Triggering the Spark of Financial Independence and Frugality

Kayla writes in:

I’ve never really understood how you could suddenly make the switch from way overspending to actually living on just one of your two incomes and saving half of your income. How does that even happen?

As I thought about Kayla’s question, I started writing a list of things that I felt played a real role in this turnaround. It’s easy to point to one single thing – my “financial bottom” – but that actually only tells a little bit of the story. It wasn’t just that one painful day – it was a series of things that happened both before and after that moment. All of these things pointed my life in a different direction than before.

Let’s walk through them.

Sarah and I Had a Child

Our first child arrived in late 2005, about six months or so before our financial turnaround began in earnest. Unsurprisingly, it triggered a bunch of changes in many different aspects of our lives.

One, it became much harder to go out in the evenings. Having a child at home made having a few date nights a week much more logistically challenging. We either needed to get a babysitter – which meant preparing supplies and directions and straightening up the apartment and also spending money on that babysitter – or we could just stay at home with our new little guy. Usually, staying at home with the new little guy won out, generally because it was easier.

Two, I wanted to spend a lot of time with my son. I was now motivated to go directly home each night after work, only stopping for vital errands. I enjoyed spending time with him – holding him, reading to him, talking to him, and so on. Most days, I really looked forward to spending some time right after work with him.

Three, we started to incur child care costs. Since Sarah and I both worked during the day, we needed someone to watch our son – and we were quite picky about who we chose. We ended up using one of several centers in the area and it wasn’t cheap. This added an extra strain on our budget.

Four, we had all of the other child care costs, too. Diapers. A breast pump. Formula for emergencies. Wipes. All of that stuff really adds up.

The simple presence of this baby in our life altered our daily routines significantly and added to our expenses.

My Hobbies and Use of Free Time Started to Change

Naturally, because I wanted to spend more time at home with my son, my hobbies and free time usage began to change direction. Not getting home until six or seven no longer made sense. Instead, I wanted to get home right after work to see my son and check on his new tooth or read him a book.

Since we were now spending a lot more time at home, I wasn’t engaging in some of the hobbies I once engaged in. There was no time for poker night. I basically withdrew from going out for drinks with coworkers. We didn’t go out to eat.

Instead, I started digging into hobbies and activities that I could do at hime. For a while, I played a lot of video games, but other hobbies really began to take center stage.

I Rediscovered Reading

More than anything, I really rediscovered my passion for reading. There were a lot of times where we wanted the apartment to be quiet so that our baby could sleep for an hour or two, so we looked for hobbies that were nice and quiet. Reading is a natural hobby in that regard.

So I started digging through the piles of books we had accumulated and started actually reading them. I had always enjoyed reading as a hobby, but I had allowed other hobbies to take front and center with my time while still buying a lot of books. This left a ton of unread books on my shelf – and I started digging in.

The most valuable part of reading is that, if you read something more challenging than a page-turner, it forces you to consider new ideas in a deep way. You really have to turn over your thoughts and feelings about various things, deciding for yourself whether your previously-held ideas make sense in the face of new information and new arguments.

So, not only was I filling my time with a new quiet hobby that was based on things already on my shelves, I was also exploring new ideas and new thoughts about my life and how the world worked. I view my reading in the winter and spring of 2006 as being invaluable in terms of priming my mind for the changes to come.

I Found My First Taste of Writing Success

In 2005, I experienced real success with writing for the first time in my life.

Throughout that year, several exciting things happened. I had a very strong tug of interest in a novel I had been working on from a smaller publisher. I started writing a column on playing poker for an organization that was paying quite well (given that the poker boom was in full bloom at that time). After our son was born, I started a parenting blog that saw a great deal of success in the winter of 2006 (I chose to discontinue it that summer for personal reasons).

For the first time in my life, I began to actually feel as though I could make real money from my writing efforts. Because of that success, I began to devote more and more of my spare time to writing. Most evenings, I could be found with a laptop crafting words.

Other “Side Gigs” Began To See Success, Too

At the same time in 2005, I saw some success with three other side gigs, though the success wasn’t as grand as with writing.

I played a great deal of online poker and I had a wonderful winning streak in 2005 and 2006. I had “invested” some money to play with, so I took my investment back out of the account. Then, later, I took out some additional money. I was literally playing with the house’s money at that point.

In 2003, I started a home computer repair business targeting elderly people in the area where we lived. I focused on the “social” side of business, fixing their computer while engaging in conversation with them. The business mostly grew through word of mouth and I was making a couple house visits a week (almost all were within walking distance of our apartment).

I also had some success with independent web design. I created websites for three different clients in 2005 and 2006, earning some nice pocket money.

Although my earnings in each of these endeavors was small – less than $2,000 each – it did show me that I didn’t necessarily have to rely on my primary job to earn a living. It became clear to me that I could switch careers should I ever need to or want to. (A few years later, I did just that, spurred on by a sense of separation from my children.)

I Started to See How My Financial Behavior Affected Others

Prior to the birth of our first child, I never really considered how my personal spending choices really affected the rest of my family. Sarah and I kept our money largely separate, mostly paying bills by committee.

After our son was born, we both began to see how our individual spending choices really impacted our family. Before then, overspending just meant that we had to personally cut back on some other area for a little bit, then everything would be fine. With a child, cutting back became a lot harder.

I didn’t like it whenever I felt like I had to make a hard spending choice related to my child. I didn’t want to ever have to buy him the cheap diapers that might leak or the cheap wipes that might irritate. I didn’t want him to ever be uncomfortable or unhappy, whether it was Orajel for his emerging teeth or a teddy bear to cuddle with.

It didn’t take long before the connection between my own spending on silly things would have a direct negative impact on my ability to provide for my son. It didn’t take much more to start realizing how the same connection was true with Sarah as well. We all relied on each other. We weren’t independent.

When I made a dumb spending choice, it wasn’t just me on the line there. It was Sarah. It was our baby, too. It was also my future self – my retired self that may or may not be able to dig out of a financial hole. It was a recognition that made me start to consider the ramifications of how I spent money.

My Social Circle Started To Change, Too

With this change in my time use – heading home quickly after work, spending a lot of time quietly at home – the time I spent with most of the people in my social circle began to change, too. I stopped going out for drinks after work other than on rare occasions. I stopped taking time to play golf. I basically dropped out of my poker group.

A few of those people understood that my life was significantly changing and maintained a friendship with me. Most of them did not and they quickly fell back to being casual acquaintances.

Within a few years, I was much more involved in community events (starting with things like coaching three and four year old soccer and local charities) which led to new friendships. We began to connect with new neighbors in our area and a pair of old friends moved back to the area.

Between 2005 and 2008, our social circle almost completely turned over. Those new people contributed new influences in our life. Many of them were parents. Almost all of them were fairly frugal. Many of them cared deeply about social causes. Naturally, those things became more pronounced in our own life.

It was hard to let go of some of those friends and some of those social connections, but I soon realized that the relationships that really mattered stuck with me. The friends that really meant something are still a part of my life because they were friends with me, not simply people enamored with whatever activity we happened to be sharing.

I Had a “Moment” That Made Everything Clear

As I mentioned at the start of this article, I did have a “trigger moment” that pushed forward a lot of these ongoing changes.

It wasn’t just an isolated moment, though. It was just a key moment that was a part of a sea change going on in my life. That moment was vital in terms of making me consciously aware of all of these changes, but it wasn’t as if my life completely transformed in that one moment.

In other words, I don’t think “creating” a moment like that works. Instead, it was just the natural result of changing all of the other factors in my life. It was an inevitable spark.

If you want to create a “moment of change” in your life, the best thing you can do is upset your routines. Find ways to make yourself try new approaches, meet new people, learn new things, and establish new routines.

That kind of change provides a fertile field for a transformative moment to grow.

I Spent a Lot of the “Honeymoon” Learning Why, Not Just How

I read a ton of personal finance books during the first few months after that “moment” and most of them were useful.

Some of them really helped with figuring out what specific actions to take to really get my finances in gear. I sold off a lot of things from our closet that we weren’t using, for example, and we built a debt repayment plan.

However, the books that really stuck with me – like Your Money or Your Life – are the ones that focused on why I was making these financial changes.

It wasn’t the “how” that kept the ball rolling forward. It was the “why.” The more I understood and thought about why I was doing these things, the easier it became to stick with those changes.

Since then, I’ve been deeply attracted to books that focus on the “why” of things, much more than the “how.” A list of instructions is just a list of instructions, but knowing the reasons behind those instructions makes you understand whatever it is you’re doing in a much more intimate way. It changes the way you feel about… well, everything.

I Had Big Goals That Really Excited Me

A big part of the “whys” was simply setting big, exciting goals. The thought of being free of debt seemed incredible. The thought of controlling my own professional destiny – and perhaps someday being financially independent – seemed awesome.

I wanted those things. I wanted big changes in my life.

Before that “moment of change,” those big goals were really nebulous and vague. They were something that my “future self” would do. After that “moment of change” and after a lot of time thinking about why I was doing this, I began to realize that it really was up to me – right here, right now – to make those goals happen.

The idea that I really could make those big changes happen in my life was amazing. All it required was smart use of my time and some self-discipline. I let those big goals become the clear horizon in my life and I became really excited about heading toward them.

Not only that, I did all I could to keep that excitement going. I spent a lot of time continually thinking about those big goals and how my life would be when they were achieved. Whenever I felt doubt, I brought those goals back front and center.

I Started To Let Go of Things – And I Realized It Didn’t Hurt

At the same time, I was making lots of practical changes in my life. I was experimenting with saving money and frugality and I was also experimenting with earning money, mostly through writing.

My frugality experiments showed me again and again that my life was still pretty amazing after I let go of whatever it was that I was hanging myself up on. Whenever I tried something new that was intended to spend money, I usually found that the change was not nearly as bad as I thought it would be. Sometimes, the change was actually an improvement.

I let go of old hobbies. I let go of old routines. I let go of old habits. And I found out that it didn’t really hurt. My life was just fine without them.

Prior to that, I thought that changing my spending routines and dropping my splurges would actually hurt. It would make my life un-fun somehow. I would just be unhappy with an empty life void of spontaneity and pleasure.

The opposite basically happened. Not only did I find new pleasures to fill my time – ones that didn’t involve spending money – I became much more at peace as our financial position became more stable.

What Does This All Mean?

For me, at least, the big lesson was that my spending habits are intimately connected to everything else going on in my life. It’s tied deeply to how I spend my days, who I spend them with, and what I’m actively thinking about.

If I spend my time with people who enjoy spending money or spend my time reading websites about the latest stuff that I might want to have or I increase my exposure to ads and product placement, I find myself with a much greater desire to spend money even if I’m conscious of the changes. It just happens.

At this point, most of my routines are pretty independent of spending desires. It’s pretty hard to build desire for spending when you’re at home alone with the internet turned off, writing my fingers off. It’s hard to want to spend money if most of your evenings involve playing games on the table or reading books I already have or are found in the library rather than digging into media forms that encourage me to buy stuff.

Can you force your life to change with these kinds of broad strokes? I’m not really sure, to be honest. For me, the ball was kicked off by the birth of my first child. It triggered a ton of changes in my life, forcing me to try new things.

There are a lot of things you can do in your own life to trigger these kinds of rippling changes. Turn off your cable subscription or your home internet subscription. Get a new job in a new place. Drop out of your usual social circles and spend your evenings trying new things. Read a book about lifestyle changes that have always been intriguing to you.

Those kinds of actions are like throwing a giant rock into a still pond. The ripples go outward, bouncing off the shore, and eventually mix together to make a completely different kind of surface.

It’s actually pretty simple. If you want change in your life, make change. Change who you spend time with. Change how you spend your time. Change where you life. Change what you do.

Then watch what happens. When you move your wheels out of the familiar ruts, interesting things happen, especially when you have a deep desire for change in your heart.

Good luck in wherever this takes you.

Trent Hamm
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.

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