This guest post from Jeanne is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes. This reader story is a response to my article last week about how to spend your money.
Until I was 34, I spent most of my young adulthood as a volunteer. For three years in my late twenties, I worked full-time while going to grad school, but the rest of the time I worked in Bolivia and in a gaggle of countries in Central America. I traveled between volunteer gigs. I even managed to pay off my college debt with temp jobs in the U.S. (Admittedly, my college debts weren't quite as much as they might be if I were in school today.)
Then I started getting jobs overseas. Paid jobs overseas. This was humanitarian work, so the jobs weren't highly paid, but at least I wasn't an unpaid volunteer anymore. That made Mom happy.
I had a credit card that I'd pull out once a year to pay for a trip somewhere because I loved to travel.
- From Mozambique, I traveled to Greece.
- From El Salvador, I traveled to Palestine.
- From Angola, I traveled to Zanzibar.
There was always plenty of money, because I only spent money on one thing — these trips.
About nine years ago, when I was 42, I moved back to the U.S. I bought a car and a house. I bought furniture, appliances, and warm clothes. (I needed warm clothes after living near the equator for twenty years!) I framed all of my artwork — in frames that cost more than the art itself. I took my three Mozambican dogs to the vet.
How did I pay for all of this? I pulled out my credit card, and just kept slapping it down because, frankly, I was used to always having money in the bank.
What happened next probably won't come as much of a shock. I found myself $20,000 in debt — plus the mortgage — before I even realized I was carrying a credit card balance. I spent the next few years paying off the debt, reading finance articles and personal-finance blogs like Get Rich Slowly, and changing my spending and saving habits.
But this story isn't about how I got out of debt; it's about what happened after. When the debt repayment was done, I had another plan, one that was going to take a lot of money. Was it to travel, like J.D. and many of his readers? Not likely.
I love my job: It's fulfilling, and interesting, and exercises my brain. Most nights, I go to sleep happy with what I'm doing. But I travel for work — all the time. These trips take two days or more each way. I've seen every movie the planes offer, often multiple times. I know every coffee shop, and where to get a wi-fi connection, in way too many airports. To get back on a plane after flying nearly 50,000 miles in the last three months? Not my idea of fun.
The house I bought when I returned to the U.S. had an unfinished basement. I've wanted to finish it since I first moved in. But I decided to wait to do so until I could pay in cash. My brother-in-law told me not to take out a home-equity loan; I'm glad I listened to him, for once, especially since the economy tanked after I bought my house.
Over the last six years, I've built up a cushion, paid the max into my retirement account, and saved money for the basement. I follow all the basics of frugality: take my lunch to work most days (though I still plan a lunch out occasionally with friends), go to the grocery store about once every two weeks (to cut down on impulse purchases), and do my own yardwork and housework. And so on, just like most of you.
Over the last six months — slowly, s-l-o-w-l-y — the basement has been coming into shape. I did the paperwork for permits; they cost more than I expected, but I had built a cushion into the amount I'd saved for the project. I had an egress window installed. Framing, plumbing, ductwork, electric — it's all moving along. It might take another six months, but as long as the contractors leave a path to my washer and dryer, I can deal with the chaos.
Doing What Works for Me
So, why does it really matter to finish the basement? After all, I've been getting along fine with space in the rest of the house. I could do without. But I'm trying to add two kids to my home, and want to still have space for a home office and a guest room. Again, I could do without, but I really want the space for all of us. And, hey, depending upon how the final cost comes out, I may even buy a big-screen TV. <gasp!> It's my choice.
I'm picturing myself working on my computer in my new office, while my new daughter does her homework at the nearby table, and my godson Skypes his family back in Guatemala. Dogs at our feet, African pop on the stereo.
Great experiences, pre-paid.