We sold our car over a year ago. We still don’t have one. We’re an upper-middle-class, middle-aged married couple. Supposedly a car (or two or three) demonstrates our social status. Conspicuous consumption is supposed to advertise our relative wealth. Since we prefer actual wealth to the perception of it, we don’t particularly care. What do we have to prove? No matter what car you drive, you still have to look for parking just like everyone else and get stuck in traffic just like everyone else. Or, if you go car-free, you can skip both. Avoiding the conspicuous consumption trap of automobile ownership is a subversive, fun way to broadcast conspicuous leisure!
As a quick note, we had a VW Jetta TDI that was recalled due to the emissions scandal. We took the buyback offer. Due to our low mileage, we got a big check that meant we had essentially been driving it for free for two years. It was a great little car. We don’t really miss it, though; for the last year we owned it, we’d have to take it through the car wash every time we drove. I work at home and my husband walked to work, so we really only ever took it to the movies every couple of weeks. We were car-free in most ways, except for the payments and the insurance and all the other expenses.
Cars are EXTREMELY EXPENSIVE as a proposition. Between the payments, the insurance, gas, oil changes, parking, bridge tolls, and maintenance, it was running us $700 a month. Cars are also socially expensive. Take a look around at all the single-occupant vehicles and ask, is this really the most efficient way to run things? Take a look around at all the pavement, the parking lots and roads and viaducts, and ask, is this really the best use of our space?
Let’s go back to that $700. We could certainly have qualified for a loan for a more expensive vehicle, or leased one at a higher bracket still. But why? Unless you’re absolutely in love with the physical experience of driving, it’s a little silly. I in fact loathe driving and find it to be THE least pleasant adult activity. I’d literally rather scrub a toilet, do taxes, or take a load of trash to the dump. Driving sucks! Neither of us are particularly impressed with the aesthetics of automotive design, either, and if we were, we could just go to the car show every week, or put up some car posters or something.
So we bought a practical compact car. Great. Fine. It was still $700 a month.
IRA contributions for one person under age 50 are currently, as of 2018, $5500 a year. That works out to $458.33 per month. Two people, since we’re a married couple? That’s $11,000 a year, or $916.66 per month. ($12,000 if one of you is over 50 and $13,000 if you both are). By not owning a car, we were able to redirect that money to fully fund one of our IRAs and half of the other.
Oh, hey, I just remembered. A lot of couples have two cars! Crazy, right? One for each of you! Why not have a house for each of you, too?? Two refrigerators and two ovens! And YOU get a car and YOU get a car...
Add up all of the expenses for both of your vehicles over year and compare that total to the $11,000 to $13,000 that would go into your IRAs each year. If you already fully fund your IRAs as well as making car payments, awesome! Good for you! Celebrate by skimming through some vacation packages and comparing those prices instead.
I want to tell you that five grand can buy a really excellent three-week vacation for two.
Not owning a car. Isn’t that extreme? It depends on how you define ‘extreme.’ I’d say it’s extreme to carry credit card debt and pay 16% interest on it. I’d say it’s extreme to “buy” a $30,000 car that depreciates the moment you drive it out of the dealership, and then make payments on it for five years or more. I’d say it’s extreme to age one year every year and not have solid plans for how you’re going to support Future You in your old age.
It’s truly not a big deal. My husband rides the bus to work, and he has a little folding bicycle that he uses between stops, because the bike rack is often full by the time he gets on the bus. His work pays for his monthly bus pass. He’s able to use that pass every day, even if we’re going to the movie theater or something. I work at home, and I walk to my gym, so I only generate transportation expenses when I go into the city once or twice a week.
Instead of driving on Southern California freeways, we can sit back and relax. Play games, read the news, read books, take catnaps, chat with other passengers, generate all sorts of wacky stories, and even get in a few steps on the pedometer.
But how do we do our errands???
We’re within walking distance of the post office, a UPS store, a hair salon, two pharmacies, two dry cleaners, a pet food store, the public library, several boutique gyms, a couple of restaurants, and the veterinarian. For everything else, there’s online delivery, which again is cheaper than car ownership just for the sake of a couple dozen errands per year.
There’s a grocery store a quarter-mile from our apartment. When we lived in a house, the nearest grocery store was about a third of a mile. The house before that had a store directly behind our back yard. They’re everywhere! We’ve also ordered grocery delivery and found that it was pretty reliable. Without that $700 monthly carrying cost of a vehicle, there’s a lot more latitude for tipping delivery drivers.
We sometimes use a ride-share service, like when we go to the airport, or when we’ve left the movie theater and it’s forty minutes until the next bus. The occasional $15 fare for two people is nowhere near as expensive as car ownership. Like paying for deliveries, ride-sharing is a way for us to contribute to the economy. I like the idea of jobs with no dress code, where drivers can choose their own schedules and play the music of their choice.
We’ve rented a car once since we sold our car. We also rented a moving van, but we would have done that anyway because our mattress wouldn’t fit in a car. We always planned that we would rent a car about once a month for running errands, but in practice it hasn’t happened. We just haven’t needed it.
When we first returned our Jetta to the VW dealership, my hubby was a little nervous. I didn’t learn to drive until I was 29, so I didn’t really care, but this was the first time he hadn’t had his own car since he was 16. He used to talk quite a bit about buying a motorcycle, or getting a new car, and I would remind him that we could take a Lyft to the dealership that very night if he so pleased. No call for anxiety. We wanted to test out being car-free for a year, using that time to move more quickly toward our goal of financial independence. That year is now up.
Now that we’ve done it, we’re most likely never going back. I won’t say “never” because innovation is happening quickly, and who knows what game-changers might hit the market in the next decade or two? For me, a car-free life is about the same as it ever was. For my formerly freeway-commuting husband, it’s a whole new world. He now sees car ownership as an unnecessary, extravagant expense. Car-free and carefree!
I’ll always say that we can get more mileage out of taking a foot off the brake than we can in pressing harder on the gas. Whatever annoys you the most, wherever you find your biggest pain point, work on reducing or eliminating it. That’s how you get to Easy World. For some reason, taxes seem to be high on the list of universal annoyances. It doesn’t have to feel that way.
There are two reasons that taxes seem to bother people: the fact that we have to pay them, and the effort involved in doing the work. I’ll offer some perspective on both.
If it weren’t taxes, it would be something else. In Ancient Rome, people were expected to personally maintain the pavement of the road in front of their house. As far as I’m concerned, paying taxes is a sweat-free, comparatively easy and low-maintenance way to participate in an advanced society.
Oh, you want to argue about that? Big hair, don’t care.
What I’m talking about here is *my* perspective. From where I sit, I simply don’t give a care about taxes. The only times I’ve cared are the two occasions when I was erroneously assessed taxes for income that I didn’t actually earn. I would enjoy writing checks that large if I had the earnings to match! I found that the IRS has terrific customer service, and I wouldn’t necessarily mind if I ever had to talk to them on the phone again.
We pay more in taxes now than I used to earn. A LOT more. If it keeps going at this rate, which I hope it does, then we’ll eventually pay more in taxes than I earned at my highest-grossing day job. I look forward to the day when I have a ten million dollar tax bill. Come at me! C’monnnn, taxes!
Big money equals big money problems. Only, it doesn’t have to be a problem.
I choose to see all my bills, including my tax bill, as manifestations of abundance. My rent would make you cry, but dolphins are my near neighbors. On the other hand, I don’t have a car payment because I don’t have a car, and my utility bills are small because I live in a studio apartment. On yet another hand, my phone bill is atrocious because I have a billionaire phone.
That tickles me. It tickles me that I have the same phone I would buy as a billionaire. It also tickles me that we do our taxes at the beginning of every spring, again just like billionaires.
I could choose to continue to let money bother me and stress me out. I used to. I used to cry myself to sleep at night, thinking there was no way out and it would always be that bad. I cried the first time I did my own taxes. I misread the tax tables and thought I was paying on my gross, rather than taxable income. I called my mom, sobbing because I “owed” thousands of dollars I didn’t have. “That can’t be right,” she said, and because she is an accountant she offered to look over my work. Imagine my surprise and delight when it turned out, forty-five minutes later, that I was actually getting... a refund! That’s the feeling of lightness and joy that we can all feel when we think about money.
Money is nothing more nor less than a convenient way of storing and transferring energy.
I cried when I was in debt. It was dreadful. Then I determined that I would be debt-free before I pass from this world, and if I did nothing else, at least I’d be able to pay for my own funeral. (Shortcut: I am a whole-body donor and those expenses are included). I put my head down and hustled. I checked my accounts every day, I focused, I earned side income every chance I got, I read library books and worked on domestic contentment, and I got free. I sawed the shackle of consumer debt off my ankle. Now the other side, the student loan side, is nearly free as well. Soon I’ll walk tall, walking the walk of perfect financial freedom. That’s something we all can have, with a little focus.
Part of why taxes are easy for us is that our lives are unencumbered. We don’t owe back taxes; neither my husband nor I ever have. We don’t own a house. The complications mostly come from me and my weird ways of earning money, from royalties and dividends rather than a salary. We take the standard deduction because we don’t have enough reasons to itemize. We just get the software, and my hubby spends not quite an hour clicking through. We have our refunds direct-deposited and we’ve usually already put them in our IRAs before our friends have even bothered filing.
If you need and want to Get Organized with your taxes, set it up now so that you can make it easier for yourself for next year.
How would it feel if you loved money and you found that every financial process in your life was hilarious and simple? What if doing taxes made you want to do a happy dance? What if doing your taxes made you want to rush down the sidewalk, skipping, flinging flower petals in the air and hugging the mail carrier?
Or what if, you know, what if it just wasn’t all that hard?
Today is the day. Today is the day that you can transform your feelings about taxes. If you so choose, you can dial up a different emotional reaction. What is it going to be? Easy, I hope.
Didn’t you talk each other into falling in love? Didn’t you talk each other into the story of your romance? If you can talk to each other at all, you can talk each other into financial security. FIRE could mean “financially independent, retiring early” or it could also mean “fund it: romance everlasting.” It’s a loving, caring way to say, “I want to be with you for the long haul.” Choosing each other means you choose your lifestyle, you choose your livelihoods, and you choose your ultimate destiny as long-term partners. It’s entirely likely that you’re “the saver” and “the planner” and if that’s true, then it’s up to you to take the lead. Come to me, my love, and we’ll be strong together against the whirlwinds of fate. Decide you want to be with this person and decide that you can do this together.
First, let’s avoid the pitfalls:
Don’t have ANY financial conversations at night. EVER!!! Willpower is low, everyone is tired, and if you get into a really deep trench you’ll both be up until midnight fighting. Number one priority is that you trust each other. Number two priority is that you can bring a high energy level to your job, and that includes plenty of sleep. Nighttime is cuddle time.
Don’t say “we have to talk.” Too scary. One way to approach your first FIRE conversation is to ask for advice. Another is to share a story about someone you know, perhaps an inspiring story of security and independence, or perhaps a gossipy tale of financial folly and destruction. Make this just one of many interesting topics that you discuss, something that’s not totally loaded with emotion.
Don’t blame. Guilt and shame are not going to get this conversation anywhere. If you find fault, start with yourself, and stop with yourself. You can say, “I’ve been spending too much on lunches at work” or “I really want to pay off my credit cards” or anything else in which you claim full responsibility. Make it easy to be accountable. Show how it’s done.
Don’t criticize. The key here is to give positive feelings for positive actions. Criticism leads to defensiveness. It’s much, much harder to stay motivated when you’re trying to avoid criticism than it is to move forward in the direction of infinite rewards. Celebrate even the most minor victories! Congratulate your partner for every baby step in the right direction. High five and yell, “YAY!” Rehearse for your victory party, right?
Now for what TO do.
Always be honest. If you keep financial secrets, let it be a surprise investment account. Guess what? My side hustle is paying for our vacation this year. Or maybe, Guess what? I just wiped out the balance on our last credit card. The only surprises and secrets between you should involve parties, celebrations, and gifts. Remember that you can do all of those things on a shoestring budget.
Always be accountable. Any time you spend too much or go off plan, you’re dumping responsibilities on your partner. That’s mean. It’s mean! Be nice to each other. Set the example and show your partner how you want to be treated. Hopefully that’s with kindness, affection, respect, and dignity.
Compliment your partner on a job well done. You both probably have a long list of traits that will help you in the journey. You’re good at fixing things. You’re a good cook. You’re organized. You have a long attention span. You bring the party everywhere you go. You have a cool and inexpensive hobby. You have a knack for turning side projects into money. You’re ambitious. You’re easy to talk to. It’s fun to be with you doing basically nothing. Pay tons of attention to everything your partner does that could lead toward financial independence.
Create a comfortable love nest. Be nice to come home to. Plan around fun and free stuff as often as possible. Go to the park, watch astronomical events, take naps. Hang around your home and yard relaxing, talking, joking around, being casual. It’s possible to forget that you’re “saving” and “paying down debt” and “being frugal” if your default mode is relaxing together at home.
When you initiate the conversation, rehearse it ahead of time. Choose your moment. Go slowly. You don’t need to try to dump the whole package on someone or teach the intricate details of the philosophy to someone in fifteen minutes. If you love this person, you know how to do it. Is this person more likely to read an article, watch a documentary, go to a workshop, have a long conversation, play a game, compete, look over spreadsheets or charts or graphs, or what? Are you dealing with someone who is sometimes stubborn, flighty, weepy, distractible, or...? Avoid the obvious triggers. Make it easy to agree with you.
When I first met my husband, we were casual work buddies. We talked about money quite a bit, because I had just graduated from college with tons of debt and he was only a year out of an expensive divorce. I told him about Your Money or Your Life, and I brought it up from time to time over the years. It wasn’t until we went to World Domination Summit together and went to a workshop with Mr. Money Mustache and Money Boss J.D. Roth that everything clicked for him. Little did I know, he needed to see more math, more spreadsheets, and more graphs. I’m not strong in that area and my pitch didn’t do the job.
Start with the vision. What would financial independence look and feel like? What would you be doing with your time? Approach your partner with what’s in it for them. Express sympathy for their stress level and their persistent problems. Bring up their outrageous dream and some ways you think it might be more attainable. List off some specific ways you are making changes that will help. Like this:
“I was thinking about how you said you want to go on sabbatical and ride a motorcycle to Alaska.” Or “Remember when we were talking about moving to Costa Rica?” Or, “What if you actually went back and finished your degree this fall?” Or, “Do you think [your project] could maybe turn into a side hustle?”
Starting with your partner’s big dream is a guaranteed way to get their attention. It shows that you were paying attention. It shows that you trust them to find that happiness within the bounds of your relationship. It shows that you’re willing to prioritize their goals just as much as your own. It shows that you’re interested and that this dream makes them more attractive to you. It makes you into the ally and cheerleader they’ve always wanted. It makes them want to please you and impress you. It also creates massive motivation.
Most dreams are not mutually exclusive. They can’t always happen at the same moment in time, but that’s fair. It’s easier to pay full attention and really celebrate when there’s only one victory at a time, and then take turns. Otherwise it can start to feel like a three-ring circus. As an example, my parents took turns working while the other one went back to school. Since they had three little kids, it would have been really hard for them both to take classes full time. The shared adversity of being working parents and full-time students helped them to know that they can handle anything together as a couple. They’ve been married now for 43 years.
Presenting financial independence as a far-distant goal that involves endless scrimping and sacrifice? That’s a loser of a conversation. If you want it, it’s up to you to make it compelling and find a way to make it attractive to your favorite person. If you’re going to do it together, make sure you’re with someone who is actually open to the idea. If you really trust and desire this person, you can find a way to build your case and make it as captivating to them as it is to you. Remember, this person is your chosen sweetheart, your partner in the zombie apocalypse, your ally as you work toward a better future.
Mercenary? Nah. Starry-eyed romantic. I believe in marriage, I believe in soulmates, I believe in love at first sight, even. How awful when what could have been a lifelong love is spoiled by fights about money. Frugality: so much cheaper than divorce! Financial literacy is a superpower that can keep couples together. Financial security is an attractive trait for singles. Constant anxiety, worry, disappointment, and frustration around money can destroy any relationship, not just romance, but also friendships and family bonds. This is why I say there’s no romance without finance.
We’re primed on a million cultural images of what dating and engagements and weddings and marriages are supposed to look like. How do you know you’re in love? When you look like a fashion plate, eat in the finest restaurants, drive around in the most expensive vehicles, stay in the most exclusive resorts, wear the heaviest engagement ring, have the most extravagant wedding, buy the hugest and fanciest house with the biggest kitchen, and have the thickest credit card statements. Anything less would be... cause for disappointment. I truly believe that lurking deep inside most of us is a vision of marriage perfectly correlated with “endless lifestyle upgrades.” Conspicuous consumption, conspicuous leisure, conspicuous confusion and dissatisfaction, conspicuous divorces.
The marriage I wanted was with the man I talked to for three hours a night. We basically got married because I moved and the phone reception was so patchy at my new house. No matter how old you are when you fall in love, if it lasts, one day you’ll look different. Looks don’t last. What does? Conversation, cooking, and, if you do it wrong, consumer debt. I had zero consumer debt for a couple of years before my wedding day, and I’ve kept it that way. It’s pretty straightforward when your relationship revolves around hanging out and talking every night.
Real marriage is based on affection, trust, respect, and communication. Avoiding conversations about money, debt, cash flow, career paths, and lifestyle inflation is a great way to blast a huge hole in that marriage. How can you trust each other if you won’t communicate about your financial vulnerabilities? How can you respect each other if you don’t share values around earning and spending? How can you even relax and enjoy each other if you’re drowning in debt and you have no retirement plans?
Refusing to get your finances in order is abdicating. That means you dump it off on someone else. If it isn’t your romantic partner, who is it? Your parents? Your kids? The Red Cross? Future You? A talking pony? Being married to someone who spends without limit and earns the bare minimum is really stressful. It’s not fair to treat your spouse like an opponent. If you yourself aren’t financially secure, and you have no plans to deal with it, then that means anyone who loves you has to do double the work. To be with you is to double the effort, double the savings, double the planning, double the stress, double the burnout. If you think you deserve this, you’d better be double-cute, double-nice, and double-affectionate just to get to zero.
Couples who are in it for the long haul need to plan together. We have to share the load. We have to look out for each other. We have to care about each other’s well-being. Our long, busy days are directly tied to the financial necessity of having to go to work. That stress is only increased when we feel trapped in jobs we hate, working for bosses we can’t stand, with unbearable commutes, annoying coworkers, and impossible customers and clients. Debt can make those feelings last forever. How can love last in that environment?
Financial freedom takes the pressure off. When you have plenty of savings instead of debt, it creates a buffer. That “F.U. money” makes such a huge difference! You find yourselves able to pick and choose what type of job you’ll take and what kind of commute you’ll tolerate. You start to feel like you have the power to determine your own destiny, to choose what your average day is like. That’s when you realize that you really have the power to choose your love. I choose you, honey, over and over and over again.
Choose the person. Choose the conversation. Choose the love story you tell about each other. Just don’t choose the debt, the bags of material objects, the unaffordable homes and vehicles. Say no to the stupid marketing messages that destroy loves and hearts and families. Say no to the rings, the dresses, the poisons that make basic long-term affection impossible.
I married my husband in part because he understood I would never want a diamond engagement ring. He got me a temporary silver ring with rhinestones. I took it off and quit wearing it on our wedding day. When I walked up to meet him, I wore a $34 dress. I paid for my half of our wedding in cash. This summer will mark our ninth anniversary, together for twelve years. What does this mean? It means we both care more about being married than we cared about the wedding. Which is the more romantic fantasy? Still actually liking each other and wanting to be together after your hair turns gray? Or one extremely expensive photo opportunity that costs thousands of dollars per hour?
Wedding cake isn’t even that good.
The really great stuff about being in love doesn’t cost anything. Talking for hours, laughing until you snort, looking for shapes in the clouds, learning each other’s life story, the inside jokes you could never explain to anyone else. This is your one irreplaceable person, your sweetheart, the love that money couldn’t buy anyway. Your best reason, if you allow it, to fight the dragon of debt and then ride off into the sunset together.
I ordered this book with great anticipation, because I’ve been following the Frugalwoods since they still had a secret identity. There’s a small community of people on the path to financial independence who are sharing their progress through blogs, podcasts, newsletters, et cetera. Obviously not everyone can come out publicly and say, “We’re quitting our jobs soon” without suffering repercussions. Meet the Frugalwoods is not just the story of a young couple who escaped the rat race; it’s also the official debut of a pair of superheroes ripping off their masks.
The premise of a frugality book is always that anyone can do this. With enough information and enough gumption, anyone can live on little money. That makes it more or less the opposite of a book on entrepreneurship, career growth, or stock market investing. There are lots of paths to financial freedom. Elizabeth Willard Thames and her little family happened to choose the classic path of voluntary simplicity. Not to put in too many spoilers, but they saved hard, learned to DIY a lot of manual skills they hadn’t been taught in childhood, and wound up buying a house in the woods.
I’m also a frugal person - seriously, you should have seen my annotated paperback copy of the Tightwad Gazette - and it was fascinating how the Thames family had almost the exact opposite financial priorities that I do! My hubby and I are city dwellers, partly because it enables us to live car-free in a small space we don’t have to furnish or maintain. While I would never again take in used furniture, after a close friend’s brush with bedbugs, I’ve never been much on clothes, cosmetics, beauty treatments, shoes, etc. We also don’t drink alcohol. It’s probably a good thing this book exists, because it shows a path to financial independence that’s more broadly appealing than my personally idiosyncratic version.
The book tells the story of how two young people made decisions and chose their path in life, the path that led to that house in the woods. There is some excellent stuff in here about how couples negotiate and influence one another, how they juggle priorities and nudge each other’s behavior. They cut each other’s hair. A married couple working as a team can achieve financial independence much more quickly than they could separately, if only they know how to talk to each other about money without quarreling. The Thameses should consider teaching workshops about financial communication!
One strength of the book is that Thames spells out the ways that she and her husband, and their families, benefited from privilege. This is a topic I’ve never seen addressed in a personal finance book before. She also mentions that they have a special type of investment set up to enable them to make charitable contributions. I really appreciated this and took notes.
Thames managed to save $2000 of her $10,000 AmeriCorps stipend. While living in New York City. This helps to explain how the two of them were able to save 40-50% of their take-home pay; not only did they commit to frugality, they also enjoyed the benefits of avoiding debt. Meet the Frugalwoods has a lot of specific advice about how to plan and save, how to hunt for bargains, and how to assess spending patterns. The results surely support the examples. This is a path to freedom that could be within reach of anyone who wants to travel it.
Frugality opened my mind up to what I can do with my life, as opposed to what I can buy.
This is a story of a stack of money that could have disappeared, but didn’t. Granted, it might be more interesting to talk about that money if it did go bye-bye. Everyone can identify with that, right? There’s more value in the story that not everyone knows, the story of how losses can be avoided through strategy and careful study. If you’re tired of being broke, the first step is to avoid losing what you already have or getting into further debt. It can be done!
It’s IRA time. Before your eyes glaze over, let me quickly explain what that means and how it works.
Not too confusing, right?
I wish I had paid more attention to this sort of thing when I first started out, because I definitely would have found a way to come up with that money, and it would have turned into tens of thousands of dollars by now. I was saving $50 a week even when my take-home pay was $220. This is money I don’t have because I was too bored to read basic instructions or spend 20 minutes setting up an account. ANYWAY...
It’s close to tax time, and my husband reminded me that we needed to fund our IRAs so we can get the deduction. We are extremely serious about saving money, so much so that we live in a studio apartment and we don’t own a car. All we had to do was to transfer the money from our regular bank to E*TRADE, where we keep our retirement munneh. Takes like 10 minutes.
We’ve been talking about this pretty much for a year, so funding our IRAs was not a decision point. We didn’t need to discuss what we were going to do; we just did it. This is a massive, huge help. Taking action on something that you understand, when you feel confident that you know what to do, is just exactly as easy as ordering a pizza. Maybe even more so!
Our position is subjective. It’s a matter of personal opinion. It’s a policy decision that we’ve made independently, based on what we think about current events, the economy, future trends, planetary alignments, or whatever. Lots of other people can and do make different decisions based on their own personal opinions and positions. My husband and I both like pineapple on our pizza, while recognizing that lots of other people don’t, and that’s fine. The truth is that those people are wrong, pineapple on pizza is delectable, and it always will be. The truth about investments is that one position may pay off very well in one year, and not pay off in a different year, because conditions change all the time.
The main risk is in saving nothing. Living on 100% of what you make, or living off credit cards because you actually spend more than you earn. I’ve been there, I get it.
Back to the story. I now had $5500 in cash in my IRA account.
Nice, flat green American dollars.
Those dollars belong to Old Me. Future Me, playing with her Future Phone, riding around town in her flying car and wearing a metallic body stocking. You’re welcome, Future Me!
What I’m supposed to do is to then use my nice, carefully saved $5500 and buy shares of various stocks or funds or bonds (*snort*) with it. As that money sits in cash, it is not technically an investment. It won’t earn a single penny in interest, no matter how long I leave it there.
A lot of people do this on accident, not realizing that their IRA account is basically just an electronic envelope to hold their money. (Or collect dividends, which I think of as “money babies.”)
Okay, so. Here is where it starts to get good.
My hubby and I had both already decided to leave our 2017 IRA contributions in cash, because we anticipate a significant market drop. We have our own separate investment accounts, and we make our own decisions, because we earned that money from our own careers and we have our own strategies. This is a type of diversification. Cognitive diversification! We do our own research and our own analysis, and we trade notes. As it turns out, my investments outperformed his last year (heh heh heh) and sometimes he buys into some of the same stuff that I do. We high-fived after transferring the money.
THE VERY NEXT MORNING
The market tanked!
My 5500 nice flat green American dollars are still sitting in my cash account, untouched by the ravages of a 734-point market drop. (Followed by ANOTHER drop of 425 points the following day!)
If I had bought shares of anything off my shopping list, they would have been worth less later that same day. I would have lost a bunch of my IRA money within just HOURS of “investing” it.
Not sure if I would have cried or punched a hole in the wall, but...
Instead, I laughed. I laughed because this time I saw it coming. I didn’t know it would happen that fast, but I was stone-cold certain that in “the very near future” my shares would be worth less than they are now. In fact the value of my investment portfolio did drop over $1000 that day, but that’s okay because it’s still worth more than it was when I started. I also believe it will be worth more in three years than it is today. More importantly, I believe it will be worth more in 25 years, when Future Me comes to claim it.
I’m not good at math - if you don’t believe me, come out to lunch with me and watch how long it takes me to calculate the tip. If someone like me, someone who started out flat broke, with poor arithmetic skills, can learn how to invest, then probably anyone can. The main thing is that you have to take the needs of Old You as seriously as you take the needs of Today You. That tends to make you careful and attentive.
If you don’t have an IRA account set up, call someone at your bank, or if you hate making business calls as much as I do, you can probably do it on their website. If you want to get into investing for the first time, hang onto that money. Then start watching the headlines. When you start to see panic about record drops in the stock market, find a nice index fund and put your money into it. Pretend it isn’t there until this time next year. In the meantime, see if you can find a way to put aside $100 a week, or $20 a week, or $5 a week, or even $1 a week. Future You is going to thank you for it.
The rote sayings and adages that you hear as a broke person surrounded by broke people are completely different than the sayings that you hear uptown. For one thing, I’m finding that upper-middle-class people seem to talk about almost nothing but poor customer service, remodeling, and the bodily functions of their pets. As a kid, I often heard adults talk about being “a day late and a dollar short.” It’s an interesting exercise to think about the opposite of everything, and it intrigued me to start thinking about always being “a day early and a dollar up.” What would this mean?
The idea of being “a day late and a dollar short” is that even if I had managed to show up on time, to, say, the county fair, it wouldn’t have mattered. I couldn’t afford it anyway. Even if I had the money, something would have prevented me from getting there. I shouldn’t bother to get my hopes up or to set my heart on anything. This is the world of broke-ness. Your transportation is unreliable, you can’t depend on a predictable work schedule, the people you want to bring aren’t available for one of a thousand reasons, none of your stuff works, and every penny you manage to set aside is almost automatically burned up by pressing material needs. Fun is not for you. Resign yourself to deprivation and exclusion.
This is a self-perpetuating mindset.
The convenience store where I got my first real paystub job is still open at the same location. It’s still open all day, every day. There is still someone working there on the same schedule that I worked in 1993. It could be me. There are no practical reasons why I could not have spent the past 25 years standing in the same spot, wearing the same uniform, and presumably selling the exact same pot of coffee and the exact same four rotating hotdogs. Pumping orange nacho cheese out of the same plastic sack, selling the same blue-dyed frozen corn syrup drinks, peddling cigarettes, malt liquor, and scratch tickets to the same sketchy neighborhood dudes. I’d still have trouble making my rent, I still wouldn’t be able to afford a car, and I’d still wonder why toothpaste has to be so darn expensive. The simplest solution was always just to find a better-paying job somewhere else. Which I did.
Almost every problem I had in those days was a financial problem. The great thing about money problems is that they can be solved with money! A problem that can’t be solved with the application of cash dollars is a sad problem. Heartache, disappointment, grief, betrayal. Everything else is up for reconsideration. Having more money means being able to relocate, repair and replace things, hire lawyers or financial planners, get advanced education or professional credentials, take lessons, get medical care, make emergency travel plans, take time off work, help friends resolve their problems, and donate to various charitable causes.
Having money also means being able to plan ahead. One of the worst aspects of being broke is that your future timeline contracts. You start planning only a month ahead, or a paycheck ahead, or a week ahead, or a day ahead. You become unable to imagine what your life might be like in three years or ten years. Feeling like you have plenty of money and plenty of options helps to extend that figurative timeline.
I only worked at that convenience store for two months. I’m pretty sure I can still remember every minute of every shift. Purgatory looks a lot like a convenience store at 10 AM on a Sunday morning, with a never-ending line of people waiting to buy one cup of coffee and a newspaper. I had no idea what I would do with myself while I stood behind that counter. I had no idea how that job would ever lead to anything better. It never really crossed my mind to go back to school, which I eventually did, because I was so sure that college was out of my reach. My take-home pay exactly equaled my rent. I was living off microwaved baked potatoes with no butter; obviously I wasn’t saving money or planning for the future. When I got a full-time office job, I tripled my pay. SEVEN DOLLARS AN HOUR! I saved over 20% of my take-home pay every week. That’s when I started planning ahead and thinking that I could make goals.
One of the first things I did was to save money for my first international trip. I took three weeks off - insane for a nineteen-year-old - and went to New Zealand.
Last year, my husband and I went to Wyoming to see the solar eclipse in totality. We found out it was happening a year in advance and set a reminder for January to book tickets. I got the last available hotel room in Jackson and paid for it with reward points. We bought our plane tickets, still available and significantly cheaper eight months in advance. My husband put in his vacation request with plenty of time to spare. If we’d waited, we wouldn’t have been able to get there at any price. These are the kinds of things you can do when you save money and plan ahead. We did in fact get to town six days early.
The less FoMO we have, the less of a sense of scarcity, the easier it is to put money aside. We only take out our wallets for the can’t-miss stuff. There have been dozens of concerts we would have liked to see, sure, and nights we would have liked to go out and eat in a restaurant. Doing these things every time the urge arises means a strained schedule, burnout, debt, and weight gain. It’s not a relaxing way to live. We like to maintain our domestic contentment at home, inexpensively, and go out for the really great stuff. It’s a completely different experience to always feel like you’re a day early and a dollar up.
This is a story about desire, willpower, and self-control, although I’m pretty sure none of those words appear anywhere in the book. Cait Flanders has written a brave yet quietly modest account of her personal battle with addictive urges. While The Year of Less is an outstanding work about minimalism and financial independence, these are almost tangential to the struggle for self-mastery. Flanders makes a strong case that if she can do it, anyone can.
The Year of Less shows what happens when someone develops a bias toward action and plunges into something. Flanders sets a challenge that she won’t shop for a year, except for a few predetermined categories such as food. This is a process goal, rather than an outcome goal. Part of the magic of process goals is that it’s really hard to predict what will come of them, what will happen when we actually stick to the plan. Almost always, it far exceeds the original expectations. That certainly happens here. There’s something of a surprise ending.
There’s also a surprise middle. Flanders is partway through her experiment when she is poleaxed by some major family drama. She shares her anguish, and how it sends her into an emotional tailspin. It’s very impressive that she managed to stay on track with her project, and it’s also helpful to see how she did it, being honest and accepting support from some trusted friends. There’s also the deep hook of that public commitment to write about her progress on her blog, a commitment that eventually led to the publication of the book.
The insights that come from a long-term project of this nature tend to be of a different quality than the occasional sudden epiphany. Flanders realizes that she’s never thought of herself as a spendthrift because she’s not a fashion victim. Yet she’s able to cut expenses and earn enough from selling off her extra, unneeded purchases to fund a replacement bed. She winds up getting rid of about 80% of her stuff and saving $17,000 on a fairly modest income. Where was it all going in the years before? Living a default, everyday lifestyle probably never would have provided the answers.
An inside-out version of this book could be imagined, a version in which Flanders emphasizes the results of her Year of Less, with a few footnotes about the emotional component. There are dozens of books of this type already, training manuals for the DIY crowd. This book is special because it’s so personal. It’s about learning to face difficult circumstances and dwell in difficult feelings. With this, a handbook for emotional resilience, you could do anything.
Nostalgia is a mystery to me. What’s so great about the past? I say this while waving my history degree over my head. There is no past era that I’d prefer to live in. There is no time, not even the 2000s, that I’d prefer to today. Throwback Thursday is wasted on me; I liked the music of the 1980s but not much else. From my perspective, every year that I’ve lived has involved more innovation, more books and music and movies, and better-quality food. As I’ve gotten older, I’ve benefited from getting my head straight and being less susceptible to emotional drama. I have more skills and I’m a better cook. These things are also true about my family and friends. Life is harder in most ways when you’re young. The future seems like an extremely exciting place to me and I can’t wait to see it unfold. This is a basic optimism that is the key to a happier life.
Optimism is a learned trait.
What is there to look forward to? Don’t you read the news? Oh, it’s awful, it’s awful.
I agree, there is all sorts of truly terrible stuff in the news every day. There always has been, because it’s much simpler to tell stories about terrible events day by day. The photographs are much more dramatic. How do you tell a story about the decline in extreme poverty with a photo? Take a picture of an ordinary, well-fed child who is studying in a classroom? How do you tell a story about the incredible decline in casualties from war? Take a picture of an ordinary town where people are working at their jobs?
That’s the thing about having a degree in history. I know too much. Our chances of dying from almost everything were much higher at any point in the past. Most people, statistically, would have died as infants. Epidemic disease, lack of sanitation, malnutrition, constant warfare, sieges, an extremely high murder rate, brigands, even attacks by various wild animals. We can only possibly feel glum about the present day if we try to compare our conditions with some imagined glory days from the twentieth century.
I grew up in a tenement apartment and I still had a lot of things that the Emperor Charlemagne did not have, that he could not buy at any price. Central heat. Ice cubes on demand. Legible penmanship. A public library and a fire department. Paved sidewalks. Electricity, including lightbulbs, a stove, and a refrigerator. Potable water flowing out of the faucet. A telephone and a television. My mattress and pillow undoubtedly kicked butt over his. Granted, I didn’t feel anywhere near as grateful for these modern comforts as Charlemagne would have. That’s because historical progress is driven by envy and dissatisfaction.
I say this is great. There’s no reason to envy someone if you can study what they’re doing and imitate it. This is obvious if you have a growth mindset! Assume that the envied person had to acquire that trait somehow. Also, you have to envy the complete package, not one thing in isolation. That means you can’t envy a celebrity without including the paparazzi and the haters. You can’t envy any individual person without including their entire personal history, their relationships, and their behaviors. Maybe their fitness level, financial success, or emotional intelligence would come easier to you than it did for them. Observing someone else means you can skip anything they tried that didn’t work. Let envy make you a better person.
We seem to be allergic to thinking about the future. Research shows that we think of our own future selves in the same way we think about total strangers. I think a lot of us are mean to Future Us. We set ourselves up in ways we wouldn’t treat our worst enemies. Hey, Future Me! Have fun trying to survive on the tiny fixed income I’m sending you. I hope you enjoy paying off our debts. Oh, and good luck burning off this slab of cake I’m eating. Maybe you can get rid of some of those calories while you clean out this garage I’m piling with stuff. And by the way, wash my dishes.
The most commonly procrastinated goals are planning for the future and dealing with health issues. In both cases, it would be easy for us if we realized that Future Me is the same person as Today Me.
Unfortunately, most of us are captivated by Past Self. We just see ourselves as cuter when we were younger. We think we had more fun and that life was better. We don’t like looking forward, because it seems depressing, but when we do, we’re oppressed by the idea that we “should” be planning, saving money, eating better, and being more active. Walking backward, facing the past, we’re going to bump into the future and feel it as a frustrating obstacle.
This is part of why people hang on to clutter. We haven’t spent any time thinking about what we’ll want or need just a few years into the future. We have this anxious sense of What If, while never spending any time gaming it out. Get specific about those What Ifs and plan around them! What If I turn into a bag lady? Well, what would need to happen to avoid that sad destiny? (Build relationships, build career skills, learn about financial planning, save money). What If my house burns down? (Get insurance, test your smoke detectors, make an emergency response plan). What If I need this later? Well, that decision is up to you. You’re creating your response to your stuff and your home. You’re creating your response to your money. You’re creating your response to food and to how it feels to live in your body. You’re creating your friendships and conversations. What your personal future looks like depends almost entirely on how you think and what you do about it, today.
The future is an opportunity. Even an hour from now: later today is the future! There’s always still time to call someone and say the things you haven’t said, like “I miss you” and “I’m sorry” and “I love you.” There’s always still time to learn new things, to travel, to try new foods and dance to new music. There’s always still time to try to be a better person, a better listener, more patient and forgiving. There’s even time to clean out the garage. Pick any single goal or any single square foot in your personal space, and do something today that will make it more awesome for Tomorrow You. The future can be whatever you wish it to be.
Apparently GOING INTO DEBT is the new way to “make the most of life’s opportunities and memorable moments.” At least, that’s according to the subject header of an email I got from the bank that issued my credit card. They want to sell me a personal loan for the sum of $21,900, at the bargain rate of 6.98% interest. Dude. First off. I am not in this to “make the most of life’s opportunities” - I’m in it to make the most of the reward points. If you aren’t offering 3x points on travel, I’m not interested. Second off. Debt is a shackle around the ankle that in fact destroys your ability to take advantage of opportunities and create memorable moments. Debt can poison every moment of happiness you might otherwise have had. It causes stress, insomnia, and, at least in my case, fits of uncontrollable weeping.
So yeah. Thanks for the invite.
What actually does create memorable moments?
Connection. Full engagement. Paying attention to your surroundings. Listening hard, really hard, creepy-hard, when other people are talking. Opening the gates of your heart. Living today like it really counts. Acting like you really mean it when you do and say things, even things like sitting on the couch wearing no pants.
How can we actually make the most of life’s opportunities?
What does this even mean?
It means we need to know what an opportunity even IS. It’s not just recognizing opportunities as they come up, because they’re available every single second. The road outside your front door has been patiently waiting there since the day it was paved. The internet hums around the clock, around the world, with all the information and maps and train tables you could ever need. You meet people every day, or at least you could, and any one of them could change your life with a word. Or you could change theirs, which is easier.
Show up. That is all that’s required.
Show up physically. Show up emotionally. Show up with your full and precious mental bandwidth attuned to live humans, face to face and in person.
Strip back your shields. Allow yourself to be bored or disappointed or annoyed or frustrated or insulted. Then go back and examine it. Is it necessary to take things personally, or can we take breaks sometimes?
Life gets so much more interesting when we pay attention to it, when we throw ourselves at it in a blindfolded, backwards trust fall. It gets predictable and yucky when we insist that it meets our limited expectations.
All my stuff needs to be cute and new! I only have to eat things that taste good! I decide what constitutes sufficient attention, affection, and respect! I must be entertained most moments! Nobody should ever disagree with, criticize, or otherwise challenge me!
Those are some fun moments. Yup. I can get them, too, with a paper placemat and some crayons. Hand me a bucket of action figures and I’ll get down on the floor and create a world that works my way.
The way to really make the most of life’s opportunities is to be ready, to recognize them when they pop up. It means we have to set aside the heavy bags, the bags of perfectionism and selfishness and impatience. When most of what’s left starts to feel like a heart attached to a set of floating eyes, that’s when we start to get somewhere.
As for the memorable moments, don’t wait around for them. Make them happen.
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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.