Here’s the new car, embarking on its first camping trip soon after I took delivery.
As I write this, I’m navigating the complexities involved in purchasing a 2023 Tesla Model Y, a rather pricey, luxury “crossover” teeming with indulgence: all-wheel drive, acceleration that outpaces a Lamborghini, ample space for seven passengers, and enough technological features to operate as a small Google data center.
Update: Looking for the ongoing tracker page? It can be found at “The Model Y Experiment.”
After taxes and tax credits*, the total net cost to me will be approximately $52,000, which is remarkably higher than the Honda van I’m replacing. I bought that trusty old vehicle for $4,500 twelve years ago via Craigslist, and it served me well until last month, traversing the mountains and deserts across the country and aiding in the renovation of many houses in my vicinity.
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As a person who focuses on frugality in financial matters, I’m also recognized for my disdain for car culture – I believe that most individuals utilize cars far more often than necessary and tend to drive vehicles that exceed their financial means. So why am I purchasing a new one?
From the first three paragraphs, it’s clear that I’m feeling a good deal of self-mockery and amusement regarding this purchase. If you also have a naturally frugal mindset, you may relate to these thoughts and likely agree that I’m being irrational.
Nonetheless, I remain committed to frugality and consistent self-mockery. This life philosophy led me to an early retirement 18 years ago, granting me the freedom I cherish today.
It was also the principle that helped me avoid buying this costly car for the past four years, even with numerous friends and online acquaintances encouraging me to loosen up and indulge myself.
However, there’s a classic adage relevant in many aspects of life that I like to reflect on from time to time:
“What got you here,
Won’t get you where you’re going.”
How does this wisdom relate to frugal living and maintaining a fulfilling early retirement?
A brief anecdote from a recent grocery store trip will clarify:
I was in the bakery aisle, looking to purchase a loaf of Dave’s Killer Bread for breakfast with some friends visiting the next day. Unfortunately, since this was a regular grocery store rather than Costco, the bread was priced at an astonishing $6.99 per loaf (compared to the $4.50 I’m used to paying, and even at bulk stores, it's about double the price of standard bread).
“DAMN YOU KING SOOPER’S!”
That was my initial reaction.
“WHO DO YOU THINK YOU ARE SELLING BREAD FOR SEVEN DOLLARS!!!”
Then I engaged in a mental struggle that I call Grocery Shopping With Your Middle Finger:
“Should I just boycott this ridiculousness?”
“Are there any other competing brands worth trying?”
“What alternatives can I consider for bread for breakfast?”
Eventually, after exhausting all other options, I resolved on the right choice:
“JUST BUY THE BREAD, YOU DUMBASS!”
"Because you’re not going to wake up in the future, glance at your bank account, and think, 'if only I had an extra $2.49 in there, I would be happier.'"
That evening, I returned from the store and recounted this amusing story to one of my guests. He completely understood because he too had achieved his retirement through years of hard work and deliberate frugality. Even though his net worth significantly surpasses mine, he confessed that he encounters the same mental struggles when it comes to treating himself.
This same friend generously contributes to charitable causes, has supported a local school for decades, and is always quick to offer financial support to friends in need or those seeking a reliable business investor.
Yet, he finds it difficult to take an Uber to the airport instead of opting for the longer bus ride.
We both recognized that we were being overly frugal with ourselves and needed to improve on this front. Consequently, we conceived three ideas aimed at helping us enjoy our hard-earned savings more fully while still alive:
1. The Minimum Spending Budget,
2. The Dedicated Money Wasting Account,
3. The Splurge Accountability Buddy.
Principle #1: The Minimum Spending Budget:
Imagine you’ve excelled over the years and built a hefty portfolio of productive investments worth around two million dollars. This amount is significant for most people, and the point is that this hypothetical individual is in an enviable position.
However, many Mustachians I know who have this level of wealth maintain very frugal lifestyles, typically spending under $40,000 per year. Moreover, they usually live in a mortgage-free home and often have additional income from a small business or two.
According to the 4% rule, this individual can safely spend up to about $80,000 annually from their nest egg, even without earning any other income.
For
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Here’s the new vehicle, on its inaugural camping excursion shortly after receiving it. As I write this, I'm navigating the different steps involved in purchasing a 2023 Tesla Model Y, which is quite costly...