What’s Your Worry-Free Spending Limit?

Investment Analysis Clubs Macro Economic Trends and Risks
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I assume that all METARs are LBYMers or we wouldn’t have assets to invest. In my case (perhaps many of us) gradually built up our assets from nothing using self-discipline and avoiding impulse buys.

This psychological inhibition against spending money may lead us to be unnecessarily frugal. (Perhaps even life-threatening, as with @intercst in his second-story walk-up condo with an outdoor staircase.)

I decided many years ago, when I got my first job in industry, that I would buy myself one “treat” per year (such as a color TV or piece of jewelry) but only if it represented a small part of my net worth. However, I still hesitated before buying myself a smaller, more routine impulse buy. I recently decided that I would buy without worry if the purchase was under 0.01% of my net worth.

Since I already have a lot of stuff I donate what I have bought in the past but no longer use. I do tend to use things as long as they are functional even if they are so worn out that even the charity store wouldn’t accept them. I also repair things to extend their useful life and recycle disposables. (Such as using laundry detergent packaging with a valve to mix and dispense Miracle Grow.)

https://www.wsj.com/personal-finance/whats-your-worry-free-spending-limit-readers-share-their-number-5c802eb1?mod=wknd_pos1

What’s Your Worry-Free Spending Limit? Readers Share Their Number

There are many, many ways to decide where to draw the line on impulse buys

By Joe Pinsker, The Wall Street Journal

Author and blogger Nick Maggiulli recently proposed a new financial rule of thumb: If you’re on the fence about a spending decision, it isn’t worth stressing about if the amount of money on the line is 0.01% or less of your net worth. … [end quote]

Obviously, this only pertains if you are net-worth-positive and already have a well-padded emergency fund. There’s no room for impulse buying for someone who is already in debt…for an LBYMer.

But most Americans aren’t LBYMers.

Bankrate’s 2025 Annual Emergency Savings Report

Written by Lane Gillespie, June 26, 2025

…

Bankrate data shows that a large percentage of Americans don’t have three months of expenses saved, and many people don’t have any emergency savings at all.

This data comes from Bankrate’s yearly Emergency Savings Report…Since 2011, the survey has annually polled 1,000+ U.S. adults about their levels of debt and emergency savings….

Only 46% of U.S. adults have enough emergency savings to cover three months of expenses. Additionally, 30% of people have some emergency savings but not enough to cover three months’ expenses, and 24% have no emergency savings at all….

The majority (80 percent) of people who used their emergency savings in the past year (as of February 2024) used the money for essentials. Specifically, about half (51 percent) of people who used their emergency savings in the past year did so for an unplanned emergency expense, such as a medical bill or car repair; monthly bills, such as rent and utilities (38 percent); and/or day-to-day expenses, such as food or supplies (32 percent)….Only a small percentage (19 percent) of people who withdrew from their emergency savings in the past year did so for non-essential reasons…

Americans (53 percent) have more emergency savings than credit card debt….

Forty-one percent of people would pay a major unexpected expense (such as $1,000 for an emergency room visit or car repair). Another 25 percent of people would use a credit card to pay for an unexpected $1,000 emergency expense and pay it off over time… [end quote]

Credit card debt is at a historic high. Delinquencies are moderate on a historic basis. Household Debt Service Payments as a Percent of Disposable Personal Income (TDSP) is running a little over 11%.

People who use emergency savings to pay for routine expenses either are suddenly unemployed or have expenses that are too high for their incomes – perhaps due to inflation.

On a Macroeconomic level, many people will be in a world of hurt if a recession causes layoffs. This has always been the case – it’s the reason a 3-month emergency fund is recommended to cover the job search. That has been enough to cover the median unemployment time in most cases. Currently, the number of long-term unemployed is climbing to recession levels (> 27 weeks). To be counted as unemployed a person must be actively seeking work. The Labor Force Participation Rate - 25-54 Yrs. is holding steady.

But back to the original question:

What’s your worry-free spending limit?

Wendy

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I’ve never really had a monthly budget since I graduated from college. (I only spent money on stuff that had value to me, and an engineering salary allowed me to save and invest a large portion of my pre-tax income (25% by age 25 once I paid off my student loans and about 50% of pre-tax annual income the last few years before I retired.)

My worry-free spending limit today is probably $1 MM or more since with a paid for home and motor vehicle, in a state with low property taxes and no state income tax, I can easily meet my monthly expenses with my Social Security check and two small pensions from jobs I had 30 or 40 years ago. I usually have money left over at the end of the month for savings.

That’s not an uncommon “problem” to have for LBYM people in lucrative careers. My only regret is that I didn’t retire 5 years sooner.

intercst

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My spend rate is just under 2% of my net worth. So I’d put my worry free spending limit at 1% of my net worth, which would still keep me well under the hard cap of 4% I put on myself. That’s not quite intersct money, but it would buy me a very nice car without thinking about the price tag.

Can’t say that rule applies to DW though. She won’t get rid of her 2017 minivan, although she likes to complain about how much she hates it.

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So do I.

But I fail to understand why you refuse to move into a safer abode if you could spend $1 million with the insouciance that I would spend on, say, a lipstick.

Wendy

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Because three different professional physical therapists have confirmed that I’m completely safe going up and down the 15 steps to my condo. I even had my dog here this afternoon and took her up and down the stairs without issue, (smart dog, smarter owner {{ LOL }}

I’ve had the “shrink sleeve” on my residual limb for the past couple of weeks. The prosthetic people are scheduled to measure the diameter of my limb over the next three Mondays. If there is little change between week 2 and 3, they’ll likely make a plaster cast of my limb and start fitting a temporary socket to accept the mechanical leg. I expect to be walking by year end absent any unexpected roadblock.

Given the promising prognosis, and outstanding results to date, why would I incur unnecessary “skim” in changing my residence?

(Note: When I look at the videos online of amputees going up and down stairs with prosthetic legs, I may continue with my current method – it seems safer and quicker.)

I try to “hop” as little as possible when I’m going up and down stairs, or using the walker. You want to “lift and place” your good leg while supporting your body weight with your arms.

One thing I found out a few weeks ago was that I’d been doing push ups wrong for years. I have my hands about 3 feet apart when I do them. Physical therapist said I should keep my elbows close to my body, with my hands about 18” apart. If your hands are spread too wide, you’re only strengthening your arms and not your shoulders.

I said, “Maybe that’s why it’s so easy for me to get up and down the stairs, I’ve been doing push ups wrong?

intercst

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Before you know it you will be running the 100 meter in the next Olympics. Kudos!

:+1:

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I’d be happy just to get back to pre-February 2025 when I still felt like I was 25.

intercst

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I have a friend from way back, he’s a double amputee, right below the knee on each leg. When we were kids, we used to hop on trains, he missed one time, I think he was 7 or 8 years old when it happened. He did not take care of himself like you do, but he had 30-40 years of deer hunting, golfing, riding dirt bikes, etc, with 2 artificial legs. And it sounds like you are vastly advanced in strength from what he was, at his strongest. I’d bet money that you are going to have a full and active life once you get used to your new leg. You’ll probably get strong as hell in the upper body,too, as you will compensate for not having that leg. Keep doing what you’re doing, doing what makes you happy, you’ve got a lot of good years ahead of you.

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intercst

What the other regulars have said regarding due caution in its place AND also

Congratulations and HOORAY!

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Well, there’s part of the problem….and possibly why neither @WendyBG nor I can fathom your decision making. I understand it up to a point, mind (I still felt like 25 at the start of 2022….and then I had notice of the state of my coronary arteries and changed my perspective) but, still…..

Prior to February I recall Wendy observing that having legs with a noticeably different circumference didn’t seem quite right (I’m reasonably sure I mentioned the same when you described that issue earlier) and you were quite dismissive of anything being wrong.

Just an observation, mind….and, I guess reflective of individual risk tolerances….but I suspect your physical therapists aren’t passing an opinion based on full possession of the facts WRT your financial status.

I for one have begun to look very critically at reassurances from professionals when looking at obvious Red Flags and would want as close to cast iron evidence as possible for any assertion meant to reassure.

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Perhaps I can go one better……as in how much we’ve exceeded what I/we (including the husband) imagined we’d cough up, in a given amount of time and on what.

Transitioned from still thinking twice about pretty much anything I spent money on to dropping north of $500k since Feb last year on legal bills associated with my daughter’s acrimonious divorce….i.e. trying to prevent an out of control, bat-spit crazy, loony toon from destroying my daughter’s business, crushing the family and robbing my granddaughter of a childhood. My daughter was finally awarded full custody (apparently almost unheard of) plus a permanent protection order (apparently almost as unusual) this last week. That is an gift that’s priceless!

Talk about ignoring Red Flags🙄

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Not at all. I’ve been asking doctors about my swollen right leg for 25 years. Occasionally they’d order a test (e.g., ultrasound scan, MRI, Ankle Brachial Index test, etc., and they all would come back showing a normal leg with edema. The diagnosis was that I had varicose veins and chronic venous insufficiency which I treated by elevating the leg when I was home, and wearing compression stockings.

Apparently you’d need a physician with “Dr. House” level skills (and an unlimited diagnostic budget) to suspect a popliteal artery aneurysm in a 45-yr-old. They are uncommon in the general population – but have about a 1% occurrence in 60 to 80-yr-old males with cardiovascular risks (of which I have none).

Aren’t you the one worried about doctors ordering excessive tests and bleeding Medicare dry?

intercst

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Well, there you go….reassurances in the face of a Red Flag. Your PT’s might be equally as wrong about what’s in your best interest moving forward.

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That’s not his job. He’s evaluating my performance of the task at hand (i.e., climbing a flight of stairs) and rendering a judgement on whether I can safely accomplish that TODAY. Of course, in the long run, we’re all dead whether we maintain a residence on the 1st or 2nd floor.

intercst

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Not I. My beef with indiscriminate testing (regardless of who’s paying) is the indiscriminateness of it…..as in, a knee jerk response without appropriate thinking going into clinical value. In fact, my own complaint has been a failure to utilise/recommend simple, non invasive testing that would’ve refined my own diagnosis a fair bit earlier……including, but not limited to, a test that was at my own expense.

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May be you need to open a new thread on this topic… any discussion will be lost…

If you could, I have few additional thoughts to ask…

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Having grown up in a “soft puritanical” family, I never had a worry free spending limit. I was brought up to think all spending MUST have a moral basis, and given that moral basis the price was only relevant to how much less I could spend elsewhere. Once in my childhood I bought an extra large soda at a restaurant and my two grandmas gently but memorably cross examined my motives….

In our heads my and husband’s estate already belongs to a spread of organizations, and we are caretaker investors.

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DW & I are/were DDINKs (Dual Doctor income No Kids) and we made a very good living. Early on we learned that it was a balancing act, saving for the future while living for today. We saw too many patients (and a few friends) die young. My best friend’s mother died 1 month after retiring with pancreatic cancer and his father about a year later.

We never really used “the B word” (DW didn’t like the word budget) but what was left after living expenses, the gross majority went to investing. We did take nice trips. Had a golf membership. Did splurge on some things using the theory of buy once cry once instead of try to go cheap and buy twice cry twice.

Neither of us were impulse buyers so that never played into the equation.

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It’s great that you can traverse the stairs. There are a lot of people who aren’t amputees that have issues with stairs. On a bad day, 1poorlady has issues (side effect of medication).

But if you can afford to relocate, why not? It sounds like you’re cruising towards an expensive funeral, rather than enjoying the money while you’re alive. For me, I don’t see the point in that. Once I’m dead, any money left is enjoyment I could have had but didn’t. In my case, 1poorkid will get it. So, she may get some enjoyment from it. As I recall, you have no heirs.

Obviously up to you. For me, accumulating more wealth is pointless when you reach a certain level. That’s why I retired a few years ago, and I assume why you retired 30 years ago.

I assume you could still live in your tax-advantaged area, in a ranch-style home with a big yard for the dog, and not even blink at the cost.

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1poorlady grew up in a third world country under a dictatorship (Marcos). Even though I assure her that we’re fine**, she can’t break the frugality habit. People at work considered me frugal, but she makes me look like a spendthrift.

As for my “spend limit”, depends on what it is. While I could spend $200K on a Lambo, I’m not going to. It would adversely affect other areas of spending (e.g. vacations). Plus, too much of that, and we would have to go back to work. We’re “normal spending” wealthy, not Elon Musk wealthy. We can do several vacations per year (last year we spent probably about 3 months total overseas), house is paid for, cars are paid for, we can buy whatever food we want. I wouldn’t hesitate to spend $30K on a vacation for three months. I would hesitate if it was only 7 days.

**Before retiring, I ran sims/calculators for a few different sources assuming NO social security, and we still came up fine.

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