Stop living paycheck to paycheck: An early retiree’s thoughts...
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| “Shop ‘til you drop” is not going to help with finances... |
One of the most important things to reach financial independence and to retire early, requires the discipline to not shop for unnecessary things. Without this under control, the path to financial independence will no doubt be incredibly harrowing.
In our consumer driven culture of buying things with money we don’t have, to impress people we don’t like, is something all of us are ingrained into from early on in our culture.
As soon as we’re able to watch television, we’re bombarded by commercials to buy the latest cool cereals, snacks, drinks, toys, and experiences. I remember watching Saturday morning cartoons dispersed with incredible amount of commercials. Admittedly, I did enjoy those ‘Tony the tiger’ cereal commercials, or anything featuring Bugs Bunny and company!
Looking back, how could a child, like me, not be brainwashed and swayed by these seemingly innocent characters selling things to unsuspecting audiences? Like most kids, I asked my parents to buy me Frosted Flakes or whatever Bugs Bunny and company said to buy...
The need to ‘fit in’ with our friends and peers in our teenage years makes this task to not buy things, nearly impossible. By teens, we’re even more blasted by commercials selling the latest fads in clothing, media, cars, and experiences.
Whatever your friends have, you want to have. Whatever experiences your friends are having, you want to have that same experience.
For me, the following things were the ‘in’ things during my teenage years:
- Ocean Pacific clothing (marketed west coast themed lifestyle like surfing, ocean lifestyle)
- Gap clothes (black, white, gray colored clothing was the trendy thing back then)
- Sports cars (Pontiac Firebird, Chevrolet Camaro, Ford Mustang, Toyota MR2, Mitsubishi 3000GT, Mitsubishi Eclipse, Acura Integra)
- Six Flags/Great Adventure, Action Park, Disney World (amusement parks never go out of style I guess)
- Sneakers (Nike, Adidas, Fila, New Balance were popular; still are today)
- Sony Walkman (personal music player that had a tape player and am/fm radio)
- Gaming consoles (Atari, Coleco Vision, Sega, Intellivision)
You really don’t think much about any of these frivolous purchases you make as a teen. I worked part time so I can spend on things that mattered to me. What’s so wrong with that??? Don’t I deserve this???
This way of thinking carried over to my adulthood. Everything just got bigger and more expensive.
Now instead of eating a Bic Mac at McDonald’s, it’d be a nice pasta dinner at an Italian restaurant. Instead of a trip to Six Flags, it’d be a trip to Montreal / Quebec City (Canada) or Cancun (Mexico). My mode of transportation started with a used sports car costing $8,000, but eventually it became a brand spanking new leased vehicle costing over $30,000.
By the time we figure out why it’s impossible to save money each month, we’re already well into our thirties or later, living paycheck to paycheck...
One missed paycheck would mean a catastrophic blow to our finances...Missed rent/mortgage, late payments, etc...
We lived this lifestyle of always needing the next paycheck to pay our ever increasing bills. You ever feel like a hamster in a cage constantly running inside the wheel? Well, that was us...Constantly running harder and faster to keep up...
Like the saying goes, ‘you have to hit the bottom, before you can get back up again’, was something that became true in our case. After racking up over $20,000 in credit card debt by the time we turned 30, we finally turned a corner after paying that debt off the following year.
My wife and I promised ourselves we will never be in this situation again. After moving to Hawaii, we budgeted everything and got better at it with each succeeding month. Groceries would be budgeted and we would put things back if it went over $80 for the week. We stopped using credit cards during these years. Things were paid in cash. If we didn’t have the money to buy cash, we didn’t buy.
This strict budgeting for two plus years of living in Hawaii, allowed us to finally get a handle on how we spend. Without Hawaii, we probably wouldn’t be where we are today. This goes to show you the power of budgeting for financial well-being!
Get back into financial health by doing these following things:
- Figure out the difference between needs vs wants
- Build an emergency fund
Without having an emergency fund, a missed paycheck will become an emergency! Have one, and you’ll feel secure knowing you’re prepared for this thing called life, happening around you. ‘Life’ to me in this instance means things that happen to us on an ongoing basis. These include trips to the dentist/doctor, car repairs, being laid off (or quitting your job), home repairs (if owning home), your pet requiring trip to a vet, your parents birthdays coming up, etc...
- Live your life your way, and not to impress others
Once you don’t care about ‘FOMO’ (fear of missing out), or ‘YOLO’ (you only live once), your financial well-being will improve.
Stop keeping up with everyone else and just live your life. Live it like you want to, and not like how others say it should be lived.
When everyone around you is spending money, save your money, then invest! See yourself living a financially healthy lifestyle and eventually towards early retirement. Visualize how wonderful it would feel to NOT work when everyone else is! Think about things you always wanted to do, if you only had the time...
Having discipline and the fortitude to save for retirement is not easy. If it was, everyone would be doing it...
Take the difficult path because you want to achieve something that will be meaningful. Work hard, push yourself. It’ll all be well worth it!
In conclusion:
The change required to achieve financial well-being is a difficult one. It is not easy to say ‘no’ when your friends are seemingly having so much fun buying the latest fad thing or buying the latest fad experiences.
Keep to your goals, have discipline, and push on. Always reaffirm why you’re doing what you’re doing. Financial well-being is one goal, but ultimately, financial independence should be your final goal.
Like I said many times, nothing worthwhile is achieved, without discipline, perseverance, and hard work.
I wish whoever is reading this post will get motivated to want to reach their goals of financial independence!
Thank you all for reading!
Jake
Wandering Money Pig
Please check out our YouTube channel ‘Wandering Money Pig’ showcasing our travels and our Pomeranian dog! https://www.youtube.com/channel/UC3kl9f4W9sfNG5h1l-x6nHw
