[important]The following post is a guest post by Connie over at Savvy with Saving. Connie is a 20-something trying to live big on a budget…in New York City. Follow her on her road to financial independence over at Savvy With Saving.[/important]
I graduated college with approximately $20,000 worth of student debt. Certainly not insurmountable compared to others, but still a sizable amount. The idea of paying all that interest and living life in debt really did not sit well with me, so I made it a goal to pay it off within a year. After adopting some frugal spending habits and living on very little, I was able to do just that.
While my debt story should’ve ended there, it didn’t. I was a young 20-something who suddenly found herself out of debt and with a lot of extra money to spend every month. I was spending and splurging on everything – nights out, handbags, and new clothes just to name a few. Luckily, I wasn’t putting myself into more debt, but I was living paycheck to paycheck. I wasn’t properly planning for my future and was just living in the moment.
I slowly began to see the error in my ways when I became unhappy at work. The hours were long and I felt like it was sucking my soul away. I kept thinking to myself, “wouldn’t it be great if I had enough saved up so I would be able to quit my job and still live comfortably?” And then I realized – How would I ever be able to do that if I wasn’t putting any effort into saving my money?
Ever since, I’ve made a conscious effort to be wiser with my money, even without any debt to pay off. Here’s why:
Living in the moment won’t get you anywhere in the future.
I’m all for being spontaneous and “living in the moment” every now and then. But I had to draw the line somewhere because that kind of spending isn’t sustainable. I like to treat myself occasionally, but I’m much more careful about what I spend on and I try as much as possible to decipher between “needs” and “wants”. If I spend on everything I “want” now, I won’t have anything left for what I “need” later on.
You never know what will happen.
The funny thing about life is that you never know what will happen. It’s unpredictable, sometimes in great ways and other times, in very bad ways. You never know when you’ll need extra money. I’ve made it a priority to build a healthy sized emergency fund because I don’t want to be stuck without any options if I find myself in a difficult situation. Having peace of mind when it comes to money is much more fun than going out and having a few drinks.
Retirement won’t fund itself.
I’m absolutely looking forward to retirement – spending time with loved ones, picking up new hobbies, and traveling. However, I’m not going to get to do all that if I don’t save up for it. The earlier you save up for retirement the better. I don’t want to be 70 years and still slaving away because I wasn’t smart enough in my 20s and 30s to save money for the future.
I’m happy to say that I’m longer spending like a crazy woman and saving more. However, I still have a long ways to go before I feel financially secure.
KK’s note: Spending can easily get out of control after months (or years) of scrimping and saving. When I first became debt-free, I was the polar opposite. I had a really hard time spending any sort of money and I was still living a really minimalistic lifestyle (which wasn’t really a bad thing necessarily). Thankfully, I’m now finding a little bit of balance between saving and spending.
Are you debt-free? Did you “go crazy” once the debt was paid off? Or continue to live like you were broke? Have you found the perfect balance yet?