A Romantic Reality

Donald Liebenson wrote an interesting article at Business Insider entitled “Most people aging out of the workforce consider retirement ‘a romantic fantasy of the past.’

Retirement. “A romantic fantasy of the past.”

The article focuses on an Allianz Life study of 1,000 Baby Boomers (people aged 49 to 67) and 1,000 Generation Xers (ages 35-48). This would, of course, put me in the “Generation X” group.

The conclusions are stunning.

Nearly seven-in-ten (67 percent) [of surveyed Generation Xers] state that the financial targets of how much one needs to retire are out of reach. Roughly half (49 percent) of Baby Boomers have a similar downbeat opinion.

[Gen Xers] lost almost half their wealth, compared with just 28 percent and 25 percent, respectively, for the groups Pew calls early and late boomers. Many Gen Xers were hit by a double whammy. They entered the workforce in the early 1990s in the midst of the recession and just as they were getting their footing, the dot-com bubble burst in 2000. They bought homes at high prices during that decade, and were hurt yet again when home values collapse in the Great Recession.

This kind of sounds like me in some ways. I entered the workforce in 2002, in the midst of a recession. I bought a home in 2007, right near the peak of the housing bubble. My story, at least to this point, is a lot like the “Generation X demographic” of this survey.

But then things go off the rails.

The Allianz study finds that Gen X respondents are significantly more likely than Baby Boomers to feel “bogged down with uncertainty when planning for retirement” (64 percent vs. 43 percent) and believe it is “useless to plan for retirement when everything is uncertain” (44 percent vs. 31 percent). They also feel they will “never have enough money to stop working (68 percent vs. 43 percent of Baby Boomers).

68% of people my age feel as though they will never have enough money to stop working. Wow.

44% of people my age feel as though it is useless to plan for retirement.

Before I get started on this, let’s look at one more nugget from that article.

Gen Xers tend to feel the financial weight of the world more keenly than Baby Boomers. They believe their generation is burdened with more expenses (80 percent vs. 80 percent of Baby Boomers), more uncertainty (86 percent vs. 72 percent) and more risk (78 percent vs. 64 percent).

You know what? I agree with many of those statements. There are elements of the world that are simply tougher for the Generation X folks, and they’re not going to get easier for the Generation Y folks (or millennials) right behind us (to tell the truth, I actually feel more akin with Generation Y… but that’s me).

For starters, higher education became much more of a requirement for success while at the same time the cost for that education utterly skyrocketed. That means a larger portion of Generation X (and Generation Y) folks are leaving school with a more painful debt burden than any generation before. That’s just reality.

Yet, although it may be reality, it’s not an excuse to fail.

The biggest challenge facing Generation X (and Generation Y and baby boomers as well) is not financial uncertainty, but poor use of their money, time, and energy. The biggest challenge the modern world gives us is not more obstacles, but more temptations – more ways to spend our money in ways that are not in line with our long-term dreams and goals and plans.

How often in a given month do you spend money on something that will bring you a short-term burst of pleasure and then completely forget about it within a few days – or even a few hours?

How many bills do you have for services that you scarcely use, services that you signed up for because you thought you’d use them or because having those services merely available to you is somehow comforting?

How often do you pay someone else to make a meal for you or take care of a simple automotive maintenance task for you because you’re “too busy,” but you find yourself just dawdling on your smartphone or staring out the window while you wait on those things?

How often do you browse the Internet while at work because you don’t feel like you have anything urgent on your plate, even though there are lots of important-but-not-urgent tasks around you on top of the always-present option of improving your skills?

How many times a month do you feel the need to “go out” and spend money somewhere even though you have a ton of entertainment options available already at home?

Do you live in a house or apartment that’s larger than what you really need, but you took it so that you could fill the extra space with your accumulated stuff?

Here’s the hard truth, one that was very bitter for me to swallow and took years for me to truly understand: The problem isn’t with society keeping you from all of the things that you dream of. Instead, the problem is with the individual money and time choices you make every day and what those choices add up to.

Instead of continuing to throw my money away on things that just brought short-term bursts of pleasure and not long-term happiness, I started watching every dime that I spent. I tracked it with software like You Need a Budget (actually, I used a homebrew spreadsheet because YNAB hadn’t come into its own when I first started down this path). I blocked off how much money I could spend each month on unimportant things and I stuck to it.

Instead of believing that a gym membership meant that I was taking care of my exercise and that a subscription to Netflix meant that I was culturally aware, I cancelled those services and services much like them. Instead, I looked at how I actually spent my time and looked for ways to use it better. I tried to delete pure “idle” time and instead replaced it with genuine leisure (when my mind and/or body is engaged in something I genuinely enjoy), self-improvement, or sleep.

Instead of paying for people to make simple things or do simple things for me, I learned how to do them myself, and I kept doing them until they became easy enough that the idea of paying someone else to do it seemed silly unless I was going for a truly special meal or a major repair that was out of my skill level. I learned how to cook meals and prepare them so efficiently that not even fast food could keep up (and I thank my slow cooker for much of that).

Instead of constantly being distracted by interruptions, I started unplugging for periods of time. I turned off the Internet. I turned off my cell phones. I started focusing solely on the task at hand and, over time, it got easier and easier to focus on whatever I was doing.

It also became a lot more fulfilling, because I realized that most of my distractions were just making me sad about what I was currently doing and what I wasn’t accomplishing with my life. Cutting off those distractions let me build The Simple Dollar out of nothing in my spare time without any advertising or promotional budget.

Instead of wishing I could “go out,” I invited friends over when I felt lonely. I tried doing lots of different things with them until I found things that we all enjoyed doing that didn’t involve throwing money down an endless rathole of “going out.” When I was alone, I started digging through my own collections of entertainment – books, movies, and so on – that were already in my house and I started hitting the library hard to gain access to much, much more.

Instead of continuing to plan and save for an ever-larger house, I started trying to minimize my stuff, getting rid of things I hadn’t used in the last year. If it’s unused for more than a year, it’s time to get rid of it, even if I “intended” to use it “someday” – because if “someday” hasn’t come in a year, it’s not coming. I’ve reached a point where I would be perfectly content with the items I could fit in a backpack and a duffel bag – although I own more than that, I realize that it’s all more or less unnecessary.

Instead of wasting my energy blaming society for my inability to achieve what I wanted, I looked at how I could change myself to achieve what I wanted.

Whenever I read a survey like this, I don’t lament that society has made anything “impossible.” I lament that so many people won’t take the time to truly evaluate what they’re doing with their time and money and energy.

Whenever I hear someone describe financial independence – because, let’s be honest, that’s what retirement is for most people – as being “a romantic fantasy of the past,” I don’t dwell on some nostalgic idea of the past. Instead, I work on making a romantic reality of the present.

That’s the recipe for success. If you think that a goal that many other people have attained is somehow unattainable for you, whether it’s financial independence or retirement or anything else, don’t give up. Instead, look at the way you spend your money, your time, your energy. What could you be doing better? Then work to improve what you do, and don’t worry about what anyone else has done. Follow your own path.

That’s how you turn a “romantic fantasy” into your reality. Trust me, it can be done – I’ve done it myself.

Trent Hamm

Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.