When I began living frugally and writing this blog, I really had only one goal: to live comfortably and never worry about money. Anything more specific than that – building an emergency fund, paying off my HELOC, saving for retirement, etc. – was really just a tactic to achieve the overall goal of financial freedom and comfort.
I thought that I would achieve this goal sometime in the very distant future. I imagined that there would be some tangible measure or trigger that would let me know that I could finally stop worrying about money. Maybe it would be paying off a mortgage and owning a home outright, or maybe it would be reaching a $1 million balance in my retirement accounts. Whatever “it” was, I mentally prepared myself to wait a good 20+ years before I felt confident enough to say, “I no longer worry about money.”
In actuality, it took only 12 months to reach that point.
Now, don’t get me wrong… I certainly did not achieve any exceptional financial milestones in that time. I didn’t generate an impressive investment portfolio, and I didn’t pay off my mortgage. But after 12 months, I did have a focused goal, discipline, and enough progress to feel confident and excited about my financial future. As it turns out, that’s all I really needed to stop worrying about money.
It’s probably important to clarify what I mean when I speak of worrying about money. To me, worry is what I feel when I’m scared or insecure. I worried about money when I asked myself these types of questions: Am I going to be able to pay my full credit card balance this month? If my house needs a major unexpected repair, how am I going to pay for it? If I become really miserable in my job, can I afford to look for another one? Am I going to have enough money to retire at a reasonable age?
When I worried about money, I didn’t have answers to these questions. All it took to rid myself of worry was to have good, solid answers:Q: Am I going to be able to pay my full credit card balance this month? A: Of course. My spending has been within budget so I’ll have the cash to pay the bill.
Q: If my house needs a major unexpected repair, how am I going to pay for it? A: From my emergency savings fund.
Q: If I become really miserable in my job, can I afford to look for another one? A: If I ever feel miserable because I’m being put in a position that violates my personal or professional ethics, I can afford to resign and live off of emergency savings while I look for another job. (Note: This is obviously an extreme situation, and not one I have ever been in or expect to be in. But it’s very good for my peace of mind to know that I can afford to get out of a seriously bad situation. If I simply didn’t like my job, I would probably never quit unless I already had another one in the bag.)
Q: Am I going to have enough money to retire at a reasonable age? A: Yes. I am contributing to my 401(k) aggressively and when I calculate my compounded return over the next 30 years, I can see that I’ll be in great shape.
It was really important to realize that I could stop worrying about money simply by having a plan and sticking to it. I’ve definitely lacked discipline in my spending over the last couple of months since I bought my new house, but I know I can get back on track. In a way, getting off track has been good for me… I absolutely love my new house and the things I’ve bought for it, but I hate feeling the financial worry creep back into my life. This has been a good reminder that I love independence and financial freedom more than I’ll ever love things, even beautiful things that make my house look amazing.
The past couple of months have been a financial hiccup for me, but I’m going to take it in stride. I’m going to use the worry that I feel to reinforce the importance of my long term goals. There’s no reason why I can’t be worry-free again in a few months, and that’s something I will work toward with focus and confidence.
Viva la Frugal!