{"id":242,"date":"2020-04-14T00:14:13","date_gmt":"2020-04-14T00:14:13","guid":{"rendered":"https:\/\/moneywithkatie.com\/i-can-afford-it-is-a-shitty-reason-to-buy-something\/"},"modified":"2025-09-05T19:55:36","modified_gmt":"2025-09-05T19:55:36","slug":"i-can-afford-it-is-a-shitty-reason-to-buy-something","status":"publish","type":"post","link":"https:\/\/moneywithkatie.com\/i-can-afford-it-is-a-shitty-reason-to-buy-something\/","title":{"rendered":"Maybe \u201cI Can Afford It\u201d is a Shitty Reason to Buy Something"},"content":{"rendered":"
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November 2018<\/h4>\n

Disclaimer<\/em><\/strong>: This post features financial transparency on my own part and a pinch of bitchy judgment (toward myself, and probably toward you) since most of us are irresponsible spenders. Read on at your own risk.<\/em><\/p>\n

I feel like I\u2019m looking at my own consumption habits with fresh eyes ever since I started reading Money Diaries and listening to the ChooseFI podcast.<\/p>\n

While it\u2019s not worth it to regretfully shame yourself for shitty money decisions in the past, I\u2019m leaning into the self-loathing a little. I invite you to do the same, you dumb spender!!!!<\/p>\n

Money Diaries<\/a> features (mostly) traditional financial advice. Stuff you\u2019d hear from your friendly neighborhood personal finance guy\u2014the guidelines that are considered normal in United States personal finance culture. Save 20% of your take-home pay, contribute to your 401k up to the match\u2026 we\u2019ve all heard this stuff before (hopefully).<\/p>\n

ChooseFI<\/strong>, however, is on the far more radical side of the spectrum. If personal finance content were right-wing news outlets, Money Diaries would be NPR and ChooseFI would be Breitbart. (Great comparison, no?)<\/p>\n

FI, or financial independence, is a school of thought that encourages people to save as aggressively as possible so they can retire early\u2014like, \u201c35 years old\u201d early.<\/p>\n

Yeah. It\u2019s a little intense.<\/p>\n

In a very, very simplified nutshell, it all basically hinges on the 4% rule<\/strong>.<\/p>\n

If you can determine how much money you spend every year (I did mine earlier this week\u2014if I\u2019m perfectly \u201con budget,\u201d I spend $30,600 per year), you can do this math equation to figure out how much money you\u2019d need invested for your money to auto-replenish itself<\/strong> with interest for the rest of your life AS LONG AS you\u2019re only spending 4% of it annually (assuming it\u2019s growing at 8%).<\/p>\n

30,600 * 25<\/strong> = $765,000
(your annual spend)<\/em> * 25<\/strong> = (how much you need saved to retire)<\/em><\/p>\n

This means as soon as I can save $765,000 in a portfolio growing at an average of 8% annually, I can stop working and maintain my same spending habits annually. No problem, right?! BRB.<\/p>\n

So obviously this is really, really extreme. Especially because I want to spend way more than $30,600 per year!<\/p>\n

Let\u2019s do this again. Say I want to pay myself $100,000 in spending money every year for the rest of my life.<\/p>\n

100,000 * 25 = $2,500,000<\/p>\n

Once I hit $2.5M, I can pay myself $100,000 per year without working.<\/p>\n

Make sense?<\/p>\n

It\u2019s called \u201cfinancial independence\u201d because your money is setting you free, playas. No more work for you. Your money is making money.<\/p>\n

While I don\u2019t aspire to this (because TBH, I like working), I like to water down their advice to help me save without being single-mindedly obsessed with this goal of retiring in my thirties. A hybrid of ChooseFI and Money Diaries presents a moderately aggressive approach to personal finance.<\/strong><\/p>\n

Here are a few high points (consider this approximately 10 hours of reading and listening distilled into three bullets\u2014you\u2019re welcome):<\/p>\n