It’s easy to save money when we have a job, the car is running fine, and you’re not worried about the economy falling off a cliff… so why is it so hard to actually save money when everything is going well??
I’m guilty of it. After 22 years of not having my own money and finally graduating college and getting a job, I spent my new paycheck faster than one of those Sex In the City girls at a Jimmy Choo store (I’m not sure what that means but Jocelyn told me it’d be a good analogy… ok, ok, I’ve seen a few episodes but I’m not proud of it). Things where finely going my way, so I had to screw up and create my own company store that I was in debt to.
In 2007, when I finally paid off my $50,000 of debt with two hard years of scraping by and living without, I found myself slowly moving back into the bad mindset that got me in trouble in the first place. I felt like I deserved to take a break as I had worked hard to pay off my debt. I was at risk of losing my financial momentum and without discipline I could easily fall into the same debt trap.
To combat this, I discovered I couldn’t be in a “comfortable” state of mind if I wanted to continue doing well with money. I’d need to continue tracking my expenses and telling my money where to go with a budget. Most importantly though, I needed to continue with the mindset that I’m in debt and can’t go crazy with spending. In essence, I needed to fake myself out and create an artificial environment of need so I could continue controlling my money. I did this with the cash budget which let me visually see my money disappear and be near zero at the end of the month – even though at the beginning of the month I had already stashed some away in my savings account.
“Save when you can and not when you have to.” – John D Rockefeller
The mindset has returned now that we’re on our round the world trip. We have a certain budget we want to hit so we have enough money to come back to when we return to the US and continue our lives. Through hard work we were able to build a sizable emergency fund outside of our “trip fund”, but we can’t let ourselves get too comfortable because we could easily dip into the emergency fund and be screwed when we get back.
This is why we’re continuing to track every dollar we spend on the trip which you can see in the spending summary pages of each country. It’s essential that we continue our discipline now so we’re in good shape when we get home. It’s why we used our campervan as a “home” in Australia and almost always cooked our own meals and lived off the grid, why we took the bus through Cambodia when flying would’ve been much more comfortable, and why we’ve stayed at places in Thailand we wouldn’t normally stay in while “vacationing”.
What about you? Have you ever created an “artificial environment” so your spending doesn’t get the best of you?