Would anything have been different if I had known sooner?
I went to a destination wedding with my family. I was about to turn thirty. I was painfully single, at least as broke as I had ever been, and recovering from an illness in which I temporarily lost half my lung capacity. As I sat in a rental car with five relatives, it felt like I had nothing going for me.
Little did I know, in exactly three months I would meet the man who would become my second husband.
I had no way to know that not only would I get my breathing back, I would eventually go on to run a marathon.
I couldn’t really imagine it at the time, but I would also pay off my student loans one day. My credit limit on one card would be higher than my loans ever were.
I didn’t even know that I would one day live with my little love, my gray parrot Noelle.
I couldn’t see three months into the future. It just felt like one day after another, the same the same the same, with this little blip of the family vacation. I felt like I would always be broke and single and ill.
This is why I wonder what would be different, if I had known what was coming.
If I’d known I would eventually be debt-free, would it have helped me sleep better at night?
If I’d known I would get my health back, and fairly soon, would I have started working out sooner? Would I have started losing weight sooner? Today I understand that having an extra thirty-five pounds on my chest wasn’t doing my lungs any favors, but I didn’t then. I would have been shocked and angry if anyone had suggested it. If I had seen the future, would I have taken action?
If I’d known I would meet a future husband in only three months, would I have felt less lonely? Would I have skipped the handful of painful blind dates? Would I have avoided dating the couple of guys I dated in between?
What would I have done? What would I have done with the time that I spent crying at night? The time that I spent writing hundreds of pages in my journal, trying to wring something out of my existential pain?
There were a few things I did that worked very well. These were things I did for myself, comforting actions born of optimism. These things helped set me up when I did embark on the relationship that became my second marriage.
The first of these optimistic actions, the one that mattered the most, was to pay down my debt. My frugality and focus on building financial security helped me to feel stronger and more confident. It also turned out to be the single factor that my hubby found most attractive! For anyone over 35, every decade that goes by makes this even more important.
Any marriage-minded person has to take into account the question: Did I save enough for TWO retirements and can I afford to pay off someone else’s debt as well?
(Hint: probably not)
The second thing I did for myself that paid off in my future relationship was to fight for my health. When my hubby and I met, we were both... well, to put it bluntly, we were both fat, broke, and angry at our exes. In other words, we were on the same emotional wavelength. Getting fit together helped to build our friendship. I was trying to get both lungs back and he was recovering from herniated disks in his spine. Two wildly different problems both helped by increasing mobility and cardio endurance, and dropping body fat.
Now we spend our vacations walking 8-10 miles a day, climbing multiple staircases, and backpacking into wild areas. Old Us couldn’t have had this kind of fun, either alone or together.
The third thing I did for myself when I was single and lonely was to prioritize domestic contentment. This is by no means the only type of love and romance in the world, but it’s a pretty darn good one. I had my own apartment again for the first time since I was 19, and I definitely made the most of it! When I signed the lease and got the keys, I showed my landlords the door, shut it behind them, and started doing the Sound of Music twirl through all the (four) rooms. I believe I even rolled around on the carpet and kicked my feet.
What attracts a friendly kind of romance is that confidence and domestic contentment. If you don’t like your life, why would anyone else? If you aren’t happy by yourself, how could you be happy with anyone else? Domestic contentment is the radical act of taking responsibility for your own happiness. Guess what? Having a partner means that your happiness is still just as much your own personal obligation and responsibility as it was when you were alone. You can’t outsource it, you can’t delegate it, and you can’t abdicate either.
Three months from the click, the main emotional commitment I had made was a solemn belief in poverty, illness, loneliness, and misery. All I thought I had was myself and I didn’t even want me.
Three months from the click, I had a travel disaster. I wound up spending the night in a downtown hotel that I couldn’t afford. A kindly desk clerk shifted a few things and got me a half-price room. In the room that night, at the end of my trip, I soaked in the bathtub for two hours. I made myself the internal commitment that I would do whatever it took to improve my situation. I couldn’t know just how much better things would be in three months. As a matter of fact, everything got at least ten times worse shortly afterward! It wasn’t certainty in a brighter future that brought me that future. It was nothing more or less than a blind commitment to work at it. To keep my head up and to keep trying.
The question that arises out of all this is, if I could see three months into the future (or three years, or thirty), what would I do differently today? Am I doing everything that I know I can to move me in that direction?
Money problems are the best kind of problems, because they can actually be solved. Most problems that can’t be solved with money can’t be solved at all!
I tried to make that list longer and I had trouble doing it. Missing someone who is far away? Call or visit, problems that money can solve even if it takes a satellite phone. Have a problem you don’t know how to solve? Hire someone and ask for their expert opinion. Want something that doesn’t exist? Hire some designers and start making it, or write it into a novel or screenplay.
Then I went back over my list of Problems That Can’t Be Solved With Money and realized I might not be imaginative enough there. The Taj Mahal was built as a way to use money to deal with grief, and it’s a monument to undying love that has inspired generations. Stephen Hawking survived far past the limited medical knowledge of his youth and lived to a respectable old age, and there must have been money involved in that. Getting a song out of your head I guess could be solved by playing a different song, or going to Disneyland and riding the Small World ride. Hurt someone’s feelings, not much you can do about that, but paying off their student loans would probably help.
It seems that a large chunk of what qualifies as existential dread may come from the idea that we are surrounded by problems with no solution.
How much more manageable is that feeling when more problems feel like they can be solved after all?
We argue for our problems. We argue that they are inevitable and we argue that there is nothing we can do about them. Ask around and you’ll find that people are constantly arguing for their own limitations and against the concept that they have free will.
Ask anyone with a problem to imagine what it would be like to not have that problem. Usually you get a blank look. Nobody thinks that far. This is sad, because imagining a world without the problem often includes the obvious solution to the problem.
As an example, the biggest problem in my life right now is that my upstairs neighbors are constantly waking me up at 5:30 in the morning. What are some ways that I can solve this problem with money?
I’m so tired that I can’t think of any.
False. I could stay at a hotel, I could bribe my neighbors to stop wearing shoes in the house, I could hire a contractor to soundproof our apartment, or, hey! I could pay the seven grand to break our lease and move elsewhere.
The mental exercise involved in solving a problem with money is the same type of mental exercise involved in solving problems WITHOUT money,
The main factor is to think of a problem as a paradigm, one possible instance out of infinite possible variations on a timeline. In one universe, this problem exists. In most other universes, it does not.
Often, solving the problem only means stepping out of the current paradigm.
Quitting a job is one example of this. Every problem associated with the bad job goes away. The commute, the bad boss, the untrustworthy coworkers, the annoying customers, the poor lighting, sick building syndrome, the breakroom that smells of burnt popcorn and reheated fish.
Divorce is another example. My own divorce created a huge slew of problems for the first year. It also took away a bunch of problems, including my wasband’s snoring. Just like changing jobs, getting divorced resets the scoreboard. You get a fresh start and a chance at something better.
Note that both a job change and a divorce are problems that can be solved with money. You can hire someone to help with your resume just as you can hire a divorce lawyer.
I was poor until I was thirty. In my younger days, my diary was almost entirely full of worry about how to pay bills or make rent. I wonder what I would have worried about if I hadn’t had so many money problems. Another way to put that is that I wonder if I had really had any problems back then that couldn’t have been solved with money.
Now I’m not so poor that I lie awake crying or pay 80% of my income toward rent.
Now I am gradually learning to ask, whenever I have a problem, Could this problem be solved with money?
Can I buy my way out of this?
An example came up of a problem that I couldn’t solve with money. I was only partway through writing this post, and I realized I needed to finish it before I went to bed. Maybe there might have been a way to pay someone else to finish it, although that wouldn’t have been my desired outcome, but not on the timeline that I had. I got a good laugh out of the thought that in the process of writing about solving problems with money, I had created a problem that couldn’t be solved with money.
This is where I circle back to my “loud neighbor” problem. My real issue isn’t the neighbors waking me up so early, it’s that I keep prioritizing other things late in the evening that keep me from going to bed earlier. I don’t want to go to bed at 9:00 PM, even though that is a money-free way to solve my problem. Apparently I also value $7100 more than I value my lack of sleep. If problems can be monetized, then they can be specifically quantified.
Ultimately every problem is about the tradeoff between one thing that I want, and something else that I want, and the friction between them.
Solving a problem is a form of investment. It takes away the problem from this moment, as well as all future moments. Thus it’s always worth more than we think it is. We just have to try harder to imagine what it would be like to step into that future timeline where the problem doesn’t exist. That future point without the current problem, that’s a future point with more options, and, often, more financial means. The better we get at solving problems with or without money, the better we get at figuring out the money problem itself.
Some ways to solve problems with money:
A plumber, electrician, or general contractor
A chiropractor or physical therapist
A dentist or orthodontist
A personal trainer or nutritionist
A new wardrobe
A down payment
A dog trainer
Now you try!
I had a discussion with a marketing person about putting on a workshop. One of the first things she said was that I should give “scholarships” so that part of the audience could attend for free.
There are several questions implicit in this idea.
One. I should work for free. I specifically should work for free. Why me?
Two. People who do my type of work should work for free. Why? Why us and not others?
Three. Certain people should get things for free while others pay. Why them? An argument can be made that there is always someone out there who is more deserving.
These are serious questions. I talked it out with my husband, who is an engineer, and he thinks the whole thing is absurd. Literally nobody has ever asked him for free engineering. Is this because of his profession, because he is male, or because he does not happen to work in one of the few fields that is considered to qualify as compensation-optional?
One of my husband’s life goals is to volunteer for Engineers Without Borders, helping people in the developing world to have access to better sanitation, infrastructure, etc. He has the skills and it sounds fun and rewarding. Why doesn’t anyone imply that he should be doing this humanitarian work right now, today, instead of during retirement?
The criteria for “you should work for free” seem to be:
“Fulfilling” or intrinsically rewarding work
Opportunity to build an audience
Therefore, teachers are told that they shouldn’t mind working around the clock for low wages because teaching is so fulfilling. But dental hygienists and nurses aren’t told this.
Writers are told to write for free, for the exposure, but accountants are not told this.
Musicians are told to perform for free, but florists are not told this.
Graphic designers are told to give away their work, but printers and publishers are not told this.
Yoga instructors are expected to offer a sliding scale, but massage therapists are not told this.
Isn’t it strange? We don’t tend to think of these jobs as divided between “people with rent to pay” and “people with no rent to pay” or “people who buy groceries to eat” and “people who do not require food to live.”
I think this is partly because people have learned to expect and demand 24/7 access to the highest quality entertainment, free of charge. Why should any of us ever pay for music, for funny videos, for wallpaper images, for news articles?
No matter what income level, people spend the same percentage of their income on entertainment. That’s the only category that is the same across all five quintiles. It’s just that we’re willing to pay if we know it’s the only way we can get ahold of the entertainment we want.
Stepping back for a moment, I personally have spent years providing material to an audience for free. There are at least two thousand pages of content on this blog, for instance. I have always had pro bono clients as well.
I’m starting to question this, because the clients who don’t pay take significantly longer to make any progress, if they ever really do. I’ve started to feel that receiving support and coaching without some kind of energy exchange is actually negative for the client. Somehow it seems to make them feel needier and more helpless, more reliant on cheerleading and external motivation.
My proposal for the workshop series that led to a call for scholarships included a way for committed but broke people to attend. I built in a couple of support positions that would include free attendance. All someone would have to do would be to help sign people in and pass out a couple of handouts. I’ve done the same thing myself as an office temp. This isn’t the same as “FREE” though. Why doesn’t it work?
Why is there some kind of impression of sketchiness or greed involved in expecting an audience to exchange something for something?
The thing about event planning is that venues are very expensive. Most of the ticket cost for an event is basically rent for the space. There’s also printing, the cost of which ramps up as the materials get glossier and more colorful. Asking to attend such an event for free is not just saying, “I should not pay.” It’s saying, “YOU should pay thousands of dollars out of pocket to host this event so that I can attend for free.”
I think people don’t realize what goes into producing their free entertainment. All the hopeful musicians who invest thousands into their instruments and recording equipment. All the hopeful podcasters who not only buy recording equipment, but also pay to host their show. This extends outward. All the hopeful yoga instructors who pay to lease the studio and then clean the restrooms themselves. All the schoolteachers who buy school supplies out of pocket and grade papers in their “spare time.”
All the people working nights and weekends, striving for a dream, all still have rent and bills to pay and groceries to buy. People who are expected to work for free are exactly like everyone else who is never expected to work for free.
This is an inherently annoying concept, granted. I don’t want to think about whether my dental hygienist deserves her salary, nor do I want to think about whether I should financially support my favorite bloggers in some way. Do you?
I do, though, want to live in a fair and just world. I want to make sure I am more of a giver than a taker. I like the idea that I am contributing to my culture in some way, and maybe making something that has a chance of lasting a few minutes past my lifetime. What I would not want is to realize that I’ve come to the end of my days, doing little more than passively consuming other people’s efforts. Or writing one-star reviews about them!
The concept of an inheritance is, I think, becoming dated and antiquated. It’s something of a Baby Boomer thing. Those of us who are younger probably understand that the world works differently now. Still, it’s worth talking about. There is a vague dream of a someday inheritance, a financial windfall, that will somehow eliminate all our problems. This is not just a dangerous illusion, but an illusion that can poison ambition and domestic contentment. Kill your inheritance, and kill it in self-defense.
Now, it’s a good thing to think of a legacy in non-material terms. We can be proud of what we’ve inherited from our family when it comes to values and character traits. Hospitality, sense of humor, frugality, ingenuity, a gift for storytelling, grit and fortitude, these are the sort of gifts we should be proud to carry on. This kind of gift is non-zero-sum, meaning it never runs out. The more you share, the larger it grows. You can roll it out and make enough room for spouses, kids, and friends.
All of that goes completely out of the window when we start talking about money, real estate, and material goods.
In my work with clutter, I have seen it over and over again. People will quit talking to each other over a photo album, a single ring, some old furniture, or a stupid teacup. Unbelievable. You’re saying you’d TRADE your blood relation for a piece of scrap that wouldn’t sell for fifty dollars in a pawn shop? A lot of this stuff couldn’t be sold for a bent nickel.
The problem is that grief makes people temporarily insane. It’s understandable. With time and some healing, we’re sometimes able to get enough emotional distance that we can recognize our own irrationality from our own mourning periods. Not likely in the heat of the moment, though. Whatever it is about the old, I dunno, the old 8-track player or the blurry slides from 1958, it seems to activate everyone’s feelings of thwarted power and desire from earliest childhood. GIMME! It’s MINE! Like fighting over the last popsicle.
Then we get to the house and the money. That sweet, sweet munnah.
Back in the bad old days, the land was almost the only thing a family owned. Material goods were expensive and hard to make, and people had very little in terms of clothes, furniture, and housewares. Property went to the oldest son, and the rest of the family had to make do or beg for a place at the table. Imagine being an unmarried adult daughter and having to wheedle your big brother for a chance to stay on and do all the cooking and laundry, because it was that or panhandle in the road.
Then property started to be divided between descendants. Probably more fair, but fast-forward a couple of generations. The first block is divided between four kids. Then they each divide their share between their five or six kids. Then each of those grandchildren has eleven or twelve grandchildren. It doesn’t take long before the tiny slivers that are left are too small to support a family. Or the global economy changes in response to technological advancement, and the world moves on. But somewhere inside all of us is a glimmer of ancestral memory, when our family several generations back were higher in the societal pecking order.
Those photo albums and rings and teacups and old furnishings remind us of a vanished time, a time that we partly believe is our true place.
I have copies of old family pictures from the Civil War through the Victorian era. Look, they’re wearing suits, and fancy hats, and dresses with bustles! Never mind that they probably owned only one or two changes of clothes. I DESERVE.
Some of that genteel feeling, we could easily get back. We could get it by hand-tailoring our clothes in our own living rooms, the way earlier generations did. We could get it by speaking more formally, using appropriate terms of address and ritual politeness formulas. “Good day to you, sir.” It’s not money that they had, so much as stricter rules for social decorum. We’d probably find it unbearably stuffy and restrictive. Personally, I prefer modernity with its electronics, egalitarianism, and endless options.
One of the most dramatic changes of our era is our incredible longevity. Human lifespan has basically doubled in the last century, certainly within the last two hundred years. I’m forty-three and it wouldn’t have been at all uncommon for a woman my age to be gone already. Now it’s not uncommon for a woman to still be up and doing at eighty-six, double the age I am today.
What this means is that our old structure of “inheritance” is going to have to change, the same way the way we think of “retirement” has to change. It was different when the retirement age was sixty-five and most people died by sixty-three. Now a lifetime’s savings and investments will be needed for the next twenty or thirty years of life. A house that would have lasted thirty years, enough time for a young family to grow up and for the owners to age properly, will now be worn out and needing major repairs just in time for that retirement. Buy a house at 35, and at 65, guess what? It’s going to need a new roof, all the appliances are going to wear out, maybe even the foundation, plumbing, wiring, windows, and floors will need to be redone.
How will there be any money left for the adult children after funding the retirement needs of advancing longevity? How can someone fund such a long retirement, working 30 or 35 years to pay to retire for 20 or 30 years or more? How could it be done at all, much less debt-free? How could it be done in perfect health, much less after funding decades of ill health, medications, medical appliances, and surgeries?
If anything, these trends are going to be even more pronounced over the next few decades. At some point, the finance industry will figure out a way to rig new mortgages and consumer debt loads. Individuals will adjust their expectations for their personal longevity, how old they want to be when they give up on their physical health, and how they intend to pay for their retirement. Family arrangements will start to look markedly different. We’ll probably move back to having multiple generations under one roof, and in that case, an “inheritance” might just look like redecorating a bedroom so the sixties-aged kids can move back in to assume caretaking responsibilities, for their eighties-aged parents and their grandparents who are still here as centenarians.
Expecting an inheritance, according to research, tends to lead to more debt and less career success. Today’s reality is that whatever investment money and home equity are there, will most likely be consumed by the daily living expenses of unprecedented old age. This is fantastic, if you actually love your relatives and cherish having more time with them. It’s a bummer, if you’ve always had this lingering hope that they’d shuffle off this mortal coil and leave you enough to pay off your credit cards.
I’m very fortunate to have young parents. They’re still working, and I’m middle-aged, well aware that I need to plan for my own old age. When I “retire,” they may still be spry enough that we can go on vacation together. All I want for them is that they have enough saved to take care of themselves and preserve their independence as long as possible. The inheritance that I desire is a legacy of strength and savvy, and perhaps the secret to a seventy-year marriage.
I met an interesting character the other day. We struck up a conversation while waiting at a stoplight. By the time we had crossed the street and walked through the park, we had managed to interview each other and exchange some interesting ideas.
Living on the pier is a crossroads of humanity. There’s a constant flow of families, dog walkers, transients, drunks and drug users, tourists, musicians, joggers, skateboarders, cyclists, young couples, barefoot surfers in wetsuits, students on field trips, retirees, and also a few neighbors. It’s busy here. It’s also not unusual to bump into someone who is at leisure at 2:00 on a weekday afternoon.
Wealthy people look different. It’s basically impossible to fake that posture, haircut, skincare regimen, wardrobe, and aura of prosperity, just like it would be pretty challenging to fake the hard-worn look of someone who has spent years sleeping rough.
I’ve learned this through having lived in many different neighborhoods over the years. I don’t particularly prefer to live among the wealthy. They spend a lot of time talking about things that bore me senseless, like where they bought stuff, what their yapper dog is up to these days, and how “good help is so hard to find.”
They also can’t usually relate to why my husband and I live in a studio apartment and don’t have a car.
That’s what made this conversation so interesting. We discovered we were both strangers in a strange land.
It basically went like this:
“What a gorgeous place”
“Another day in paradise”
“I’m new in town”
“Were you here for the butterfly migration?”
Blah blah blah
“I live on a sailboat”
“Oh, are you a nomad?”
“I don’t know what I am, what’s that?”
“There are a lot of people who are financially independent, who travel around the world, it’s a thing”
“Are you one of them?”
That’s when we started comparing strategies and a few numbers. “What’s your efficiency?” he asked. By that I understood that he meant what we call “the nut” or monthly overhead.
“You should live on a sailboat,” he said. It costs him $1600 a month to stay at the marina (right next to our apartment complex) and apparently it comes with access to a gym and a steam room and stuff.
He went over what it took to manage such a feat, how he learned to sail various types of boats, starting with the very smallest size and working his way up in complexity.
I asked how old he was when he learned to sail, and he said he started about ten years ago, which both did and didn’t answer my question. I gather that he was at least in his thirties when he suddenly decided, Hey, I should learn to sail. That somehow turned into, Hey, I should live on a boat, sail from Canada to San Diego, and figure out where I want to settle down. Or not.
I have my own opinions about all this, of course. I’m not a strong swimmer and I can only really manage myself in a canoe or a kayak. I have read quite a lot of nautical adventures, though, and that’s why I asked a few more questions.
“What do you do in the winter? What about when it storms?”
“I haven’t done this over the winter yet,” he admitted. Ugh.
I told him I wanted to go to sea as a child, that my fantasy was to become a “cabin boy” and that I was very disappointed to learn that wasn’t a job anymore. At least, I was disappointed when I was nine. As a middle-aged woman, going through a tropical storm in a sailboat of any size sounds pretty darn dreadful.
There are other factors, too. I don’t know this man’s story, or why he’s suddenly free to sail down the length of North America alone. Was he married before? Does he have kids? Is he retired? Is he actually F.I. or is he burning through cash reserves while he bounces back from divorce, getting fired, or losing a lawsuit? Who knows?
Me, I live with a man, a dog, and a parrot. Noelle would probably love being on a sailboat and smooching kids at the marina, shaking out her nice red tail feathers. Our frail, ill, elderly dog would not enjoy himself at all. Could my husband and I deal with sharing a tiny ship cabin, a tiny ship stove, a tiny ship heater, and of course the tiny ship’s head, with the shower spraying on the toilet? Eh, maybe, maybe not.
We actually are the type of married couple who could probably do well while living on a sailboat. We’re already minimalists. We’re good at what we call Pack-Fu, or the art of fitting objects carefully into a tight space. We’ve spent weeks backpacking and sharing a tent together. We’re both handy with tools and we have the kind of discipline that is needed to stay on top of leaks and mildew. We do, of course, also love money and the saving thereof. Paying an “efficiency” of $1600 a month sounds pretty great!
It sounds great until we factor in the part about buying a small, used seafaring vessel. “It’s like an RV,” I say to this sailor/retiree I’ve just met, and he agrees. In my mind, that means it’s high maintenance, hungry for repairs, expensive to fuel, and hard to park. You’re stuck with it, like it or not, and it can be hard to find a buyer when you realize it isn’t your dream of an easy, relaxing retirement after all.
What a great fantasy, though! If you don’t like your neighbors, you can simply sail away. Sail away from thoughts of trouble, sail south when storm clouds gather at the horizon. Sail away toward... toward what, exactly?
We saved 48% of our income last year.
What that means, specifically, is that 48% of our net base salary went into our retirement accounts. Net = after taxes and any other non-retirement withholdings. Base salary = the amount in the employment contract.
This does not include money that went toward paying down debt. For example, I finally managed to pay off my student loan.
How is this possible?
I’m going to write a somewhat abstract post because I don’t want to just baldly state our actual income. Some people do that, but *shrug* I’m not going to. The point is to focus on STRATEGY for those who will find it helpful.
Posting actual numbers, Money Diary style, tends to draw doubters and naysayers. That’s not my audience. Big hair, don’t care.
How is it possible to save half your income?
Two ways: offense and defense.
My husband taught me this. I’m an extremely hardcore full austerity frugalite. I play D. I can casually do a Buy Nothing Month and barely notice, because I’ll just spend the time reading library books and journaling. I’ll cheerfully serve up lentil soup, darn my socks for a third time, and dilute my laundry detergent to 80%. The trouble with this scrimping method is that you can only get your expenses down to zero dollars and zero cents. There’s a finite limit to how much you can save by playing defense.
I married a strategic thinker. He plays O. There is an infinite amount of money that someone can earn. There is no top level to how much you can escalate your income. In his mind, it’s a lot easier to find a way to EARN ten thousand dollars than it is to SAVE ten thousand dollars. That’s why he quit his job as a logger to go back to school and become an aerospace engineer.
We’ve learned to respect each other’s mutual styles and use them to work together. He appreciates my sincere desire to cooperate toward financial independence and stay on plan. I appreciate his ludicrous ability to read textbooks for fun, design things that go to space, and accrue patents. We take turns suggesting lifestyle pivots and talking each other through the pitch.
That’s how we’ve wound up in this bizarre, outlier situation of banking half our income.
Step One: Cooperate and tell the truth about your life. We have a breakfast meeting every single week where we talk about our finances, among other things. We’re able to do this without blame and recrimination because we share the goals of early retirement and excellent vacations. We’re allies. Wealthy celebrities go bankrupt and get expensively divorced all the time because they don’t know how to work as a team, and this is why cooperation comes first.
Step Two: Focus on career direction and earning potential. We’ve relocated for jobs four times in our ten-year marriage. We don’t have a mortgage but we both work at our dream job. The goals here should be, how do we do the most fascinating possible thing all day while mentoring younger people and also making it rain money?
Step Three: Lifestyle design. The tricky part.
The most valuable parts of anyone’s lifestyle are usually outside the cash dimension. Love and friendship. Self-expression. Connection to the natural world. Developing a personal philosophy. Sleep quality, cooking skills, having a home filled with laughter and conversation. Put a price on any of that.
We build our feeling of home and being entertained around the intangibles, and that’s what makes it relatively easy for us to chop expenses.
Okay, seriously though, how do we save half our income?
We live in a studio apartment close enough for my husband to take the bus to work. I work at home.
We got rid of our car two years ago because all they do is eat money 90% of the time.
We cook at home, only going out to eat maybe once a week because we’re really too busy. We’ve only had pizza delivery ONCE in our entire thirteen-year relationship, and it wasn’t very good either.
We don’t drink alcohol or indulge in any other recreational substances such as pay cable.
We don’t “shop” as an activity, and that’s no sacrifice, because we both hate wandering around in stores. Also, we live in a 612-square-foot studio, so where would we put anything?
Our default weekday is to work all day, go to kickboxing class together, bike home, shower, eat dinner, hang out with our pets for a while, and go to bed.
Base salary. See above. We’ve prioritized earnings over our own lifestyle throughout our marriage. That has meant moving away from family and friends over and over again. It has also meant getting rid of at least 80% of our possessions and living in a quarter of the space we had as newlyweds, because we’re nomads now.
Overtime earnings. Many jobs don’t have this as an option, and not everyone is in a position to take advantage of it. My family’s perspective is that working overtime helps take the pressure off of all the colleagues with young families or other caretaking responsibilities. Take one for the team, ka-CHING.
Bonuses. My husband has this terrible habit of winning awards at work. Unfortunately he might also wind up making money off his patents at some point, too. It’s dreadful.
Non-cash perquisites. One feature of frequent business travel is that it racks up a lot of points and miles. Another is that a lot of passthrough expenses go through our credit cards, building up yet more points and miles. We typically don’t have to “pay” for plane tickets, hotel rooms, or rental cars anymore.
Side hustle money. Everything we make on the side goes toward things like electronics upgrades, vacation, or vet bills. It used to go toward debt payments. There’s something highly motivating about thinking, “I’m going to earn myself a brand new Mac” or “this will buy our dog another year” as opposed to abstract numerals with a dollar sign in front.
The treats: Part of why our lifestyle works for us is that we’re both motivated by the same major goals, one of which is financial independence and the other of which is travel. We splurge on vacation, as well as a few other things: Our phones, robotics textbooks, spoiling our pets, hanging out at Starbucks, and going to our boutique gym. Since we save half our income, we feel entitled to indulge ourselves in the ways that matter to us, as opposed to things that don’t, such as owning two vehicles, eating snacks and drive-thru food, watching cable TV, or living in an average-size house.
We moved into a studio apartment so we could get a year ahead on our retirement savings, instead of a year behind. (Scrambling to pay 2015’s IRA contribution in spring of 2016, whereas now we’re already saving for 2020 in 2019). It worked! Saving crazy amounts of money has been fun for us and it’s helped us to build a stronger marriage. The stress of debt is so, so much harder than the stress of sharing a tiny living space and basically living like college students.
The $1000 Project is a new, exciting approach to earning and saving money. Canna Campbell decided to turn her finances around. Her story starts as a single mom who had experienced postpartum depression. Other people mentioned in the book have various challenges, making this strategy feel accessible.
The premise of the $1000 Project is to save money in small increments. This can help to make even huge goals seem more approachable. The wins are closer and more frequent.
This is an Australian book, so the dollar amounts are Australian dollars. I looked it up, and at time of writing, $1000 AU is about $700 US. On the one hand, that makes the $1000 Project simpler and more obtainable. On the other hand, I think it’s more exciting and motivating to keep that $1000 figure in mind!
There are also details about investing that are specific to Australia. As an American investor, I can say that the overall strategy still makes sense and that the terminology is not that different. Don’t let this single chapter hold you back from benefiting from the overall message. Looking back, I wish I had paid more attention to the investing chapters in all the personal finance books I read; if I’d started even a year sooner it would have paid off by at least $10,000 more than I have now.
The book offers dozens of ideas for earning extra money. Some are suitable for even the most entry-level young person, such as dog-walking. Others are somewhat surprising, like leading tours or teaching surfing to tourists. There are also plenty of ideas on how to save money, most of which people tend to know, though they aren’t willing to put them into practice. This is why it’s so helpful to have a goal like the $1000 Project, because mobilizing every possible strategy leads to much quicker results.
Campbell dedicates an entire chapter to reader stories. They are inspiring, motivating, and also detailed, including specific dollar amounts. Readers based their $1000 Projects around such goals as IVF, paying off credit card debt, paying for their wedding, or getting reconstructive surgery.
Campbell herself wanted to get out of debt, learn about investing, set a good example for her son, have a better career, and be able to give to charity in a significant way. The $1000 Project led her to reach all those goals, and more: It set her up as a realistic example for so many other people to reach their goals, too. You could be next!
...I learnt never to underestimate the power of consciously taking action in small ways to make a big difference.
Start by asking yourself these questions:
What do you love doing?
What do you dream about?
What would make you feel better?
Once you’ve managed to move off the debt repayment treadmill, you can turn your mind to creating more wealth and stability for yourself!
We can choose to be well prepared for obstacles, emergencies, and challenges.
I could put my hand on my heart at the end of the twelve-month period and say with authenticity and contentment that I’d given this project everything I had.
I found this book originally under the title The YOLO Budget. Jason Vitug reminds us that living a life of meaning and purpose involves money. This perspective might help to make financial education more appealing, especially for Millennials, whose economic reality is different than that of previous generations. What’s true for them is true for all of us: We’ve lived through the financial meltdown of 2008, we need to plan further in advance for longer lifespans and longer retirements, we’re overwhelmed with information overload, and we’re learning that experiences are more fulfilling than material things. It’s time to adjust our attitude toward money.
Why aren’t people able to apply simple financial advice to their own lives?
It starts with awareness. Vitug gives the example of a man who claimed to check his bank balance every day, yet believed, incorrectly, that he wasn’t paying any fees on his account. Another man claimed that he knew exactly where his money was going, but admitted that he didn’t actually track his expenses. Another said he was “on a budget” but turned out not to have one in place. Specific terminology can mask vagueness. It’s possible to have a high degree of certainty without it being based on reality. This can be amplified by being organized, in the sense of paying bills online, checking account balances, and other activities without any real strategy behind the efficiency.
Why don’t people like budgets? Vitug says they can be reminders of past mistakes, that they can reveal there isn’t enough money for current spending habits, and that ultimately people feel that they aren’t necessary. I would have guessed (based on my own life) that the main reasons might be feeling too busy, not being all that great at math, and feeling annoyed at the “preachy” aspects that make budgeting feel similar to dieting. The difference is that Vitug actually traveled around and talked to people about their emotional connections with money, so his work is based on data, not guesswork or intuition.
Vitug saved $35,000 and took two years off to backpack around the world. The realizations and habit changes that paid for his trip are what inspired him to try to help others fund their own dreams. A big part of this comes from challenging people’s perceptions of their situation and whether they are really fulfilled by their choices. We can make emotional choices that make us happier when we are more aware of what it is that we really want. After all, You Only Live Once, and if you do it right, once is enough.
Here are some key questions from the many in the book:
We should prioritize spending on things that contribute to our quality of life and help us progress toward our goals.
Our electric bill was $292.77. I don’t mean that was our bill for a month, a cold and rainy winter month. I mean that was our cumulative electric bill over twelve months. It averages out to $24.40 per month. I’ve included the amounts at the bottom of the post for reference.
Why is our power bill so low?
Some of it depends, no doubt, on our region and the fact that we signed up for an alternative energy provider. We live at the beach in Southern California, where the temperature is the same most of the year.
Mostly, though, it’s because we live in a tiny home and we don’t do much that draws power.
We live in a 612-square-foot studio apartment. It has one external door and a standard sliding glass door in the same wall.
This apartment isn’t great in terms of energy efficiency. If you stand next to the slider on cold nights, you can feel the temperature drop close to the glass.
On the other hand, we have only five light fixtures: two in the kitchen, two in the bathroom, and one in the closet. Usually only two of them are turned on.
We have one refrigerator and no chest freezer.
We do not have a washer or dryer. We have to take our clothes to the laundry room in another building.
We almost never watch TV. If we do, it’s generally a single episode of a 30- or 60-minute show.
We also rarely have a desktop computer turned on.
Our main power draws are charging our phones and my tablet, using the microwave and a countertop dishwasher, running an air filter, and charging the Roomba. I also use a flat iron and sometimes a hair dryer. I play the radio for my parrot during the day if we’re not home.
For most people, their biggest power draw is heating and air conditioning. We don’t have an air conditioner, or anywhere to install one. It’s fair to say that our power bill would be higher if we lived in a different climate, and it’s also fair to say that we moved here on purpose. We were willing to drastically downsize and we now live in a quarter of the space that we had when we first got married. A QUARTER!
Our entire studio apartment is approximately the size of the master bedroom in our old place. Or the garage. In fact I think it’s a little smaller than our first, double car garage.
We’re able to live in a space this small because we got rid of almost everything we owned. I’m sure it’s more than 80%.
A workbench, power tools, the lawnmower, the ladder, virtually everything that we used to store in the garage - gone.
Almost all our appliances, a couch and chairs and two dining tables - gone.
Almost all our books and three bookshelves - gone.
Look, we don’t miss it. A lot of that stuff was inexpensive, worn out, or carried over from our respective first marriages. When we eventually move back into a slightly larger place, we can afford to upgrade with all the money we’ve saved.
We spent some time visualizing and crunching numbers, and we downsized gradually over five moves, but we did it with strong intention. It’s no accident that our power bill is so low. In fact, it’s part of an overall plan and a concerted effort.
We saved 48% of our net income in 2018.
We did it by living in a tiny space, not owning a car, and prioritizing retirement savings over everything else.
While saving that much of our income, we also went on vacation three times. That’s part of WHY we live so cheaply, because we’d rather spend money splurging on vacation than by dribbling it away on things like a higher monthly electric bill, cable television, or snack foods.
Here are some ways we keep our electric bill low, other than simply living in a tiny little apartment:
We use lap blankets when it’s cold. Feels snuggly rather than the futile effort to turn up the heat in the room.
We use a heated mattress pad. Also feels very cozy and is more effective than heating the air in the room.
We wear socks inside, and I go so far as to wear a sweater, sometimes two. I’m one of those people who never feels warm enough, and I’d rather bundle up than, again, blast the heater.
We strategically open and close the sliding glass door in summer, planning when to let in cooler air or shut out hotter air. We’re also strategic about where to put the fan. (Helps to have an engineer around sometimes!).
A few weeks a year, it feels either intolerably hot or annoyingly cold here. We remind ourselves that it’s temporary and it’s worth it to be a little sweaty or grab an extra blanket. The alternative would be to move to a place that actually has air conditioning or more than a one-foot-square wall heater. We could do that, but right now we’d rather save money.
Save money and lots of it!
Other couples fight about money. We sit around talking smugly about our high savings rate. During times when we’re taking the bus rather than driving, or wrapping ourselves in blankets because our apartment is cold, we’re bonding through shared adversity. It’s easier for us to make strategic decisions about our cash flow because we’ve shown that we’re both willing to make sacrifices for our mutual benefit.
It’s even easier when we use the money we would have spent on heating a standard suburban ranch house to go on vacation instead.
If you’re curious about our electricity provider, here’s a referral link: https://www.arcadiapower.com/jessica9228
And yes, if you use this referral link, I personally benefit from it.
January 22, 2019 $33.44
December 24, 2018 $30.60
November 20, 2018 $15.72
October 17, 2018 $5.00
September 18, 2018 $23.48
August 20, 2018 $24.76
July 23, 2018 $25.08
June 20, 2018 $25.51
May 21, 2018 $17.51
April 24, 2018 $5.00
March 26, 2018 $41.01
$6.71 (split billing because we moved to another unit in the same complex)
February 20, 2018 $38.95
Almost nobody is making it financially. The trouble is, you only see it in the statistics, because people would rather show you their embarrassing skin rash than admit that they’re struggling. They’d rather say how much they weigh than how big their debt is. This makes it hard to figure out what to do. Where are the positive examples? We trade tips on clipping coupons or cutting minor expenses. That type of small-time frugality is like bailing out a leaky boat.
Better to go back to shore and repair the boat, right?
Or maybe get a different boat. Maybe a smaller boat, just for a while.
Sometimes the radical approach is the easiest, best, and fastest. The reason it’s the radical approach instead of the obvious approach is that a radical approach always sounds like madness to the majority. Average people are comfortable doing average things and getting average results. That’s fine when all you want is, say, an average pizza or an average night at the movies. It’s a disaster when the average isn’t really working for anybody.
It’s also a disaster when the negative effects don’t really start showing up for thirty years. Like sun-damaged skin, a crack in a building’s foundation, or heart disease. Or a failure to plan for retirement.
There are so, so many reasons why people would rather stay in a terrible situation than make a change. Sunk cost fallacy. Lack of better ideas. Pushback and naysaying from other people. Disbelief in the consequences, just thinking, “Everything is fine, that will never happen to me.” Annoyance with the preachy, holier-than-thou know-it-all who is suggesting a certain course of action.
Quit smoking, wear sunscreen, save money, lose weight, blah blah blah. Buzz off.
This is why I don’t care anymore about stating my clear opinion and outing myself as a contrarian. People will either listen or they won’t. It’s not my business whether people agree with me or not. It’s not my responsibility if other people would rather do things their own way. I owe it to those who are looking for a better (or at least different) way to share my perspective.
My perspective on frugality is that it’s a sad waste of time to nitpick over pennies when the real issue is tens of thousands of dollars.
Clip coupons rather than move somewhere less expensive. Shop at thrift stores rather than push for a better-paying job. Pack your lunch rather than analyze your finances and run up a balance sheet.
(I do shop at thrift stores and make my own lunch, due to preference, without letting that distract me from higher-impact strategic choices).
It’s good for your basic self-esteem to be able to say, “I’m doing so much better than I was.” That’s self-compassion and it’s vital to any lifestyle upgrade project, whether that’s prioritizing sleep, making physical space to do your art, or releasing debt.
It’s also a guaranteed way to continue to have a perpetual problem.
Personally, I don’t want an A+ grade for tolerating an intolerable situation. I don’t want high marks for working hard. I want to FIX IT and make the bad problem go away entirely.
I don’t want to learn to patiently accept myself for where I am. I want to go somewhere else!
If I spend 101% of my income, I’ll go into debt and that debt will grow.
If I start paying attention and being careful, and I cut back so that I’m only spending 90% of my income, it still might not be enough to pay off the debt I already have. I may feel deprived and vigilant and stressed out, while continuing to fall deeper into debt. That’s how the debt machine works. It takes everything you have at a faster and faster rate. The machine puts numbers over human lives. It’s like an evil robot and it doesn’t care about you or how hard you work.
There are two things about debt. 1. Understand where it came from and 2. Get rid of it as quickly as possible, by any means necessary, before it eats you alive like a cranky crocodile with a bad tooth.
We’re back to my “leaky boat” analogy. If you’re bailing water out of a leaky little boat, and a cranky crocodile comes along, well, you’re hosed.
Debt is closely related to scarcity mindset. In scarcity mindset, everything feels hopeless. Nothing ever feels like enough. Deprivation, deprivation, deprivation. The focus is on how hard things are, how the struggle will never end, how I feel powerless, and how I need little treats to keep going.
Abundance mindset is about gratitude, how even when things are rough, they could certainly be worse. Abundance is about noticing every single last thing that’s going right and enjoying the little things. There is plenty and there will always be plenty more: Friends, hugs, laughter, strategic planning, music, nature and its solace, talent, creativity, love, learning experiences, and infinite second chances.
It’s abundance mentality that allows two people to live in a tiny studio apartment and not own a car, while feeling comparatively wealthy and powerful and still having a good time. That’s my husband and me, saving 40% of our income and laughing about it. Eating lentil soup, proudly, because wow, that was a great soup! Knowing we have the power and ability to move and expand our baseline luxuries, while also knowing that we could be doing that, feeling dissatisfied and jaded, and losing all our financial leverage.
Strategic thinking and abundance mindset are what can allow someone to start over with nothing, and quickly bounce back. Scarcity mindset is what causes wealthy celebrities to squander multi-million dollar fortunes and wind up divorced, addicted, and trapped in lengthy legal battles. Try to guess which celebrity, because that story is a familiar pattern and it’s applied to dozens of people over the last century.
If vast wealth isn’t enough for them, who’s to say it would be enough for anyone else?
Don’t scrimp and save. Don’t count pennies or clip coupons. Figure out what major, drastic changes you can make to get rid of your debts as quickly as possible. Get it over with. Let your burning determination push you through. Make an epic story about it. Just please don’t hunch over with a little paper cup, trying to bail the sea out of a rowboat. If you have to, abandon ship and swim for shore.
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.
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