Cash be flowin’

March 9, 2011 · 26 comments

Living 1.300 miles from Girl Ninja is no fun. It’s only been a few days, but I’m already missing her like crazy. We aren’t fans of the long-distance relationship, but we’ll make it work. Although our situation is not ideal for marriage, it comes with one major perk: Some serious positive cash flow.

We’ve always kept a pretty tight ship when it comes to our money. We invest 15%, tithe 10%, spend what we have to, and save the rest. We’ve been doing our best to be good stewards of our income. After all, what kind of personal finance blogger would I be if I was totally getting pwned by our money? Answer: A pretty sucky personal finance blogger.

Over the next four months, Girl Ninja and I will see a decrease in our expenses, and a serious increase in our discretionary income (to the tune of about $1,800/month). I don’t know about you, but having that much extra coin makes me a very happy ninja.

I’m stoked because we have a chance to make some big strides towards our goals. We can start a Roth for Girl Ninja, we could add to our ‘down payment’ fund, or we could even use this as an opportunity to spend a little more frivolously… you know to buy that Justin Bieber cutout I really want.

Honestly, the personal finance nerd in me says “Take it all to the bank”, but the Ninja in me says “Quit being such a frugal fruitcake“. I mean, at some point there has to be a such thing as “over-saving”…right? At some point lifestyle inflation is expected, isn’t it?

Right now, we have no clue what we will do with the extra money. We’ll probably buy Girl Ninja a ticket to Germany so she can come visit me while I’m there. We’ll probably save a good chunk of it. And we’ll probably buy that Justin Bieber cutout I mentioned earlier. Ah decisions, decisions.

Do you believe in over-saving? What’s the different between being frugal and miserly? After saving what percentage of your income, would you finally loosen up and indulge a little?

1 Angela

I don’t know if there is a specific percentage of my budget that I would stop saving, I haven’t really reached that point yet. However I personally feel that if you get to a point that you’re saving for the sake of saving and that is just your goal and it’s getting in the way of socialising/general human interaction or you know re-using a tea bag 3 times there is a point that you need to step back and consider if its worth it.

2 Blue Shoe

Long distance can be difficult – done the America – Japan thing before. But if you’re good about communicating and making each other feel loved and thought about, it’ll be all right.

And I’m undecided about the cutout. What are you going to use it for? Rubber dart target practice?

3 Mo D.

I believe there has to be a balance; as the saying goes “you can’t take it with you”, though I’m sure my FIL will find a way when his time comes. I think it’s AWESOME that you and GN are so young and able to sock so much away every month (as well as planning for you retirements), but I hope you also take the time to smell the roses and have a little fun… occasional rewards for all your hard work make it all worthwhile ;-)

I find that when we have the extra money at the end of the month, I’m WAY more frugal and want to hoard every penny… and I guarantee I’d never spend the dough on the Justin Beiber cut-out LOL!

4 Will @ HackingTheBank.com

I think there’s definitely such thing as over-saving, just as there is over-spending. The key is to find the balance that lets you live the life you want at all times. Some waste away their money as they get it and suffer in the future. Others save too much and focus only on the end, and not the journey. You’re making super duper great progress toward your goals. I don’t think that spending some of this extra money is going to hurt you financially. I think you can have some great times and make some terrific memories with the money, such as bringing Girl Ninja out to Germany with you. I full-heartedly hope you decided to take the leap and do a few things like that. Down the road you’ll be glad you did.

5 Summer

I agree with those above who have said balance is good. You need to be able to enjoy your money. If I were in your situation, I would probably use some of that extra money on a fun trip with my significant other…maybe you and GN can meet somewhere in the middle on a weekend and have a nice mini-vacation together. Saving that money (especially if it can go towards your down payment in the future) is great, but you should get to enjoy a little of it now :-)

6 Kevin @ Thousandaire.com

When you’re doing all the right things like saving money, tithing, and just being cheap in general, I think it’s important to reward yourself. You deserve it.

7 Amy

Yes, I think there is a thing called oversaving, in fact, I’m totally guilty of it! My husband and I (51 and 45, respectively) have no mortgage, no car payment, no student loans…no debt at all. We each save 15% in our 401(k), save about $60 each pretax per week in an HSA (we have a HDHP), and then I save over 33% of our take home pay. Just as there are compulsive spenders, there are also compulsive oversavers. We do spend money on overseas travel, some concert tickets, we dine out once a week (well, usually with gift cards we got through points redemption of some kind!), go to the movies about once a month, etc. But I’m always trying to SAVE SAVE SAVE and look for the edge (let’s charge this dinner on Discover since it’s 5% back, groceries on Chase since it’s 5%, etc.). I have had to ask my husband to tell me very pointedly if he wants something, since my first reaction is always to save instead of spend.

8 psycharah

I’m glad to hear that GN might go to Germany to see you. That’s what I’d spend some of the extra cash on for sure. When DH and I had to live apart, money was beyond tight, and our biggest indulgence was long distance bills. We spoke daily, even if only for a few minutes. We only got to see each other every few months if we were lucky. Also, if you don’t already have webcams, get them! They are cheap, and there is something so different about seeing your loved one and having a face to face conversation-miles better than just the phone!! Good luck with surviving being apart and managing the balance between savings and fun :)

9 Jen

Over-saving can easily become miserly behavior. The key difference between frugal and miserly is how you feel the pinch. If you are living comfortably on your current income, then save the majority of the increased discretionary income. If you always deny yourself the basic luxuries of life (like good wine and cheese!), then loosen up the purse strings.

If it were me, I would save 80-90% of the newly freed-up income, and spend the rest (or at least save it for short-term spending, like an upcoming trip together).

10 First Gen American

Me personally, I’d save most of it, and use some for a vacation. I have never regretted money I spent going on vacations before the kids were born. It’s so much cheaper only having to buy plane tickets for 2 people instead of 3 or 4. Once kids hit the picture you’ll have reduced income and increased expenses. And if you buy a house, that is a whole other black hole that money goes. There’s nothing wrong with saving a lot now…this type of cash flow will not last forever, so take advantage of it while you can.

11 Jessie's Money

Long Distance is soooo hard, good luck with that!

remember saving it for later is just planned spending. So save some and plan to spend some and have a little fun (visit each other!)

12 shoppingtosaving

I would save as much as you could while you can. The plane ticket to germany is a good idea. Also traveling to visit each other would be money well spent.

13 Larry

I’ve seen those Justin Bieber cutouts on the ‘Net from $24.99-$49.99. So yeah, I think you can get the deluxe model, and you’ll even have something left over.

14 CityFlips

Ugh…long distance is not so much fun. A good chunk of my budget goes towards that. I try to save at least 15% of my meager grad student income right now. I think about what percent of my income I will save when I get a “real” job and the honest answer is “I don’t know.” I will max out any retirement benefits plus an IRA. Plus I want some investments that are fairly fluid and an emergency fund. I’d like to make up for lost time in the savings world. Right now, my savings goals are short term and relate to what I may need when I graduate (e.g., furniture, down payment on an apartment, other moving expenses). I think that’s a pretty good goal for now. When I have a “real” income I’ll probably spend more from day to day than I do now, but not by much.

15 Investing Newbie

I don’t know if I believe in over-saving, but if it does exist, I’m guessing it would be that point where saving that next dollar doesn’t mean anything to you. It doesn’t bring you any closer to any goals you have and it doesn’t make you any more comfortable. At that point, I’d say start donating more to charity or enjoy that money with a luxurious vacation.

16 Sara

I’m one of those people who can always figure out how to spend some money, so much so that I even have an ongoing “wishlist” of sorts for things that I would like to afford, but aren’t at all priorities. If I ever happen across extra money, I usually look at that list and figure out what to go for. Generally the things on it are things I’d like to do, such as take a weekend vacation somewhere, do some cosmetic dental work, take some classes at my work, etc. The ticket to Germany is a great idea, maybe you guys could also plan a weekend get-away while she’s in Europe with you? Nothin like spending extra money on experiences together that you both will cherish! :)

17 momninja

Definitely bring GN to Germany and spring for a first class train ticket for your adventure to celebrate your time together. Save also as I know you will.

Now seriously JB cutout is so last year wait for the newer one with his new hair style.

You should also buy Mom Ninja something pretty because your readers think she’s worth it…..

18 StackingCash

I second the “buy Mom Ninja something pretty” idea!

19 Mo D.

Third vote for buying Mom Ninja something pretty!

20 StackingCash

I’ve been trying to find the balance between saving and spending for quite some time now. So far the best advice I’ve read was to set a percentage of your income dedicated for fun. Unfortunately, I still find it difficult to set that percentage! This is another reason I don’t like budgets, they can be too restrictive and “life” is way to “flexible.”

Another way to spend wisely is to have saving goals, like your ticket to Germany and a new home. The worst goal for me is retirement. I don’t think we can ever save enough for that…

21 Ana

You could save 50% of your extra money and spend the other half. But I’m not really sure about the cutout, I mean, what exactly are you gonna use it for ???? haha :)

Ohhh good luck with your long distance !!!

22 krantcents

If all you do is save for some future date, you will crack! You have to enjoy the journey as well. I would set aside some of the savings for the fun stuff. It can be something as simple as a weekend away. We all need encouragement in the form of a reward.

23 Austin

Just wrote about a similar thing! What my wife and I are considering lately has been how much to save vs. how quickly to pay off our debt. I’d love some feedback! We’re saving on the order of 25% of our income, but a lot of that is going toward some debt payoff… so I guess we’re not really saving it? Shoot. I dunno. Sorry about your living situation, just got married myself and I’d hate to have a long-distance relationship again!

24 DonCarlos

I agree that there is a point where you can cross into over-saving, though I’m still struggling with the right formula for saving/spending. How we do it now is that we’ll usually set a given savings or debt-reduction goal over a few months, then we’ll lighten up for a few weeks and spend a bit more until we figure out our next goal. It’s far from a science and I want to get better. After our next debt-reduction target is met we’re planning on meeting with a financial planner to have another person that can look at our finances and help us figure it out.

Good luck with the long distance thing –> I did it for a year and it wasn’t easy. I would suggest that you reevaluate after a while and look past the money savings and objectively look at whether this is the best thing for your relationship or not.

25 sonya

I dont know if there is such a thing as oversaving because realistically in this economy having a nest egg can be your life blood. Things may be great now but who knows in the future, that’s why i say save, save, while the cash is good because when you guys buy a house, hell have a baby youll wonder where it all went.

26 Little House

I don’t think there’s such a thing as over saving. Especially since you’re still so young, you have the cash to save up for a down payment and still keep saving for retirement. A lot of people struggle to do this, you are fortunate and can do both. However, I think it’s also okay to splurge on one or two items, like that ticket to Germany. Of course, I wouldn’t condone that Justin Bieber cut out, but to each his own I guess. ;)

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