When you're in school, it feels like you're always moving forward to the next step. Finishing the year, graduating high school, getting in to university and graduating. And then you enter the working world and all of a sudden you're just kindof...floating. It can feel like there isn't any real endpoint. Just work, sleep, pay your bills, and go to Mexico once a year if you're lucky.
So to fill this lack of purpose, we start to find new goals to fill our life. Buy a house, get a dog, have a baby. And it's not just you. Once you pass twenty five, it seems like everyone is constantly asking: "When are you going to buy a house?" "Are you going to have kids?" "Are you going to get a dog?" There's nothing wrong with houses, dogs, or kids, but all this pressure can push us into jumping into responsibilities we're not ready for. When you're just starting out on your own or just freshly married, it might take you longer than you realize to learn to balance cooking, cleaning, working full-time, making sure you're getting enough sleep, and navigating living with a significant other. If you're in that boat, I highly recommend waiting a few years to take on the additional responsibilities of home ownership, pet ownership and parenthood. Not only will this give you time to get your shit together, it will also allow you to build up a strong financial base before adding on these additional costs. Imagine a pretty typical couple. Sara and Edward have recently graduated and moved across the country to a more economically active area for their first full-time jobs. They are now choosing where they're going to live and what responsibilities to take on. Let's do a choose-your-own-adventure. Scenario 1: Sara and Edward get approved for a mortgage the day they finish three months at their jobs. They make about 90,000 and are approved for 450,000 mortgage. They have 5% down-payment. They purchase a home for 449,900 that is a half hour drive from both of their jobs (in ideal traffic). To facilitate their commute, they each get a car loan and purchase brand-new vehicles. Now that they have a yard in the suburbs, they decide to adopt a dog. A few months in, Sara's boss starts to act like a real dick, but Sara has to grin and bear it, because how else would they pay the mortgage? Edward hates his commute, which due to traffic is almost an hour every day, even longer in the winter. They both feel guilty because the dog sits at home alone all day, and they're too tired to walk him when they get home from work. After a long commute, who feels like cooking? They start ordering in and within eight months have both put on twenty pounds. They start planning on getting pregnant. Scenario 2: Sara and Edward start to get house fever. But, after going to a few open houses and crunching the numbers, they realize they're better off renting for now. Their jobs are on opposite sides of the city, so they move close enough to Sara's job that she can walk to work, and Edward buys a used car for 9000 in cash to commute to his job. Within six months, he starts looking for work closer to where they live. Although they want a dog, they decide to wait a few years until they're ready for a house. In the mean-time, they take some fun road-trips and enjoy camping with friends. They save one salary and within a few months have saved quite a bit of cash. Sara's boss starts acting like a dick, and she starts getting depressed. Edward knows they've saved up enough to get them through more than a year, so he tells her to quit and look for another job. Even with Sara not working for awhile, they manage to keep saving and taking the odd vacation. -------------------------------------------------- Which scenario would you choose? There's no reason why our couple from Scenario 2 can't get a house and a dog eventually. But by waiting a few years, they are much more financially and emotionally prepared for the responsibility. In the meantime, they can navigate the ups and downs of adulthood without freaking out over every unexpected financial issue or bad boss, and have the freedom to still hang out with friends and go camping. This is the joy of a low-responsibility life. Responsibilities are like salt - you can always add more, but it's hard to take it away.
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You might remember from Part I that one of my colleagues was recently laid off. Today, I found out that two more colleagues had been let go.
Now, you're probably thinking - geez Consumer of None, you better get your ass in gear and start applying for jobs. And I've certainly been doing my share of resume polishing and sending out applications. However, the thing that took me most by surprise was that the company isn't actually doing all that bad. They're also creating new positions in other departments, despite removing positions in others. What this made me realize is that the workforce rules have changed, even from five years ago. Companies are lean and fast moving, and just growing is not enough to satisfy them. One month you might be valuable, and the next, not. One of the people who was cut just came back from mat leave with her third baby. On top of that, she was the only spouse with benefits as her husband recently started his own business. You'd think there'd be a second thought to cutting someone in that position who had worked for the company for several years. Nope. Believe it or not, I'm not saying this to freak you out. There's no point in going to work everyday petrified that you'll be fired. There's things you can control - your performance, being a pleasant person to work with - and things you can't - the economy, your boss's/the company's whims; and there's no point worrying about things you can't control. The important thing here is to keep this reality in mind when making financial decisions. Lately, I'd been wondering if I'm too tight with money. Maybe we should move on to a house. Maybe we don't travel enough. Events like these make me realize - are you kidding?! The greatest gift you can give yourself is to establish a life you enjoy that: - keeps expenses and responsibilities low - doesn't require a long commute Once you've done that, you realize that they can't touch you. If you can learn to live simply and enjoy the little things, guess what? Not only do you end up with lots of money in the bank (even on a small salary), but you are also prepared for difficult situations that may come your way. If I got laid off tomorrow, I'd be depressed about it, sure. But I also know that I could go almost 2 years unemployed - and could pay my expenses with a minimum wage job if it came down to it, with few changes to my lifestyle. |
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May 2019
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