I first became part of the Get Rich Slowly community six years ago. I lived in Austin, Texas, at the time and had to travel a lot between jobs. I say that I drove a scooter to save money on gas; but really, it was because I couldn't afford a reliable car. The fact it cost me less than $2 to fill up my tank for a week was definitely an added bonus.
I was working multiple jobs to pay off student loans and looking for answers after I reached the top of that mountain. But thanks to everything I learned here, I finally got totally out of debt. How did I do it? Through multiple sources of income and some tough budgeting decisions, I hustled my way into the commendable financial hat trick:
- I learned to budget and spend sensibly.
- I eliminated my debt.
- I built up an emergency fund and started saving regularly.
What it's like to put debt reduction front and center
I put paying off debt at the forefront of my existence. I got a little burst of dopamine every time I saw my debt number go down. I furiously cut every expense I could out of my budget. As a single guy, most cuts were easy to for me to make, like buying new clothes or fancy drinks with friends. However, some cuts were far more challenging:
I haven't spent a Father's Day with my dad for over a decade. Don't get me wrong, my father is awesome. If I could jet-set at will, I'd be flying non-stop to make him Bloody Marys every third Sunday in June.
This year is different, though. A break in my schedule and a new nephew in the family means I am back in my hometown for a nice, long stretch this summer. My mother is looking forward to long dinners on the back deck with my wife and me, and my father is looking forward to having me do all the honey-do list items that his doctor says he shouldn't tackle anymore.
Let the tool hunt begin!
Now, the perfect tool for Dad can be a pretty tough gift to find, especially for the father whose collection is already pretty complete. That said, the tool industry has to get more innovative every year in its quest to find better, more creative solutions to age-old problems. So here are some guidelines as you set out to find the perfect thing to make your papa proud:
Right now, I'm on my first-ever visit to Ithaca, New York. I'm attending my third wedding in the past month. These three weddings have taken me to three different states and three different time zones. My girlfriend and I just got another invite to a sorority sister's upcoming nuptials this fall and had the same first thought: "Do we have to?"
Our friends and family are important to us and we want to support each one of them on their special day. But with plane tickets, hotel rooms, time off work, and modest gifts, these weddings are adding up.
On top of that, while we've been gone, we've both received a lot of text messages from friends back home eager to get together when we return to hear about our travels. After budgeting for all our trips this summer, it means we won't have as much disposable income as most of our friends.
I love the jeans I'm wearing. I actually wear them almost four days a week. Chances are that if you see me, I'm wearing these jeans. They're my only pair. When I bought them, I very gladly put down my $200 cash and left the store with a smile. The jeans I had before them cost the same, and I wore them until they got holes in them, and then I got those patched up, and then the patches got holes in them and the hem came out and I decided to move on.
A lot of personal finance advice I read says that $200 is entirely too much to spend on jeans, no matter their longevity. The problem here is that I love these jeans. I feel confident in them. It sounds weird to me, but having jeans that fit this well have become a value of mine. The jeans aren't the point though. Chances are, we all have something we buy that maybe costs more than it should, or at least more than it could, be it wine, fitness, clothing, makeup, electronics, or pure-bred cats. My goal is to spend on the things I care about, and ferociously save on the things I don't.
I practice the art of conscious spending.
Sometimes, my summers feel like any other season. Other times though, I do the season right. A couple weekends back, I sat out on a dock with my family, overlooking a small lake in Michigan, our bathing suits still wet and our t-shirts sticking to our backs in the heat. My brother had made a pitcher of lemonade. My sister was strumming along on her ukulele. It was one of those summer scenes where your biggest worry is getting stung by a bee, and even then, it can be cured by the plant in the neighbor's backyard.
While we're in school, we spend almost two decades with summers off, and I think it's going to take me at least two decades to get over the fact that I no longer have that. I might be working all summer, but there's a lot I'm doing to keep the richness of the season this year while still keeping the richness of my back account.
The Livin' is Easy
Summer is the time after seeding, before the harvest, when we get to sit back and watch things grow. For me, summer is as much of a state of mind as it is a season. Back in the day, I remember the transition from the rigid time frame of the school year to the lack-of-schedule of summer. In school, we lived and died by the sound of a bell, scurrying from class to class with each punctual chime. When summer came, time seemed to open. Somewhere between playing catch with my friend across the street and eating dinner on the back porch, days became endless. It's this openness of time that defines summer for me, and what I try to find again today.
If you're anything like me, you're barely insured. I don't work for a company that offers benefits and so I've had to shop for individual insurance. Setting aside what a headache that was, I've ended up with catastrophic insurance. This means that if I step off a curb wrong and break every bone in my leg, I won't be in totally ruined. That said, I don't get any help with regular checkups or routine care.
There are lots of things I do every day to help keep the Doctor away that go far beyond a simple apple. Every day, I work toward more optimal health and have learned that prevention is far cheaper than treatment. Not only do I consider my health to be my greatest asset, but staying away from MDs is a financial reality I've had to learn to navigate. None of this is groundbreaking, but let it serve as a reminder that just like your financial health, your mental and physical health requires daily attention.
Yes, it's expensive and you'll probably never use it. I haven't had to go to the Doctor since college. The what-ifs however, are too disheartening to ignore. Any sort of grave accident or surprise diagnoses, without insurance, would have me sunk. I have an extremely high deductible and not surprisingly, it matches my emergency fund. If you feel like you don't need insurance at all, you don't necessarily need get much, but get yourself something.
Over Memorial Day weekend, a few friends and I took an RV to Banff, Canada. I'm from Chicago and have only been in the Pacific Northwest for a few short months. We Chicagoans are flatlanders and the geographical splendor of the snow-caps that now surround me is a source of a daily inspiration.
While we were heading through Glacier National Park, I sat at the coffee table in back of the motor home playing cards with my girlfriend, contemplating the turquoise melt-water when Brian said from the front seat, “Take a good look, my friends. We're gazing into the future. Here's us in 40 years. This is what retirement looks like.”
It lead to an interesting discussion between a group of 20-somethings about what we picture our retirement will be like. The vision of Florida, golf courses, cruises, and RV trips didn't fit for any of us. We all agreed that our generation, with its student-debt, terrible economy, and little ability to trust the solvency of social security, has to redefine our image of retirement.
“I don't know what they want from me. It's like the more money we come across, the more problems we see.”
— Notorious B.I.G.
For a while, just like Notorious B.I.G., I battled the stresses of lifestyle inflation, though on a much smaller scale. I was making more money than ever, yet more nervous about finances as well. I was more knowledgeable and more empowered with money than ever, but somehow still felt like catastrophe was right around the corner.
I sat down to look at the financial infrastructure I'd set up and my heart sank. I thought I had it all together: automated savings and bill pays, targeted accounts, investments. Everything. But it all suddenly felt so wrong. My liberal arts degree couldn't help but cry out, “Tim, this doesn't express you.”
We all have our ways of destressing after a long day. One of my weirdest and most beloved post-work, take-a-load-off strategies has always been cruising the aisles of gourmet grocery stores just to look at packaging. Give me an aisle of fancily bottled extra virgin olive oil, and I'll need at least an hour. Nothing is more calming to me than fancy fonts on fancy jars of fancy imported foods.
I don't even need to buy anything. Often I just stroll around, try a sample of pickled figs, and continue my stroll home. Sometimes though, I'll splurge on a $3 glass bottle of spring water from some promised fountain-of-youth in Italy. This, to me, is the quintessential quandary of wants vs. needs: I need to drink water, but I don't need it to come from a hydro-spa in Lurisia.
What's a Want? What's a Need?
There were a lot of comments in my last article about spontaneous spending as to how to determine wants and needs when budgeting according to the Balanced Money Formula in Warren and Tyagi's All Your Worth. Whether you use their formula or not, figuring out the essentials of your budget is important. For those of you just tuning in, the balanced money formula says that 50% of your income should go toward needs, 30% to wants, and 20% into savings. I think this comment exemplifies some of the confusion:
This past Friday, I got an e-mail from my uncle letting me know the Sox were here in Seattle. Since leaving Chicago, it's rare that I get to see my hometown sluggers, and it's not an opportunity I would want to miss. But by the time I caught wind of the windy city being in town, the cheap seats were sold out, which meant that tickets for my girlfriend and me were around $50. Yes, I should have checked the schedule ahead of time and planned accordingly, but I didn't. I took the cost in stride, along with the $6 Seattle dogs (cream cheese and grilled onions — so good), because I had money set aside for this very reason. Awhile back, I started contributing a small amount each month to what I call my spontaneity fund.
The Spontaneity Fund
We often hear that the first step of our personal finance expeditions should be to set up an emergency fund. A spontaneity fund isn't the second step, or even the third or fourth, but I wanted a way to follow a whim or two and not feel guilty about it after. Whether it's a concert I just found out my favorite band is playing down the street, or an impromptu evening out because my best friend had a terrible week at work, I want to be able to be there without breaking my budget completely. At my income level, without money set aside, there's no way I would've been able to see my beloved White Sox at the ballpark the way I used to as a kid. This is exactly what I had set up a spontaneity fund for; it's like an emergency fund for total non-emergencies. That said, where does the money come from? Continue reading...