More is ALWAYS Better…(or is it?)
November 05, 2010I saw the movie “Supersize Me” recently. (Yeah, it’s been out a long time and I’m just now getting around to it! But I HAVE seen every Disney and Pixar movie made in the last 10 years.) One part of the message that I heard in the movie was that “We’re Americans! Bigger is better!!!”
The “bigger is better” mentality permeates our society, and excess is often rewarded. Just look at any Red Carpet event and the attention heaped on celebrities for proof. But, can this culture of excess be a bad thing financially? I think so.
Can saving money be carried too far? Possibly! I met a woman who was 68 years old (widowed since age 50) and working full time. She was contributing 20% of her income to her 401(k) plan and had a balance in excess of $800,000. She earns about $37,500/year, which means she is living on a gross income of $30,000 per year ($2,500/month BEFORE taxes). Yet she felt unable to retire from a job that she hated, and she felt under financial stress because of living on a “limited budget.” (I won’t ask who had limited it.) She was afraid of retiring and running out of money, yet her Social Security and company pension would provide an income higher than her existing income. Her strong desire to save money created a situation where she worked at least 10 years longer than financially necessary because she didn’t realize that she was financially secure.
Her plan was to continue to scrimp and save and retire at age 70, with the hopes of being able to “just get by.” When we met and reviewed her financial position (the first time she had ever sought help with her financial situation), she looked relieved when we determined that she could live very comfortably without eroding her nest egg.
She reached the point of financial independence years ago but continued to work and save aggressively (foregoing some comforts in her life) because she didn’t think she “had enough.” She thought she needed more. In her case, more wasn’t really any better.