Go for Financial Stability
Posted by Gail | Filed under Debt Traps, Money Management
Only spending what you can afford seems like such a no-brainer. So why do so many people spend money they haven’t earned yet to buy STUFF? What are they thinking as they whip out their credit cards to pay for a meal in a restaurant, a pair of new shoes, or the latest electronic fad? Why are they so willing to let their hard-earned money disappear like sand through their fingers?
It seems maintaining a lifestyle we can’t afford is more important than being financially solvent. Whether it is the social pressure to conform, our own sense of entitlement, or a disregard for the potential risk we place ourselves in, when we use credit to buy STUFF we’re willingly giving up our financial security.
There are actually people out there who believe that using credit is “normal”, that it’s what they should be doing. After all, their parents did it, their brother’s doing it, so is their best friend. In fact, most of the people they know are doing it.
It’s as if people are afraid to just be. They have to drive the right car, go on an annual cruise, have new leather furniture, watch a high-definition, big-screen television, eat out three or four times a week, drink the best Scotch, or consume designer coffee every day. And they’re willing to exchange hours, days, months, years of peace of mind for the momentary high that comes with the new acquisition.
Social pressure to conform isn’t in your imagination. It’s real. But if you submit, if you’re willing to live a life of smoke and mirrors, if you want it ALL right NOW, then you need to accept that you’re creating a miserable life for yourself. It’s only a matter of time before the piper comes a’knocking and you have to fork over the grocery money!
One way to gain some perspective is to ask yourself (and your partner) what it is you really want in life. If you only had six months left on this sweet earth, what would you want to be doing? Would you be shopping for new furniture? Would the kind of car you drive really make a difference? How about the handbag you’re carrying?
I often talk to my daughter, Alex, about how important it is to live a worthwhile life: A life that brings challenge and love, that lets you to share, laugh, and be happy.
So, what are the things that make your life worthwhile? And what are you doing to put more of the things that make you happy into your life?
If you love your life (as opposed to your stuff), relish the time you spend working, look forward to seeing the people you share your space with, and feel as if you’re making a difference, I don’t think the kind of car you drive means much. And a big-screen TV or how often you eat in a fancy restaurant won’t have the same kind of pull.
Focus on creating the life you want. Take small steps to achieve your goals. And finding a way to laugh while you’re doing it. I’m willing to bet you won’t miss the STUFF.
July 24, 2012 at 6:11 am
After five years of my “nattering ” my fiance is finally seeing the light. I am helping him make a plan to drop his debt and save money. He sees that i can paycmy share AND save AND get what I want and now he wants in to that club too!
I have a Sunday job in addition to my M to F to help reduce my cost on my passion – horses, I have two, and I would gladly continue to do so!
Thank you Gail – he can never get your last name right but like I said he’s seeing the light!
July 24, 2012 at 8:08 am
I am all for financial stability and have always been. I will say, if I knew I only had 6 months to live, I would quit my job and move to Atlanta, which is one of my favorite cities. I am currently taking steps to get there.
July 24, 2012 at 9:09 am
I wouldn’t do a whole lot differently if I had 6 months. I do need to get out kayaking a bit more, but I’m in the process of making that happen.
July 24, 2012 at 9:31 am
It’s also about priorities… but if the people HAVE the money to spend then by all means… if they do not then it becomes an issue. I do not NEED to have a new phone… I waited until my contract was about to expire and got mine for free and lowered my bill. I have grown so much in the last couple years… I would rather have experiences with people than stuff. For our birthdays we went out to dinner together to some place we normally wouldn’t, when we move out I am most excited for (other then living with my love) getting rid of a whole bunch of clutter and hopefully living a simpler life which shouldnt be to hard with him… he doesn’t want movies or stuff really… just likes newer appliances and stuff for his car.
July 24, 2012 at 10:07 am
Our mantra when we’re facing a purchase that’s not planned (eg, groceries, clothes, household project supplies) and falls into the category of impulse spending — does this item enhance my life right now? What does this item do to get us closer to our goal?
Our goal in this case is to purchase a fairly large tract of land (future hobby farmers!) and build an ICF-home that is off-grid.
So far the mantra is keeping us on the same page. And out of our wallets when it’s not planned spending.
July 24, 2012 at 10:13 am
It’s not only stuff – some people have the same attitude towards experiences, such as travel. I think it all comes down to an attitude of people wanting stuff/experiences NOW (and on credit) as opposed to waiting until they actually have the money to purchase it. Delayed gratification makes obtaining things all the sweeter, but our now, now, now society prevents people from experiencing that.
July 24, 2012 at 10:55 am
As they say, you can have it all in life just not at the same time. It irks me to see people do things like move into a new home and then expect that they’ll still be able to have an annual vacation. I don’t think there’s wrong with buying a little stuff here and there, as long as you realize that you’re choosing NOT to do something else. You have to proactively make choices or they’ll be made for you.
July 24, 2012 at 11:24 am
Stuff is only a temporary high, like drugs or alcohol I’d guess. How many times have we purchased something, after really wanting it so badly, just to have that “high” vanish as quickly as we’d pulled out our “DEBT GROWTH” card (credit) to pay for it!? I have recently sold a lot of stuff that I have learned adds nothing in the way of fulfillment the way that Gail quite rightly points out here. I have found the small things bring way more joy and contentment and don’t cost anything. Spending more time with my three teens (yes 3..help!
) going for a walk, seeing my savings grow with the money from selling my stuff, it’s true, we don’t need the stuff. Thank you Gail, you bring clarity to a fuzzy world. I’m a single Mom, no father in the picture, and teaching my children your principles of money is one of those proud Mommy moments I’m enjoying that keeps on coming. Seeing my teens save what little they “think” they have but watching them realize that a few dollars here and there saved really does grow. They too have “sold” (they donated) some of their things and felt a strong sense pride to be able to give to others who have less. I tell them that there are always others who will have less than they do, and to remember that.
July 24, 2012 at 11:24 am
We are similar to Dani in that we can’t wait to downsize, get rid of our crap, and sell our home. We want a simpler life. For years, we used credit to keep up with the Jones’ and created a facade of a lifestyle in order to meet approval of not only friends, but family also. Living this way was extremely stressful. About 14 months ago we were forced to face the truth when everything came crashing down just as Gail explains in this blog. Now we are working towards debt-free and have completely changed our priorities in life. It made us realize that stuff is a waste of money and happiness is not having to worry about money. Wow, do we feel different about banks! We will never borrow again.
We have fewer friends, and family doesn’t believe we ‘don’t have the money’ when asked to travel, attend functions, parties, and dinners. Well, they’re right. We do have the money but choose to put it towards debt repayment or savings. And we don’t feel one bit bad about it!
If we only had six months, that would be tough considering we are still not debt-free and have children. I suppose I would spend 6 months trying to figure out how I could get another 6 months!
July 24, 2012 at 11:36 am
I’ve just sent this to my partner!
Immediately after finishing school he was lucky to get into a very, very high paying position. After finishing school without any debt, he enjoyed splurging on a few things for his new apartment (like a massive TV) and was saving a decent amount.
Now that high paying job is coming with a huge amount of stress (the reason why people in this job are paid so much) and over extended work hours, so he’s looking for a position that matches more closely to his recently acquired masters degree.
While he says that he realizes taking on a new position will likely come with a hefty pay cut (he’s looking to move into positions that are mostly based in not-for-profit) he keeps spending like he’s going to be making $100,000+ for a few more years. Hopefully this article will help convince him that $10,000 is better to be set aside in savings rather than spent on a new motorcycle.
July 24, 2012 at 12:12 pm
I have to admit, I like my stuff. I am struggling with what seems like an ever declining income due to family problems. I shop mindfully and frugally, but I come home and sit on the couch I saved for and look around my beautifully finished bedroom and … I like my stuff. It makes me happy that I am able to have a small but lovely home. I am proud of the years of work I put in to get here. Everything I own has a story of how it was acquired and is carefully maintained.
July 24, 2012 at 12:22 pm
It’s so easy to get sucked into wanting ’stuff’. When I was in my 20s, wanting stuff was a full time occupation. Since I was building a household, getting stuff was a pastime and frankly, was needed in some cases to fill space in even modest living spaces.
Now that I’m close to 40, I’ve realized that I don’t need granite counter tops and designer hand-bags. I do travel twice a year, and that’s my extravagance. People will often ask me how I can afford to go on two cruises every year, like it’s some mystical impossibility, or I’m simply charging away the vacations. When you really want something, and it really matters to you, it becomes much easier to prioritize. I’ve also got enough experience to cruise rather frugally, and of course, I save up for the trip in its entirety and never come back with a bill.
I agree it really comes down to prioritizing. We have not been to a restaurant for dinner in probably about 3 years. That doesn’t mean we don’t occasionally order a pizza or go out for the much less expensive lunch option. And I can honestly say I don’t miss it.
July 24, 2012 at 12:55 pm
I now enjoy getting rid of much of the stuff I’ve accumulated over the years, either purchases or gifts, that fill up all the available spaces. I take donations to one of the thrift shops nearly every month. It feels good to have clear window sills and empty spaces on shelves and in closets. It’s easier to clean too.
As for large purchases, I believe the only way to go is to pay in full. A new car provides more pleasure if there is no money owing upon driving off the lot and a vacation is much more enjoyable if it is completely paid for before boarding the plane.
July 24, 2012 at 1:35 pm
I agree with Erin B. I too, like my (our) stuff. I research the heck out of every major purchase before I hand over a dime of our hard earned money, but I do have a great sense of pride when I think of the things DH and I have acquired during our life together.
July 24, 2012 at 2:04 pm
When people emotionally feel like they don’t have enough control in their life, that they’re not pretty enough, skinny enough, handsome enough, or well enough “endowed”, they buy things. They’ve proven this and advertisers know it. Commercials are designed to make us feel insecure and inadequate because when put in that emotional state, people revert to animal-squirrel like states where they nest and build forts and cover themselves with stuff.
If you turn off commercials, don’t read magazines, and even slightly tune-out of mainstream advertising, your consumption levels of both food and stuff will naturally go down. We should be addressing the root of the stuff problem instead of the symptoms.
July 24, 2012 at 2:55 pm
Sigh… Must avoid Pinterest. It’s giving me the “must have” feelings…
July 25, 2012 at 9:32 am
Thanks for the reminder that my family is on the right path. We live in an very affluent area (west of Toronto) and it’s sometimes difficult to be financially responsible. We are constantly bombarded with expensive cars, fancy restaurants, and HUGE houses. We have to remind ourselves that most people are financing their lifestyles with big mortgages, lines of credit and credit cards.
My husband and I are self employed and other than a line of credit for the business and a very small mortgage, we have no other debt. We have a nice house, drive older cars, and have money in the bank. Our main indulgence are family vacations which we always pay for upfront. Sometimes, you can get sucked in by “wanting all that stuff” that other people seem to have, but at the end of the day, I can sleep at night knowing that we’re not drowning in debt trying to maintain a lifestyle we can’t afford.
July 25, 2012 at 10:51 am
I’m guilt. Period.
I go through spurts of wanting, not wanting, wanting, not wanting. The best thing is staying out of stores.
I try to be mindful of my purchases and realistic but it doesn’t always work. I know logically I do not need any new major items. We have already replaced alliances and bought furniture – it’s all paid for – no credit.
I decided I no longer wanted my Digital SLR camera gear so I sold it all and used the profits to buy a 2nd hand aquarium and a new smaller digital camera. Paid in full. It felt good to not use credit.
It’s not the big things – it’s the little things that ADD UP BIG TIME. That shirt on sale for $14.99, the back to school clothes and sneakers, that dress that was on sale and actually fit perfect! Extra trips to the city meaning a 1/2 tank of gas.
I think I’m going to set up an automatic savings $10/pay to cover back school next year. I’m also going to make it known not to expect me very often in the city as I need to focus on saving some money over the winter months. I’m really hoping for a posting at work closer to home, or opportunity for advancement at this location. My gas expenses are $350+/mth. Transit isn’t an option and my car is a 4 cylinder. I already plan my trips so I’m not doing unnecessary driving. Should I stay at this location long term, I will likely sell my home and buy closer. When I agreed to transfer to this area, I didn’t know which location I would be posted in.
One day at a time and staying focused is so important. I know logically what I need to do – take the credit cards out of my wallet, stay home more, plan my purchases and live within my means – and stay out of Costco!
Dani, I am waiting for my cell contract to end so I can make changes to. I have been successful in getting my bill reduced quite a bit though.
Andrea, your plan sounds awesome. I eventually would like a small farm house with a bit of acreage to have a small orchard and chickens.
Gail, I heard part of your interview on CBC Radio yesterday – you were so funny! Factual of course! But funny too.
July 25, 2012 at 2:52 pm
I feel compelled to reply to this post today. 2 and a half years ago our world came crashing down and the only way out was a consumer proposal. I remember thinking my life is over, how will I ever make things right again. We managed to keep our home and 1 vehicle. I can look back now and say this was the best thing that could have happened to make me realize what is truly important in life. Yes I desperately wanted to keep my home and my husband needed his car to commute to work. Earlier this year we also paid $20,000 in arrears on our mortgage and did this in less than 3 months. Other than that I didn’t care. It was almost as if the useless stuff was a constant reminder of all the bad choices. Over the past 2 plus years I have de-cluttered my life in so many ways, not just material things. I have come to realize the most important things in life are not things, they are my husband, my kids, my grandkids and my true close friends. I am more aware of how quickly life can change as I sit here today broken hearted as my best friends dad passed away through the night last night. Seems since I became more open I see things everyday that are so much more important than stuff. If I only had 6 months I think I would continue each day as I am now because I try to live each day with true meaning. I now take time to smell the flowers, spent time my family and make good choices each day. Our goal now that we are all up to date with everything is to focus on saving for retirement as well as an emergency fund. We are 45 and 46 and in good health. Here’s to hoping we stay healthy for many years so we can be somewhat prepared for our golden years.
July 28, 2012 at 7:20 pm
[...] Gail Vaz-Oxlade wrote an article on going for financial security and focus on creating the life you want. This is so important to me because life is so short, and we should take the time to plan the life we want. You may also like:Anonymous Giving! [...]