For the past couple of months I’ve been meaning to check my vacation accrual rates. I was pretty sure that my vacation accrual would increase this fall because I’ve worked at my job for 10 years.
Yep, 10, ten, diez, dice, 1111111111, years.
The thing is after that length of time you lose track of certain pieces of information such as-when your vacation will go up. So, I began to make calls and getting the run around. I finally decided to look at some random record of my employment and I was correct-my vacation accrual rate was going up to 12 hours a month.
Then, I discovered something else. There was a 10 year snapshot of my earnings and what I saw I found pretty shocking.
My Income Doubled!
In the past 10 years my income had literally doubled…but, my ability to deal with my debt load hadn’t balanced out until the past 2 years. My overall debt load (like most Americans) was a result of: student loans, unfocused spending, and low wages.
My debt load was really an amount that my current wage could actually “handle.” But, my initial wages were too low to handle the debt and that debt load overwhelmed me for many years.
As my wage went up-so did my lifestyle.
Income creep was the name of the game
It didn’t matter that my wages were going up. And even though I bought a very, very small affordable home-my other expenses wrecked havoc with my expenses. Nice meals out, trips, nice clothes, and lack of focus affected my ability to pay off debt faster and stabilize my situation.
In the past 10 years I have learned a lot about debt, money, and myself and I’d like to share them with you.
- Your monthly expenses mean everything. Keep them low as humanly possible. Look at everything: Phone, internet, meals out, clothes, trips, and the list goes on. If you focus on these ongoing expenses you will discover that you have more money than you think with the money that you currently earn. By getting out of my Verizon contract and a storage unit I saved around $3200 dollars in a year.
- Pride stands in the way of debt repayment progress. Before I got my job I was working at Starbucks. For almost two years. I will always be grateful for that job and that’s why I like Starbucks so much. Then, I was hired on at my current position and I decided to also work at a retail store in the mall near my house. I worked that retail job for 3 years and that helped to slowly stabilize my situation. It wasn’t a lot of money but it made a difference. When people complain about working at a job that is “beneath” them I just want to scream. I worked at Starbucks with a Masters Degree-because I had to eat. Are you too good to do what you have to do to survive? Ask yourself that question. What are you willing to do (that is legal) to survive?
- You will stumble as you claw your way out-and it’s ok! I’ve made so many mistakes on this debt repayment journey and still are making them. While I try not to make a money mistake, when I do, I take a look at what I could have done to prepare myself better to avoid the mistake.
- Simplicity is key-For the average person managing their personal finances is a mind-numbingly scary process. Set up simple systems that guarantee your success. Starting with making your bill payments on time. Find out if you have to have the money post on the day it’s due, or if you can post the payment on the day that it’s due. If you automate can you also make additional payments without being penalized?
- There Are Many Types of Emergency Savings…Embrace All of Them-Can you pay extra on monthly bills to create a credit during times when you’re flush with cash? Can you save actual cash? Are your cabinets consistently well stocked with food and household supplies? In the past I specifically focused on stocking food and household items. This habit has put my mind at ease during times when money was tight. I am now also focusing on paying extra on my: electric, internet, HOA, and Home insurance. By paying more now that will free up almost $200 a month and simplify my monthly expenses. Are you saving for retirement? Roth? DO IT. And don’t get stuck on being too young or too old. Just start. Whatever you save will be more than if you don’t start.
- Your Debt Repayment Process Is Yours-You may find that people will offer advice on what you should do. You can choose to listen or ignore what they are saying. Sometimes you are looking at naysayers who are cloaked in good intentions, love, etc. If you are actually getting results, then do what is working for you.
Ultimately, you must make your financial life simple and here’s how.
- Keep your overhead LOW. Do not purchase a home at the maximum loan amount that you could potentially be loaned. Remember, banks are running a business and aren’t looking out for your welfare.
- Count your line items-How many things are you paying for? How many line items are in your budget. My goal is to have 15 or less.
- Save like your life depends on it-because it does.
- Don’t use emotion when you are in a tough situation. It’s counterintuitive but if you react emotionally you will make a mistake. Freak out, cry, scream. Take a walk. Then, figure out your options.
- There is extra money out there just waiting to land in your pocket. Find it.
I’m loving the increasing simplicity of my financial life and am feeling happier everyday. Now, as I continue growing my income I find it ironic that I don’t need as much money as before.
You live and learn.
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Great post Michelle. It grates my nerves as well when people complain they are sitting at home and want money but deride those who will work wherever they can in order to bring in some income.
Thanks Cassandra! I’m over people judging people for doing what they have to do to move forward in life. I think that people forget that life is not static-it keeps moving and evolving. I wasn’t going to work at Starbucks forever. It was just a moment in time. I will always have my barista skills to fall back on-or for dinner parties.
This is full of good stuff. Yeah, my hubby and I make over six figures and when I let that reality sink in, it’s simply inexcusable that we didn’t get a handle on our debt earlier. I guess we’ve stumbled a lot 🙂 I’m trying to embrace the simplicity philosophy with all things, including my budget, but I also need to remember your point about keeping emotions in check!
It was super painful to realize that everything financially was so out of whack that even though I doubled my income it didn’t matter. Once I got everything streamlined and paid off that’s when I really noticed the difference. I am totally sold on less is more. I’m all about travel/good food/experiences, so now my spending is completely aligned with what I value. Much better.
Wow, that’s crazy! It’s interesting how things can just creep up and we don’t even notice! Glad you are working hard to recover from everything. Awesome advice here.
Yep, my wage actually doubled. It’s absolutely ridiculous that my debt load was so out of balance with my debt. But, that is the story of many Americans. I’m just glad that I’ve eliminated so many debts and cut my living expenses drastically. It’s a great feeling and so much easier to deal with. Loving life.
Gotta love the doubling of income! Very cool you’ve kept your expenses relatively constant.
Funny how everything goes up over time.
Sam
I would have loved it even more if I had a clue what I was doing with my money. I was a mess. Now things are pretty steady so I’m finally feeling pretty good about things. Thanks for commenting!