I remember my rock bottom financial moment like it was yesterday. I’ve talked a lot about it over the years on this site (and did a video), but in case you’re new or need a refresher, here’s the story:
My Financial Rock Bottom
In February 2012 (the day after Valentine’s Day), my car was towed because I mistakenly parked it blocking some kind of driveway. After walking around the neighborhood trying to find my car and wondering if I’d lost my mind, I called the cops (thinking it had been stolen), only to find out then that it had been towed.
The cost of getting my car out of “car jail” plus having to pay a ticket on top of that (kicking me when I was down) was just about the same money I had been desperately waiting for from a client. Bye-bye money!
I had a money breakdown, and I knew there was no way I could live like that anymore.
For me, I’m lucky in the sense that I have an incredibly low tolerance for feeling like I’m “broke.” Back when I said I was “broke,” I really wasn’t. Credit card debt wasn’t my main issue, and I had a paid for car. I also had money in investments. Actually, a pretty good amount.
Broke, to me, meant no money in my checking account, because I really felt that I had no business ever touching that retirement money (even though some of it was in cash in investments).
Broke, to others, might literally mean not having a cent to their name.
In my case, fear and worry were the catalysts that motivated me to change my ways and become extremely frugal, and learn about managing my money better. Heck, it even led to this blog!
But is this the best way to be motivated to change? And if so, when that fear is no longer there, how do you find a way to continue to be wise with your money?
I find this to be a tiny problem with my finances as it stands today. I’m no longer in that fear and worry zone, and in fact, have built some great buffers like my current 20k emergency fund. I’m also saving a LOT for retirement every month.
But, not having that motivator is making me lazy about money. Sure you could say that because I’m automatically saving every month that I should ease up on myself, but one of my goals is to be as financially independent as possible…as quick as possible. And like I said, my tolerance level is really low and I never, EVER want to put myself in a financial position like I did when I was freelancing.
What I mean by lazy is starting off every month being very good about tracking expenses and budgeting, but towards the end of the month, I stop adding up receipts and entering them into my budget excel spreadsheet.
And even when and if I do, if I’m close to going over or am over in a category, like life expenses, I ignore it and buy what I want anyway.
It’s sure as hell a lot easier to do this when you know your paycheck comes every other Wednesday, the taxes are taken out, and you know what the amount will be each and every time. Not so when I was freelancing, when I would sprint out of my house to the mailbox, nearly tackling the mailman on the way.
Am I still frugal? Yes, for the most part I still am. I even recently cancelled a vacation, part of the reason being that I did not have enough saved up in my vacation fund. I also still choose low-cost entertainment, bring my lunch or go home for lunch every day, and say “no” to eating out, concerts, and other leisure activities.
Another weird and crazy thing I do is watch Youtube videos on people who are living paycheck to paycheck, or talk about being broke. I use that fear tactic to get me back on good spending habits.
What do you think? Do I need to find some other kind of motivator now that fear and worry are gone? What emotions keep you from spending?