Tuesday, January 1, 2013

Living within our means doesn't mean hardship

It's rainy in Puerto Vallarta, and quiet. Both unique in Mexico for January 1 of any year.

Michael and I started our New Year's Eve last night with our annual 'Budget Summit' -- something we started doing monthly when we made the decision to retire more than five years ago. We had accumulated some credit card debt, had lived beyond our means for a bit (had a great time too!) but it was time to hunker down and figure out how to get out of debt. Get adequate savings. And retire.

Wishing you a great New Year from Mexico!
We started because although I was absolutely ready to retire and walk away from my university teaching job, we couldn't afford it. But I also knew I could keep on plugging away as long as I could see we were making progress toward pulling the plug.

I just suited up, showed up, got my direct deposit, only spent cash and then only frugally. And Michael reported monthly on how much progress we were making on paying off our debts, how much money we were able to put into savings.

We hunkered down together with a mission to be debt free in two years ---  we got in the life raft together with both of us rowing in the same direction ----  and we accomplished that goal in 18 months. And immediately filed for retirement.

A sweet reward for some self-discipline and working together as a couple.

Last year we added a philosophical level to it: apply a matrix of our personal priorities/dreams.  It was after Michael read the Steve Job's biography where Job's said everything you do, every decision you make, should be connected to the top categories in your matrix.

For Michael, it was health, family, writing, friends. For me, it was health, community, adventure, fiscal prudence. Basically, living within our means. I guess I was concerned about living on a retirement income.

But regardless of what is in the matrix, it's a great conversation to have with a spouse. Hey, Hon --- what are your priorities for the year? A seriously important --- and interesting ---  conversation.

So last night we had our budget summit. Today we talk about our personal priorities, see what has changed, what has stayed the same in our matrix. How does it overlap? How is it different?  And then I'm hoping we will be able to apply that to our spending:  is what we're about to spend directly related to one of our agreed on categories as a couple?

Hopefully, more travel! More family time! But we'll talk.

What triggered my frustration this morning is reading about this supposed compromise to our national  'fiscal cliff' by our elected leaders. It isn't a surprise that our elected leaders aren't providing the leadership required for this country to pull itself out of the abyss. Regardless of party.  It is not a surprise that our leaders don't believe we --- the American public --- can understand or be persuaded that we will all have to sacrifice and we will all have to live within our means, as a country.

But that's the leadership I want. And I believe it's the leadership that is required.

Perhaps it's time to have that conversation as a family first, then as a country and not wait for our elected officials to solve this. Because they either can't or won't.  I can barely stand to watch, like a slow motion car accident, but I can't avert my eyes either.

So, personally, 2013 is going to be a great year. Nationally, well, not so much?

Feliz Año Nuevo, friends, wherever you are.

1 comment:

Randy Crutcher, Ed.D. said...

Good stuff Sylvia. I like that you shared your process around your passion to be financially free. For us, our matrix is our top five passions which we regularly review and refresh with The Passion Test, the fun and quick way to get razor sharp clarity, prioritization and direction. Besides The Passion Test test and book, another great book I read years ago is "Your Money or Your Life." It is about making financial decisions daily and purchase by purchase that are in alignment with what you value most. When we saw Karin would die in her career if we did not make a change, I hired a financial planner who helped convince her she could take that life changing sabbatical. That planner went on to help rewrite "Your Money..." for its republication a couple years ago.