I’ve been thinking lately about what life-changing money for me would be. I’ve always thought that I’d have to come into a serious amount of money to have any lasting change on my life – serious amount meaning hundreds of thousands of dollars.
But then I realized – at this point, life changing money for me really means simply getting out of debt and establishing an adequate emergency fund. Because at that point, money doesn’t have to be on my mind and factored into every decision as much as it does now. At the point where our debt is eliminated so that our income is a healthy amount above our obligations every month, and we have enough of a cushion in the bank that if something unexpected happened, we could deal with it without risking our overall financial health, that’s the point where our life has changed.
That’s not to say it isn’t changing a little bit every day, and getting closer and closer to that point. That’s one of the things that is so satisfying about debt reduction – you can see and feel the point of debt freedom come closer and closer, and truly feel your life begin to change.
When I started this blog, our income and obligations each month were almost dead even. For every penny that came in, it went out just as quickly, and although we were moving forward, it was very very slow and felt like we were barely treading water. Since last June 19th, I’ve developed three separate sources of income for our family that we didn’t have before (and lost one through no fault of my own in the process), we’ve learned to use the money that comes in more wisely, and we’ve managed to lower our monthly obligations by $200 through eliminating our credit card debt. That in itself has felt life-changing, and probably has been. Our income now exceeds our expenses each month enough to make a significant dent in our debt every month and weather the obstacles in our path as well.
My life changing money? At this point, about $40000 (after taxes) – and shrinking every day. What’s yours?