Systemic Spending is a concept I’ve heard bandied around on some of the blogs and podcasts.  I wasn’t sure what systemic spending is, so I decided to dig into it and see how it relates to me.

There is little about systemic spending as it relates to the FIRE community, so my understanding is mostly based on two sources: The SAFE plan and the ChooseFI podcast 033; Design your future with Dominick Quartuccio.

In essence it seems to be that in order to be happy we need to live our lives with intention. In order to achieve that, our spending must also be with intention. This translates into happiness by ensuring that our spending is appropriate. In other words, making deliberate spending decisions based on the lifestyle we want to live, striking a balance between wants and needs and understanding the difference between the two in order to reach your goal(s) and also to maintain a level of happiness or contentment on the journey to those goals.

But it is also more than that in that it can impact our road to FIRE in dramatic ways. An example is trying to curtail spending in such a way to increase the savings rate but being miserable in the process, due to feeling deprived etc. When one feels this way, it makes it really hard to continue with the savings.

In the case of Cat and myself, we really should not use DoorDash as much as we do. We could increase our savings rate and get to FI a little faster than we are due to, but honestly we love good food, and we are busy. Dragging our asses around the kitchen every day just makes us miserable so the occasional DoorDash meal is a welcome pick me up and keeps us happy. This is just one example of course.

Another example may be a mortgage payment. It may not be logical or optimal to be in a house, paying a mortgage, but it may provide peace of mind; in having a home that is really yours. Some people need this and this would be a systemic spend; as it is not optimal, but can provide mental stability and peace. These are also important aspects of the journey.

In many ways I think we can call systemic spending, non optimal saving perhaps?

The opposite of systemic spending is drifting. Drifting is a term that has been coined for moving though life on autopilot, or with a lack of intention. In this case, the spending if often without thought or regard for the impact on life and goals.  In some ways, Cat and I drifted during the rebuilding stage of our life, and certainly before the disaster. Drifting is so easy to do which I suspect is why many of us are guilty of doing it. It requires no focus, no thought whereas intention requires focus and thought. Sometimes focus and thought are not easy after a long shift or a hard day/week/month at the office. I know, I’ve been there and this mostly manifests itself in DoorDash!