Hey everyone, as you probably know, I’ve recently started a new column as the home for posts by my favorite bloggers. Laurie from The Frugal Farmer is by far one of my favorites. If you haven’t checked out her blog, click here and make sure you do! OK, enough peanuts from the gallery, here’s Laurie herself….
Hey, everyone! Joshua graciously offered for me to guest post today at CNA Finance, so allow me to introduce myself:
My name is Laurie, and I’m 46 years old. I’ve been married to my husband, Rick, for nearly 18 years. We’ve got 4 of the best kids on the face of the earth, and raising them well is among our top priorities. In our nearly 18 years of marriage, we’ve owned 3 different houses, had several different jobs, lived in two different cities and had lots of other great growing experiences.
We’ve also gotten ourselves into a boatload of debt. And by boatload, I mean we started 2013 with a debt-to-income ratio of 65%. No, that’s not a typo – I really did say 65%.
I remember being younger and thinking we “knew it all”. We were smart, hard-working twenty-somethings with goals, aspirations and dreams. By 2001, we had moved into our dream house; a 3,600 square foot mini-mansion with all of the bells and whistles. We had one kid, and the second followed a couple of years later, followed quickly by numbers 3 and 4. Life was great! Or so we thought.
As we continued on the road to “having it all”, we wandered in and out of consumer debt, home equity loans and refinanced mortgages.
In 2010, my husband got laid off, turning our one-income family into a no-income family. Seven months later, Rick got a job at an awesome company, but at a 20% pay cut from what he was making at his old job. Ironically, even with my husband being out of work for 7 months, we still hadn’t had that “light bulb moment” concerning our finances. We were about a grand short every month, due to the cut in pay that Rick took with his new job, but instead of reducing our spending and learning to budget and spend-track, we just continued to spend like we had, convincing ourselves that we had “no other options.”
Then, we “traded up” in housing, telling ourselves that because our payment would be the same (due to the low interest rates at the time) that it was “okay”.
By the end of 2012, we “found” ourselves saddled with more debt than we could manage, and thus, in January of 2013, we began our “journey to debt free”.
That’s a whole other story, which you can find at our blog site, The Frugal Farmer, but what I wanted to talk with you about today is the hard lessons we’ve learned, in hopes that you won’t make the same mistakes we did, and wake up in your mid-forties a very, very long way away from your financial dreams.
So, what did we learn?
Time Passes Much Quicker Than You Think it Will. When you’re in your twenties, there’s generally a mindset of “I’ve got all the time in the world”. SO not true, especially after kids come along. We had all four of our kids in 6.5 years, and suffice to say that those first 10 years of kids are pretty much a blur. A good blur, but a blur nonetheless. J
If you’re in your twenties and thinking you’ve got lots of time to get out of debt/save for retirement/think about a financial plan, you’re wrong! Make your goals and your plan TODAY, and stick with it! The time will pass quicker than you ever imagined it would.
You’ll Likely Want Different Things in Your Forties and Beyond than You Do Now. Priorities, goals and dreams change. Whereas our list of dreams in our twenties included more material things, those goals and dreams have changed dramatically in the last decade and a half. We’re now much more interested in things like early retirement, experiencing life, and financial freedom. Material things are completely unimportant to us now. Unfortunately, our financial picture doesn’t match up with our dreams; due to years of thinking that those material things like the mini-mansion were what we really wanted. Sit down today and don’t just think about the life you want today, but think about the life you want to live forty years from now, and make your financial plan based on both pictures, not just the current one.
The More You do to Prepare Financially Now, the Easier it Will be To Grow Wealth, Both Now and Later. This is HUGE, my friends. It’s kind of the same as how we take care of our physical health. As an example, my uncle, who is nearly seventy years old, was a very talented gymnast during his high school years. If you know anything about this sport, you’ll know that you’ve got to have a super strong upper body to compete in gymnastics. My uncle did, and still does, have rock hard “pipes” to this day, even though his workout routine (if you can even call it that)for the past 40 years has consisted of his job as a window washer (which he retired from a decade ago) and biking around the neighborhood in his uber-small town. Although he’s active, he does very little in terms of “working out”, yet is still much stronger than most men I know. Maintenance, where finances and health are concerned, is MUCH easier than repair and clean-up.
As another example, our journey to debt free has been much more difficult than it would have had we made and kept at a sound financial plan from the get-go, as we are doing cleanup now as opposed to maintenance. If you choose today to:
-live within your means
– have an automatic savings plan and stick to it
– stay out of debt
– have a plan for your money and your life
you may have to sacrifice a little bit now, but you’ll have the freedom to do what you want in life very, very soon, and for all of the decades that follow. And it’ll be well worth the “sacrifice”. You can take that from someone who’s done the “you only live once” way and is now digging out of the crater-sized whole they’ve made.
Friends, today is the first day of the rest of your life. Do you want to live that life living your dreams, or dreaming about your dreams? The choice is yours.