My Goal As A Grownup Was To Have Just Enough To Not Struggle
When I was a teenager and a young adult, I set my financial goal pretty low, or so I thought. My goal as an adult was to have enough money so that I could do small things each month without worrying about running out of money. Not extravagant things - I honestly have never had extravagant tastes. Just things like going out for a movie once a month or so, going out to eat once a week or less, the occasional bottle of Bath and Body Works lotion.
This isn’t a post about frittering, although it could be. My material desires were really not that huge. What this is about is setting goals and expectations for yourself in a vacuum.
For although I had small goals I thought were totally reasonable, I had no plan at all how to reach them, or even the tools to understand how. My spouse and I make a decent living - we are not by any means wealthy, in fact we hover right around the border of the 15% and 25% tax bracket - but it should be enough for us to live comfortably enough. But we were constantly derailed in our struggle to more than get by, and honestly it felt like there was nothing we could do about it.
Our derailment was in unexpected emergency expenses. We didn’t plan for emergencies, and so when they happened (which they seem to with an annoying frequency) we had to pull money from wherever we could find it and use it for the emergency. Usually our checking account, and sometimes some money from our son’s college fund (that we ourselves had established). Then we’d be behind, because we needed to repay the college account. And once we did that, it seemed something else would come up. It was a vicious cycle, and although the solution was rather simple, I honestly had no idea what it was.
We focused on reducing our outflow. Not completely (we had two kids along the way) but we focused on trying to reduce our credit card so we’d have one less bill. We looked forward to each raise my spouse received, but it seemed spent before we even got it. We counted the years until we’d have the student loans paid off.
What we didn’t do was establish an emergency savings fund.
We were like a lot of people. We thought that “If we could just make more money, things would be easier.” And maybe they would be. But if we established an emergency fund, we would have money for those unexpected emergencies, and that coupled with a true and honest budget have really turned things around for us.
No, we still don’t have enough money to go out to eat and buy little treats. But the difference now is - we know that someday in the near future - we will.
Note: The whole family is suffering under the stomach flu now, so Tell All Tuesday may become Tell All Thursday this week. I’ve got fun news though so check back for it!
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December 18th, 2007 at 8:30 am
What a great view PT. One step at a time is a great plan. I hope you family gets well soon.
December 18th, 2007 at 9:17 am
I’m just learning about the importance of a well funded emergency account now. Our water heater just melted down, leaving us with two options. One, freezing cold showers. Or two, an epic 5,000 bill.
So I know exactly how it feels. Trust me. Good luck!
December 18th, 2007 at 9:18 am
Totally could have written that post! The other thing, for me at least, is that all those “unexpected” expenses are really ones that should be expected, like car maintenance or household repairs. Now that they are budgeted for, they are no longer unexpected or really even emergency fund worthy (unless they come before there’s enough money in that budget category!).
Thanks for writing even though you feel rotten. I hope you ALL feel better soon! Stomach viruses are just so yuck. And so contagious!
December 18th, 2007 at 10:03 am
I totally understand where you’re coming from with that one. I should reach my current goal of a $3000 emergency fund in January. I’m a young, single and childless renter, but there are still a lot of things my EM wouldn’t be big enough to cover: big medical or legal expenses, or a long period of unemployment. But even so, I feel much better knowing that I can at least handle any little things that go wrong.
December 18th, 2007 at 11:00 am
I understand–it’s easy to make plans in a vacuum and you’re so right, that’s what I did too.
I never really anticipated all the debt. I began to realize it in my last few years of college, when Micah and I communicated more about finances.
December 18th, 2007 at 2:31 pm
We started to do this a couple of years ago and I actually just have an automatic withdrawal of $25 each month moved to a separate account. There is no purpose for it except for those unexpected situations. It doesn’t even sound like a lot, but over time it has grown. We are so proud!
December 18th, 2007 at 5:58 pm
I’ve just gotten to the point where I feel like an adult. I’m 26 years old…and I’m an adult. I have retirement accounts (yes, it’s plural), but I didn’t really feel like an adult until I had about $1k in savings…that was the wake-up call!
December 19th, 2007 at 6:31 am
Hey there,
Not sure how I got here in the endless world of the blog-o-sphere but here I am! Nice to meet ya!
I really hope everyone gets over the flu! Hurry…Christmas is coming and you shouldn’t be sick!
Having read this I like how you reiterate the importance of having a reserve account. Truth be told, it’s easier to spend money than it is to earn it and we don’t realize our financial woes until it comes time for an emergency…and without that reserve account, things can get really stressful.