[mcantor]

I think financial freedom is best achieved with a balanced combination of "spending less than you earn" and "earning more than you spend."

Personal finance expert Ramit Sethi has a lot to say on this subject; he leans more towards the "earn more than you spend" approach, but he focuses on brutally cutting spending on anything that doesn't really make you happy.

One of Ramit's favorite rants is to criticize people who encourage budding savers to avoid spending money on "lattes" (in Ramit's rants, it's always lattes). The way Ramit sees it: if lattes, or expensive cars, or Fabergé eggs make you happy, there is no reason not to spend money on it--as long as you have your other vital expenses, which includes savings, taken care of first.

I think that's the biggest takeaway from the "spend less than you earn" approach: lots of people buy expensive cars or big houses because they think it's what they want, or because they assume it is what they're "supposed" to have or want, but closer examination would probably show that often, enough is enough, and more is too much.

[kirstendirksen]

Funny about the lattes. I am probably complicit in that criticism, but maybe because I'm usually happier spending my $100/month (depending on how many you buy) making my own tea/coffee and spending that same amount renting movies on itunes.

But to the real point, I think you- and Sethi- are onto something with it being more about figuring out what really makes you happy. If, it turns out, that what makes you happy are big houses and expensive cars or planes (I have an uncle who truly seems happy with all 14 airplanes he owns.. though he's an ex-commercial pilot who usually finds old planes he refurbishes and doesn't mind if they crash land in corn fields.. I witnessed that one) then I can't criticize that.

But I wonder if the majority of us really are happier with more and would be just as happy realizing that "enough is enough" and focusing on things that really make us happy.