In honor of my 250th blog post, I wanted to write about something that I thought was:
1. Very relevant
2. Something I believe firmly in
3. A good lesson for all
I thought about it long and hard, and settled on this topic. In a world where so much emphasis is put on what car you drive, the label on your clothes, the house you live in and a lot more, what better topic to tackle. I was guilty of these thoughts when I was younger too, so I am speaking from experience instead of pointing fingers.
I remember as a kid that I would only want a specific brand of shirts and shorts to wear to school. They were not cheap, and so instead of getting several new items for my birthday or Christmas, I would get one or two. My sister would get a bunch of presents, but my “allocated expenses” only covered a couple of things. This nonsense carried forward through my high school days too, and I tried hard to fit in with the cool kids that did the same but with a higher budget. My family didn’t have a lot of money, so it was a struggle to “keep up” say the least.
I don’t know when the peer pressure kicked in enough to make me feel this way, but clearly it did. This may have been the origin of the process of spending more money than necessary to try to impress people that I associated with. I drove more car than I could afford, as leasing a car facilitates this quite easily. I bought nice clothes that were no more functional than the less expensive versions, they just had a different label on them. That label cost a lot more, and quickly reduced the money I had. I got a job at 15 to have money to buy things, and did not spend wisely. By the time I headed off to college, I was a prime candidate for credit card abuse as a way to fund my lifestyle.
Not too long after college I started dating someone who had the same issue I did when it came to money. Together we did some real damage to my credit cards, and pretty soon I was paying over 20 percent interest on things like dinners out, fancy Valentine’s Day gifts, and the list goes on. Add this to my bad spending habits playing on the Pro Racquetball Tour and I was over $50,000 in debt in just a few years. My thought process at the time was that I would get a real job at some point, and earn enough money to pay off my credit cards. The credit cards weren’t the problem, the spending habits were. So of course the more money I made, the more I spent, and the problem continued.
Fast forward quite a few years and I met the woman of my dreams. We went on one date and I knew that she was the one I had been waiting for. We moved in together after one year, and started splitting the living expenses. Suddenly I was faced with the reality that I was going to bring seventy thousand dollars of debt into our marriage. Not only was I embarrassed by that, I also didn’t seem to know how to solve the problem. Although I was making more money than at any other point in my life, I barely made a dent in the mountain of debt I had accumulated. I put off proposing to the woman I love because of it. By the grace of God, we talked about this issue and she agreed to take on this burden with me. I proposed with my grandmother’s ring not too long after that conversation; I didn’t want her to leave and I realized I couldn’t solve the problem without her.
Oddly enough, one of the things that was a catalyst to changing my mindset was a head-on collision with a drunk driver in 2015. Nothing like a brush with death to make you see the world differently. I was driving my leased 2014 Toyota Camry at the time of the crash, and within a month I had gotten my insurance check and went to purchase another Camry. With the insurance check as a down payment, “I was finally able to buy a car.” Or at least that is what I thought at the time. I didn’t buy it outright, I was making payments on it, for another 60 months, by the way. I was driving it for about a month before the first payment kicked in, and that was when I realized I had perpetuated the same issue I always had: I looked at handling money on a month by month basis, and not in the same manner that a business would. It was time for a change.
Soon after, my wife and I sat down and looked closely at our finances. We were lucky to find Dave Ramsey‘s book Total Money Makeover, and we committed to following his plan to the tee. We did the debt snowball, and ranked our debts smallest to largest, factoring in the highest interest rates as well. It seemed like a massive hole to climb out of, but what other choice did we have? But, before long we “killed” the first target on the list; it was the smallest amount on a credit card I had, I think it was $2500. It felt so good to send that last payment and scratch that off the list we had posted on the fridge. I saw light at the end of the tunnel. I added a part time job to make money, and before long targets two and three fell. She went back to nursing school and we were able to cashflow this as well as stick to the budget we had set for ourselves. We cut up almost all of our credit cards, and vowed to pay cash for everything. We cut way back on eating out, and buying random things we wanted but didn’t need.
Within two years, were we out from under the $70,000 pile of debt I had created.
In two years time, we completely changed our lives. Now that she is out of nursing school and working, we have nearly doubled our monthly household income. This allows us to make even more progress. We have paid off all of our credit card balances, we own both of the cars we drive (both are more than 10 years old, but in good shape) and she exited nursing school owing no money whatsoever. At the writing of this blog, we are one third of the way to paying off our house. Once we accomplish this, we will have a monthly household expense of about $600, and a huge chunk of the money we earn will go towards retirement.
Throughout this process I have learned quite a bit:
1. I no longer buy things based solely on the label on them.
2. I have two pairs of jeans…one light colored and one dark colored
3. I find great pleasure in seeking out a deal on anything I buy.
4. A slightly used item priced at 60% less than new is just as good.
5. A car is a mode of transport; it does not define me in any way.
I can honestly say that I no longer give a crap what other people think of my clothes, my house, or my car. Luckily, I am seeing this trend with people like Gary Vee, Mark Zuckerburg, Chris Sacca, and many others. Although these guys may own massive homes, they literally wear the same clothes all the time. Their public appearance is way more about them personally than the image they project. I am following suit and using this same approach. I have one nice suit in case I need it for work or a formal occasion like a wedding. I have a couple of dress shirts for if and when I go to a conference for work. Other than than, half of my wardrobe either reflects my fly fishing or my racquetball pursuits. I will never own a pair of Yeezy’s or anything that says “Supreme” on it…there is no need. Plus, I may have aged out of those things anyway :-)
Here is the takeaway from this…do your own thing. Don’t fall into the traps of perceived (or real) peer pressure to look a certain way or own a specific car. These things do not make you happy, they do not add to your overall personal worth in any way. Carve your own path, and do it your way. Stay out of debt so you never have to eat beans and rice for two years to solve the problem you created. Get educated about personal finance so you can make the most of what you earn.
If there is anything I can assist with (other than a loan or monetary gift) please reach out to me.