March 22, 2010
“Finite means, and deciding how to spend them, has a delicious tension that infinite means can’t supply.”
– From Carla Power’s The Pleasure of Pinching Pennies on Oprah.com
I can’t tell you know much I love that sentiment. The paragraph continues …
“If the lamp’s genie had granted Aladdin limitless wishes instead of just three, where would the fun be in that? The link between thrift and being fully engaged with life’s possibilities was recently noted by Barbra Streisand, of all people. Back before she got famous, she had to stretch her $45 clerk’s salary all week. “Those were amazing times,” she told a talk-show host, “when you have your future ahead of you, and the challenges of making that $45 last, and appreciating every penny.
Spoken like a true multimillionairess, you may scoff. The glamour of making ends meet frays pretty fast when you’re worried about losing your house or going without health benefits. There’s thrift, and then there’s fear, and nobody should confuse the two. But for those fortunate enough not to want for basics, there is a glorious discipline in trying to stretch your money to fit your vision of the world. Like a good workout, or great sex, weighing up how you spend your money recenters you, allowing you to feel the reach and heft of yourself moving through the world.”
The distinction made here between thrift and penury is critical — there was absolutely nothing fun about working 80 hours a week, trying to make decent grades in college, all the while wondering if I was going to bring home enough to pay both the rent and utility bills. There was nothing glamorous about dropping silent tears over my checkbook, willing the numbers to match up and stay in the black.
But years after that was over, when I graduated and started making a little more money, I made choices for myself. I started to appreciate what was truly important and why they meant more to me than eating out or buying Stuff. My parents’ choices made more sense: buying used clothes; handing clothes down through four cousins; only allowing me to borrow, not buy, books; and helping displaced family with comparative luxuries like take-out food, money and shelter. It took some years before I realized that they were making perfectly acceptable sacrifices for their kids to provide basic necessities to our extended family.
When you have just enough to get by, your choices are your values. Your lifestyle brings out the grit and creativity that usually hides deep in your bones.
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My post on buying a car (should I or shun’t I?) was included in this week’s Carnival of Personal Finance! ’twas rough times out there, the Carnival is overrun by the classic ninja vs. pirates vs. nuns vs. fighting robots vs. real estate agents vs. zombies!
January 28, 2009
Things I wish I’d done in the last five years:
1. Started a CD ladder. Even if it were just a little thing with a few hundred per step, I wish I’d realized that I wouldn’t need everything in the e-fund immediately.
2. Contributed more to the Roth: it’s the only investment I have that’s doing well in this market.
3. Applied for a job in San Diego in the comic book industry two years ago. I was afraid to take the leap and it would been really cool to have a foot in that door.
Conversely, I’m glad that I did not:
1. Go straight into grad school out of college. Not only would I be in debt, I wouldn’t have known what my professional strengths and likes/dislikes were.
2. Continue to bail out my brother. Telling my brother that his free ride was OVER might have been painful for me to say, unbelievable for him to hear, and shocking for fellow bloggers to read, but it was past time that he started to grow up. Of course, my decision alone didn’t matter until he’d hit rock bottom, but it was the right thing to do at the right time.
3. Let go of my responsibilities before I was ready, as some friends encouraged me to do. They just worried about me, but my OCD attachment to PF over the years has been a blessing in this blog, the friends I’ve made through the community and the knowledge I’m able to use and share.
While washing my hands this morning, I had two long term goals occur to me:
1. In the job after next, I would like to be earning a six figure income.
2. And I want to save half of that income. My portfolio/net worth would be SO awesome!! Muahahha…..
Anybody else reflecting on their dids and didn’ts lately? Care to share?
May 6, 2008
Each month, I round up all my expenses and work out the total of what I grandly call my net worth. A lot of bloggers do it, in one form or another. Actually, I call mine “snapshots” because they’re just a quick glimpse at my ever-fluctuating expense and income sheets. In a way, I like that the numbers continually change, especially since I get bored so easily. Activity isn’t always a good thing, though, as noted by the massive reductions in net worth during the BroDucky debacle. Let me emphasize how I never want to spend so much for so little again. 😛
Every month, I put together these snapshots, but I don’t actually have a net worth goal. And keeping track of numbers without an actual goal seems rather halfhearted. I do have annual savings goals, as you can see by my sidebars, but I don’t have an overall net worth goal. Part of this is because the savings goals are both saving and spending goals. A good half of my goals pertain to a future purchase or expenditure: car maintenance, home ownership, auto payoff. The other half are for retirement (completely untouchable), emergencies (almost always untouchable), and mistakes (only if it’s serious).
Between the two, it seems like I’m just saving to spend. Oh, that’s not really the case, I’ll still have the savings at the end of a long hard day, but the half and half structure of my goals implies that this isn’t all about holding on to my putative wealth. In that light, “net worth” doesn’t seem applicable unless I have something more concrete than the employer retirement funds and cash in a savings account. Some things more like CDs, and savings bonds, and property. An actual stock portfolio, at some point. You know, grown-up things. So again, what’s the point of tracking my net worth?
After all, it can be very subjective. You can choose to include or exclude any number of possessions or holdings that you deem worthy or not of being considered. I leave out my automobiles entirely because it’s a bit too complicated to include them. I don’t plan to sell my personal vehicle ever, and the family sedan, which is not my financial responsibility, is still being paid off. Still, if something happened to it, you betcha I’ll be the one who has to figure out a replacement. Same goes for personal loans. I only started including those because I’m getting forgetful, and didn’t want to lose track of them entirely. One of the reasons I’m leery of including any possessions is the idea that possessions only have value to me. If I lose or break something, I have to replace it at a cost to myself. It’s highly unlikely, in the general scheme of things, that my possessions will be worth anything to anyone else. Barring selling large ticket items, of course. But my point is, things are primarily a liability. More often, I’ll have to replace things, not make money from them.
So, why track a seemingly artificial net worth? In part, accountability. As long as I see steady progress, or lack thereof, in the form of numbers from one time period to the next, I have to stay on track. Some kind of track. And if I keep the variables constant, then the change in amounts is a valid indicator of circumstances. Just because I don’t include my possessions doesn’t mean my financial holdings aren’t real.
The other part, motivation. Seeing the numbers makes the whole game of finances, bargain shopping, and frugality more real. It’s not just theory, it’s life in action. If I were to be completely objective, I’d be proud of myself for going from working to pay off my family’s debt (credit cards, car payments, personal loans), to actually building a cash cushion, putting a decent amount away for later, and generally making some progress. It’s harder to see that, though, on those bleak days when all I can think of is the $18,000 I foolishly lent and lost, the entire salary of my 4 college years going towards bills bill and more bills, and most of my post-college salary going towards not me. I can only see the other side of the coin if I actually keep track of it.
It’s all too easy to forget that the grind can actually produce results, and to keep going because we’re going to make it. I look at the accomplishments of fellow bloggers, and I’m A-M-A-Z-E-D. And you know what? Seeing my numbers keeps me honest. I can finally be happy for what I’ve done here these past two years, too. Combine that with the realizations that it’s ok to be free, that it’s ok to live, and I’m going to say, not too shabby, really!
So, let’s keep on with the net worth! It doesn’t define me, and it may not truly define my “wealth” but it’s a good way to keep me truckin’ from milestone to milestone.
April 4, 2008
Readers, please head over to MoneyDummy’s and laud her for an amazing job of paying off her student loan debt over the last year and a half. She (and he) managed to pay off eighteen thousand dollars with one child in the home and a new one during that time.
What an incredible accomplishment!