mad anthony

Rants, politics, and thoughts on politics, technology, life,
and stuff from a generally politically conservative Baltimoron.

Friday, June 13, 2008

Deferred gratification... how long should you defer?

I've long been cheap. The kind of person who buys stuff on sale, goes out of his way to save money, and is always looking for new sources of income. I use coupons. I brown-bag my lunch. I never leave a clearance rack unbrowsed. I shop yard sales, goodwill, salvation army. I sell on eBay, at hamfests, on I have two savings accounts. I once spent 8 hours outside an Ikea for a free chair. I've taken books out of the trash at work to resell. I never turn down overtime, including once sleeping in my cube during a hurricane.

Because of that, I've managed to save a decent amount of money. I was able to put 10% down when I bought my house - not a fortune, but not bad for an at-the-time single 25 year old working for a college. I paid off my truck, have 3 months income stashed in a difficult-to-access online savings account, put 2% of my income in my 401k (my employer matches 12%) and have still managed to save a decent amount. Which begs the question - what should I do with it?

My plan has been to save up another 10% of the cost of Casa De Mad, and pay that off from my house, which would allow me to drop PMI (private mortgage insurance), which would save me ~$100 a month. It would also save me money in mortgage interest. Of course, paying mortgage debt is worse than not having debt, but better than having any other kind of debt, since it's tax-deductible and cheap. If I can keep up my current savings rate, I should be able to do that by next year.

But sometims I wonder if I should use that money for something else - like a Porche.

I've long toyed with the idea of buying a gently used, medium-high-end sports car. The Ranger I drive now is great for hauling and in snow, but I've always wanted something sporty, preferably a convertible. Some of the models I've thought of are the Porche Boxter, Chevy Corvette, Nissian 350z, Chrysler Prowler (hey, it looks cool), Chrysler Crossfire (hey it's Mercedes for 50% off!) and Toyota MR2..

My plan was to pay off 10% the house first, then save enough for a down payment on the car, buy it with financing, then quickly pay off the loan.

But what if I don't wait? What if I do it soon? If I don't, will I have the chance to later?

In the past few months, we've lost two employees where I work who were in there 40's or 50's, with young kids and who were, as far as everyone knew, in good health. It's served as a reminder that life can be cut short when you least expect it. Which means that you shouldn't put off things you want to do, because you may put them off to a time that's too late.

Of course, you probably won't die soon. The trick is finding a balance - being responsible enough that you can afford to live a long life, but still spending enough to do the things you enjoy, so that if you die tomorrow you have at least some things on your "to do before I die" list crossed out.

I've always leaned towards the deferred gratification side, saving money and spending it on "responsible" things like buying a house (which, given the market, turned out to be completely irresponsible, but that's a whole 'nother issue). Part of the house-buying thing, I suppose, was in the hope and expectation that at some point I would find someone to settle down with, but that hasn't been going too well of late. Of course, on the off-chance I ever find a woman who can put up with me, I'd probably no longer be able to do things like buy a sports car, so maybe I should do it now.

As much as I would love to be rolling in something small and red, I don't know if I could ever to that, if I could bring myself to not put off spending a bunch of money on something that I probably shouldn't, even if I would get a ton of enjoyment out of driving it.

Of course, the deferred gratification thing applies to more than just how you spend your savings. I put no real effort into dating for years, and now it's biting me in the ass because all the good ones (and most of the bad ones) are taken. And I can't help but wonder if I haven't spent enough time with my parents. They won't be around forever, but I only visit them a few times a year, and have cut short planned visits for work or skipped them for other things, like Hamfests. While it's somewhat unlikely that I won't make it to my retirement, there will be a time that my parents won't be here, and I should be spending more time with them while they are.


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