{"id":39811,"date":"2010-08-12T04:00:08","date_gmt":"2010-08-12T11:00:08","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/?p=39811"},"modified":"2023-10-26T11:15:41","modified_gmt":"2023-10-26T17:15:41","slug":"life-after-debt-what-its-like-in-the-third-stage-of-personal-finance","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/life-after-debt-what-its-like-in-the-third-stage-of-personal-finance\/","title":{"rendered":"Life after debt: What it&#8217;s like in the third stage of personal finance"},"content":{"rendered":"<p>I <a href=\"https:\/\/www.getrichslowly.org\/free-at-last-saying-good-bye-to-20-years-of-debt\/\">paid off the last of my debt<\/a> in 2007, <a href=\"https:\/\/www.getrichslowly.org\/how-to-quit-your-job-gracefully\/\">quit my day job<\/a> in 2008, and have been working to build wealth ever since. As I wrote early last year, I&#8217;m in the <a href=\"https:\/\/www.getrichslowly.org\/what-next-the-third-stage-of-personal-finance\/\">Third Stage of personal finance<\/a>: I&#8217;ve paid off my debt, built a cash cushion in savings, and am maxing out my retirement accounts. And after doing all of these things, I have money left over to spend on comic books and travel. I&#8217;m a lucky man.<\/p>\n<p>For the past year, GRS readers have been asking me to write more about the Third Stage of personal finance. What&#8217;s it like there? What choices does a person face? What sorts of things does she do with her money?<\/p>\n<p>Though I&#8217;ve wanted to respond to these requests, I haven&#8217;t.<\/p>\n<ul>\n<li>For one thing, I&#8217;ve felt like there isn&#8217;t a whole lot to say. Mostly, the Third Stage of personal finance is like the earlier stages, but without the debt. I&#8217;m still pretty careful with my cash, but instead of saving to pay off past purchases, or saving my emergency fund, I&#8217;m now saving for other goals \u2014 like travel.<\/li>\n<li>For another, I&#8217;m reluctant to talk about some of my spending. It&#8217;s not that I think I&#8217;m making poor choices \u2014 I&#8217;m not \u2014 but that taken out of context, some of the numbers look shocking. It&#8217;s very difficult to put yourself in another person&#8217;s shoes, after all.<\/li>\n<\/ul>\n<p>Today, though, I&#8217;m going to write a little bit about the Third Stage of personal finance. I&#8217;m even going to share some actual numbers. <b>All I ask is that when you see these numbers, you understand that I&#8217;m making <i>conscious<\/i> decisions to spend this money<\/b>, and I&#8217;m sacrificing other things in my life to make the purchases I describe.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"the-cost-of-fitness\"><\/span>The Cost of Fitness<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Tonight was Guys&#8217; Night Out. Or Geek Night. Or, as my sister-in-law calls it, Dragon and Troll night. Every month, my band of geeky friends gets together for some sort of activity. It started out as a chance to play Dungeons and Dragons, but it&#8217;s morphed into an ever-changing variety of events.<\/p>\n<p>Tonight, for example, we headed into downtown Portland to watch the Portland Timbers take on the Minnesota Stars. The Timbers are the local pro soccer team, for which I bought a pair of season tickets last spring. (I paid $435 for two general admission tickets.) We geeks didn&#8217;t watch the game from the stadium, though; instead, we headed next door to the <a href=\"https:\/\/themac.com\/\" target=\"_blank\" rel=\"noopener\">Multnomah Athletic Club<\/a>. One of our group is a member, and he signed us in so we could watch from the club&#8217;s balcony, which overlooks the south end of the stadium.<\/p>\n<p>The Multnomah Athletic Club is amazing. It&#8217;s posh \u2014 it oozes wealth. It looks like the sort of place where you might have to wear a suit and tie just to jog on the treadmill. Everything is dark wood and brass and wall-to-wall carpeting. The attendants at the door <i>are<\/i> in suits and ties. It&#8217;s not a very J.D. place.<\/p>\n<p>&#8220;Wow,&#8221; I said to Josh as we waited for the game to start. &#8220;This place must be expensive.&#8221;<\/p>\n<p>&#8220;I knew somebody was going to bring that up,&#8221; he said. &#8220;It <i>is<\/i> expensive, but my parents have been members for almost forty years. It only cost them $700 back then.&#8221;<\/p>\n<p>&#8220;$700 for what?&#8221; I asked. &#8220;Per month?&#8221;<\/p>\n<p>&#8220;No, $700 for the initiation fee,&#8221; Josh said. &#8220;I think the fee is getting close to $10,000 per family now.&#8221;<\/p>\n<p>&#8220;<i>$10,000?!?!?<\/i>&#8221; I asked. &#8220;Just to join?&#8221;<\/p>\n<p>&#8220;Yeah,&#8221; said Josh. &#8220;And there&#8217;s a waiting list to get in. Plus, once you <i>do<\/i> join, dues are about $200 a month.&#8221;<\/p>\n<p>My mind boggled. I was about to say, &#8220;That&#8217;s outrageous!&#8221; when I realized: <i>I&#8217;m<\/i> paying $200 a month for <i>my<\/i> gym, too.<\/p>\n<p>Whenever I talk about <a href=\"https:\/\/www.crossfit.com\/\" target=\"_blank\" rel=\"noopener\">Crossfit<\/a> and the amazing things it&#8217;s done for my health, I always leave out the cost. Yes, I&#8217;ve lost 30 pounds. Yes, I&#8217;ve dropped from a size 38 to a size 32. Yes, I&#8217;m stronger than I&#8217;ve ever been in my life. But this progress has come with a cost: $200 a month, to be precise. You know what? It&#8217;s a cost I&#8217;m happy to pay, and one I plan to <i>continue<\/i> paying. If this system is working \u2014 and it is \u2014 then it&#8217;s worth every penny. If I&#8217;m not fit, nothing else matters. (But again, taken out of context, this expense would look ludicrous.)<\/p>\n<div align=\"center\"><img decoding=\"async\" loading=\"lazy\" title=\"My gym, which I love.\" src=\"https:\/\/www.getrichslowly.org\/wp-content\/uploads\/cs_crossfit.jpg\" alt=\"\" width=\"500\" height=\"250\"\/><\/div>\n<p>So, I admitted to Josh that I was paying just as much as he was for a gym membership. (But without any initiation fee, of course.) We stopped chatting as the match began.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"the-cost-of-fun\"><\/span>The Cost of Fun<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>We watched the Timbers and Stars play to a 2-2 draw in front of a large crowd. As the game wound down, I used my binoculars to spy my seats for next year. In 2011, the Portland Timbers will join Major League Soccer, and last month I spent $1410 to purchase a pair of tickets on the mid-field line. I&#8217;m eager for the season to start, and the current season isn&#8217;t even over!<\/p>\n<div align=\"center\"><a title=\"portland timbers vs seattle sounders by jcestnik, on Flickr\" href=\"https:\/\/www.flickr.com\/photos\/jcestnik\/4764750059\/\" rel=\"nofollow noopener\" target=\"_blank\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/www.getrichslowly.org\/wp-content\/uploads\/4764750059_101b60f5f3.jpg\" alt=\"portland timbers vs seattle sounders\" width=\"500\" height=\"375\"\/><\/a><\/div>\n<p>Walking back to my car after the game, I thought about that expense: $1410 for a pair of season tickets for a soccer club. A couple of years ago, I would have thought that was insane. I wouldn&#8217;t have been able to view it as a justifiable expense, no matter how much I had in savings, no matter what sorts of sacrifices I made in other parts of my life. I would have condemned it as <a href=\"https:\/\/www.getrichslowly.org\/lifestyle-inflation\/\">lifestyle inflation<\/a>.<\/p>\n<p>Maybe it <i>is<\/i> lifestyle inflation. But it&#8217;s also an example of conscious spending. I love soccer, and I can afford the tickets. I&#8217;m meeting all of my financial obligations. <b>When you&#8217;ve paid off your debt, saved for emergencies, and set aside money for retirement, whatever&#8217;s left over is yours to do with as you please<\/b>, right? In my case, that means that if I want to buy Portland Timbers tickets, I can. I have no regrets.<\/p>\n<p>These are the sorts of things I think about in the Third Stage of personal finance.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"the-cost-of-travel\"><\/span>The Cost of Travel<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>There are still financial dilemmas in the Third Stage. Being here doesn&#8217;t mean I can afford <i>everything<\/i> I want. In fact, I&#8217;m always picking and choosing. (It&#8217;s just that the things I&#8217;m choosing between are sometimes more expensive than before.)<\/p>\n<p>For example, Kris and I just learned about an opportunity to travel to Africa in February. <a href=\"https:\/\/willamette.edu\/\" target=\"_blank\" rel=\"noopener\">Our college<\/a> has put together a package tour for alumni that includes visits to South Africa, Botswana, Zimbabwe, and Namibia. It&#8217;s a 19-day tour and it costs $5600 per person.<\/p>\n<p>Well.<\/p>\n<p>I&#8217;ve been begging Kris to go to South Africa for a <i>l-o-n-g<\/i> time. I&#8217;ve wanted to visit ever since I read <a href=\"https:\/\/www.amazon.com\/dp\/074326195X\/?tag=grsorg-20\" rel=\"nofollow noopener\" target=\"_blank\"><i>Cry, the Beloved Country<\/i><\/a>. (Jolie Guillebeau doesn&#8217;t help by always reminding me that South Africa is her favorite place she&#8217;s ever visited.) Kris has always steadfastly refused to consider a trip to South Africa \u2014 until now. She actually <i>wants<\/i> to go on this tour, and so do I.<\/p>\n<p>The problem is that even though we&#8217;re in the Third Stage of personal finance, $5600 (per person!) is a lot of money for a trip. Especially considering we&#8217;ve already shelled out a lot for our upcoming journey to France and Italy.<\/p>\n<p><iframe loading=\"lazy\" title=\"Battle at Kruger\" width=\"500\" height=\"375\" src=\"https:\/\/www.youtube.com\/embed\/LU8DDYz68kM?feature=oembed&#038;enablejsapi=1&#038;origin=https:\/\/www.getrichslowly.org\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" allowfullscreen><\/iframe><\/p>\n<p>Can we afford to take on the expense of traveling to South Africa in February? And if we can, is it something we really want to do? As I drove home from the game tonight, I thought about it.<\/p>\n<p>First, I considered how to come up with the cash. We&#8217;ve already funded our trip to Europe, so that&#8217;s not an issue. I just need to figure out how to come up with $5600 by February. (Because Kris and I keep separate finances, she has to come up with her own $5600. That&#8217;s not really going to be a problem, though. Remember: She&#8217;s <i>always<\/i> been the responsible one, and she has tons of money in savings.)<\/p>\n<p>I considered my options:<\/p>\n<ul>\n<li>Last week, I canceled my <a href=\"http:\/\/www.cycleoregon.com\/\" target=\"_blank\" rel=\"noopener\">Cycle Oregon<\/a> registration. Cycle Oregon is a week-long bicycle tour of the state, and I&#8217;ve always wanted to do it. But after riding 100 miles in one day last month, I realized I have <i>zero<\/i> desire to bike 500 miles in one week. I&#8217;ll be getting back about $750, which I could immediately set aside to save for Africa.<\/li>\n<li>I could save up some of the money by going on a comic fast. I give myself a monthly comic-book budget, and if I were to reduce this to zero (or something near zero) for six months, I could accumulate a few hundred dollars.<\/li>\n<li>I could borrow from my Mini Cooper fund. Yes, I bought a used Mini last year, but since then, I&#8217;ve been saving for an eventual replacement. The car is running great at the moment, so it&#8217;s probably safe to pull some money from this account.<\/li>\n<li>Similarly, I could borrow from my tax account. I&#8217;m not sure I&#8217;ve mentioned it before, but I have a separate savings account in which I save for taxes due in April. (Because I&#8217;m self-employed, I&#8217;m responsible for setting this money aside myself.) I could borrow a few months of contributions from this account, and then double my savings efforts in the spring.<\/li>\n<li>And most drastically, I could conceivably borrow from my emergency fund. It sits at $20,000 now, which is more than ample for most short-term needs. If I drew it down to $14,000 or $16,000 or $18,000, odds are I&#8217;d be able to replenish it without a problem.<\/li>\n<\/ul>\n<p>Plus, I could make sacrifices in other areas of my life: I could eat out less often, I could make better use of the public library, and so on. At its heart, this is the same sort of decision I used to make, but on a different scale. Instead of trying to scrounge up $500 per person to spend a week in Victoria, B.C., I&#8217;m now trying to find $5,000 per person to spend three weeks in Africa.<\/p>\n<p>Again, is this lifestyle inflation? If so, is it wrong? And do Kris and I really want to spend this much money on a three-week vacation? I don&#8217;t know, and I&#8217;m not sure how to find an answer.<\/p>\n<h2>Life in the Third Stage<br \/>\n<i><\/i><\/h2>\n<p><i>These<\/i> are the sorts of things I think about in the Third Stage of personal finance. Yes, <b>we&#8217;re still growing and canning our own food, still looking for cheap entertainment, still shopping at thrift stores, and still asking for discounts whenever possible<\/b>. Now, though, these aren&#8217;t techniques to help me get out of debt. Instead, they&#8217;re the steps that allow me to spend $200 a month for Crossfit, $1410 for soccer season tickets \u2014 and <i>maybe<\/i> $5600 to travel to Africa.<\/p>\n<p><b>I&#8217;d love to hear from other folks who have reached this stage.<\/b> What sorts of things do <i>you<\/i> spend on? Do you sometimes think, &#8220;Man, ten years ago, I would have thought this was outrageous?&#8221; Do you still make sacrifices in order to buy the things you want? Do you still practice frugality? If you&#8217;re in the Third Stage of personal finance, what&#8217;s life like for <i>you<\/i>? (And if you&#8217;re not there, do you find this sort of spending inspiring? Or is it intimidating? Infuriating?)<\/p>\n<div class=\"highlight\"><i><b>Note:<\/b><\/i> As I was making my final edits to this article, I realized it&#8217;s a sort of follow-up to June&#8217;s post about <a href=\"https:\/\/www.getrichslowly.org\/why-we-scrimp-and-save-the-rewards-of-frugality-and-thrift\/\"><b>the rewards of frugality and thrift<\/b><\/a>, in which I described some other things I&#8217;ve been spending on recently.<\/div>\n<p><i>Portland Timbers fan photo by <a href=\"https:\/\/www.flickr.com\/photos\/jcestnik\/\" rel=\"nofollow noopener\" target=\"_blank\">Jenny Cestnik<\/a>.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>I <a href=\"https:\/\/www.getrichslowly.org\/free-at-last-saying-good-bye-to-20-years-of-debt\/\">paid off the last of my debt<\/a> in 2007, <a href=\"https:\/\/www.getrichslowly.org\/how-to-quit-your-job-gracefully\/\">quit my day job<\/a> in 2008, and have been working to build wealth ever since. As I wrote early last year, I&#8217;m in the <a href=\"https:\/\/www.getrichslowly.org\/what-next-the-third-stage-of-personal-finance\/\">Third Stage of personal finance<\/a>: I&#8217;ve paid off my debt, built a cash cushion in savings, and am maxing out my retirement accounts. And after doing all of these things, I have money left over to spend on comic books and travel. I&#8217;m a lucky man.<\/p>\n<p>For the past year, GRS readers have been asking me to write more about the Third Stage of personal finance. What&#8217;s it like there? What choices does a person face? What sorts of things does she do with her money?<\/p>\n<p>Though I&#8217;ve wanted to respond to these requests, I haven&#8217;t.<\/p>\n","protected":false},"author":3287,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[492],"acf":[],"_links":{"self":[{"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/posts\/39811"}],"collection":[{"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/users\/3287"}],"replies":[{"embeddable":true,"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/comments?post=39811"}],"version-history":[{"count":0,"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/posts\/39811\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/media?parent=39811"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.getrichslowly.org\/wp-json\/wp\/v2\/categories?post=39811"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}