My wife and I are both naturally stingy people. When drafting our wedding list we spurned the posh department stores and I carefully picked out the lowest price best quality items on Amazon instead. I bought 100 dollar beds and 100 dollar mattresses, and we slept on them for a year and a half because "we're anyway emigrating soon". When we did emigrate, I ended up shipping them and we slept on them for another year and a half, much to my pregnant wife's annoyance.
We might have overdone it given our means at the time, but the truth is this wasn't a bad decision: we put down a mortgage on our house in 2020, and that plus basic furnishings used every scrap of savings we had. Since then house prices in our area have risen about 70%. If we'd been a bit less frugal we might have been permanently locked out of owning a house, and been forced into the cheaper neighbouring apartments instead. On average overspending causes more problems than underspending, and it's far easier to course correct one than the other.
A few months later I started as an L4 SWE at Google, and two years later I was promoted to L5. Without discussing my exact pay package, on levels.fyi you can see that an average L5 engineer in Israel earns $7K in stock each month. I have never sold my Google stock (except to diversify to other stocks), and since I joined Google both it's stock and the S&P 500 have shot up. If I do sell, my tax rate will be 50% on the initial grant and 25% on capital gains.
In short, even if I spent my entire base salary each month, I'd have significant savings just from my stock.
But my spending habits have only recently started to catch up. I've needed to manually learn to look for the solution that best fits my needs, even if the extra cost doesn't seem commensurate with the extra functionality, so long as the total cost is not huge and it's not a regular purchase. I spent 400 dollars on a good set of pots and pans recently even though I could've got a nearly as good set for a 100. But I don't need 300 dollars, and pots are something I use every single day. That decision was difficult for me, and a year ago I would've been searching online for all sorts of cheaper options.
There's lots of ways that small amounts of money can make your life easier or more pleasant, and I've started to ingrain in myself the habit of taking them. Buying a book I'll enjoy even though it's expensive. Taking a taxi if my wife wants the car at the same time I do and it's too far to cycle. Paying for delivery rather than schlepping it myself. Ordering a takeaway when cooking doesn't make sense
The key point is these must be occasional. If I ordered takeaway for dinner every day for my family of 5, I'd be spending an extra 1000 dollars each month just on food. Similarly if I took taxis to work each day. But used judiciously, these options can be a huge help, and have limited impact on my total savings.
The biggest risk is scope insensitivity. Saving 20,000 dollars on a new car allows you to spend 50 dollars on a convenience every single day for a year. It's easy to switch to an attitude where "were spending money now", and find that you've just dropped 250k on a backyard pool. I'm still trying to find that balance where I'm naturally generous with small amounts of money, but frugal with large.
I'm also trying to make sure I don't lose myself in the process. I enjoy setting up IKEA furniture, or going to a shop and working out how to get the damn thing back. I had fun oiling and hanging up the 15 metre wooden trellis in our garden. But all of these are a ton of hard work and it's too easy to get someone else to do them for me because "we have money now", and find myself finding life just that little bit less invigorating.
My wife and I are both naturally stingy people. When drafting our wedding list we spurned the posh department stores and I carefully picked out the lowest price best quality items on Amazon instead. I bought 100 dollar beds and 100 dollar mattresses, and we slept on them for a year and a half because "we're anyway emigrating soon". When we did emigrate, I ended up shipping them and we slept on them for another year and a half, much to my pregnant wife's annoyance.
We might have overdone it given our means at the time, but the truth is this wasn't a bad decision: we put down a mortgage on our house in 2020, and that plus basic furnishings used every scrap of savings we had. Since then house prices in our area have risen about 70%. If we'd been a bit less frugal we might have been permanently locked out of owning a house, and been forced into the cheaper neighbouring apartments instead. On average overspending causes more problems than underspending, and it's far easier to course correct one than the other.
A few months later I started as an L4 SWE at Google, and two years later I was promoted to L5. Without discussing my exact pay package, on levels.fyi you can see that an average L5 engineer in Israel earns $7K in stock each month. I have never sold my Google stock (except to diversify to other stocks), and since I joined Google both it's stock and the S&P 500 have shot up. If I do sell, my tax rate will be 50% on the initial grant and 25% on capital gains.
In short, even if I spent my entire base salary each month, I'd have significant savings just from my stock.
But my spending habits have only recently started to catch up. I've needed to manually learn to look for the solution that best fits my needs, even if the extra cost doesn't seem commensurate with the extra functionality, so long as the total cost is not huge and it's not a regular purchase. I spent 400 dollars on a good set of pots and pans recently even though I could've got a nearly as good set for a 100. But I don't need 300 dollars, and pots are something I use every single day. That decision was difficult for me, and a year ago I would've been searching online for all sorts of cheaper options.
There's lots of ways that small amounts of money can make your life easier or more pleasant, and I've started to ingrain in myself the habit of taking them. Buying a book I'll enjoy even though it's expensive. Taking a taxi if my wife wants the car at the same time I do and it's too far to cycle. Paying for delivery rather than schlepping it myself. Ordering a takeaway when cooking doesn't make sense
The key point is these must be occasional. If I ordered takeaway for dinner every day for my family of 5, I'd be spending an extra 1000 dollars each month just on food. Similarly if I took taxis to work each day. But used judiciously, these options can be a huge help, and have limited impact on my total savings.
The biggest risk is scope insensitivity. Saving 20,000 dollars on a new car allows you to spend 50 dollars on a convenience every single day for a year. It's easy to switch to an attitude where "were spending money now", and find that you've just dropped 250k on a backyard pool. I'm still trying to find that balance where I'm naturally generous with small amounts of money, but frugal with large.
I'm also trying to make sure I don't lose myself in the process. I enjoy setting up IKEA furniture, or going to a shop and working out how to get the damn thing back. I had fun oiling and hanging up the 15 metre wooden trellis in our garden. But all of these are a ton of hard work and it's too easy to get someone else to do them for me because "we have money now", and find myself finding life just that little bit less invigorating.