Today I set a new record for most consecutive days that I have been alive. That’s an old joke, but one that still feels funny. More interesting to me is that I can count how many days I’ve lived, but nobody knows how many days are still ahead of me. What’ll happen in the world? In my life? What kind of phone will Future Me have? Which of my favorite authors and musicians and filmmakers will put out new work? Will George R. R. Martin ever write that next Game of Thrones book? Future Me knows. Meanwhile, every day I’m Present Me. Present Self, living out whatever Past Self stuck me with, trying to make a better day for Future Self.
Since last year, I’ve done a bunch of stuff. I like to take the day to look at where my life is going, and whether it feels better or more fun or more interesting or more fulfilling. Have I made good use of my time on Earth?
I also do this process at the New Year, on my wedding anniversary, and on a smaller scale every quarter. Birthdays feel like a pretty significant milestone, at least to me. One day, maybe I’ll have my one-hundredth birthday, and if I do, I’d like to feel some sense of ceremony around it.
Since last year, I’ve moved to a smaller apartment, taken up martial arts and earned two orange belts, gained 15 pounds, promoted into a volunteer leadership position, and started riding my bicycle again. My husband filed his first patent, leading to some big stuff at work. My parents got a puppy for the first time in about forty years. These are all major changes.
Incremental changes have happened, too. We’ve made a bunch of new friends and acquaintances, and so has our dog. Due to our downsizing move, we’re financially better off. Our phones have better battery life. The addition of the extra muscle has happened gradually enough that new physical abilities seem to have magically appeared. I can open jars! My daily walking average has gone from 3.1 miles in 2015 to 5.2 miles in 2018.
A lot of stuff is the same as it ever was. Noelle just had her 20th hatch day and she still loves to shred paper everywhere and make a lot of beeping sounds. I still need more sleep. The blog continues to chug along.
Some stuff in our daily life is harder. Since we moved, we no longer have a washer or dryer, and all our meal prep has to happen in a single square foot. We’re continually unplugging and plugging things because of a shortage of power outlets. Our upstairs neighbors [*]. Someone down at the marina keeps setting off a propane cannon in the middle of the night. Life feels much busier.
From where we are right now, it’s hard to imagine where I will be on my next birthday. We’re planning to move when our lease is up, but where? Right now we’re living a combination of Best Location Ever and Worst Apartment Also. I intend to continue with martial arts, and that means moving into a physical reality I’ve never experienced. Looking around at the other women in my classes, women in higher belt levels, I see some astonishing speed, power, agility, and muscle definition. It’s somewhat alarming to think that this could be me one day, and all it takes is the schedule and the persistence. Continuing on my current plan, I ought to have nailed all the requirements for Distinguished Toastmaster. I should also have my student loan paid off, and all I can do is imagine what it will feel like to be debt-free and financially stable for the first time in my adult life.
So, what? This time next year: buff, debt-free, and living in a nicer place? Possible?
Looking forward three years, five years, and ten years, gosh. No idea. Talk about plot twists.
I celebrated turning 43 by finally getting my headstand, after working on it for two weeks. I plan to spend part of my day messing around and focusing on circus tricks. Depending on what kind of videos I find, I’ll either be trying to juggle, riding my unicycle, doing hula hoop tricks, or trying to turn a cartwheel. Then I’ll spend some time imagining what I want to learn to do before I turn 44.
How about you? What would you like to be doing before your next birthday?
Q: How do you know it’s time to level up in your career?
A: It’s always time.
Most people hate updating their resume, applying for jobs, and going on interviews. These are reason alone to avoid thinking about a career change, retraining, or aiming for a promotion. Unfortunately, coasting is not a permanent option. The workplace is always changing, and not just job positions but entire industries can quickly be made obsolete.
I was 19 the first time I became aware of this. It was my first day on a new temp job, at a time when I thought of myself as “a data entry clerk.” My trainer walked me through the forms I would be typing into the system, and offhandedly explained that they were transitioning to a bar code system. “One day all of this will be done by computer.” Huh. I grew up in Oregon, during the recession of the early 1980s, and even as a teenager I was aware that a lot of loggers lost their jobs when the trees went away. Not much left to log! I also knew that a lot of people had new jobs in the tech sector, not that I knew to call it that back then. I just shrugged and accepted that it would be easier to train for a new job than to try to hang on to one that was going away. As a 19-year-old, it felt a bit like a continuation of high school.
Of course, there were other reasons to think about leveling up and doing something other than data entry. One, the poor pay. Two, the chronic pain of repetitive stress injury.
The path upward was confusing and not obvious, not at all. In retrospect, I can say that my biggest hidden obstacles were my wardrobe, grooming, and chronic punctuality problems. It truly didn’t matter how hard I worked, how much I improved my skills, how many operating systems or software applications I mastered, or how many degrees I got, because I didn’t look the part, didn’t know it, and didn’t care. I didn’t understand that for the clock-obsessed, being five minutes late is proof of moral dissolution, and being fifteen minutes late is like setting the building on fire. I felt that my low income trapped me at the level of wearing thrift store clothing and relying on the bus to get to work. It is what it is, right?
The real problem was that I had a subservient support role. Nobody else was ever going to pull me up, create a position for me, or even explain what I needed to do to climb up a rung. I had to figure it out for myself.
As a young woman, I took whatever job I could get and did my best to flail along. I thought I’d be fine if I followed orders, worked hard, and shared my ideas on how to improve anything I could. Then I’d be stymied when I constantly had to answer the question: “Where do you see yourself in five years?” Um, making more money? All I knew was that I wanted something more, and I’d certainly take it as soon as someone offered it.
What successful people do is to set their sights on something extremely specific, figure out how to get it, and then work on those steps.
This is how my husband did it, and it still boggles my mind. He 1. took a career assessment at school 2. Looked at the results and compared the incomes of ‘history teacher’ and ‘engineer’ 3. Applied to engineering school, figuring he could study history on his own time 4. Got in and crushed the work, even as 80% of his fellow students washed out.
...Doesn’t it seem so... OBVIOUS? So... STRAIGHT-FORWARD???
(I took the same test and it gave me ‘massage therapist’ and ‘cab driver.’)
Where we get into trouble is in trying to form the initial vision. What DO we want? What WOULD we be good at?
Please won’t someone just tell me exactly what to do so I can do it?
What I know now is that my super-skill is ideation. It’s something that most people don’t particularly do well, and I’m quite brilliant at it. My natural state is to wake up in the morning with my brain already churning out ideas. Inventions, song lyrics, ad campaigns, B-corp structures, business plans, articles, book titles, limericks, workshops, recipes, cartoons, futurist predictions, you name it! The problem is more slowing down or stopping the flow than trying to get started.
How would I have figured this out, though? What convergent path could I have followed in school or entry-level service positions that would have indicated: ‘YOU have a rare and valuable talent!’?
I also know that I’m extremely productive, as long as I can work on my own priorities. I published over a thousand pages in 2017, in addition to other writing projects and articles that went into the Ready to Post folder. The week before this post, I had six meetings, gave three speeches and wrote another, formatted and scheduled two weeks’ worth of blog posts, produced a newsletter, worked on our new podcast, deep-cleaned our apartment, worked on my headstand, passed my three-hour Muay Thai belt promotion, and still managed to get my hair cut. On Tuesday, I walked 6 miles, rode my bike 4 miles, and did two back-to-back martial arts classes, followed by walking 7 miles on Wednesday and carrying four loads of laundry up and down a flight of stairs. Nothing can stop me when the plan is my own.
The signs of burnout, stasis, and stalling are feelings of low energy, frustration, sadness, resentment, and dread. Sleep procrastination - staying up late even when you’re chronically exhausted because you feel owed more personal private time. Recreational eating - eating snacks and junk food, especially late at night, because it’s one of the few pleasures in your life. Money worries. Envy of other people, because their success feels unattainable, and why should anyone get anything when your life is so hard? Fixating and perseverating on wretched things that happened at work, because you can’t shake it and even thinking about your boss or your customers makes you want to cry. Just feeling stuck and having no idea what to do.
If any of that feels familiar, hey, it’s okay. It doesn’t have to be that way. Staying at a job you hate, a job that’s beneath your abilities, isn’t doing anyone any favors. You deserve more, your coworkers deserve someone who actually wants to be there, and your customers and clients - well, who knows what they deserve, but surely someone out there deserves your best, not your mediocre most average. What would you do if you had something awesome, a job you loved, a job where every time you finished something, someone was excited? What if that someone were you?
Time to level up!
Just the title of this book puts a jolt through me every time I look at it. Overcoming Underearning! Barbara Stanny teaches financial literacy, and she defines underearning as not reaching one’s earning potential. This probably applies to most people, because how do we know what our true earning potential might be? How do we know whether we have more in us or what heights we can reach? Of course, it definitely applies to the half of American men and women who feel underpaid. What if our underearning has its roots not just in external economic conditions, but in internal beliefs and assumptions?
Case in point: An acquaintance patches her income together from a variety of sources, including cleaning houses, pet-sitting, and other odd jobs. She doesn’t count her income by the month or the week, but literally by the day. Yet she related how she had cut her rates for her most demanding client, and then drove her an hour to the airport for free. For someone who needs to make every dollar count, why would she give discounts and free labor to someone who is difficult to work with? Especially when it takes up time she could be using to earn more money doing easier work? Overcoming Underearning points out that giving away our work for free is a common behavior.
According to the underearning quiz in the book, my acquaintance scores at least a 13/15 as an underearner. That’s based on things she has said directly to me, and it’s entirely possible she would agree with the other two if I asked. Yet she also has many of the traits of a high earner. That’s a paradox that, again, probably applies to most people. Why is it that working hard isn’t enough?
One of the most interesting insights in Overcoming Underearning was, for me, that high earners simply don’t identify with the way that underearners think about money. The rules and beliefs and structures that we put up around our careers, our finances, and our business decisions don’t make sense to them. This strongly implies that as long as we hold these beliefs, it doesn’t really matter what we do, because what we’re doing will not lead to promotions, wealth, being debt-free, or other goals.
Another great feature of the book was the list of Twelve Signs You’re in Resistance. This should be available on a poster, t-shirt, coffee mug, tote bag, and giant billboard directly across the street from my front door.
Barbara Stanny gets it. She’s clearly talked to so many hundreds of people, all of whom have their own special, inaccurate reasons why they should stay broke forever. She’s also seen the way that this information can transform someone almost overnight. This book deserves to be a classic.
I knew that staying stupid was not an option.
“If I admitted that I was an underearner... then I would need to do something about it.”
For every excuse you give me, I’ll show you someone in the same boat who is prospering.
We’re going to World Domination Summit for the third time. At our first event, we had the opportunity to buy tickets for 2017 while we were still sitting in the auditorium. We took one look at each other and launched. Now it’s a core part of our vacation planning. This is a life philosophy thing. Plan your desired vacation first, then your desired retirement, and build the rest of your lifestyle around those poles.
How do you afford that vacation?
There are tricks to it!
The first thing is to focus on what you personally enjoy doing, and to realize that this may not look anything like someone else’s dream vacation. For instance, my husband and I usually go somewhere rainy on vacation, because we live on a Southern California beach where it’s summer nearly every day. Why pay more to go through TSA and fly to an island with lots of sun and sand when we can just do that at home? We’re willing to ride a bus and camp out in a tent in the rain because it enables us to travel longer. We like going to museums, exploring local grocery stores, and visiting historical sites. We don’t spend money on booze or dance clubs or shopping because we don’t care about those things.
On this particular vacation, we’re staying at my parents’ house. We’re able to roll WDS into a family visit. Granted, we’re almost never there, but there really is something special about being able to hug your parents in their kitchen on a regular workday.
We paid for our plane tickets with reward points. This comes about because our first financial priority is to maintain good credit, and because we systematically earn and burn those travel miles.
Here’s the thing. None of that constitutes a ‘trick.’ Anyone can fantasize about the perfect vacation, learn how to use points and miles, or cajole a friend or relative into playing host for at least a little while. The tricky part is that whole thing about building your lifestyle around your vacation.
We save 35-40% of our income.
That’s part of it. We simply refuse to spend money in ways that we find boring, unfulfilling, or unnecessary. We live in a studio apartment and we don’t own a car. The money we saved the first two months of car-freedom more than paid for this WDS trip. That doesn’t even begin to include what we saved by lowering our rent and utility bills for the year. I don’t spend money coloring my hair, getting manicures, or going for “retail therapy” because I see that as stealing from our vacation fund. We both went to Morocco for a day for $65, money that I could have easily spent on a single pair of shoes or pants that I never even wore.
Another part of “affording that vacation” is to build the idea into your life and make it a part of your identity. Travel is part of what my husband and I do as a couple. We decided to define ourselves that way, and make sure that other people see us that way. It’s fun to teach other people how to travel on a budget. A lot of the things we do on vacation have filtered into our daily life, such as our habit of having strategic planning meetings at breakfast. If more of your ordinary days feel like vacation days, then eventually it feels like you’re on vacation all the time. What that means is that you’re creating an intentional life. You see the potential in each day and the special things about your current location. You look at the world with an attitude of open wonder and adventure.
That’s what makes money and savings feel somewhat irrelevant.
I don’t feel “deprived” by not having cable television or a wine budget because those things don’t interest me, especially not in comparison to the awesome things that money can buy on vacation. I love the sense that we’re nearly always in vacation planning mode, that we always have a new trip to anticipate and research and plan. What amazes me is that people feel like they can “afford” routine daily and monthly expenses that I see as both extravagant and dull.
The other thing about “affording that vacation” is that it gave us the ability to make a radical decision. We live in a studio apartment that is, in point of fact, smaller than some of the hotel suites where we have stayed on vacation. We jokingly refer to it as “going back to the room” to remind ourselves that it’s temporary, and that it’s a choice. We deliberately live a minimalist lifestyle full-time because it provides the leverage for more interesting things. All we really do at home is to cook dinner, sleep, shower, and store our stuff. Why pay for the biggest, fanciest place we could possibly stretch to afford when we’re gone most of the day anyway?
What we want to be doing, as often as possible, is exploring the world. We like to be close to nature, watching the sun set or watching a crow toss food wrappers out of a trash can. We love the feeling of having hours to lounge around, deep in conversation, and we do that most weeknights. All of these are cost-free; they’re mindsets that anyone can adopt and fit into any lifestyle. Peace of mind, close connection, a feeling that the clock is turned off and that the next moment is full of potential. You can afford all of that if you choose to look at it that way.
As long as I’m making a contrarian stand, I might as well toss out there that a house most likely isn’t an asset, either, but that’s a topic for another day. An “asset” is an economic resource, something valuable that produces income. If a thing generates expenses, then it is not an asset, it is a liability. The concept that a car may actually be costing someone money, that it might not qualify as an asset, is something that can really be upsetting. Let’s explore it, though. At the end of the thought experiment, anyone who owns a car will still own it, and nothing has changed except for a bit of a brain workout. Let’s go. Why is a car not an asset?
When I owned a car, I was utterly shocked to realize that it was costing me a quarter of my net income. A friend of mine who drives a low-mileage pickup truck disputed my figures. Look, I’m sorry, but I didn’t have a very high income at the time. Almost everything I earned went to the three categories of rent for my cruddy apartment, my car, and my student loans. There are probably a lot of people in my situation, who have never thought about how much it costs to have a car in their life but who could technically be getting to work by other means.
Note: Driving your car to your workplace to earn an income does not make the car an asset. The job is the asset.
There are only three ways that a car could ultimately be an asset, which I would define as bringing in more money than it costs. That would have to be more than a break-even rate, too. I imagine a car could be an asset if it 1. Earned its own income, such as a classic car being used in commercials, but does this even happen? Would that income actually exceed the total cost of the car, including purchase price and lifetime carrying costs? 2. Sold for far more than its original purchase price plus lifetime carrying costs, but does this ever happen, either? Like a, um, what do you call them, a Maybach or something? 3. Enables the owner to earn more money than could be earned through other means. I don’t think this is true of 80% of ride-share drivers, for instance, because it looks like most of them aren’t calculating externalities such as depreciation of their vehicle. They also aren’t paying themselves for the time they spend waiting or driving the unpaid legs of their trips.
The reason most people think of their vehicles as assets is that the thought of trying to get through life without one just seems hopeless or extremely annoying. Never put people in a position where they feel that they are going to lose something or have something taken from them. It’s the same with personal finance or fitness - people feel that “giving up” an inefficient habit is not worth the gain of being debt-free or more agile. It’s hard for us as humans to realize that letting go of one thing can be a significant upgrade, a tradeoff for something better.
I claimed that a car is not an asset, because it depreciates in value and because it incurs significant carrying costs. I also claimed that a bicycle is an asset. Let me back that up.
When I was 22, I got a windfall at my $9/hour job, a retroactive pay increase of $400. I sat on that money for about two months as I decided what to do with it. Then a sale came up at a local bicycle warehouse. I bought the new bike that I still own 20 years later. I had been paying between $30-$35/month for a bus pass, and I wanted to cut that expense from my budget. At just $30/month, the cost of the bike would be fully amortized in 13 months. That bike was my main source of transportation for the next three years, and sporadically in the following years, depending on where I was living. My bike became an asset because it allowed me to save money I had previously been spending.
There are other reasons why I regarded my bike as an asset:
At that time in my life, on $9/hour, I could not afford to own a car. I wouldn’t have dreamed of paying to join a gym. My bike, which paid for itself, was a major life upgrade. I felt stronger and safer, and I had more time and slightly more discretionary income.
After I originally sold my car in - I think it was 2007? - I got my old bike tuned up and started riding it around again. I paid off my credit card balances. I paid off one of my student loans six years early. I bought a new couch. Then I went on vacation to Cancun. I’ve remained free of consumer debt for over a decade now, and I’ve gone on yet more vacations, just longer, more often, to more interesting places, in much nicer hotels. Car ownership was draining a quarter of my income, and after I eliminated that expense, I was finally able to start saving for retirement in earnest.
I got married in 2009, paying for my share of our wedding in cash, and we both drove my husband’s pickup until it died a little after 200,000 miles. We switched to a sedan and got a great rate on the loan, because my credit score is over 800. It was still a loan, though. We sold it back to the dealership after the big emissions scandal, and due to that weird situation, we essentially drove it for two years for just the cost of the gas. The improvement in our cash flow since we’ve been car-free has meant an escalation in our retirement planning. We save and invest 35% of our income, a number we couldn’t pull off while our practical, economy car was bleeding off $700/month in total costs.
I got my old bike tuned up again. My hubby and I have started riding around and exploring our neighborhood together. It feels like we’re dating. More than that, it feels like we’re on a date on a vacation! There’s just something indisputably romantic about riding bikes on a bike path together. I can’t say I ever felt that way when we were spending our weekends driving through freeway traffic to go to the warehouse store. I know neither of us ever felt that way when we were commuting in freeway traffic to get to work. Riding our bikes is helping us to save thousands of dollars for our retirement, stay fit and mobile as we get older, avoid the worst annoyances of standard commuting, and even feel more connected and affectionate with each other. For all these reasons, I continue to claim that a car is not an asset but a bicycle is.
“I could never do that” is most people’s automatic response when hearing about an alternative of some kind, whether that’s getting rid of their TV, waking up at 5 AM (same), or not eating dairy products. Nobody is asking; generally people are just talking about something that they do, not campaigning for other people to do it. Living without a car is definitely, definitely on that list. For those who are curious, it’s not really all that complicated. Resolve how you’re going to get to work, and that’s almost all of your trips. Shopping and errands take different strategies than the work commute. This can be an interesting game in its own right.
The first secret behind car-free errands is to realize that many errands are really just excuses for something to do. Going straight home every night can feel boring and restrictive. Errands can be set up to include fun stops, like picking up some ice cream. In fact, I think the majority of the time we’re looking for reasons to swing by the drive-thru. Guess what? They don’t let you through the drive-thru unless you are, in fact, driving thru. Gotta go inside. If the treats and fun side trips are a hidden motive behind errands, those can be rewards for using an alternative mode of transport, whether that’s a bike, unicycle, donkey cart, or the city bus.
The second secret behind car-free shopping is that so much of it can be either eliminated or delegated. For instance, I refuse to buy any garments that are dry-clean only, so we never have to go to a dry cleaner. We order a lot of things online and have them delivered. Judging by how many different delivery services come through our apartment complex, more and more people are doing this, and it seems pretty efficient. It’s also possible to special-order various products, from groceries to books, that a conveniently located store doesn’t currently have in stock. Occasionally, we’ve been known to have groceries delivered. This feels like a true luxury, and it’s definitely cheaper than the carrying costs we were paying when we still owned a car.
The idea here is that we’re only making side trips when it’s fun, when we want to. We refuse to be daily freeway commuters, and we also refuse to spend our precious free time on evenings and weekends circling around looking for parking. When we go out, it’s an excursion.
Another very important strategy behind car-free shopping and errands is to consolidate them. We have various hubs where we group errands together, and most of these trips can be delayed until we have enough of them to make a real outing of it. Examples:
Movie theater/favorite casual restaurant
Movie theater/mall/chain bookstore
Independent bookstore/nicer restaurant/specialty dessert place
Grocery store/pharmacy/haircuts/UPS Store
Bike shop/bookstore/REI/nicer restaurant/indie movie theater
For many errands, there are multiple options. We may be going to one place because we’ve always gone there, because it was close to our old apartment or our old job, or because it’s close to our hidden destination of frozen yogurt or whatever. We can often find an equivalent, or a different location of the very same chain, that’s closer to another stop we need to make. Finding these places is a big part of the fun. Often we run across hidden gems, expanding our sense of possibility and enjoyment of where we live.
Another aspect of car-free shopping and errands is to choose what type of car-free option to use. My husband and I go places on foot, by bike, on the bus, and using ride-share services. We choose which way to travel based on what we’re trying to do and what time of day it is. For example, we rode our bikes together to get breakfast on Saturday at the cafe near my gym. On Sunday, we took the bus to the movie theater, walked to a restaurant to get dinner afterward, and caught a Lyft for the trip home. The local bus is cheaper, but it only runs once an hour at that time of night. We’ll eventually ride our bikes for more of our trips, as we get fitter, because our increasing physical strength will start to redefine what we consider to be “biking distance.”
A bicycle is the most efficient way to get around for anything within a 7-mile radius. I confirmed this for myself when I first bought my bike twenty years ago. Not only could I beat the bus home, but I sometimes made it home before my evening bus would have made it to the stop by my work. Almost all errands involve items that can easily be carried in a backpack or panniers (which are special bags designed to hang off a rack on the back of your bike). An easy pace on a bike is about double a fast walking speed; I can speed-walk to my gym in a sweaty 35 minutes, or bike it in 15-20, including the time messing with my lock and helmet. There are only a few occasions when a bike is less efficient: When picking up very bulky or unwieldy items, like a garden rake; when combining a trip with bus travel, if the rack on the front of the bus already has two bikes on it; and, for us, if we’re trying to bring our dog somewhere. The existence of affordable delivery services and ride-sharing make these anomalies something of a moot point.
If you want to cut back on how much you drive, because driving is really a very annoying chore when you think about it, you can do it gradually. Test out one errand or one trip through an alternative method. If that didn’t work out so well, try the same errand a different way, or try something else. Then start keeping track in your mind of every time someone cut you off, honked at you, or stole your parking spot. Remind yourself every time you have to clean out your car, buy new tires, or send in your quarterly insurance payment that these are just part of the price you pay for car ownership. Or you can look at some of my vacation photos and see where else that money could be going!
See you at the beach. There’s plenty of room for you to lock your bike at the rack right next to mine.
You Need a Budget if you have any stress, anxiety, or confusion about money! Jesse Mecham’s book is brilliant in that it’s the opposite of most budgeting books. There are no spreadsheets! There are no formulas! There are only a couple of spots where numbers or budget categories even show up. This book is about strategy and mindset, which makes it perfect for possibility thinking rather than scarcity.
The Mecham family includes six children. Perhaps because of this, most of the advice in You Need a Budget is geared toward married couples who plan to (or already do) have kids, own a home, and drive a car. While there’s nothing radical about this, there are some contrarian elements to the YNAB financial philosophy. One of these is that it’s good to revise your budget if you realize you aren’t sticking to it and you can’t make the numbers work. Several real-life examples back up why this is a really smart idea. Desire for something specific is an excellent motivator to go over your expenses and rejigger them, shifting money from less interesting areas of outlay to your real passions, whether that’s Korean lessons or a diamond dog collar. Mecham is not here to judge.
This book derives from a web-based community, which is where the success stories arise. Real people are using this method to pay off six-figure student loans, pay off mortgages, save for extravagant weddings, and go on lavish vacations. A core element of YNAB is to “age your money,” which means you’re putting aside money in advance rather than looking backward and paying off past expenses. This feels positive and effective.
Most people don’t want to make budgets because they feel restrictive, because they’re confusing, or because even thinking about a bad financial situation is emotionally overwhelming. YNAB focuses on feelings of freedom, options, and power. Your money is here to serve you! You might not have realized it, because you may have associated the term with restriction, panic, or boredom, but guess what? You Need a Budget.
We sold our car over a year ago, and we’re laughing. That was $700 a month that we now have available for other things. Most people will immediately shut down any exploration of that topic, because not having a personal vehicle is too radical to even think about. For the curious, this is the sort of strategizing to do.
The first thing we did was to look at our pain points. A “pain point” is any persistent area of stress, annoyance, or frustration in your life, such as losing track of your keys or running out of dog food. We determined that commuting on the freeway every day was the single biggest annoyance in our life. For us, it was worth doing anything possible to rearrange our lifestyle and avoid a freeway commute. We were able to do that very quickly by finding a rental house within walking distance of my husband’s workplace. That gave us about a year to feel what walking everywhere was like while still retaining our vehicle.
Walkable neighborhoods are not always all that easy to find. It’s a sign of privilege. We’re able to afford to live in a safe neighborhood with lots of shops and services nearby. Of course, walking in your neighborhood automatically starts to improve its safety! Each individual person who dares to go out, carrying a phone and video camera, helps the other residents to feel safer and more comfortable going out. (Martial arts training is not irrelevant to this discussion, and neither is dog ownership). In my opinion, car drivers’ assessment of the safety of a given neighborhood is often off-base and unduly paranoid. I’m much more afraid of car drivers than I am of pedestrians!
What about anchors? An anchor is anything that keeps you in a given situation. When my husband and I first got married, we had two anchors: His golden-handcuffs job, and my stepdaughter’s school. For other people, anchors might include home ownership, a spouse’s job, a probation officer, proximity to a certain doctor or hospital, caretaking for an aging relative, military service, owning a storefront business, or anything else that makes a permanent location strategically important. These anchors actually make it much easier to plan around going car-free, or at least ditching one vehicle. You know exactly where you need to be for the foreseeable future, so you can feel more confident in your other decisions.
There are a bunch of ways to transition to going car-free. Some households have multiple vehicles and are paying insurance even on “project cars” that aren’t running. It’s possible to do this if you have a big garage, a big driveway, a lot of street parking, or more than one property. In SoCal, where we live, most neighborhoods will have as many as five cars associated with one house. Street parking is almost impossible to find, and sometimes people are even living in converted garages. It makes sense when there are five or six working adults sharing a house. It makes less sense when it’s one married couple! Count up everything that needs insurance and ask whether any of them can go.
Getting rid of a vehicle frees up the monthly, quarterly, and annual expenses associated with it. Our “$700/month” figure includes car payments, insurance, gas, oil changes, maintenance, parking, bridge tolls, car wash, and every other car-related expense that we no longer have. If we had owned two vehicles, it would have been much higher. Getting rid of a vehicle might also generate a lump sump of cash, which could be used to pay down the loan on the main vehicle; pay off credit card debt; put aside for an emergency savings account; buy a motorcycle, scooter, or electric bicycle; or, what the heck - go on vacation.
We live in a walkable neighborhood, and the reason is that we chose it when my husband got his current job. He got the offer, we had twelve days to relocate to a new city, and we moved our stuff into storage and stayed in an AirB&B while we scouted the rental listings. Another valid point about going car-free is that we downsized from a suburban house with a garage to an apartment. Not only did we eliminate that $700/month of car ownership, we also significantly cut our rent and utility expenses. We were able to painlessly escalate our retirement savings.
Going car-free is about more than just the money. It’s a straightforward fitness strategy. My hubby just turned 50, and I’m cruising through my forties, so we have to start taking our health and mobility more seriously. He rides the bus for most of his daily work commute, using his folding bicycle to get between bus stops. (That was strategic also, because standard bikes are not allowed inside his building, but he can carry the folded bike and store it in his office). I ride my bike to my gym, adding 20 miles a week to my fitness program. The initial cost of a bike is amortized when you weigh it against what you would have spent on a car, higher rent, a gym membership, or other fitness equipment that you might have bought.
Our overall lifestyle was constructed from the ground up. We have a status meeting every week, and we sat in a cafe and talked out our ideal life. That made it easier to imagine ourselves living in a one-bedroom apartment instead of a three-bedroom, two-bath suburban house with a two-car garage and a car payment. In one way, it was an extreme, radical move, but in another, it was really straightforward. We spent two weeks downsizing our stuff and relocating, and then we were done. My hubby sits on the bus and reads the news for half an hour instead of being tailgated by road-raged caffeine junkies. I ride my bike and get a free warmup before my martial arts classes. Our retirement accounts are filling more quickly than they ever have before.
The result of going car-free is that we’re both fitter and more relaxed, partly because our finances are in such great shape. Because we were willing to downsize into a tiny living space, we can afford to live at the beach. It’s fair to admit that we’re in a position to go to a car lot, take out a loan, and drive home with a new car any day of the year. Most changes are not permanent. We didn’t really risk anything by making a radical lifestyle decision. There was much more risk involved in spending a higher proportion of our income, with comparatively less in savings. We originally agreed to reevaluate after one year, and we already have. We’re in no hurry to ever own a car again. It’s fun and freeing and helps us feel like a team. Plus, we never have to set aside time to “clean out the garage.” Think about it. Maybe going car-free for a while would work for you, too.
Zero savings. I keep reading about it everywhere and it’s infecting my mind. Where does the money go? How can people possibly have not one single dollar tucked away somewhere? I have a jar with over $80 in it, because I’m a scrounge, just from coins I’ve picked up in the street in the last twelve years. (Mostly pennies!) Then I remind myself that most people do not make a mental or emotional connection between “savings” and their spending habits. We don’t even think of our “spending habits” as spending habits, just as “trying to live my life.” When I work with photos or do home visits with my clutter clients, I look around and think, even at a dollar per item, there’s a lot of money sunk into this room.
When I don’t have any savings, then my personal belongings represent my net worth.
Um, unless I have debt. Then I have clutter and a negative net worth.
Before we go on, I’ll state the obvious: Financial net worth is not the same as spiritual net worth or social net worth. All we’re talking about today is money. Although, as long as we’re on the topic, when we don’t save any money then we are counting on other people to fill in for us, bail us out of trouble, and perhaps support us in frail old age. What will we do if we find out that they had the same plan as us, to count on us for material support the exact same way we were counting on them? We tend to fill our homes and lives with clutter when we cut ourselves off socially and isolate ourselves emotionally. That’s part of why any discussion of the emotional, spiritual, and social inevitably includes the financial.
Back to the clutter. Where did it come from?
The extremely frugal of us will be chuckling and remembering all the stuff we’ve brought home for free. The chronically disorganized will be looking around and noticing how much of the clutter consists of junk mail, newspapers, recycling, and other stuff that... well, it didn’t cost anything but we don’t think it’s all that valuable, either. In both cases, we might do well to ask ourselves if we could lower our rent by using less space. We can also ask whether we could earn more by diverting our scrounging, bargain-hunting energy toward more lucrative side hustles or training for a higher-paid career.
The rest of us can ask, did this cost more than a dollar? A used book, a shirt, a throw pillow, a pen, a can of soup? I still shop at thrift stores, and the price range in my area is now $3-8 for most items. Anyone with a good memory for the lineage of their bargains may be able to bump up that estimate and say, Yes, everything in this room cost at least three bucks, or whatever that number might be.
It could be an interesting exercise to go around with a notepad and write down estimates for the larger items. Roughly how much was the couch, the TV, the bed? It could also be interesting to do an estimate for one small area, such as “everything in the fridge” or “everything on the floor of my car.”
There’s something about the number 55 that comes up often in my work. Fifty-five coffee mugs, fifty-five t-shirts on the floor, fifty-five mechanical pencils. At a dollar each, we can say, “Okay, that’s $55.” Did I actually need each and every one of them? If all my shirts are in layers on the bedroom floor, and I’ve been washing the same basket of other clothes for the last several weeks, then is it possible I could have saved that $55? If I had, would I then have an envelope of money and a clear surface in my home?
Or does any cash on hand “burn a hole in my pocket”? Does a bare surface make me feel a little stir-crazy? Do I spend money quickly or surround myself with stuff because it’s emotionally more comfortable and familiar?
The trouble with clutter is that it fades into the background. We’re so used to it that we forget it’s there. More, we have trouble imagining anything else. How would life be different if I never had to clean this up again? How would life be different if I actually had an emergency savings account? How would life be different if that savings built up over years, and I started trusting its presence?
The other problem with clutter is that it generally doesn’t have any resale value. Many of my people are so emotionally attached to the sunk value of their stuff that they’ll hang onto boxes and piles of it for years, hoping to “get something for it” at the yard sale they’ll never have. Then they finally do put a yard sale together, spend twelve hours a day sitting out in the hot sun, and fail to sell 80% of it. This is a mistake that derives naturally from scarcity mindset. Abundance mindset says, donate it all to charity, spend the weekend napping and going to the park, and think of a different way to come up with $300. My husband and I once wasted a beautiful summer weekend trying to make $100 at a yard sale, and this year we just offset our expenses $600 a month by moving. The new place is thirty square feet smaller, which is less than the size of a ping pong table.
In an emergency, could we get everything out? I think not. I have two pets, and if a natural disaster happened, I’d really have my hands full just collecting them and getting them safely out the door. In my area, the main risks are tsunami, earthquake, wildfire, flash flood, and mudslide. Years ago, I decided that I would never allow myself to get my heart broken by feeling like my stuff was “ruined” or that I’d “lost everything.” If I’m alive, my loved ones are alive, and my pets are alive, then I have lost nothing. I feel much better having an emergency plan, a go bag, physical fitness, insurance, and emergency savings than I think I would if my apartment were full of a bunch of material objects, no matter how awesome they might be.
We keep clutter because we’re overly concerned with the value of things. We’re caught up in the aspirational feelings that we will Definitely Use This Someday. We believe that objects represent our memories and our heritage, and that without the objects we’d forget our past. Many of us believe that our stuff is our personality, so much that we even use the term ‘conversation piece.’ When we feel poor and that life is difficult, we hang onto our stuff because we believe it’s the best we’ll ever have. Imagine how different it would be to instead feel financial comfort, to feel that the future will be more interesting than the past ever was, that we are changing and growing and contributing all the time, that tomorrow will be easier. Imagine how it would be to feel less “this thing is worth something” and more “I am worthy.”
The Financial Diet sets itself apart from other beginner’s guides to personal finance. Almost every book in this category is full of textbook advice on how to set up different types of accounts and how to allocate investments. This can be very intimidating. The Financial Diet focuses more on the mindset and emotional realities of getting a handle on your money. This makes it a great starting point for anyone who feels overwhelmed by numbers.
When I first decided to learn about finance, I had no idea where to start. It seemed like every book on the shelf was written by and for people in their forties, people who owned a house and a car and had college degrees and careers. I couldn’t figure out how to get from where I was, a broke office temp with no credit, to where I wanted to be. Wherever that was? Because I had no idea when I was in my early twenties where I would eventually wind up. I just knew I hated being poor. I very much would have appreciated a book like The Financial Diet, with its profiles of various successful women and its casual language.
Another way that this book sets itself apart is that it devotes a section to domestic skills. There are even recipes for traditional comfort food. From the perspective of someone who has gradually climbed the ladder, this is really important. It’s hard to keep to a budget without a sense of domestic contentment and a desire to spend most of your time hanging out at home. The advice here on how to cook, do home repairs, and shop for bargains is pretty solid.
The specific financial advice dealing with actual dollar amounts and actual types of accounts is solid as well. Seeing a selection of budgets from different people with different lifestyles is much more helpful than the abstract percentages and worksheets that fill most budgeting books. I found the checklists and journaling prompts to be insightful and thought-provoking, even for someone whose finances are already organized.
The Financial Diet is not, and does not claim to be, the only personal finance book anyone could need. The subtitle spells out that this is for total beginners. Speaking for myself, I really appreciated how it addressed class privilege, imposter syndrome, and the challenge of transforming from a clueless young person to a professional adult with a career. I would recommend it to any beginner with a good sense of humor. Come to think of it, this book would make a good graduation gift.
“Learning basic skills like how to install a shelf... has done more for me financially than any raise on a biweekly paycheck.”
“I know from personal experience that the more control I got over my financial life, the more I realized that I am not my mistakes - and neither are you.”
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I've been working with chronic disorganization, squalor, and hoarding for over 20 years. I'm also a marathon runner who was diagnosed with fibromyalgia and thyroid disease 17 years ago.