Today's grativibe is about reconciling my comfort zone with financial goals.
The lightbulb went on just like that. I sat in bed feeling financially frustrated, constrained, stressed. The realization hit me like a train: I need choices.
Doug and I had been on an aggressive path to pay off debt. We’ve done well with those “inspirational” purchases mentioned in Big Money Meetings, but we have some long-ish term loans: the mortgage, the home equity loan that built the garage and deck, two car payments when we usually have one at a time, and some lingering student loan debt from my masters-level courses. I had read Dave Ramsey’s book, "Financial Peace Revisisted", on vacation. Not exactly a beach read, but it gave me affirmation and inspiration at the right time. We were already putting every penny on debt, roughly according to Dave’s plan. I felt good about that. But something didn’t sit right, and I struggled to define it.
While we were making a tremendous and admirable effort, every night I went to bed feeling like I couldn’t breathe. My budget was so tight, like I was back in the 80s lying on the bed to zip my jeans. Now I’m in my late 40s, and there’s a metaphorical muffin top I absolutely cannot tolerate. My self-inflicted financial squeeze was making me miserable. And that’s when the lightbulb came on and burned bright.
Doug, who usually is quietly snoring (okay, sometimes not so quietly) as I’m still awake reading or researching or mindlessly scrolling, was startled by my nighttime declaration: “Oh my God, I cannot go on like this. I need a cushion. I need choices!” From there I went on a tear about how I cannot live with a financial situation that literally causes me to become physically short of breath. At that moment, Doug gave an incoherent endorsement, and I changed my strategy.
The very next morning, I resolved to pay only my required loan payments and redirected any extra money in my monthly budget into what I call my Secret Savings, which is separate from my checking account. It’s not so much a secret from Doug as it is from my psyche. I like to call it Secret Savings, so I mentally view it as untouchable. When I put money into Secret Savings, it is sacred. It is for choices.
After about six months of funneling my extra dimes into Secret Savings and excitedly (and often impatiently) watching it grow, I am three months from making a pretty big choice. Even though I'm not following Dave Ramsey's method to the letter, it inspired me to make this change that is comfortable for me. I will have accumulated enough to either pay off my student loan debt, some debt left over from investing in my closed business before my current job found me, or paying off my car. Or I could do none of those. I could continue making the required loan payments and continue socking away a nice nest egg. That’s a choice, too.
What do these choices mean? Choices always have consequences. Paying off student loan or business debt will leave Secret Savings with a balance on which to build for future choices. Paying off my car means that Secret Savings starts back at zero. That is not ideal, because - criminy! - it took almost FOREVER to accumulate this sum. However, paying off the car will free up the most significant amount in my monthly budget. That would allow me to put even more into Secret Savings, which translates to more choices at a faster rate. Choices are liberating!
The freedom to choose cannot be measured. Holy cow. I can breathe!
The point and encouragement of this story are that no matter how much or how little you can afford to save, it’s important to start somewhere. It may seem like it takes forever to have enough to pay off a debt, but there is comfort in knowing money is stashed away for choices or in case of emergency. Stay strong knowing you will reach your goal. Know that every effort you make compounds. Want proof and motivation and a reason to have patience? Read this book: "The Compound Effect" by Darren Hardy.
Time is money. And time is on our side.