Is it frugality... or extreme cheapskate?

[Ted$8roadFan]

Speaking of pizza, I've taken to ordering carryout lately. (Apologies to Zachary, should he read this.) I live near enough to Pizza Hut that I figured out that, even at the IRS mileage rate, it's faster and cheaper for me to go get the pizza myself than to have it delivered. (The only exception is if something's going on at the house where I don't want to leave; e.g. we have people over).

A lot of people are doing that, especially if they're close to the store. I get it -- the mysterious 'delivery charge' that I certainly get none of, tipping, all of that. At least you're not a dick about it. There's an apartment complex behind the store, that depending on the building, it's faster to just walk. I've walked deliveries there before. I don't mind 'I don't want to pay the extras, so I'll go get it myself'. It's the "I mind the extra charges, so I'm going to order and take it out on the guy that drives the car" that bugs me.

Our favorite (non-chain, local) pizza place at one point had a small discount or some incentive to pick up our pizza ourselves because they had such a hard time finding and keeping drivers.

[Max Rockatansky]

We go get our pizza from the local restaurant which is two miles down the road.  It's not worth the delivery fee charge for a two mile drive.  They even offer uncooked pizzas which save us about $6 dollars if we are inclined bake ourselves (my wife pretty adept at it).

[bing101]

All I can say about frugality depending who you look are people looking at their actions now with long term effects implications when it comes to their budgets. The people I see that claim to be Frugal and Cheapskates look at Warren Buffett and his home as a framework on how to live their lives.
https://medium.com/live-your-life-on-purpose/warren-buffetts-frugal-lifestyle-is-the-secret-to-happiness-e06e739e5790
Who would "Frugal and Cheapskates" look up to if Buffet were to leave?
Who is your candidate that this group would look up to?

[Rothman]

All I can say about frugality depending who you look are people looking at their actions now with long term effects implications when it comes to their budgets. The people I see that claim to be Frugal and Cheapskates look at Warren Buffett and his home as a framework on how to live their lives.
https://medium.com/live-your-life-on-purpose/warren-buffetts-frugal-lifestyle-is-the-secret-to-happiness-e06e739e5790
Who would "Frugal and Cheapskates" look up to if Buffet were to leave?
Who is your candidate that this group would look up to?

The idolization of Warren Buffett glosses over the fact that he's just as cutthroat, if not more, as any other businessperson (IMHO, he's also a jerk if you look at his life comprehensively).  He also did not amass his fortune just through frugality, but by having a good mind for quantitative analysis and therefore increasing his chances of making good investments through evaluation.  He coldly followed his analysis and invested accordingly, which a lot of other people would think as very risky if they did the same things themselves. Therefore, looking to him as some sort of paragon of frugality seems misplaced.

Having only recently come to a financial milestone in my life where I at least have a net worth in the black, I'm not sure there is a perfect role model out there.  Dave Ramsey's blind to the fact that some people have worked themselves into such a hole that they don't have enough hours in the day or capacity to earn enough to get out.  Suze Orman has been legitimately lampooned for similar reasons ("What do you mean you can't save up an emergency fund living paycheck to paycheck?").  I admire those who are able to save up for a few years and are somehow able to "retire," but that's not in my cards given my income level and frankly, desires (e.g., travel).

Just seems that people's financial dreams are all different and therefore they need a conglomeration of advice or examples to achieve them.

[Takumi]

All I can say about frugality depending who you look are people looking at their actions now with long term effects implications when it comes to their budgets. The people I see that claim to be Frugal and Cheapskates look at Warren Buffett and his home as a framework on how to live their lives.
https://medium.com/live-your-life-on-purpose/warren-buffetts-frugal-lifestyle-is-the-secret-to-happiness-e06e739e5790
Who would "Frugal and Cheapskates" look up to if Buffet were to leave?
Who is your candidate that this group would look up to?

"Frugal"  and "ownership of a Mk4 Jetta"  don't belong together. Although the photo in the article itself shows a Camry, which is much less of a money pit.

[formulanone]

All I can say about frugality depending who you look are people looking at their actions now with long term effects implications when it comes to their budgets. The people I see that claim to be Frugal and Cheapskates look at Warren Buffett and his home as a framework on how to live their lives.
https://medium.com/live-your-life-on-purpose/warren-buffetts-frugal-lifestyle-is-the-secret-to-happiness-e06e739e5790
Who would "Frugal and Cheapskates" look up to if Buffet were to leave?
Who is your candidate that this group would look up to?

"Frugal"  and "ownership of a Mk4 Jetta"  don't belong together. Although the photo in the article itself shows a Camry, which is much less of a money pit.

Berkshire Hathaway owns over 100 automobile dealerships, so perhaps Warren Buffett doesn't pay a cent for repairs and maintenance.

[Ted$8roadFan]

All I can say about frugality depending who you look are people looking at their actions now with long term effects implications when it comes to their budgets. The people I see that claim to be Frugal and Cheapskates look at Warren Buffett and his home as a framework on how to live their lives.
https://medium.com/live-your-life-on-purpose/warren-buffetts-frugal-lifestyle-is-the-secret-to-happiness-e06e739e5790
Who would "Frugal and Cheapskates" look up to if Buffet were to leave?
Who is your candidate that this group would look up to?

"Frugal"  and "ownership of a Mk4 Jetta"  don't belong together. Although the photo in the article itself shows a Camry, which is much less of a money pit.

The frugal billionaire shtick is kind of pointless, even if Warren Buffett literally eats at McDonalds. But at least he's not like this guy:

https://www.mansionglobal.com/articles/in-miami-a-waterfront-estate-with-two-homes-sells-for-a-record-106-875-million-01662144514

[Takumi]

All I can say about frugality depending who you look are people looking at their actions now with long term effects implications when it comes to their budgets. The people I see that claim to be Frugal and Cheapskates look at Warren Buffett and his home as a framework on how to live their lives.
https://medium.com/live-your-life-on-purpose/warren-buffetts-frugal-lifestyle-is-the-secret-to-happiness-e06e739e5790
Who would "Frugal and Cheapskates" look up to if Buffet were to leave?
Who is your candidate that this group would look up to?

"Frugal"  and "ownership of a Mk4 Jetta"  don't belong together. Although the photo in the article itself shows a Camry, which is much less of a money pit.

Berkshire Hathaway owns over 100 automobile dealerships, so perhaps Warren Buffett doesn't pay a cent for repairs and maintenance.

Sure, but if you want to emulate him...yeah, get another car.

[ZLoth]

When I talk a look at this home, the things that I think of are as follows:

• How much are the property taxes?
• How much are the utility bills?
• How long does it take to clean that size of a home especially that it's a two-story?

I'm sure it's a nice home, but it's just too big for me.

[JayhawkCO]

How long does it take to clean that size of a home especially that it's a two-story?

It probably initially took a long time to set up the cleaning service, but now they're probably just on a schedule.

[Scott5114]

How long does it take to clean that size of a home especially that it's a two-story?

It probably initially took a long time to set up the cleaning service, but now they're probably just on a schedule.

Right? I think if I were to hit the lottery, I wouldn't necessarily upgrade my house to be too much bigger; beyond about five or six bedrooms I would struggle to come up with things to do with the space...but I would hire someone to help run the house. Having someone to do the dishes so I don't have to sounds way more luxurious than having a 15-bedroom mansion.

[NJRoadfan]

Warren Buffet already lives in what would be considered a $1+ million "mansion" in other parts of the country. Good for him being content, but it's far from "modest".

I seem to recall Suze Orman's early newspaper articles telling people to get into serious debt like college loans because it was "good debt" or something ("Don't worry about it!") like that and it would be paid off later. Seems her tune has changed on that. Wish I kept that article though, it was a hoot.

Dave Ramsey is popular simply because so many people are lousy with money that they make his techniques look like magic. Financial literacy is pretty poor in this country. A good percentage of the people featured on Ramsey's clips would buy more junk/non-essentials before putting food on the table or a roof over their head!

People are also pretty damned lazy and won't even do what websites call "hacks". Things like asking if there is a discount for paying in cash, cutting coupons, or stocking up on sale items. Way too many people focus on stuff like monthly payments, leading to paying more for things like cars and insurance (paid in full policy discounts have saved me thousands over the years). I never lease cars and even when I did trade a car after 3 years, I still came out ahead. I also don't have to deal with the pressure of having to find a new car when the lease period ends or worry about going over mileage.

Debt sucks. If there is one thing Orman gets right is that it allows other people to control and manipulate you on top of the anxiety it brings. Ever wonder why federal security clearances check your finances? Because you are more likely to take a bribe in exchange for state secrets.

[ZLoth]

As far as I'm concerned, there are only the following "good" debts:

• Short term debts that are paid off immediately.
• 0% financing on large purchases provided that you follow the terms.
• Loans where you can deduct the interest and property taxes, like a mortgage.

All must be within reason, of course. As I have stated before, I put all of my bills except my mortgage on my credit card, but that credit card is paid off every month (because it's one of the higher interest cards), and I get money back at the end of the year. I did use 0% financing when I replaced my air conditioner (paid more for a energy efficient variable speed) in 2020, and had it paid off within a year.

Yes, a mortgage is "good debt", but with caveats. In the past two years when, for multiple reasons (low interest rates, high demand for home because more space was needed), we had a surreal estate market, and people were trying to get into a home... any home... and were making some questionable decisions in the name of Fear Of Missing Out (FOMO), including waiting home inspections and appraisal contingencies, and are in homes that they can barely make the payments on, never mind the . With the rise in interest rates and the corresponding decrease in home demand, there is now a price correction, and some of these folks are now underwater. While I admit that I purchases my home in a slight rush, I also had my mortgage set up "ready to close", and did my research ahead of time, and stuck with my budget. Three years later, I am satisfied with my decision with my "modest" home especially when I look at the nearby apartment rental prices and home values. In my state, the homestead exemption which caps the rise in property taxes only applies to primary residences, not rental homes, and this year's assessments are going to be hard for those landlords who will pass that cost along in the form of a stiff increase in the rent.

As for car leases, I'm sure that the model fits some people, but I haven't found a business cases where it works for me. Because of the mortgage above, I'm holding off on purchasing a new car until after my home is paid off, plus the current car market is not in a good state to purchase a good car at a decent price. And, it'll probably be that way for another year.

I do agree that "financial literacy" education is in a sad shape. Some of this falls upon the parents who aren't great with finances themselves. Part of good financial planning is figuring out what is important to you first, and how you want to accomplish it. For me, the priority means I save up for retirement, followed by paying off my home. This means I will only take a good vacation every few years.

[Rothman]

Student loans are indeed horrible nowadays.  We've gone from really being able to work through college (aside from some outliers that will probably die of a heart attack in their 40s), to Gen X low interest rates (<3%) to Gen Z loan shark rates (8%+).

Having two kids in college myself, have to say my kids managed their debt a lot better than I did (both graduating with minimal outstanding debt).  I'm still aghast with the burdens placed upon kids nowadays though:  They have to be more exact with guessing what the job market will be like years down the road so they don't get a useless degree and then they have to be financial wizards to avoid being strapped for the next few decades.

Our society is a dystopia.

[Ted$8roadFan]

Higher education is in deep trouble. 

[jeffandnicole]

I half-wonder if the mortgage interest deduction is overly relied on. The standard deduction for 2022 is $12,950. Married filing jointly is $25,900. Head of Household is $19,400.  If someone has no other deductions to itemize, that's quite a bit of interest one has to accumulate to make itemizing worthwhile, which means they either have a high-priced house, high interest rate, or both.  That's fine if it's affordable, what they wanted or within their budget. It's not fine if they went a bit overboard.

Or let's think of it this way: a single person paid $13,000 in interest. It's more advatagous to itemize. But they would've gotten $12,950 anyway. Are they deducting $13,000 of interest... or $50?

[Rothman]

I half-wonder if the mortgage interest deduction is overly relied on. The standard deduction for 2022 is $12,950. Married filing jointly is $25,900. Head of Household is $19,400.  If someone has no other deductions to itemize, that's quite a bit of interest one has to accumulate to make itemizing worthwhile, which means they either have a high-priced house, high interest rate, or both.  That's fine if it's affordable, what they wanted or within their budget. It's not fine if they went a bit overboard.

Or let's think of it this way: a single person paid $13,000 in interest. It's more advatagous to itemize. But they would've gotten $12,950 anyway. Are they deducting $13,000 of interest... or $50?

The new higher standard deduction (was it set to expire like other elements of the bill?) did throw things out of whack, but if you're itemizing when you should be taking the standard, you need to do what the government has been incentivizing everyone to do:  Buy tax preparation software.

Of course, the higher standard deduction did kill billions in charitable giving since the tax incentive dissipated.

Also remember that deductions are not a straight subtraction off one's tax bill, but adjustments to one's taxable income.

[Max Rockatansky]

Higher education is in deep trouble.

I don't really think the institutions are in trouble per se.  What is more in trouble is the mentality that going to college is manifest destiny for all.  Or at the very least, is the benefit of going to college versus seeking a career that doesn't require a huge amount student loan debt.

[NWI_Irish96]

Higher education is in deep trouble.

I don't really think the institutions are in trouble per se.  What is more in trouble is the mentality that going to college is manifest destiny for all.  Or at the very least, is the benefit of going to college versus seeking a career that doesn't require a huge amount student loan debt.

I think you'll see college attendance continue to increase, but the distribution will change. You'll have fewer people, especially among those not planning on going into law or medicine where grad school admission is ultra-competitive, opting for private universities over state schools, and you'll have more people in general opting for online and regional public institutions over the big state schools.

While I absolutely loved my experience at Notre Dame, and to a certain extent you can't put a price tag on that, the value added came nowhere close to what I had to pay in loans and interest.

[Max Rockatansky]

Higher education is in deep trouble.

I don't really think the institutions are in trouble per se.  What is more in trouble is the mentality that going to college is manifest destiny for all.  Or at the very least, is the benefit of going to college versus seeking a career that doesn't require a huge amount student loan debt.

I think you'll see college attendance continue to increase, but the distribution will change. You'll have fewer people, especially among those not planning on going into law or medicine where grad school admission is ultra-competitive, opting for private universities over state schools, and you'll have more people in general opting for online and regional public institutions over the big state schools.

While I absolutely loved my experience at Notre Dame, and to a certain extent you can't put a price tag on that, the value added came nowhere close to what I had to pay in loans and interest.

My wife and I have had massively different approaches to our careers.  I basically only went to college at local schools when I had money and time, I sought out field experience early.  My field is heavily reliant on experience over education, her's is the opposite but is way more competitive.  She on the other hand went to a big four year school and incurred student debt from it.  I'm still at present moment ahead of her by about 20% on pay but I was able to invest far more since I didn't have student loan debt.  I predict she will pass by base work income in the next decade.  That's a pretty long game to play to get into a competitive field to only really have it start paying off approaching a decade and half working. 

If I could do it again I would have enlisted and took advantage of GI Bill.  Military experience generally equates in what I do so it could have been a potential boon to get a free four year degree. 

[J N Winkler]

Just a few observations:

*  Warren Buffett was a congressman's son, so he was born on third base, and early in his career he was also a finance bro, so his fortune was seeded by successful speculation.  He is also a classic example of how the investment opportunities open to you increase with the amount of money you have available to invest.  He did not become the Sage of Omaha as a retail investor or solely through value investing.

*  The FIRE gurus (Mr. Money Mustache being a classic example) tend to underplay the fact that their lifestyles are possible as a result of great financial success early in life, typically as a result of involvement in tech startups that took off.  Much of what they suggest amounts to "it takes money to save money."

*  Dave Ramsey is selling a message of redemption to the income-constrained working class:  it is no accident that much (nearly all?) of his shtick consists of holding up people who make money-management mistakes and saying, in effect, "Don't be like these degenerates."  Hence the constant use of words like stupid and wise in morally loaded ways--direct quote:  "100% of the people that built wealth saved money, on purpose, a lot. Some people do it poorly in a stupid money market account and make no money on their money. Others do it wisely in mutual funds that outperform the S&P 500."  It's not dispensing financial advice in a neutral manner:  it's building engagement through appeals to tribalism.

[abefroman329]

Higher education is in deep trouble.

I don't really think the institutions are in trouble per se.  What is more in trouble is the mentality that going to college is manifest destiny for all.  Or at the very least, is the benefit of going to college versus seeking a career that doesn't require a huge amount student loan debt.

I agree that (a) college isn't for everyone and (b) there are a ton of jobs that require a college degree, but shouldn't, but if you think the situation with student lending for higher ed is bad, well, the trade schools and coding bootcamps are even worse.  With the latter, I took a data analytics bootcamp that was worth its weight in gold, but they didn't require a college degree to enter the program.  Never mind the fact that almost all of the jobs it was training you for required a college degree...

[kphoger]

My wife attended college for one semester back in 2000.  We still haven't paid off her student loan.

Last year, we finally had enough in the bank to pay it off entirely.  But I knew our car was on its last leg, and I didn't want to pay off the last of our debt only to be stuck with having to buy a new vehicle.  But neither did I want to spend that money to buy something that's salable (a car) and be left with debt that's not (a student loan).  So I decided to just sit on the money and do neither.  People thought I was being foolish.  Then, later that year, the car threw a rod.  So now we have a new vehicle, but we also still have student loan debt.

We also don't know if it will qualify for Biden's student loan forgiveness program.  We meet the income requirement and she was a Pell grant recipient–however, the loan was government-backed but privately issued, the program it was issued under hasn't existed since 2009, and the loan has changed hands under consolidation two times over the years.  It's one of those grey areas.

[abefroman329]

the loan was government-backed but privately issued

Then it should qualify

the program it was issued under hasn't existed since 2009

Shouldn't matter

and the loan has changed hands under consolidation two times over the years.

Also shouldn't matter

[kphoger]

and the loan has changed hands under consolidation two times over the years.

Also shouldn't matter

Yeah, well it's this part that gives me question marks:

Consolidated loans are eligible as long as all of the underlying loans that were consolidated were first disbursed on or before June 30, 2022. If a borrower consolidated federal loans into a private non-federal loan, the consolidated private loan is not eligible for debt relief, according to [the Department of Education].

We'll have to dig into it some more.