I’ve been observing lately how friends and family interact with money, or the lack of money in their lives.
I know this may be obvious to everyone reading here, but I honestly never thought about the impact of money until the last few years. It really does impact nearly every area of our lives.
It impacts our school choices, our family vacations, our church giving, where we entertain ourselves, the circle of friends we have, how we sleep at night.
But I don’t think it has too. As I climb closer and closer to getting out of debt, the more and more I want my life to NOT be defined by money.
I want my life to be defined by my values, my ambitions, my family. Not my bank account.
3 Major Hindrances
So, how do you do that? Well, I think it starts with removing the hindrances that money can play in your life.
1. debt
2. not having savings
3. not having steady income
If you have debt, it’s constantly on your mind. If you don’t have savings, you’re always in fear of your car breaking down. And if you don’t have a steady income, both debt and no savings are difficult to achieve.
Once those three milestones have been hit (little debt, healthy savings account, steady income), the challenge is to recognize how far you’ve come, and choose to not let money rule your life. But it’s very difficult until those three marks have been hit.
I still have a lot of debt. And so unfortunately, I still feel ruled by that debt. I can’t run off to some third-world country to help feed the poor. I don’t think that’s my calling, but because of my debt, that isn’t even an option, I’m confined by that debt to some extent.
What do you think, does money rule your life? Are you confined by your debt? Or your lack of savings? or lack of a steady income?
{ 7 comments… read them below or add one }
I hear ya. For me, financial independence is all about the freedom to do whatever the heck I want. Within reason of course. I’m not materialistic, so having the money to buy a bunch of junk isn’t all that important to me. I don’t know if you’ve ever seen the movie Office Space, but I love the main character’s response to what he’d do if he had a million dollars.
“Nothing. I would relax. I would sit on my ___ all day. I would do nothing.”
I probably wouldn’t do nothing, but what’s wrong with wanting the option?
I used to let money control me more as a younger man. Now that I’m older, it’s no big deal any more because I’m more financialy secure. I think many people will feel this way the older they get.
Being in your twenties (as I am) and being successful usually leads to leveraging your income stream to accomplish various tasks in life such as home purchases, vacations, other material goods, and basic fun. At the same time, saving for retirement and other future needs start off very slow because compound interest is not our friend yet. I have been tracking my net worth – don’t laugh, I am a banker – since I was 20, and now at 26 I am finally starting to put meaningful distance between my assets and liabilities. Between compound interest, and RE appreciation, I have seen that number go from around $10M to well over $150M in a few years. Point of the story is: debt levels are relative to the amount of assets they are sitting on. As you continue to save and let time work its magic, you will find that feeling financially secure is much eaiser to obtain even while you are still pushing around a moderate amount of debt. Now, if you were 48, had high debt (based on your comfort level) and a networth less than or equal to 20% of your total assets, I would worry then!
Here are some links for understanding banking:
7 Page article in The Times on Goldman Sachs
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6907681.ece?token=null&offset=0&page=1
Article in Rolling Stone on Goldman Sachs
http://www.rollingstone.com/politics/story/29127316/the_great_american_bubble_machine
The great American bank robbery:
http://vodpod.com/watch/2040248-how-to-rob-a-bank
How banks gained control of America:
http://video.google.com/videoplay?docid=-515319560256183936#
How to fix bad commercial banks that take in money from depositors. Simple. People power. The Dutch brought an arrogant bank to its knees in twelve days:
http://news.bbc.co.uk/2/hi/business/8323991.stm
I think you are spot on. My debt keeps me exactly where I am – at this job, in the house I live in, in this city. Of course, that is because I have large mortgages. If I had to do it over again, I am not sure I would have made the same choice.
It certainly helps me to focus on giving and helping others with my money rather than just using it to consume things for myself. The more that I think of money as just a tool to accomplish goals and help others then the easier it becomes for me to take charge of money instead of money ruling me.
My debt does confine me. I limit my choices because of it. It frustrates me. It brings strain om my marriage at times as well. I’ working to get out of it as soon as possible.