For the past six freaking years I’ve worked on personal finances. It has been a unsurprisingly stressful process, but also a very enlightening one as well. Digging through my financial mess gave me a lot of time to figure out the different money mindsets I’d learned throughout my life and one of those money mindset related issues really caught me off-guard for awhile.
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Money Mindset
The hardest part of my financial journey hasn’t been paying off the debt (and that was hard). The hardest part has been dealing all of the financial demons that I’ve been fighting for years…and didn’t even know it. Paying off debt seemed like a no-brainer, doesn’t everyone want to be debt-free?
Well…
If you’ve never been debt-free in your entire adult life, getting rid of the debt feels strange. On the one hand, you may feel like you’re in an abusive relationship. Each time you get close to leaving the mind-tricks start:
- Such as telling yourself that you deserve to be in this situation. That this will always be your normal. Having too much month than money, That bill collectors are normal and receiving tons of mail and communications from people you owe is not an unusual occurrence. But, it is. It’s not normal dealing with these situations, but never having experienced financial calm as an adult it’s easy to distrust that you could live a life without this type of constant stress.
- Giving up right before you achieve successful outcomes. Yep, that’s a thing. Quitting because it’s easy to think that you don’t deserve to have financial peace. But, you do. And, I had to tell myself over and over again that I deserved better. And, I had to tell myself that every.single.day. until I believed it. Then, I had to tell myself some more.
- Low expenses can become a low-income trap. This one caught me off-guard. Who knew that it was possible to get weird about earning more? It doesn’t make any sense. Doesn’t everyone want to make more money? Here’s the thing, making more money hit on some negative beliefs about money that I didn’t even know that I had.
- Earning more money is greedy-Here’s the thing, if I earn more I can create financial security in my life. I can pay my bills, and I can do one of my favorite things which is to eat.
- Rich people are evil-I actually know A LOT of very rich people and several of them were once broke in a past life. Or, they were frugal and grew their income via hard work, investing, and saving. They also are very generous with their time and money because they have both to give.
- No one will pay me what I’m worth. Yikes, this one is tricky. I’ve earned decent salaries before, but when I became an entrepreneur I struggled with this a lot. In fact, this mindset related issue surprised me. What was wrong with me? Well, I’d worked jobs that were of service to others and in working those jobs I felt a deep sense of conflict with the idea of earning more. I’m over that now…but, it took a long time to get to that point and I even had to change the name of my blog to assert this belief to myself.
- If I my expenses are low, I don’t need to earn more than what my expenses are. Insert side-eye here. Currently, my expenses are pretty low. And it pains me to tell you that for a really long-time I didn’t push myself to earn more because I was earning just enough. But, in reality I was communicating a really negative message to myself “Just enough was ok.” And, it wasn’t a work ethic issue, I used work 60+ hours a week for other people.
Low Expenses Can Become a Low-Income Trap
Last year I recorded a podcast interview with Kara Perez from Bravely. She made a point that would pop up in my mind from time to time since then. She basically said that there is a point where you just can’t out frugal your finances. Here’s a snapshot of my financial life.
- Mortgage-My monthly mortgage is half the average amount that most people spend on rentals here in Denver.
- Electric-Maybe once a year I ht a little below $100 and that’s usually in February. My electric bill averages around $40 a month and is a lot cheaper during the summer (think less than $20 a month).
- Food-I spend less than $250 a month on food related expenses. And, I eat organic, occasionally order Hello Fresh, and shop at Whole Foods. I do use the iBotta app that helps me save money on my groceries. If you’re a new iBotta user earn $10 towards your first payout after redeem your first savings as a new user. Head’s up $20 is the payout threshold. Love.this.app. It’s also made in Colorado! Those of you who know me, know that I like this about the app too.
- Clothing-I really don’t spend a lot on clothing anymore. When I do, I check out ThredUp.com to see if I can find what I’m looking for on the platform. Sign up here for $10-$20 off your first purchase. The amount changes depending on the time of year. I love ThredUp (and thrift shopping) because I have a knack for finding items with tags still on them.
- Fun-It’s crazy how many activities I get to enjoy for a fraction of what I used to spend before. Next week I’m going to free yoga, a few weeks ago I stayed in Breckenridge for three days and I plan on going back up to Breckenridge for 4 days in December.
I do spend too much on coffee and I’m working on that habit as we speak. Basically, my expenses are crazy low and for quite awhile I was just not motivated to earn more. There are a couple of reasons for this:
- I was satisfied with the status quo. If it ain’t broke, don’t fix it. I was still living the same life as I had before with a ridiculous amount of financial tension. But, at least I could go hiking (insert sarcasm). Remember, I’m talking about money mindset-it doesn’t have to make sense.
- The amount of hard work that I knew I had to do to change my finances was…unappealing. People will avoid being honest about the fact that they aren’t excited to work hard again after making a change as drastic as I did. But, there is a point where it’s time to embrace the process and make some changes.
- Freedom is addicting. But, without money that freedom will be fleeting.
Earning More
Is now my new focus. Fortunately, I’ve connected with the F.I.R.E. community and my quest to earn more is aligned with some very clear goals:
- Create financial stability into my life. It’s hard for me to imagine financial stability as a normal part of my life.
- Financial Independence (Retire Optional) I can’t imagine that I will ever stop working as long as I enjoy what I”m focused on. Instead of working just to afford a vacation or payoff debt, I had to tie my goals and ambitions to something that I could get excited about.
- To earn enough money that I’m able to help other people without hurting myself financially.
You would think that being this clear about my financial “why’s” would make taking action easier. Well, it’s not. I’m building a habit and I recognize that I will have to work on mindset every single day. That’s ok-I’m up for the challenge.
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earning more is good if it doesn’t wreck your good life to get the money. for example, mrs. me lost a long time job 20 months ago and we’re in a good spot to live on just my full time income. she has had 4 different part time jobs since then just because saving and investing is addictive. we’ve both been very broke in our 20’s and 30’s and don’t want to go back there.
don’t be afraid to charge what you’re worth. nice blog.
Thanks for stopping by Freddy! I think it’s ok to work hard like a ninja…as long as people keep in perspective that they are in a short-season of hard work.
It’s so important to realize the lies you tell yourself when you’re in debt repayment mode. Recognizing them (my personal demon is “this is permanent”) and refuting them is a huge part of the uphill battle towards FIRE. Great post!
I’m working on the “earning” lie right now and it has been very intense. Thanks for checking out the post!
I also think it’s important to take a moment and dispel a broadly embraced I believe wrong assumption about the F.I.R.E. movement.
Its focus and promotion of saving money.
Promoting how to save more being a symptom of the movement rather than the F.I.R.E. movement’s true roots.
Ask me to describe who you are?
Before I tell you I will ask to see your bank account transactions.
Because it is from these choices we make and what we spend your money, on that defines us. To ourselves and others.
Therefore, our saving or lack of them, is the result and a symptom of our choices rather than the purpose of our efforts.
I’m not completely sure where you’re going with the first part of your comment. BUT, I totally love the following point that you made “Because it is from these choices we make and what we spend your money, on that defines us. To ourselves and others”