My Story: Redefining Financial Necessity
by Rachael Astyk
How to Waste Money
Before You Buy, Think Different
Mind Over Money
When most people think of frugality, they think of people who have some kind of dire financial need, like losing a job and having to apply for welfare. While that defines the most extreme need for reassessing spending patterns, there is a lot of gray area in between there and complete spendthriftery (I know this isn't a real word, but I liked it.)
The reality is most of us don't assess our financial situation until something happens. The student loans come due and we don't have enough to cover the payments, a pregnancy or marriage rocks our world, or a crisis makes us take a look at 'what matters'. Not poor, just strapped for cash. Then we go into crisis mode.
Which is a good thing. But once our crisis is over, it is often easy to slip back into what is comfortable. Crisis over, problem solved, bills are on time again, right? Wrong.
Okay, maybe not wrong, but certainly ineffective - you are still completely unprepared for the next crisis - and if one can happen, two can. This isn't a scare tactic, it is a simple statement of fact. Financial emergencies happen. Statistically less often if you are young, have no property or dependants, but they happen. And this board is visited by all walks of life, not just the recently graduated.
There are things that only you can do to fix the situation. That's what this is about. Not just being able to pay the bills, but truly never having to fear picking up the phone, or a car breakdown again.
Not to say that you will never be comfortable without becoming another Amy Dacyczyn - because everyone's circumstances are different, and some of us make enough money to compensate for overspending, and there are all levels of money philosophy. But I will say this as fact: if you are never content with what you have, you will never be able to stop spending money long enough to look at all your options. If you are trapped by your choices (into a job that has no meaning to you, or a lifestyle you can barely afford) there are ways to change your life. But the changes aren't as simple as eating out less and driving an older car.
In order to do this (and there is no easy way, here - sorry) you have to change the way you think of money. Several years ago, I started contributing to a 401k at work, because everyone said to do it. I only contributed 3% of my salary, and I hated the loss of income. I was about 24 at the time. When I changed jobs 3 years ago I cashed one out (very small, but still a no-no), but did invest at the next employer. About a year ago I started playing with retirement calculators to see what it would take to retire at 45. After about the 6th retirement calculator told me there was just no way it was going to happen, I started getting scared. Since I wanted to retire 14 1/2 years before I could draw on my retirement account, I needed to change things fast! I have not only upped my contribution to the 401k to 8%, but also started to do private investments. Next year I plan to start other accounts for my fiancee and I.
But what changed things was all of a sudden 45 (I am 27) didn't seem so far away. Not exactly imminent, but at least worth planning for.
The same things can work on day to day expenses. What is necessary is a level of perception. Instead of driving to work, I can take mass transit. Instead of taking mass transit, I can ride my bike.
What spurs changing your definition of what is financial necessity will be different for each person. But the reality is most of us have choices that we make every day with our money without thinking about it, without realizing it. We choose not to compare prices at the grocery store (or compare stores), we choose to eat lunch out instead of packing it, we choose to buy pop tarts and Ben and Jerry's instead of having toast with jam and store brand ice cream.
The thing that seems to scare people about changing their lifestyles is that it all seems so HUGE. It isn't. It works just like a snowball rolling down the hill. For me it was bringing in my breakfast and drinking the coffee that work provided. I switched from my $3.00 per day coffee and bagel habit, hating the switch for about a month until it started to feel natural. I didn't change much else in that month though. Now, a year or two later, I change things on average of 3 per week, reassessing needs and wants and uses and places to find things.
So what if there is no big reason to change? Then you may not choose to. But how much longer will it take you to reach your goals if you don't? Can you take a year off to write or travel? Can you stay home with your kids? Aren't your goals as important as getting laid off in terms of changing your life? If not, why not?
Debt from my past is preventing me from saving for my future! Tell us: Yes, debt is hindering my ability to save! or No, debt is not a problem but I am trying to get ahead financially!
My Story is a regular feature of The Dollar Stretcher. If you have a story to share please send it to firstname.lastname@example.org with "My Story" as the subject. You don't need to be a writer. Just someone who's learned about saving money and is willing to share the information with others. If you'd like to remain anonymous, that's ok, too. Just let us know.