This guest post from Rya 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. Rya writes a Bulgarian personal-finance blog called kadebg.com.
My name is Rya. I'm 25 years old, and I live in Bulgaria. That's a small country in Eastern Europe, right next to Turkey, Romania, Greece, and Serbia.
In May 2009, I took a loan to start my own business, which eventually failed. By the end of 2009, I was left with €2500 in debt. (For reference, the average salary in Sofia, the capital of Bulgaria, is €500 per month. That's roughly $700.) After my business failed, I got a job that paid €350 a month, while my living expenses were €200 a month at the very least. I couldn't squeeze them any lower than that.
So I was left with €2500 in debt, and I could only put €150 a month towards it. And that was if I lived like a monk: eating simple food, wearing modest clothes, cutting off all entertainment.
Then in January 2010, a family emergency called me home. I left Sofia and my job for my small hometown with 40,000 population.
Not a Sob Story
In the beginning of 2010, things got tough. I had:
- A failed business
- €2500 in debt
- A family crisis
- A break-up with my boyfriend (due to said crisis)
- Major life-change (from Sofia to my small hometown)
- No job
During times like these, you take comfort where you find it — an overpriced latté or a sinful pack of smokes. But suddenly €2 ($3) for a pack is more than you can afford. Think you can't live without internet in the 21st century? Please! — that's the easy part. Chips, chocolate, soda — scratch'em off the menu. Your new menu is potatoes, eggs, and tap water.
But this isn't a sob story; rather, it's a “before and after” story.
Before this, I never really managed my money. I just tried not to spend too much on certain things, and it worked. I'd broken even for the month — nothing left for savings, but no debt either.
After this, I started looking for information about personal finance. I found The Simple Dollar and Get Rich Slowly, which prompted me to start me own blog (in Bulgarian): kadebg.com. And I began to read a lot about saving since it's a major topic in personal finance.
“I Can't Afford to Save”
“I can't afford to save. There's just no money left at the end of the month.” That's what I heard quite a bit from friends and family. That's what I used to say.
So when I first spoke about savings on my blog, some people felt it was almost insulting. Was I out of my mind? What was I saying? I had dared tell people an ugly truth — save now or starve always — and they didn't like it.
But what really got to me was when I started hearing: “Bulgaria isn't a rich country like the USA or Western Europe. It's easy for them to save; they don't spend 50% of their income on food.”
There's some truth in that. Americans can afford a home mortgage, a car loan, and student loans totaling hundreds of thousands of dollars and still live in a well-furnished home while not worry about food or bills. Americans can say things like, “I save 20% of my income” and still eat healthfully, buy clothes, and make the payment on that SUV. That's hardly possible here!
For the majority people in Bulgaria, saving doesn't come easily. It usually means cutting back on basic things like food, clothes, and transportation. It takes a big effort. My aunt's family of three lives on less than €500 a month in Sofia — luckily, they have their own three-bedroom apartment, so they have no rent or mortgage.
So, how do you save when you can barely make ends meet?
“I Can't Afford NOT to Save”
I thought about this a lot. How different it is to save between these two scenarios? First, when you make more than you need for simple survival? And second, when you barely make enough for survival needs?
But tough or not, you have to do it. Otherwise, there's no way out. You'll never get to financial independence, and you surely won't get rich.
I wasted a lot of time being angry at the circumstances and being angry at how hard it is to save. I wanted things to be different so badly! I was only 24 — it wasn't fair!
But wishful thinking got me nowhere. I was acting like a child, not like a young adult. Taking the loan for my business was my decision. “Suck it up, Rya,” I told myself. ” Get on with your life!”
As I mentioned at the start, I now have my own blog about personal finance. Saving is one issues I talk about most. I've become a big advocate of saving, but I constantly get comments (sometimes really charged!) about:
- How it's hard to save
- How people would gladly save if they made more money
- How it's stupid to save when you should enjoy your youth
- How it's humiliating to save and count your pennies (“stotinki” here)
- How there's just not enough money to save
I recognize my old self in these comments. I used to be just like that. I would speak to someone with better financial sense than me, and they'd generously tell me what I needed to do. But I didn't like it. It sounded like too much work. It sounded like change. It sounded like less fun.
But in the end, I was forced to learn the hard way that they were right. I had to hit rock bottom before I woke up from my no-money-management coma. It was painful, but it worked. I just repaid my debt after a year's struggle. I kept reading personal-finance blogs to keep me on the right track until the finish line, and I now have the Financial Freedom Medal. It feels great!
So, I urge people to do whatever is necessary to find ways to save. And when they say “I can't afford to save”, I don't buy it anymore.
Not Buying It
If I can do it, so can you. Sure, it's uncomfortable. Sure, it's tough at times. It takes sacrifice! But I'm a 25-year old woman. If I can get by without fancy clothes, make-up, and entertainment at my age, you can too. What I've learned is that there's a huge difference between “I can't” and “I don't want to”.
During 2010, I spent a total of €40 on shoes and clothes — buying second-hand or cheaply-made Chinese stuff. I didn't buy Dove soap for €1 ($1.40); I got ten no-brand bars for the same price. My cell-phone is a several-years-old Nokia with a VGA camera. I couldn't afford a gym card, so I trained at home or ran outside. I've finally realized: Being frugal isn't the end of the world.
I've also learned — through reading blog posts and comments — that not all Americans have it easy. I've read some strong personal stories from Americans who seemed to be in even worse situations than mine:
- A single father lost his job and barely had any food for his young child.
- A retired woman shared tips on how to keep a house cool in the summer using blankets and reflectors to cover the windows — she couldn't afford air conditioning.
- I read stories about moms stretching $5 to feed a six-year-old and a baby for several days.
Sure, the U.S. economy is stronger than ours in Bulgaria. Sure, Americans generally live better than Bulgarians. But when you have a major crisis in your personal finances, it doesn't really help that much if your countrymen have a high standard of living. They won't come and swoosh you out of the quicksand. Their full wallets won't fill yours. You're on your own, American or Bulgarian.
So, are you telling me you can't afford to save? Save! I don't buy it anymore.