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I’m not thinking about my retirement savings. I’m not thinking about my debts. They’re lost in the fog right now. All I can think about is that I want a meal at that fancy restaurant or that I really want an iPhone. That’s what I see around me, with everything else greyed out and not even present in my mind. I’ve worked hard. I deserve these treats. Retirement? Debt? My future self will deal with it.

This was an extremely familiar state of affairs for me during my late college and early professional years, and it’s a state that I still fall into every once in a while.

I call it the money fog because it’s a feeling much like a fog.

When I’m in that state, the future becomes invisible. I don’t really consider the ramifications of what I’m about to do beyond the next hour or two. I simply want something and the impact of that choice is pushed out of my head.

Jerome sent me a great question for the reader mailbag, but I found that my answer was getting too long so I chose to spin my response off into its own post.

Jerome asked this:

One of the big ideas of frugality is to not waste anything. That just seems to lead to hoarding, though. Most of the cheaper people I know have garages and closets jammed full of all kinds of things that I would probably just throw out. Does frugality lead to hoarding or am I missing something?

This is a really good question that touches on a bunch of interesting issues all at once, so let’s dig in.

First of all, you’re absolutely correct in saying that one of the big principles of frugality is to avoid waste. You get absolutely no direct value out of throwing something away, but it’s very likely that you had to invest something in acquiring that thing you’re throwing away. Thus, when you throw stuff away, you’re throwing away money.

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Handling old collection
2. Interesting experience with generic aspirin
3. Good books about financial independence
4. Dealing with a pay cut
5. Too tired to enjoy it?
6. Expensive cars
7. Devaluing of the dollar
8. Is it hopeless?
9. Product “downsizing”

One of my favorite personal finance concepts is that of the “real hourly wage.” It was an idea I picked up from Your Money or Your Life and it’s well worth understanding, so let’s walk through it again before we move on.

Your Real Hourly Wage

Most of us can easily calculate our hourly wage. We just sit down, add up how many hours we worked in a given year, and divided our salary by that number. For example, let’s say someone makes $50,000 a year and works 40 hours a week for 50 weeks a year. Forty hours a week times fifty weeks a year makes for 2,000 hours per year, so if we divide $50,000 by that, we get an hourly wage of $25 per hour.

But does that reflect reality?