Financial Friday #1 – How to Thwart the Financial Fates

Introducing The Financial Fates

Greek mythology depicted the Fates as three elderly women who weaved tapestries which contain the destinies of humans.  In my mind, I picture a single thread being woven amongst other threads, courses of lives and interactions being directed until the final death snip with a pair of mythical shears.

In Jane mythology, the Financial Fates weave their tapestry, determining one’s financial destiny among other destinies. The difference? They have a wicked sense of humor particularly directed at those who feel a little security in their overall insecure financial picture.  Come into an unexpected bonus…the car breaks down, a little extra overtime cash…the washing machine starts to leak, a monetary gift appears from a family member…dog gets stung by a bee and requires a vet visit.

In the past, my husband and I would deal with these blows to our finances in the most logical way.  We’d deal with the issue and then go out for dinner because we deserved to soothe the financial pain with a little pleasure.  Sadly, while a good meal temporarily soothed the angst, it did cause long-term pain in the form of the Visa bill a month later.

What to Do, What To Do

Enter the emergency fund, the single most effective way of foiling the impact of the Financial Fates’ power.  The savvy experts (which are not us) say that you should have 3 to 6 months’ worth of money in an emergency fund which for us would be in the realm of approximately $25,000+.  That’s an intimidating amount of cash to put away.  One of the joys in the process of understanding and accepting myself is the knowledge that this kind of savings while doable with discipline will not work for someone like me.  I need to change it up a bit and set smaller milestones or I won’t be able to play the mental long game.

The First Goal

Dave Ramsey encourages you to set up an emergency fund of $1000 before you tackle debt.  This is completely manageable; however, we knew that my husband would be facing a possible work slowdown in the winter season.  We did some calculating and decided that $6000 would carry us through the winter months as a worst-case scenario (realistic worst-case scenario…not cataclysmic worst-case scenario).  We considered possible receipt of EI benefits, possible length of layoff and our tendency to enjoy the luxuries of eating and toilet paper to make our estimate.  We would also save money on both gas and car insurance by going from two vehicles to one which is a significant expense as my husband does a fair amount of commuting.

Therefore, our current goalpost has been set to $6000.  Eventually, we will put aside the requisite $25,000, but by setting small goals and celebrating those wins, we have a better chance of success.  

Since we have had this plan ongoing for the last couple of months, we are not starting at zero.  I will update each week to demonstrate our progress, slow and steady.

Here is where we are:

Emergency Fund Goal: $6000

Current Saved: $5000

Looking forward to thwarting those Fates, and one day, I will be the one holding the damn scissors.

Photo by Les Triconautes on Unsplash

Money – Grabbing A Vision

The Tug of War

The issue of money for my husband and I has been a big of a gentle tug of war since we first got together.  From my side, I would be pushing for things like updating our home and necessities for the kids (what seemed like necessities at the time), and he would be pushing for paying down debt or putting money away.  So what happens when two loving people disagree on money?  They spend on things they agree on like meals out, family and friend activities and impulse purchases and not on either one’s goals…you know, intelligent things (see Money – My Back Story).

We Try and Try and Try

Fast forward a few years later and we discovered Dave Ramsey.  He was a shining light in our darkness because articulated our distress perfectly…we were feeling sick and tired about feeling sick and tired about all things money.  What followed was an actionable plan of getting out of debt and building up a small emergency fund, and we had many successes and pulled ourselves out of debt. 

Then as in all things, our momentum petered out in the face of life happening again and again.  Money seemed like the perpetual grind….save, save, save, life happens, fall behind quickly in spite of said emergency fund, and it felt like we were spinning wheels to nowhere, and admittedly, I just wanted to stop trying at all.  We did still follow the steps as it was now habit to us, but the goal of accumulating wealth for wealth’s sake was not strong enough. There was no heart in the process. 

In the early days, frustration grew as I perceived all the things I lacked…a nice home, a car that didn’t have some quirk (one of our cars had a trunk that popped open if we engaged the emergency brake), a yearly vacation and an easier life.

Attitude of Gratitude

Fast forward again, the process of working on attitude and gratitude has been a long, far from completed, process, but this is what I have learned so far.

  • A house and a car are reasons for gratitude period.
  • Mindful living is a perpetual vacation.
  • My response to life happening and maintaining perspective determines whether my life is easy or hard (in most things…I generalize cautiously here).

Getting Myself A Vision

In August of last year, I curled up on the couch with a book that I had randomly ordered from the library. I have a habit of ordering books on a sudden whim and then bringing them home to look at them wondering what I was thinking at the time.  Usually, I could pinpoint what event precipitated the ordering of the book…bad parenting day – books on raising resilient children, tax bill – books on sustainable living, having to attend a social function – books on making conversation.  This particular book though I could not figure out how I got; however, the title and the warm, happy cover made me peruse the first few pages on the couch one afternoon with a cup of coffee. 

I could not put it down.

This book gave me what had been lacking in our financial plan since the day we joined bank accounts…a vision.

Meet The Frugalwoods

The book was called Meet The Frugalwoods written by Elizabeth Willard Thames.  In my own synopsis, it detailed a couple’s journey from working (not by choice) and living in between to living and working in between (by choice) and introduced me to the concept of financial independence (FI).

I had heard about people who retire early, but thought that it was a combination of luck and high incomes and that these situations were anomalies, but as I started to dig, I realized that there are whole communities of people dedicated to the concept of financial independence.

There are smarter people than I who can provide tenets of financial independence, and I will point you to these sites: Mr. Money Mustache, Frugalwoods and JLCollinsnh for more details, but the essence is to reduce spending, increase savings and if you can get your savings rate at 50% or more, you could possibly look at retirement in 10 years while at the same time creating the life you want (and it’s not a life revolving around stuff!!!).  Again, this is a brief synopsis.  There is more in terms of simple investing that you need to understand, but I would just like to share our story.

The Vision

Flash forward to today and I feel we have a vision for our money.  One in which neither of us has to work, but we can spend our time contributing to our world in our own way (blogging so much more…think what I can inflict on you with more time!!!) without money entering the equation.  The road ahead will be long, but we’ve been working towards it for the last few months and have made more progress than I had thought was possible…often that’s how a vision (shared) works.  My spouse is still skeptical about this being possible, but he is extremely supportive in both words and action so I will vision for the both us right now.

So what is the vision?   

Retire in 10 years

Retire in 10 Years

Is it doable?  Yes!  Are we late to the party?  Absolutely, many financially independent people have reached independence in their 30s.  We will be in our 50s, but it is never too late to strive towards vision.  A clear vision tends to attract things into your life which support your vision.  Will we have to live cheaply?  No, we will have to live frugally, but if these years of money struggles have taught me anything, money and stuff does not determine your happiness.  I have been grateful, yes grateful, for our struggles with money.  It has taught me what I need to live a beautiful whole life, and it doesn’t look too much different than the life I live now, except with the choice to not work and more time.

It is important to recognize that money is itself not the happiness. Money is just the vehicle that enables you to explore the lifestyle that is going to make you happy. – Liz from Frugalwoods on BiggerPockets Money Podcast episode 11.

I encourage you that if you’re floundering financially either with excess spending that does not feel fulfilling or large debt, get yourself a vision…a big one…one that allows you to align to your life purpose.    Vision points you towards your purpose which allows you to shake away those things that don’t align. 

And read Meet The Frugalwoods.

Note:  I do not receive any money from the above recommendations.