Financial Success and Sacrifice

In the many articles I’ve written about my financial recovery, I’ve mentioned lots of things I chose to give up – buying DVDs, going out to eat, playing collectible card games, obsessing over video games, visiting coffee shops every day, buying books, and so on. Giving up these things enabled me to find the money I needed to begin my financial turnaround – and sticking with them has enabled me to pay off a lot of debt and build up some semblance of financial security in my life.

At face value, it seems to be a story of sacrifice. I gave up a lot of things to start turning around my financial ship – things that did bring enjoyment into my life. It wasn’t easy giving these things up, either. My heart often longed to fall back into those old routines – it wasn’t just a matter of waking up one morning and simply choosing to do something different.

The idea of such sacrifice often leaves a bitter taste in people’s mouths. They don’t want to give up some of the perks and trappings in their life. I know I certainly didn’t – but I also knew that I had to change something. I was standing at the edge of the abyss, looking down into a large chasm of financial despair, and in that moment I was far more afraid of falling into that pit than I was of trying something different.

What I discovered is that giving up all of those things wasn’t a sacrifice – it was a trade. I gave up all of those bad spending habits, but in return I was able to knock down that scary pile of debt, start saving for my children’s college education, build up a big emergency fund, and buy a house.

It was a trade that I needed at that point in my life. I was really becoming aware of my responsibilities as a parent, as an adult, and as a husband, and this awareness had driven me to spend a lot of time thinking about the choices I was making in life. My conclusion was, largely, that I needed to stop thinking about the short term so much and instead start looking at the long term.

In truth, the trade I actually made was swapping short-term gratification for long-term benefits and security. Buying books and video games and DVDs brought me a lot of short-term joy, but really didn’t contribute much at all to the quality of my life over the long term. On the other hand, not buying these things and instead paying down the bills is incredibly boring in the short term, but provides a lot of long-term happiness – I now live in a nice house and know that things are fairly secure financially.

This isn’t a trade that some people want to make. That’s not necessarily a good thing or a bad thing – it’s just a difference in perspective. If I were single, I might very well be content to live in an apartment and spend my time and money on more frivolous short-term pursuits and enjoyments. But such short-term pursuits simply do not reflect where I’m at right now.

It’s because of my own experience that I believe that successful financial turnarounds are often tied to serious introspection about what you truly want out of life. My financial turnaround, for instance, was triggered by a lot of introspection done in the aftermath of the birth of my son. Different events may trigger such introspection in others – it could be a major event, or it could be something as simple as merely getting older.

Is financial success a sacrifice? I think it’s only a sacrifice if you look at it solely in terms of what you lose without proper respect for what you gain.

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39 thoughts on “Financial Success and Sacrifice

  1. Rob says:

    If I didnt have a child who is two and a half, I probably wouldnt be reading your post. I never cared how I spent my money. Now I need to sacrifice as you say, all the time. I want him growing up with ease, not with a struggle.

    Also dont sign up for Tip hero. I did, and the spam started coming. I block it, but now they are getting sneaky.

  2. Shan says:

    This post was really helpful. Thanks for giving a new perspective to a single mom struggling to get out of debt. Keep up the good work!

  3. Melody says:

    I think we all go through this cycle at some point. The trouble lies in people’s expectations. If you expected, for example, you’d have this great job and be financially able to vacation, sip latte and shop w/ your friends and have the magazine-cover family (2 kids and a dog, usually) you might fight *more* about giving up things. Because what you want in life isn’t attainable right now. And trust me, that feeling sucks! Swallowing humble pie and saying ‘I can live with what I have even if it’s not what I originally wanted’ is why therapists have jobs. LOL

  4. Joan says:

    I also started getting spam after signing up for Tip hero. I really enjoy getting Simple Dollar. You are a very thoughtful writer, and I like the fact that you are so easy to understand.

  5. Mary says:

    Trent – I think this post is an instant classic.

    Like you, I arrived at this place through introspection as well. For me, it was questioning my place in this world and recognizing that having grown up a child of American television, I had been programmed to be a consumer. I had been trained to want the newest technology, to display my wealth, to want the “best” labels so that people could read my success by the purse I carried or the logo stitched on my shirt.

    And then I realized that I had been scammed. I had been sold a lifestyle that enriched the pockets of others at the expense of my own.

    Now I like to see myself in the image put forward by Dave Ramsey. The millionaire that no one knows about. They can’t tell by my car or my clothes or my house. (And, I’m not a millionaire – but I’m doing okay. I just don’t have to spend money to advertise my success any more) And now I am a more responsible consumer and citizen of this world by not consuming more than I need.

    The “trade” idea is extremely powerful and important. It’s a wonderful day when we learn it’s value.

  6. You hit the nail on the head when you said that “successful financial turnarounds are often tied to serious introspection about what you truly want out of life.” This might seem very common sense, but my husband and I have been in a cycle of falling off the wagon and getting back on in terms of turning around our finances. It wasn’t until we sat down and had a conversation about where we wanted to go and what we wanted to do that we were able to “inform” our financial plan with our goals. We vaguely knew that we needed to get out of debt, but it wasn’t until we determined why we needed to get out of debt that we were able really stick to our plan to do just that. And a good deal of determining the “why” forced us to really think about our spending habits. How important was it to maintain our expensive hobbies, in light of our long term goals?

    Loved this post!

  7. EXCELLENT point. A trade, not a sacrifice. I would add that things that once seemed like a sacrifice to me now seem like total non-issues. A lot of our expectations are shaped by what we have established as “normal” in our own lives. So one one side of the change it looks like a sacrifice, deprivation, unpleasantness; on the other side of that change it just looks like someone else’s life that holds no particular allure.

  8. Julie-Ann says:

    I, too, like the idea of “trade” rather than “sacrifice.” By giving up many things that were sucking a lot of money out of my life, I have been able to work for myself instead of being beholden to someone else.

  9. Caroline says:

    Trade vs. sacrifice is a very good point. I like these sorts of posts – the whys (the hows are still good – heck, it’s all good). I find this blog very inspiring. Even when I thought I was doing a pretty good job with my money, you’ve shown that there’s more (almost) painless stuff I can do to cut my spending further. Thank you!

  10. Trent, I have a similar story. Thanks for sharing.

  11. Jade says:

    Great post Trent!

    I suppose if traveling wasn’t an option for me I would be spending my money differently, probably buying more Starbucks and DVD’s and not worrying too much about grocery shopping with a list. But now that I’m old enough to travel without my parents and my boyfriend likes to go on road trips, I’ve cut back on the everyday indulgences, grocery shop with a list, and now I’m saving up for the Great American Road Trip!

  12. Chaturon Wattaporn says:

    Brilliant article! Very similar to what I went through when turning my financial life around: paid down $125K in debt in $5 and $10 increments over 4 years; i.e., whatever was saved by NOT purchasing, say, a magazine or DVD or soda was applied to paying down the debt. Chipped away at it little by little. Now am much happier with free time and security (vs. things) and am able to retire early!

    Am forwarding this article to all my friends who lack a long-term view of life and are teetering on bankruptcy because of undisciplined, unfocused spending.

  13. Anne says:

    Fantastic post. “…It’s just a difference in perspective”, exactly. Time to start emailing the link to this post to some friends of mine.

  14. Arlene says:

    I like this post except one thing – the assumption that being single would predispose one to want to be frivolous and spend on the short term. I’m single and I feel even more inclined to plan for my future since I’m the only one I have to count on. I can’t rely on a spouse’s retirement account or life insurance, it’s all on me.

  15. Stephanie says:

    Trent, this blog post tops all other posts that you have written. Thank you so much for writing it.

  16. doug says:

    Trent, you are absolutely right about the introspection aspect of behavior modification. Personal finance, at its heart, isn’t really difficult. After all, basic math skills are all that’s needed. But you have to deal with the person you look at in the mirror, and that’s where things get hard. Are you willing to stop eating out? Are you willing to not go down and buy a brand new car?

    Dave Ramsey has a tagline that sums up the idea of trading what you want now for what you want later: If you live like no one else now, later you’ll be able to live like no one else.

  17. Anne says:

    THANKS! You’ve synthesized my struggle!

    I’m having a hard time giving up my clothes shopping habit even though the end of my consumer debt is in sight. It’s helpful to not thinking of it like a diet, but instead as a choice for capturing my long-term financial stability.

    I’ll print this post out and put it with my budget and tracking sheets as a reminder.

    Thanks again!

  18. Eve says:

    I think financial success is a sacrafice. I am in a situation where my spouse buys lunch everyday, golfs once a week with the boys,and is not willing to bargain shop at all. I,,on the other hand grow my own veggies, compost my waste, bring my own lunch to work and spend less than what I make. I am at a crossroad of making a big decision in my life right now cause I know what i want for my future but he knows what he wants right now and is not willing to make that sacrafice.

  19. todo es bien says:

    I think commonly in our materialistic culture sacrifice is linked to suffering. I do not necessarily see it that way. When I noticed that I had a choice to drive an old car and save for my daughters college or drive a new car and not, I made the choice to save. Some would call it a sacrifice, but really I was just trading away one thing for another, and frankly I ultimately did it because I felt better by saving. Which would bring me more pain? Driving an old car or having my daughter face difficult straits in obtaining her education? For me, easy choice I decided to save. I think sacrifice just means trading something smaller for something larger, whatever that might mean to me. Similarly, someone who is compelled to sacrifice their life is trading away what they perceive to be something smaller for something larger. In some strange way, maybe they are actually getting a bargain.

  20. Griffin says:

    Sacrifice is giving up something good, for something better.

    That is the big rule that I live by :-) Everything is a trade-off.

    I started today with $23.

    Do I want hair dye tonight, or do I want to e-file my taxes and get my return back earlier? They are both wants technically, so I could obviously choose “neither.” But taxes are more important, so I chose to e-file so I can add the small refund to my budget for February.

    $23-10=13.

    Next, do I want hair dye or flax bread for the week? I want to dye my hair, but flax bread is a need. So Flax bread it is!

    $13-5=8

    And with $8 I can get a lesser-expensive hair dye if I don’t have another need to spend it on right now. :-)

  21. Ken says:

    You hit the nail on the head when you said you switched from short-term thinking to long term thinking. If only more families would begin to think this way. It’s what I call here and now thinking. No thought of tomorrow at all. I’m 41 and wished I had began saving much earlier than I did. People today do not like sacrifice. They don’t want to wait any longer than 1/2 a second. Supporting their now robs them of their future.
    Great post!

  22. oneofnine says:

    Isn’t this similar to the book where the guys interview hundreds of millionares in America and discover that most of them live frugally and invest heavily in the future? The book (I’m sure you know what I’m talking about but the title escapes me right this minute) pinpoints the difference between being wealthy and being affluent. The affluent may have high incomes but still live beyond their means and often carry large amounts of debt. The wealthy, on the other hand, live well BELOW their means and could comfortably maintain their lifestyle with their investment and savings for years to come if their income suddenly disappeared.

    It’s not a hard choice for me! I’d certainly rather be wealthy than affluent. Which is one of the reasons why both my spouse and I have our own businesses and expect to “retire” in our 40′s. It’s not a sacrifice; its a pleasure knowing that our future is secure because of the decisions we made yesterday and today. What could be better?

    Great post!

  23. Steve says:

    Nice post Trent! I just wrote a quick blog about the same topic, but from a different approach. I like your’s better ;)

  24. Charles Cohn says:

    About the most important decision a person needs to make in their life is whether or not to have children. It should be a considered decision, not just letting it happen. I decided in my early teens that I never wanted to have children, and that decision has served me well up through the age of 77 where I am now.

  25. Dawn says:

    But what to you trade when you don’t have anything to trade with? I am a single parent. I brwon bag lunch every day, take coffee from home, haven’t seen a movie in years, don’t eat out, live in MN and keep the heat set at 62. I live very simply and frugally. My one luxury is the internet. I purchase groceries from a list and don’t deviate, clip coupons, drive a 7 year old car – try not to make any unnecessary trips.
    I don’t have much to trade. Sometimes I think its not much of a life, but its what I can barely afford. I’m not trying to whine, I am at least employed, have a roof, food, etc. Probably better off than a lot of people. I just think sometimes its not as easy to say “make a trade off” when there is very little to trade in the first place.

  26. Meggles says:

    Trent, I really like how you substituted the word ‘sacrifice’ for ‘trade’. When giving up enjoyable, but wasteful habits, it feels like a sacrifice in the short term. But in the long term, one trades short-term enjoyment for long-term security and stability. My own area of temptation is cute outfits for our daughter and things for the house. I’ve gotten better, but still working on the siren call of those two things.

  27. Goal Hunter says:

    I like it. There’s no need to judge one as worse or better than the other, it’s just about which path takes you where you want to go.

    oneofnine: I think the book is called “The Millionaire Next Door” by Thomas Stanley.

  28. tammy says:

    Dr Wayne Dyer says, “When you change the way you look at things, the things you look at change.”
    Perception is reality- perceiving “sacrifice” as trading is a wonderful concept!

  29. Fred says:

    .
    The source of Capital formation is in the postponement of immediate consumption in the hope a of future greater satisfaction…

    Capital can buy assets that will put money into your pocket… So, what is your plan? Do you have a spending plan or an investment plan?

    Sacrifice!? Not that I don’t hear the whiners, but I am still to see real misery in America where everyone has access to potable water, education and medical treatment.

  30. Daphne says:

    I’m a reformed (in process!) consumer, and am constantly surprised by the simple pleasure I get in choosing to NOT spend money. Last week, a young friend and I agreed to read a book together and discuss it. I was sure I had the book in my voluminous (no pun intended) home library, but after digging through all the shelves, came up empty handed. I decided to borrow the book from my local public library, but it’s not there either. I have an unspent gift card from Christmas, and had just about decided to try to buy the book in a local bookstore with the gift card. Then it dawned on me. . .I probably have another friend who owns that book. If I can borrow their copy, and they would like to borrow another book from me, we both get something we want without spending a dime, and it puts me in touch with another person, instead of with a Big Box store or the internet for a purchase. All around, this is so much better than my old way of doing things. Six months ago, I wouldn’t have thought twice about placing an order on the internet for that book. . .along with 2 or 3 others, so I could take advantage of free shipping.

  31. Isabelle says:

    The idea of giving up things is a fallacy. Yes, we can ‘buy’ many different consumer items with ‘future money’, by using credit cards and loans – but when we stop doing this and live within our means we are not ‘giving up’anything.

    The feeling of wealth and abundance we get when we use credit is completely false. The day MUST come when we have to pay. To do this we have to go from living above our means to living below our means.

  32. Gena says:

    Just wanted to let you know I walked into my local Barnes and Noble yesterday and your book had its own table as soon as I walked in the door!

  33. Steve says:

    There’s been several blogs that I’ve been following that talk about frugality. Too me, be frugal on the daily mundane walk of life so that you can enjoy (and even be someone excessive) on the special non-daily things. I’ve been enjoying one such site that seems very minimal in scope and just posts 1-2 daily “deals” that are in step with daily living- frugally= http://www.CrazyBargain.com I enjoy buying day-to-day stuff on the cheaps so that I can splurge on the unique and seldomly purchased things.

  34. Betsy says:

    Trent,
    If all of us in America could make this mental switch, we would be on the way to solving our financial, climate-change and energy crises.
    Thanks for your practical view towards large issues.

  35. CathyG says:

    I know it feels good that my family is now in a position not to have to worry every day about money, but it is starting to feel like people who made short-sighted decisions are getting rewarded (handouts, bailouts, college grant money, forgiveness refinancing, etc) while those of us who made wise decisions and sacrifices are getting dragged down(how’s your 401k lately?).

    It’s getting hard to keep that green-eyed monster at bay, and it’s hard not to just give up and join the spend-it-now hoards.

  36. ZP says:

    Being frugal is a great thing but I see that your focus is mainly on cutting expenses. Why don’t you think more about increasing streams of income? I guess it’s more inspiring. Anyway, thanks for your work.

  37. Mario says:

    Also it has always been – Money makes the world go round – it is like that! I think due to the financial crisis competition became stronger!

    Regards,
    Mario

  38. Trent-
    If you ever get a chance to read any sociology, you should try a book called “Social Problems for the 21st Century” by J. John Palen, PhD.

    Sociology was a wake up call for me. It had always been on the tip of my tongue how we all live in a “social construct” and some of us bought into it more than others. When I was able to see that it’s not “sacrifice” but “waking up to reality”, things made a lot more since.

    We all buy goods and put value on them. Often that value isn’t real dollar value, but social pressure and construct. People *believe* Starbucks is better coffee.. but what really makes it any better than the 5 cents worth of hot tea I have in a reusable travel mug? It’s perception. It speaks of social class and prestige.

    Often when we get a little older, mature a little more, get some kids… we stop caring so much about impressing others and flaunting our social class. It’s not sacrificing frills.. it’s growing up and accepting who you are, not about what you own. You quit buying into the construct and really start living.

    Aggie

  39. Bill in NC says:

    Housing and transportation are generally the biggest expenses for a household.

    And in the long-term have much more impact than any latte.

    So if you want to build wealth like “The Millionaire Next Door”:

    1. live in a modest home (no 5000 sqft. McMansion)

    2. and drive inexpensive, preferably used vehicles.

    You can always rent the vehicle of your dreams for the class reunion!

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