Photo by Mooncat
Some folks have an epiphany when they hear Dave Ramsey or Suze Orman pontificating for the first time:
“Hey, I need to get out from under all this debt!”
This realization is the first step to your financial metamorphosis. Like a catapillar that becomes a beautiful butterfly, you first have to put yourself into a cocoon, saving your pennies and tackling credit card balances, student and car loans, and any other albatrosses with high interest rates. As you pay down your debt, you will slowly transform — you’ll grow wings, add color to your blase appearance and grow stronger. When the financial metamorphosis is complete, you’ll break out into the world completely changed, for all to see.
But before you can save, you need to get rid of your debts. Like a sworn enemy, they must be vanquished completely so they will not return to haunt you at a future time.
There’s no easy answer for those who ask, “How do I save money?” Saving begins with less spending. There is no other way around it, short of increasing your income and keeping your spending at the same level. Because as most of you can guess, when your income increases, your living expenses tend to creep upward with it. Perhaps it’s this keeping-up-with-the-Joneses mentality that leads to many money mistakes.
This doesn’t mean you need to live like a pauper. Do what feels comfortable: shop at thrift stores, clip coupons, drive an old beater. You don’t have to completely deprive yourself of the things you love. Maybe going out to eat once a week truly makes you happy. And that’s fine. But keep in mind that a semi-minimalist lifestyle — or “everything in moderation” — is the best way to balance a good quality of life with financial responsibility.
I love when people find the balance they need to keep themselves out of debt and on good financial footing. I don’t care if you follow Dave or Suze — as long as you have a plan and a focus, you’re well on your way to getting rid of debt and becoming a saver.
I’ve written about the “breaking point” — the point where spenders become savers. Me, I’ve always been a saver. But if you’ve had problems handling money, it’s absolutely possible for you to change your bad habits.
I agree that your debt repayment should be supplemented with starting a new savings habit!
Change is the only thing permanent in this world. If you focus on your financial goal, change is possible. I usually spend beyond what I earn but when I decided to buy a house, I learn to save more and spend less without actually depriving myself. Great post.
@Christina: It’s all about balance. You can save and still buy or do some of the things you enjoy. Thanks for stopping by.
The financial armageddon was my a-ha moment. It made me realize that debt is dangerous when things are falling precipitously!
Wouldn’t have started my site either and learned how to make some money online!
Best,
Sam
I love the butterfly metamorphosis tie-in.
I’m not a natural saver, but I am able to save for sinking funds and debt snowball by making them budget line items. That way, it’s like I spent it…
Change is possible. I was the biggest baller on the block and we all know what’s happened to me 🙂 I hit rock bottom in April 2009 and have forever changed from a spender to a saver. My wife was a spender too, not a likely combo. She will not be as crazy as me, but she will not be the spender she once was either.
It’s all about balance, IMHO.
What a great analogy – metamorphosis! Love it!
I would like to add a small caveat … NO MATTER WHAT, pay yourself first, before the bills. By paying yourself first I mean saving. You have to build a new habit, a saving habit and it can be started even while you are paying down the debt. Putting in as little as a dollar into your “savings” every time you get a paycheck is not going to adversely impact your debt elimination, but it will impact on a savings mentality and a new habit which can kick into higher gear as the debt outstanding becomes a mere shadow of its former self.
I agree that your debt repayment should be supplemented with starting a new savings habit!
Very elegantly written!!!
I would comment more, but your article is perfect in meaning and style, so all I can really say is Great job!!! 🙂
Thanks for the glowing review! 🙂
Hey Nicole – great post! Psychologists use the term “hedonic treadmill” to describe how our expenses always rise to meet our income – no matter how much or how little we make – if we don’t proactively give and save before we spend. I like saying “keeping up with the Joneses” though, it’s a little more fun. 🙂
What’s interesting is how the “breaking point” is different for so many people. I met a lady recently who as emotionally distraught over $8,000 in debt. I’ve also helped folks dealing with over $100,000 in credit card debt alone. For some it’s the second time through bankruptcy that the light bulb goes off. For others it’s the first late payment that causes the metamorphosis.
Great methaphor with the butterfly – how great it is to spread those wings!
“Hedonic treadmill” — I might have to borrow that term. As you’re pointed out, the breaking point seems to be different for each person.
Good point (and analogy!). As long as you have a plan, and stick to it, it does transform your life. I can’t wait until I’ve reached the butterfly stage :)!
You will get there soon, grasshopper… er, I mean, butterfly!
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