I wrote a post a little while back about not really having an interest in being wealthy, because I’d be reasonably well off if I just kept doing what I was doing. You know what’s funny? When I was in debt, I wanted to be wealthy. When I was out of debt and saving money at a healthy clip, I wasn’t interested in being wealthy. Now that I’m in debt again, I’m once again gobbling up articles on how to acquire money like nobody’s business.
Could it be that once I was out of debt the gleam of wealth wore off because in some ways I already felt like I was wealthy?
Maybe….
When I was in debt originally I used to day dream about being wealthy. I’d never have to worry about anything, because the money would always be there. My biggest concern would be figuring out how to preserve my golden nest egg for future generations. I’d never owe anyone anything. No more looking at the minimum balance owing, worrying that I might not have enough money this pay period to cover everything. Living pay cheque to pay cheque would be a thing of the past.
Then I paid off my debt. I was living day to day life, watching my savings balances increasing every pay period. I watched as my emergency fund climbed to a full pay cheque’s worth (no more living pay cheque to pay cheque!) Then to a month worth of expenses. Then to two months worth of expenses. I projected I’d have three months worth of expenses socked away by the end of the year. I did up spreadsheets projecting how long it would take me to fully fund my emergency fund. If I really pushed myself, I could save $10,000 by my debt pay off anniversary. How awesome would that be?
Then my bubble burst, and suddenly I was back in debt again. I was pissed. Working that hard to build my finances up just to get knocked down in one fell swoop? It doesn’t seem fair. Where was that unknown long lost great uncle twice removed that died and decided to leave his entire estate to me? Where was the fairy god mother who decided that since I had worked so hard she’d just look after this little expense for me? Where was the massive lottery win that would take care of me for the rest of my life? (I suppose I’d have to buy a ticket for that last one to happen…)
Just like that, I wanted to be wealthy again.
My consumer debt doesn’t currently cost me a lot, less than $1 a day in interest actually, so it’s not like it’s choking my budget. It’s just pissing me off. I wish I had enough money so I never had to worry about things like this happening. It really highlights just how vulnerable my finances are to hiccups at the moment. It also highlights how difficult it can be if you don’t plan for life’s mishaps. Just imagine if I had been on one long spending spree since paying my debts off. Not pretty.
It’s going to take me a while before my finances are bullet proof, but I think right now that’s what I need to work toward. I’m also thinking I need another income stream.
How large of a financial setback could you safely absorb right now?
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I appreciate your observations on debt and how they affected your attitudes on wealth. I’m a firm believer in debt-free living – whether I wa earning a wage below the poverty line (as I did for the first 3 years of my career), receiving a six-figure salary package (as I did for a couple of years), or taking a 40% pay cut, now looking at another 25% reduction. One key, I believe, is that we not see “financial set-backs” as something that just happen to us. Through disciplined, faithful stewardship, learning to live on as little as possible, and doing our best to earn a decent living, debt can be more the exception than the rule.
I really like that “learning to live on as little as possible”. We don’t need to spend money mindlessly or carelessly. I get excited when I find $20/month savings.
I need to start getting excited about $20 savings here and there again, it started to slip when I had more disposable income. It takes some effort to maintain my focus, especially when the unnecessary but nice things become available again.
I’m working to get to that debt free point as well (mortgage included!) The closer I get, the more I firmly believe in it.
“Through disciplined, faithful stewardship, learning to live on as little as possible, and doing our best to earn a decent living, debt can be more the exception than the rule.”
You’ve summed up what most people convolute into an incredibly concise bullet point. Thank you for that.
I just moved, in order to save money (a lot- about $700/mo) but the move itself was expensive once the security deposit, moving costs and paying rent for 2 places for 2 weeks set in. I survived it, but with spending some money for Xmas too–I’m pretty tight right now! I just keep telling myself it was better to move before the new year and since I’m done Christmas shopping as of yesterday I can go back to being serious about debt repayment again.
Understandably, it’s a hard time of year to take an expense like that! It’ll be worth it though, especially when your next rent payment comes out an it’s $700 smaller than it was before. That’s a great move financially that most people don’t have the guts to make, so well done!
Everyone dreams about being wealthy at some point. It’s just until you reach the point where you can absorb a $10,000 set back without depleting any resources, that you feel comfortable.
For me, that point was when I accumulated about $50K in cash, in addition to the $30K locked in my RRSPs. That’s when I felt comfortable enough to handle anything coming my way.
You make a really interesting point. I figured I’d feel much more comfortable once I had $10,000 in my emergency savings account. In all reality, if I was hit with a $10,000 bill, which is quite possible, I wouldn’t actually feel comfortable. I’m going to have to rethink my emergency fund plans. $10,000 is a good start, but in the long run insufficient.
That stability cushion is so important. I started feeling really comfortable when we were on track for retirement savings and had a year’s of expenses in taxable stocks.It was also nice living on 40-60% of our income, but next year DH is leaving the job market so we’ll be closer to 100%.
Living on 40-60% of your income is an incredible feat, especially if you’ve been able to save the difference! I look forward to having that stability cushion again.