Hey everyone! Today I have a great guest post for you by Sami from EatPrayBudget.com. I know a lot of you are like me and drive old cars, live below your means, and avoid debt whenever possible. This is an awesome message a great reminder for all of us that are grinding to get ahead right now. Enjoy! ~ M$M
Things don’t equal wealth – I read this statement in Rachel Cruze’s latest book “Love Your Life, Not Theirs”. To be honest, the statement hit me on the forehead. Having just climbed off a mountain of debt, which I talk about here, I’ve felt for the last year or so that almost everyone around me must be thriving financially.
It seems like new is in and people are buying up new cars or going on vacations like it’s going out of style. Slaying debt required us to live a very frugal life so there has been no new car or mega vacations for this crew.
In a world where it seems like we’ve been going down a completely different path than the rest of society, perspective can be crucial to keeping your sanity!
We all do it. We visit a friend’s home and pine after their newly remodeled kitchen or immediately start planning the purchase of that epic car we saw at the grocery store the day before. I guess it is human nature or maybe a product of the constant stream of content we see on social media every day.
But we all tend to watch the Jones’s and even try (or want to try) to keep up from time to time.
A recent study by Career Builder states that nearly 80% of folks in the U.S. are living paycheck to paycheck. That is staggering! It’s no surprise to anyone that we live in a consumer-driven society. Now I’m not saying that anyone taking exotic vacations, driving flashy cars or living in expensive homes are doing something wrong.
Now I’m not saying that anyone taking exotic vacations, driving flashy cars or living in super expensive homes are doing something wrong.
It just seems that if the study is accurate, the majority of folks we compare ourselves to are not really affording their lifestyle. In other words, they’re just making payments each month.they’re just making payments each month.
Our financial journey has changed my definition of the word afford. I, like many of you, thought that if I could afford the monthly payment then I could afford the purchase. What’s a $600 car payment, right? A few years ago I would have thought nothing of that car payment.
I was part of that statistic, living paycheck to paycheck.
Now, my definition of affording means I can pay cash for it. That means no more auto loans, no more throwing a new wardrobe on a credit card. To clarify, my definition of affording means I can pay cash for it. That means no more auto loans, no more throwing a new wardrobe on a credit card.
To clarify, I’m not talking a mortgage here. We definitely plan on taking out a 15 year fixed mortgage once we have a healthy savings account and down payment saved. Yes, we could save up the cash for a house but that’s another blog post…
So what do my new definition of affording and the statement “things don’t equal wealth” have to do with each other? Everything. Our human nature to compare ourselves and want what the next guy has is tough to crack.
I am constantly reminding myself when I see that flashy Benz roll down the road or as I stroll past my dream home that those things do not equate wealth in my world. Yes, they’re lovely and maybe one day I can afford to buy them myself but wealth is more than the car we drive, the house we live in or the clothes we wear.
Wealth could definitely be defined by each person individually.
It is after all personal finance. Wealth could mean a healthy savings account, diversified investments or a real estate portfolio. For some, wealth could be a positive cash flow.
Heck, it could mean that tomorrow you can walk into your 9-5, quit, and still live for the next six months to a year on your savings account. Maybe it does mean you’re driving that Benz or living in some extravagant home.
All I know is that it does not mean living paycheck to paycheck, it doesn’t mean driving a vehicle (a depreciating asset) that you’re making payments on. And it definitely doesn’t mean keeping up with the Joneses.
Right now, wealth for us is driving around cars that are over 15 years old with over 100k miles on them.
It means that we’re living in a rental home right now so that we can build a decent savings account and save for our next home.
Wealth means budgeting each month, remaining frugal even though we’re out of debt. It’s us being extremely intentional with our money and having a positive net worth for the first time in our adult lives. Now, clearly we’re by no means wealthy but we’re working toward that.
Now, clearly we’re by no means wealthy but we’re working toward that. We’re making tough decisions now so that later we can have some fun.
My point to all of this?
The next time you struggle with the things you see and want or even if you struggle with keeping up with the Joneses…remind yourself; those things don’t equal wealth. That person may look wealthy but seriously question, are they really wealthy?
For 80% of us here in the United States, those things equal the chains of debt and the stress of making it each month. I encourage you to define what wealth looks like for you and pursue that. Since you’re reading M$M you’re definitely in the right place.
Soak in the epic information Bobby provides here. Maybe collectively we can work to flip that statistic and live by our own definition of wealth.