Updated on 09.22.14

How Personal Finance Changes as You Begin to See Success

Trent Hamm

Five years ago, when I was working at a very stressful job and buried under piles of debt, I felt as though this is what life was going to be for me as an adult – an endless path of making payments to others, keeping my head just above water, and buying stuff I couldn’t afford because it took the sting of it away for a while.

Today, I feel completely different about my relationship with money. I no longer feel like it’s something I’m constantly battling – instead, it’s something that just works for me. Here are five examples that explain this sea change.

Five Ways that Success Changes Your Personal Finance Outlook

1. You move from paying interest to earning interest.

At the peak of my debt, I was paying over $2,000 a month in interest payments on my various debts and rent. My money was disappearing down a seemingly endless rathole. Today, my only monthly debt payment is my mortgage – we own all of our vehicles and have no other consumer debt.

What changes is that instead of having to shell out mountains of money to cover debt interest, I’m socking that money away instead and I’m seeing the interest and investment income come to me. Interest is no longer my opponent – it’s my friend. (As I was about to post this, I noticed that Frugal Dad hat recently posted an article on this very idea.)

2. You stop worrying about money and start using it as a tool.

I spent a lot of nights worrying about money and coming up with clever schemes to keep the bills paid. Today, I just write a check and the bill is paid – no stress or worries about it at all.

What changes is that you no longer worry about overdrafting when a bill comes in. You don’t have to get cash advances or move things around just to cover your electric bill. You don’t have to be late on your debts just because you couldn’t pay the piper.

3. You move from being afraid of the future (or not thinking about it at all) to being hopeful about the future.

I used to not think too much about the future. I had this vague idea that my “future self” would take care of all of these financial problems because he’d be earning more or something like that. Today, I love thinking about the future.

What changes is that you recognize that “future self” isn’t going to be the one solving problems. You can solve them, and your future self can have pretty much anything.

4. You stop putting out fires and start building for your dreams.

Rather than saving for the big things I wanted from life, most of my money went to put out financial fires – overdraft fees, interest payments, and so on. After I excised those from my life, it became easier to start saving for the real dreams I had in life, things that I couldn’t save for before.

What changes is that your money isn’t just going to cover up the tracks of your reckless choices. It’s going towards a future that you’ve always dreamed of. You’re not spending all of your time trying to cover up the mistakes of the past; instead, you’re spending your time building the things you’ve always wanted.

5. You stop endlessly chasing the things you cannot reach and deeply enjoying the things that you can.

When you’re caught in a cycle of spending recklessly, it’s hard to find the time to stop and smell the roses. You buy things, then you buy more things before you have the time to thoroughly enjoy the first one. You spend more and more time dealing with maintenance and cleaning of your piles of stuff. All the while, you’re stressed out by the financial pressure on you. Today, I spend most of my time enjoying the things I already have and make serious attempts to get maximum enjoyment out of each one.

What changes is that you’re no longer spending your time buying things and spending more and more of your hard-earned money. Instead, you’re spending your time enjoying the multitude of things already available to you. Why buy more DVDs when you have piles of them around you unwatched or only watched once? Why buy more video games when you’ve barely played the ones you have? If you don’t like the ones you have, then trade them to get the new ones. Better yet, focus on the experience of enjoying the things around you, because the DVD itself isn’t fun, it’s the movie on it. The sports equipment itself isn’t fun, but the exercise and the game is.

In the end, all of this comes down to a simple choice, one you can make almost every day. Do I want to spend my money chasing something new or do I want to enjoy all of the opportunities and things I already have available to me? The more often you choose the latter decision, the easier it becomes to reach financial stability and then start reaching for your dreams. It’s such a simple choice, but it changes your life.

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  1. Josh says:

    I think including rent in your $2,000/month “interest and rent” figure is very misleading.

  2. Julia says:

    I like this article, but I expected it to be a little bit different. I’m finding that each little step I make makes the next step easier/more enjoyable. From the title I kind of expected this to be more about that.

    Some examples:
    First I sold a game. That sale made me excited to sell more stuff.
    I paid off my credit cards. When I saw how much closer I was to being debt free I become more aggressive about paying off my car.
    Selling my stuff has yielded about $100-300 per month in extra car payments over the last 2 months. I still have more to sell but I’m already thinking about ways to continue this extra income once I sell everything. This process is awakening an entrepreneurial spirit I never thought I had.

    It’s very inspiring to hear the before and after story. But I’d love to hear some more of the story in-between.

  3. Esteban says:

    Like Julia, I expected more details. We want to know what steps you took, specially how and why things changed. Oh, I am happy for you.

  4. Tracy says:

    Trent, did you pay the Prius off? I must have missed that. Congrats.

  5. SEC Lawyer says:

    A good column. As control over money increases, control over the circumstances of life and the prospects for future happiness and success also improve. One of the saddest things about choosing to live paycheck to paycheck has to be inability to plan much beyond the next paycheck. (I never lived that way, but I have relatives who did and still do.)

  6. MikeTheRed says:

    This is absolutely 100% correct. When I turned from paying off piles of debt to actually saving and investing my money, the world changed.

    Its funny, I actually think about my personal money very little overall now compared to what I was doing when trying to pay off debts. Now, I have so much of it automated that it doesn’t haunt me constantly.

    Being debt-free is liberating first and foremost.

    Do I still spend more than I should? Yeah. My wife and I still eat out a lot. We still go out and do stuff pretty frequently. I also have a video game habit to feed. But you know what? All of that is spent out of money LEFT OVER after all the important living expenses and saving roughly 40% of our take-home pay.

    Life is so much better since I made the decision to get my spending under control and kill off all of my debt.

  7. The Yakezie says:

    I agree with all your points Trent. Also, you simply stop worrying about money period, and start pursuing the tings you’ve always wanted to do.

  8. Lauren Hannah says:

    Well on Sept. 6 at First Energy park the Blueclaws are having $1 item giving away. What a great way to save money.

  9. Angie says:

    @Tracy – Maybe he didn’t count the Prius; didn’t he have 0% financing on it?

  10. valleycat1 says:

    @Angie (#6) no matter what the interest rate, a loan is a loan.

    My eye-opening moment was when I calculated all my non-debt average monthly expenses & realized what a small portion of my income is spoken for. Our house is paid off but I’m still paying down credit cards. Even though some of the categories I had been putting on credit cards would still be cash expenses, once I pay them off I can probably join MiketheRed in saving 40% of take-home pay.

  11. Tracy says:

    @Angie – Maybe you’re right, I figured I’d have remembered him mentioning it after all the furor that purchase caused around here. But, whatever.

    Upon further thought, I also think it’s a bit disingenuous to lump your rent and interests payments together. I get that it looks like a bigger turnaround that way (look how much more cash I was frittering away before I got it together! so much interest was wasted!), but rent is rent and whether you’re paying rent or a mortgage everybody’s probably paying something for somewhere to live. You’re still paying a mortgage out every month now, but you’re classifying that as a “good” payment when you weren’t before.

    I get the point you’re making here and I even agree with it, but that was not the best example you could have used. It still would have been a good point without having to try and inflate your starting point higher.

  12. Julia says:

    I think he did pay off the prius. I seem to remember him mentioning this somewhere. Maybe in a reader mailbag.

  13. almost there says:

    Well, his spouse had a good government job, he never went hungry or lost the roof over his head. All he had to do to get out of the “financial meltdown” he stated he was in was to stop spending on all the gazingus pins (ala YMOYL). So, yes lumping in the rent with the interest to make it look larger a poor showing of actual interest debt.

  14. Mary Kate says:

    A great article. I wouldn’t change a thing. It’s something I’ll pass along to my teen and a friend.

  15. Tiny Potato says:

    Great Post. I’m definitely filing this one away to share with others to inspire them to work towards their financial goals.

  16. Systemizer says:

    “Why buy more DVDs when you have piles of them around you unwatched or only watched once? Why buy more video games when you’ve barely played the ones you have?”

    Yet more evidence supporting the existence of the Monique Paradox: A collector of DVDs and video games who accumulated $20,000 in consumer debt without buying a flat screen TV.

  17. tarits says:

    i just turned 27, and right now, i don’t have any debt. however i’m earning below minimum wage as a part time teacher and full time grad student. my savings are nearing zero, my parents are still paying the bills, and i am not happy about it. but a soon as i get my MA thesis out of the way, i can look for a full time teaching job and finally feel some success. thanks for your post; it reminded me that i have something to look forward to.

  18. Another Dave says:

    “You stop putting out fires and start building for your dreams.” This was the #1 thing I have strived to change in my life. My whole family has moved from one “Fire” to the next as long as i’ve known. I tear my hair out and scream at the top of my lungs, frequently, when trying to perform even simple tasks sometimes. Becuase they do it to themselves… poor $ management is a start, but as we’ve all seen, it also a sympton of Poor Management skills. Something as simple as putting the tools back in the toolbox when a project is done. Makes doing the next project simpler since it doesnt take 2 hours to collect all the tools.

  19. Personal finance changes DRAMATICALLY as you see more success .. you’ll see what I mean as you continue to climb that slippery slope :)

  20. debt says:

    That’s Nice.. Now how about explaining how you got from point A to point B?

    Did tons of cash just fall in your lap? Because you make it sound like one day you woke up and decided to quit paying your bills and instead put your money in the bank.

    Can you do that? I thought the bill collectors would come after you

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