TL;DR

A young, high-earning saver feels financially deprived despite high savings. High rent and a rigid savings plan create a sense of scarcity, mirroring the psychology of predatory financial products and illustrating the danger of prioritizing saving over happiness.

Story

The tale of the 23-year-old making $90K in Cincinnati, Ohio, isn’t a rags-to-riches story; it’s a cautionary one. He’s diligently saving, maxing out his Roth IRA, and putting away a hefty chunk of his paycheck. Sounds great, right? Wrong. This isn’t a celebration of financial prudence; it’s a case study in the insidious nature of perceived scarcity.

His biggest expense? A $1900 rent. That’s a significant portion of his income. In this age of financial precariousness, even seemingly sensible choices can lead to feelings of deprivation. This is no different from the 2008 subprime mortgage crisis, wherein seemingly stable homeowners found themselves drowning in debt. The root cause is the same: an imbalance between income and expenses, and in this case, high rent plays a crucial part.

While he’s diligently saving, he feels deprived. He wants a keyboard but hesitates to buy it. The irony? He’s already spending on ‘fun’ - dinners out weekly, subscriptions. Yet, the lack of funds for a simple purchase reveals a fundamental disconnect in his budgeting. It’s the subtle, psychological manipulation of ‘financial responsibility’ that traps people—the feeling that every dollar needs to contribute to some grand savings goal and never for simple joys.

This situation is mirrored in the many predatory financial products that exploit people’s fear of being behind. The psychology of this is simple: If someone is spending their money on seemingly frivolous items, they will feel bad and will want to save more money to feel better about themselves. This is the same tactic used by marketers to make you feel bad about your purchasing habits.

The lesson here isn’t to stop saving. It’s to recognize the emotional pressure of extreme saving and find a healthy balance. Re-examine your spending. Maybe $1900 rent is too high, and perhaps cutting back on some ‘fun’ could free up funds for things you actually want. A slight reduction in savings may improve your quality of life without compromising your long-term financial goals. Otherwise, you’re just building a bigger, more secure cage for yourself.

Advice

Don’t let extreme saving lead to deprivation. Regularly review your budget, find areas to cut costs, and prioritize spending on things that bring joy. A balanced approach to finances avoids burnout and fosters happiness.

Source

https://www.reddit.com/r/personalfinance/comments/1m4uv1f/why_does_it_feel_like_i_do_not_have_much/