We All Must Determine Which Path to Take and Why
Four and a half years ago, I was $28,000 in debt. I was earning just a few thousand more than that per year. The road ahead looked uphill, unpaved and foggy. Young adulthood and the real world weren’t seeming so fun. What was I to do? I had two options:
- Live it up
- Stop this madness
I had made it to age 23. I was out of college and glad to be finished but also bummed out because those years were behind me. I now had major responsibilities. I had to make it in the real world. You know how it feels. It’s scary when you first enter this stage of your life. No more relying on your parents to pay for your doctor’s, dentist or eye doctor’s visit. No more free riding on insurance. No more free grocery money each month.
Living it up was an attractive option. Living it up meant taking vacations, like my road trip to California in the summer of 2008. Living it up was what I did when I bought my $20,000 car on a whim during that trip. I wanted to do much more living it up, like moving up in apartment into a nicer place and buying some really nice furniture. I wanted a nice place to live in addition to my nice car and nice toys. I was in the real world now, working full time. I wanted to reward myself for this hard work.
All along, I had a voice in the back of my head that cried out over and over again, saying “Stop this madness”. It was up to me to figure out what that meant. As I dealt with the stress of owing $20,000 on my car, paying back $5,000 in student loans and paying off a few more thousand on my credit cards, I took some time to think about it all.
Upgrade my Lifestyle or Invest in My Future?
Both of the two paths ahead of me were inviting:
- Upgrade my lifestyle
- Invest in my future
I figured I had a few hundred extra dollars each month. With the next raise at work, I could move into a nicer place, buy some new furniture and still be able to take a vacation or two each year. That would be a pretty great lifestyle. One that I would really enjoy.
I could also take another path that would require sacrifice. It wouldn’t be glamorous at first, or for many years actually. This path would be to use all of my earning power to get out of the financial mess I’m in and never go back. If I got out from underneath my debt, I could save up and actually be able to buy a home someday. I could also rid myself of the financial stress and anxiety that I had come to know very well. I decided that I’d take the second path, that of stopping my lifestyle inflation madness and investing in my future.
Why Investing in My Future Was the Right Decision
Becoming a person who lives below my means was hard to do. I don’t talk a lot about the difficulty of this lifestyle for a couple reasons:
- It’s more rewarding than it is painful
- The positives exponentially outweigh the negatives
I just don’t feel that complaining about not being able to buy a new car, house, TV, stereo system, set of snow skis, set of golf clubs or bike or take extravagant vacations is productive. They are material things and they don’t bring us happiness. They are just “stuff”. I know it’s not ideal to have to have to live with what you got and be careful about what you buy, but it’s life. So, I don’t complain about it. After all, I have a comfortable place to live (my apartment), a reliable car to drive, food in my fridge and a few dollars of spending money in my wallet. I don’t have room to complain.
I will, however, brag about what it means for my life that I don’t blow through all the money I earn. It means I have a cash emergency fund, should anything happen to any of the things I own, or to my income. I won’t have to panic if I get slapped in the face by life. It means that I get to log into Mint.com every day and see zero debt. It means I get to learn about investing because I actually have money to invest. It means earning over $2,000 in the stock market in less than 3 months of investing. It is fun, empowering and exciting. I feel like I’m on a positive path in life, one that will lead me to experience my hopes and dreams. How great is that? I think it trumps the inconveniences of having to miss out on my lifestyle upgrades and nice things that I could have had.
Where to Go with Living Below Your Means
This is always a good question. Where should you go with this lifestyle? What is the point of it? Why do it?
One reason I do it is for myself. I’m doing it to feel better and to reach my potential. Yes, it is pretty selfish. I don’t want to feel like crap. Living with debt personally makes me feel like crap. I worry about the future. I stress over how my situation is going to improve and how long it will take. I lose hope. I get negative, complain and feel angry. That’s not how I want to feel anymore.
And I also do it for you and everyone else in this world. With my uniqueness, originality and talents, I have gifts to contribute to this world, many of which I haven’t yet been able to offer. I really want to contribute to this world as much as I can. I expect you feel this same way. I’m sure that deep down you believe you have many things to offer this world too. I feel it’s important that you and I use our gifts to make this world a better place. Do you agree?
Don’t take my word for the “why” of living this lifestyle. Think about how the opposite makes YOU feel. Does it feel less than ideal? What could it mean for you to be out of debt, winning financially and free to use your best talents, skills and passions to add value to the rest of us? We all have the dream and the “why” that can motivate us to forget about the pain and sacrifice of living below our means. The question is, are we paying attention to it or ignoring it.
Category: Learning New Things
Living within your means provides more choices. I can do all the things you wanted to do as a new college graduate, but choose not to. I have enough put away for retirement, but keep adding to it.
It sure does provide more choices. Like, where do I want to move to? Should I buy a house or keep renting. Should I stay at my job or should I leave. Should I start a business? If so, what kind?
Congrats to you on having enough. I hope to get there someday, and as soon as possible.
I wish I saw more people with this mindset!
Well, unfortunately, there is only one of me. Haha, just kidding. I know there are a ton of people out there who think like this. Hopefully, more of them will come visit us here at our little hangout called Young Cheap Living.
I remember the days of living above my means. Though I thought I was living the life, it ended up that I was just causing more stress in my life. Now that I am living within my means, I am happier and can do what I like to do without stressing myself out.
Hi Grayson,
I agree, completely. It always seems like living it up is fun, until it’s over and you’re broke. After making big progress financially, I no longer feel the need to “live it up” all the time. Maybe once in a while, but other than that, I’m good to go. I sure feel better doing without the stress.
While living free can be fun, it is much more rewarding to have all of your finances in order and you don’t need to stress about something happening.
Hi Sean,
Of course it’s great having all of your finances in order. The stress point is a big one with me. I hate stress and reducing it is one of the main reasons that I’m doing all of this.
I love reading your blog, my husband and I live below our means, I often read your blog to confirm everything and keep us moving in the right direction. Have you tried food shopping in Aldi? it is so much cheaper our food bills have halved!! we are from England and lived in Austria/Germany for sometime so we have been using Aldi for many years. Many of our US friends turn their noses up at Aldi which makes us laugh as in England Aldi has a niche market as it sells vv good products at a great price.
Hi 30andhappy,
I do know of Aldi. I actually live right around the corner from an Aldi. I tried it at the recommendation of a friend and co-worker. I made a fool out of myself there when trying to figure out how to unlock the carts. Turns out that you just needed to deposit a quarter. Who would have known, lol.
Anyway, it is a very cheap store, but I didn’t absolutely love the experience. I think it takes some getting used to. I haven’t calculated how much I could save by shopping there either. So, at this point, I have no started shopping there. Perhaps, I will look into it more seriously in the future.
I do appreciate the recommendation very much. And thanks for stopping by as well.
Kraig – you are young yet but have come a long way so the future is good. I agree about Aldi @30+ – they have stores in Minneapolis as well! Their cold meats are excellent.
Hi John,
So you’re an Aldi shopper too, huh? Not a bad thing. I just have to get used to the place. It is a little different and it doesn’t have the full selection, so I would have to continue shopping at my current grocery store in addition to picking some things up there. Any tips on how to successfully shop there?
Another great article Kraig. Together with all the other great benefits of living below your means, there is also the benefit we do to the earth by not endlessly consuming products made from non-renewable resources.
Thanks, James. Yes, that’s a major benefit to the earth and to all of us living on it both now and in the future. Consuming less means hurting the earth less by using less of its resources. We aren’t sustainable taking care of the earth anymore, but we could be if we all stopped this consuming madness.
Living far below your means opens up so many choices and different paths to take. My expenses are so low that I could literally work at Taco Bell and pay all of my bills plus some. I definitely wouldn’t want to do that… but it’s nice to have options. It’s nice to not feel like I have to do anything.
I agree with your valuing of options and choices. I love the fact that I only need half of my current income to maintain the standard of living I enjoy today. I don’t know if I could get by working at Taco Bell, but I probably could. That’s kind of neat to think about. All in all, I LOVE having options and choices. It’s one of the big reasons why I do it.
Kraig,
Great stuff. I couldn’t agree more. Especially enlightening is when you talk about the long – terminal effects from living above your mean, namely : debt. It may feel fun in the moment, but when you’re staring at debt in the face after the fact you’ll feel like the world is coming down on you. People typically will deal with stress like this by going out and having fun and spending money, which is obviously not really the right way to address the issue. And so the cycle. The cycle is just as apparent when success breeds success. You first dig yourself out of debt and feel great. Then, you have all this free capital that you’re no longer paying out to creditors… so you invest. Then the investments start to do well and return a decent amount and before you know it, you’re flush with capital and feel wonderful. Its too bad that more people aren’t aware of this cyclic duality.
Best wishes!
Congrats on your success with getting out of debt and living below your means! Yours is an inspirational story.