Life is hard. Between keeping your financial head above water, living in the moment, and simultaneously saving for the future, there are so many variables you have to manage. Do you buy that thing because it’d be nice to have? Do you stay in a lesser hotel to save a few dollars on your trip? For that show you’re seeing, do you spurge on orchestra seats or resolve to the upper mezzanine?
We deal with these dilemmas every day, and if you’re a saver, you probably pretty good at balancing the pros and cons of your spending options.
But despite your best efforts, there are still forces that work against you. They work against you no matter what your resolve is. And frankly, these forces suck.
Last week I talked about something very anti-frugal: the concept of purposely cheaping out on things as opposed to buying high-quality and potentially long-lasting things.
However, there are just some no-go things when it comes to spending money, where I will spend obscenely larger amount to get the highest quality I can. Some of these items are just basic common sense, whereas others you might think are a bit borderline – I’ll let you decide.
And there is something about drugs in here, I promise.
Frugal folk are all about quality. That means buying things of excellent quality and workmanship because they know it’ll last longer or taste better than the cheap stuff. It’s simply a matter of ROI – why buy something for $1 that might break any minute when you could spend $10 and keep it for life?
However, we all have our vices when it comes to cheaping out on things. And personally: I cheap out on quite a few…
And that was day 1. She had resided to spending over $500 for the weekend so she could be a good friend.
Now her friends are nice people. I’ve met them, even went to school and worked closely with one of them, but their desire to give their soon-to-be-married gal pal an experience of a lifetime cost a lot. Maybe not to everyone, but to at least a few people in the group.
So let’s talk about that today with a term I like to call “financial consideracy”, which I define as being considerate to other people’s finances in the spirit of inclusivity (and yes, I know it’s a made up term).
The thing is: those things may appear bizarre to us, but it’s not bizarre to them. It’s a conscious choice they’ve made to become their best frugal selves. And for the record: we are all guilty of bizarre habits. Some people are crazy about folding clothing a certain way, or keeping their book collection meticulously alphabetized (in my youth, I also used to organize all my VHS tapes by production company. Suffice to say, no one could ever find anything but me) – and there’s honestly nothing wrong with that.
So really: we’re all a little weird. And that’s okay. I also do weird things, specifically around saving money and I welcome you to judge me because really, our oddities is what makes each of us special.
Let’s be real: lots of things are out of reach overnight. In all likelihood, you won’t wake up a millionaire. Your dream home won’t magically appear before your eyes. And that amazing job until retirement will likely elude you for many years. In fact, very few of us get what we want and when it comes too easy, we don’t truly appreciate it.
Things take time. The morning you wake up a millionaire, chances are that moment has been building and building for quite some time through diligence, frugality, and smart investing. And also a little bit of opportunism.
I want to start by saying I don’t feel rich. Yes, I know, a six figure salary technically puts me in the upper middle class, but with its high cost of living in the City of Toronto, it’s hard to feel that way. Just to define that relative to Ontario, upper middle class is any single income earner with an income over $108,000.
I also acknowledge the more I make, the more I’m expected to pay in terms of tax. I just didn’t think it would happen so quickly or be so progressively punishing across all other forms of income.
So let’s talk about that today: tax on the upper middle class. I think tax can be a good thing (after all, I am a public servant myself), but we should all still strive for a level of tax efficiency, just like we would when it comes to any other form of spending. Continue reading “Tax Lessons for the Canadian Upper Middle Class”