qualify as a teacher this year and the youngest is just about to finish his Masters degree.

On your last point, my Dad retired at 59 through ill-health, never got to do the things he'd planned on in retirement and was diagnosed with early onset dementia at 65 and died at 68 three years later. That definitely affected my views and ambitions to retire earlier than most.

Malthusian

kangoora said:

I actually asked my wife recently if she had any regrets over the last 30 years and she said only not quite being able to afford to put both kids through private school (it was both or none). They've still turned out OK, one will qualify as a teacher this year and the youngest is just about to finish his Masters degree.

Have you asked your kids whether they'd've preferred to go to private school at the cost of the two of you having to work for longer?

Even a diplomatic lie would be a revealing answer as it would be very different from a genuine "no".

consciousobservation

Thanks for the replies, I appreciate them all.

thegentleway said:

Yep we’re very similar: remember our parents worrying about money when we were growing up so we both have always saved a lot. Have increased spending with income but still saving about 50% of income. Spending money on yourself is surprisingly unsatisfying: you only get very short lived enjoyment then crave the next purchase due to hedonic adaption. I’d suggest looking into give some of your income to effective charities: take a look at giving what you can. I found the book Happy Money useful as well. Enjoy, it’s a nice problem to have!

This is very true, I think it's worst when you realise shortly after that it hasn't really made you any happier. I've had this a few times and it really drives home that money doesn't bring happiness. 

DireEmblem said:

Is the answer you are looking for the right ‘balance’.

If you don’t need to spend all your income, then it opens up to you multiple options. 

1) You could retire earlier as you require less funds to work on.
2). You could work on reducing your fixed expenses(mortgage) to further lower costs in the future.
3) You could invest to generate passive income.
4) You could cut back your working hours.

There are multiple options open to you, and only you know what would be best for you.

Some interesting food for thought, I'm sure future me will be thankful when I have options to hopefully retire early/work reduced hours later on in life.

kangoora said:

That is something only the individual(s) themselves can answer. Jam now or jam tomorrow, with the proviso that taking the jam now means you delay getting it tomorrow.

In our case we always had a low mortgage relative to income (very good combined salary) and never aspired to that 'executive' house we could have afforded on our salaries (Northern England which helps), we bought 1 'new' car in 30 years (pre-reg at 40% off list price), always maxed out pension contributions (just because Dad said it was a 'good' thing to do), designer clothes - none ever crossed our doorstep etc

We did spend a lot on holidays, e.g. cruises, Disneyland, California etc but that was our (and our kids) treat and my specific 'blowout' was a new gaming PC every few years but even then I'd buy 2nd tier and never the latest and greatest. We wouldn't buy cheap for the sake of it and would spend money if warranted e.g. bought a Delsey suitcase set in 1985 which was horrendously expensive at the time, I still use them occasionally 35 years later and they've had to survive being thrown in the back of Hercules and Chinook aircraft. Our Hi-Fi cost £1000 in 1989, apart from a second hand tuner replacement off Ebay that still works fine at 30 years old

End result, I retired at 54, which was 4 years ago. DW wanted to do a few more years to boost her pension but she's retiring next year at 52. If we'd gone for that executive 4 bed and the new BMW in the drive every 3 years I can guarantee I'd still be working now and probably not be looking to retire until well after 60 years old. I actually asked my wife recently if she had any regrets over the last 30 years and she said only not quite being able to afford to put both kids through private school (it was both or none). They've still turned out OK, one will qualify as a teacher this year and the youngest is just about to finish his Masters degree.

On your last point, my Dad retired at 59 through ill-health, never got to do the things he'd planned on in retirement and was diagnosed with early onset dementia at 65 and died at 68 three years later. That definitely affected my views and ambitions to retire earlier than most.

Thanks for your input, I agree with spending on quality if it is going to last, especially if it is something that will give you many years of enjoyment e.g. a hifi. We have no interest in keeping up with the Joneses so new BMWs or flashy houses that we can't really afford won't be an issue, we hope like yourselves this will pay off in the long run.
A sobering story reference your dad, that must have been a reality check. I think no matter how many times you hear that you "only live once" and to enjoy the moment, unfortunately it takes a personal experience like that to really take it on board and consciously act on it.

Hope that makes sense, work been hectic (but rewarding) this week and my brain is a bit fried.