When this article appears on The Simple Dollar for the first time, many readers will be celebrating Christmas morning, hopefully surrounded by family and friends. I hope to be doing the same exact thing with my own family.
For me, the Christmas season is also a time for reflection. It’s such a unique opportunity during the year for me to reconnect with family, plus it comes at the conclusion of a year and just before the start of a new one. I always find myself thinking about the purpose of what I’m doing in my life.
Is my life in a good place? Have I spent my year doing things to make my life – and the lives of those I care most about – better? Have I found a good balance?
Over the last several years, a big part of that answer has come from financial responsibility. Since 2007, Sarah and I have made a lot of personal decisions that have led us down a path toward financial freedom and away from debt. Those choices have come at the expense of some of the pleasures we could have enjoyed.
Is that a trade I’m happy with?
While there are undoubtedly things I have given up that I would have enjoyed in a world with no financial concerns, I am incredibly happy with our decisions and the path we are currently on.
Financial responsibility is less stressful
Assuming that you have sufficient income to cover all your needs, choosing to spend significantly less than you earn and save the rest for the future is substantially less stressful than spending everything you earn. It’s not even close.
I don’t wake up at night worried about the future. Thoughts of financial doom don’t run through my head as I’m trying to go to sleep. My worries, such as they are, focus much more on things like the healthy development of my children, my relationship with Sarah, the continued happiness of the other people in my life that I care for, my own self-actualization, and so on.
I do not worry about putting food on the table for me or my family for the immediate future. I do not worry about being able to afford my children’s urgent needs. I didn’t worry this year about making sure my family had a nice holiday season. There is just very little stress about money.
Several years ago, that was not the case. I had a lot of sleepless nights in 2004 and 2005 and 2006 (and 2007) worrying about our financial future, both immediate and long term. It was so stressful.
That stress affected my health. It affected my job performance. It affected my marriage. It affected my bonding with my infant son. It was this huge weight that just put a damper on everything.
That weight isn’t there now – and I never want it back. Ever.
I still feel as though I spend plenty – perhaps even more than enough to be personally happy
I genuinely don’t feel as though I go without anything that I really want in life. I choose to budget adequate money for myself to spend spontaneously on hobbies and interests and I sometimes make other purchases as well after talking them over with Sarah, so I do have plenty of little splurges to enjoy.
The thing is, it’s not an endless train of splurges. The nice things that I have – a lunch out at a good restaurant with an old friend, a new board game on my shelf, a morning spent at the local coffee shop writing – are things that I enjoy, but I don’t enjoy them every day or even every week. They’re a part of my life, but they’re not a constant part of my life. I like it that way.
I don’t want an endless train of splurges. I did that for far too long and all it did was numb me to the joy of those things. When I went to the coffee shop every day, it just became a normal thing. It was no longer anything special. It became another $7 that went down the tubes to maintain a “normal” that didn’t really bring me any special pleasure.
For me, making that “normal” as cheap as possible is a far better way to go. When I drink water most of the time, that occasional cup of coffee or craft beer becomes something special, something much more than it would have been if it were the normal thing. When I eat home-cooked meals most of the time, a dinner at a restaurant becomes a special experience, something that’s new and distinct and flavorful.
Not only that, a minimal “normal” is far less expensive. Drinking a coffee at the local coffee house every day means an experience that is just normal and boring and it costs $150 a month ($7 a day… you do the math). Drinking a coffee at the local coffee house once a month means an experience that is distinct and different and it costs $7 a month.
That’s why I derive more joy from spending $7 a month at the local coffee shop than spending $150 a month.
Furthermore, I consciously try to explore low-cost hobbies. I spend my time on activities that don’t require a lot of financial support to bring enjoyment into my life. Ongoing cost is a big factor for me choosing which hobbies to delve into.
But doesn’t that lock me out of some great hobbies? Maybe so, but there is such a huge abundance of things to do without a significant ongoing cost that I never really feel deprived. I never feel at a loss for something to do or new things to try.
The things that I used to spend money on (mostly) didn’t last.
When I look back at all of the things that I spent money on during the first several years of my professional career, I …. honestly, I don’t remember the vast, vast majority of them.
That cup of coffee at the coffee shop had no real lasting impact on my life. Most of the trips I went on didn’t have much impact, either, nor did the gadgets I bought, the video games I bought, the clothes I bought, the drinks I drank, the expensive meals I ate at restaurants, and so on.
Very little of that stuff mattered. It just brought no lasting value whatsoever into my life.
To me, that just feels rather sad. All of that money… gone. The vast, vast majority of the things I spent my money on didn’t really make my life any better.
What did make my life better? People. Relationships. The things I’ve learned. The big projects I’ve worked on and guided to completion. The skills I’ve built.
The thing is, all of those things were enjoyable along the way. I enjoyed the time I’ve spent with the people in my life and the relationships I’ve built with them. I’ve enjoyed the process of learning new things and building new skills. I’ve enjoyed the big personal (and professional) projects I’ve completed.
Not only do I enjoy those things in the moment, they last. They stick with me.
Even more, almost all of those things don’t cost a whole lot of money. They require time and they require focus, sure, but the financial demand is pretty low.
I don’t want to be in situations where all I’m left with a few days after a purchase is an emptier bank account. I don’t mind spending money, but I want it to build to something. I want it to mean something.
My visions for the future are optimistic but also realistic – and that’s incredibly exciting
Early on in my adult life, most of my big dreams for the future were nebulous. It was easy to visualize that first step, but there was always this big haze of “unknown” between where I was at now and where I wanted to be someday. The financial realities of my life made it difficult to see how I would ever get from “here” to “there,” so I treated those big pictures as daydreams and nothing more.
Now that Sarah and I have achieved some degree of financial independence, the path from “here” to “there” for many of my life’s goals is no longer completely unknown. I can now see how I can get from where I’m at now to where I want to be in a realistic way.
Eight years ago, when Sarah and I thought about buying a big house in the country with some woods behind it, we simply didn’t see a realistic path to our destination, so we really didn’t do anything about it. Now, that realistic path is sitting right there. We can see the line from “here” to “there.”
Our challenge now is a different one. We see a lot of these lines. We have a number of goals that we have for the future and we see clear lines between here and there for each of them. The challenge now is choosing which ones to follow.
Getting a solid grip on your finances and clearing out all of your debts makes the path to a lot of life goals much, much clearer than before. It turns out that finances are a huge obstacle for so many things, even if you don’t immediately see them as an obstacle.
Financial responsibility ensures future opportunity for my children
As my children grow, they’re going to have a number of opportunities on their plate. They will have the chance to go on educational trips, engage in optional classes, travel for extracurricular activities, and just have a cavalcade of doors available to them to further their education, grow as people, and also build a resume.
After that, of course, looms college, which offers almost boundless opportunities for them from the college and area of study that they choose to the people they meet and the study opportunties that they have (such as semesters abroad).
When I was their age, I not only attended school in a small district where many of those opportunities weren’t available, my parents didn’t have the economic resources to enable me to capitalize on the opportunities that remained. I have memories of having to leave behind things I was really excited about because there simply wasn’t the money to be able to do them.
That’s not something I want for my children. I never, ever want an educational or self-improvement door to be shut in their face due to my own financial irresponsibility. I want to give them the maximum chance that I can to be able to spread their wings and fly to wherever it is that they want to go in life.
Sarah and I can’t provide that kind of assistance to our children if we’re struggling with our own finances. If we’re dealing with mountains of debt of our own, it becomes much more difficult to pay for an extra class or a musical instrument or a trip for our children. We would have to say no to a good school solely based on the price, not based on the fit.
Those are not things we want to do. Making the constant choice to move toward financial independence frees us from having to make those kinds of choices.
Sarah and I can now make professional choices based on factors besides pure dollars and cents
When you’re struggling to keep your bills paid, the most important factor in your career is your salary, period. You need the biggest possible income at this given moment in order to keep your financial house of cards from collapsing.
Why is that a bad thing, you ask? There are two big reasons.
First, the highest paying job is often not the one that you find to be interesting or compelling. It might force you into a management role that you don’t want to take on or it pushes you into areas of work that you don’t enjoy at all. At the same time, there are often lower-paying opportunities that can bring you much more personal fulfillment – or at least less personal discomfort.
Second, higher paying jobs are often more stressful. More is being demanded of you in exchange for that salary. Those greater demands sap your time and your energy and your focus, taking it away from the other elements of your life like your marriage, your personal interests, your children, and so on.
Often, when you’re working paycheck to paycheck, you’ve given a ton of power to your boss. You need that paycheck and because of that your boss can get away with making huge demands on your time and energy and focus. Guess what? You’re suddenly going to be coming in Sunday or else. If you need that check, you don’t have a choice.
I choose to work to live, not live to work. I expect to be paid for my work, but at the same time, I want to be able to enjoy that work and be fulfilled by it. I get that kind of joy and fulfillment from writing the vast majority of the time.
Do I make as much money as I once did at my previous job? Not really. Is it a lot less stressful without uncertain demands on my time? It sure is. It leaves me a lot more time and energy for my family and for my other interests.
Financial responsibility gives me the freedom to make that decision for myself. It gives Sarah the freedom to make that decision for herself. That’s worth a lot.
I can avoid being a burden to others
One of my greatest concerns is that I will someday become a financial burden upon my children. The last thing I ever want to do is become a weight around their neck once they reach middle age.
I have many friends who are part of the proverbial “sandwich generation,” where their shoulders are burdened by ailing parents at the same time as they’re raising a family of their own. We’re in that situation to a small extent right now and we see it growing in the future.
I don’t mind carrying that burden. I know quite well the many things that my parents have done for me and if I can do something to help them, I will happily do it.
At the same time, though, it’s inevitable that I look ahead to my own later years and can see that someday my own children may be in that “sandwich generation.” My desire is to be in a situation where I am no burden to them and that the impact I have on their life is a solely positive one. They may worry about me – there’s nothing I can do about that – but I don’t want that worry to spread to worry about themselves and how they will be able to make ends meet while still taking care of me.
There is also no guarantee that my children will be able to extend a helping hand at that point – or that they would even want to.
Again, financial responsibility provides a clear path for us. We are socking away as much as we can for the long-term future so that when we get to that point in our lives, we can rely on our bank accounts instead of the theoretical helping hand of our children.
This wealth of benefits relies on continued financial responsibility
Over and over again, we can see the benefits of financial responsibility in our own life. It allows us to open up all of the doors described here – the lack of stress, the career freedom, the parental opportunities, and so forth.
We were able to open the doors to these opportunties because of our smart financial choices over the last eight years. Without those choices, all of these opportunities would not be realistic thoughts. They would be pipe dreams, just like they were back in 2004 and 2005.
The thing is, as wonderful as it is that those doors have opened for us, they can just as easily close again. Those doors remain open only through continued financial responsibility – and they actually will continue to widen.
If we choose to go back on our financial responsibility and start spending more extravagantly, those doors start to close. Sarah and I begin to lose some of our career freedom. We start to be less able to provide opportunities for our children. It all starts to slip away.
Financial responsibility is like that – it’s akin to opening a door that naturally tends to close on you if you don’t keep pushing against it. Sure, the hardest push is the initial one to start opening the door, but if you stop pushing against it, it will slam shut.
Thankfully, the routines of financial responsibility have become second nature at this point
The real key to all of it, in the end, is to realize that our financial changes aren’t just a temporary thing to “fix” some problem. There isn’t some expectation that we will revert back to some high-spending lifestyle.
Instead, they’re a permanent change. Our life is one that’s consistently devoted to spending less than we earn. Our daily routines are built with that idea clearly in mind.
We don’t make some kind of special choice to spend less, as though we’ll suddenly stop doing that when we’re rich. Instead, our normal choices are geared towards spending much less than we earn. Our normal lifestyle patterns and spending choices are those of a family making half as much as Sarah and I do combined.
The thing is, we’ve come to realize that we gain so much more from that lifestyle than we ever would gain from a lifestyle where we spent ourselves to the limit. It is well worth it for us to give up a healthy dose of transient luxuries to gain the things we talk about here.
This is why we are financially responsible, now and forever. This is why we’re sticking with a path to financial independence, now and forever. It’s not a path that gives us every little luxury that we could afford. Instead, it’s a path that gives us so much more than that.