The series of the following posts was inspired by one of my good friends and a great blogger Joe, the creator of Retireby40 , where he is chronicling his journey to retirement. Joe wrote a post How To Retire By 40 where he outlined and mapped his journey to an early retirement.
It is a very stimulating post and an exciting journey for those who stayed on track, who have mapped, saved, invested, planned from the early age. Those people already can visualize a nice bungalow somewhere warm and exotic. They close their eyes and see themselves raising their grandchildren. They stock up on travel books because they know they will travel the world. In other words, those people see the light at the end of the tunnel by age 35 or 40.
But then there are those, who are not staying on their retirement track for a variety of reasons. They close their eyes and see bills. They stock up on travel books because that’s the only way they can travel the world. They don’t see the light at the end of the tunnel. In fact, they are not even sure where this tunnel can be found. I am one of those people.
Pick The Right Partner
The right partner means common goals and mutual understanding. It means partnership. It means working together towards common future. Beaker and I are definitely right for each other in spite of the fact that I am a spender and he is a saver. In spite of the fact that I look at money as something to be spend on travel, books, furniture, and clothes, and Beaker looks at money as a means to an end that provide security and stability.
What can I say? We complete each other.
Get Rid Of Consumer Debt
I came to the U.S. with no debt. Then over a few years living in a consumerist paradise I accumulated quite a bit of it. I told my story about that time in my life here. I took out some student loans to get myself through the school. The result of my few years in the US: piles of credit card debt, student loans and a car loan.
Beaker had one student loan when he met me. A few years and one European honeymoon later, we increased our debt by a few thousands and enthusiastically added a mortgage on a top of it.
Looking back I am not sure what triggered the bitter awakening, but something definitely did. Maybe it was the realization that debt sets us back in our life achievements. We finally saw that in order for us to do what we want to do, to live the life we want to live, we need to get rid of our debt. As fast as we can.
Last year we were able to pay off $13,000 on our debt. It feels great. But we still have a long way to go. But at least by now, we know where that mysterious tunnel, we were searching for sometime now, is located.
Spend Less Than You Make
This is a very simple truth, isn’t it? Wrong! It surely sounds simple. But try living according to it and you will see that there is nothing simple about it.
Some of us don’t follow the notion of spending less than we make not because it is difficult to do, but because so many of us are oriented towards immediate results and instant gratification.
The devil of consumerism appears at your elbow full of sympathy, suggestions and possibilities. Humans are weak (at least those if us who came from the former Soviet Union) and we give in to the devil’s temptation. Yes, I served the devil of consumerism for years. Budgets and savings love us in the long run. But it requires time, effort and discipline. The devil of spending (or consumerism) takes an interest in us and provides an immediate gratification we humans crave. By the time you realize it, it’s too late and the damage is done.
There is only one financial thing I fear now – debt. For I have seen it, felt it and lived it. In fact, I am still living it.
I know now that it is debt and reckless spending that undo us.
To be continued.
P.S. By the way, Joe just had a baby, and if you didn’t say “Congratulations” yet, head over to his site immediately and do so!
A great post Aloysa! You managed to pay off $13,000 in a year – you have no idea what an awesome achievement that is!
Looking forward to the next part and hey, welcome back!
Paying off 13K is a great achievement but we still have a long way to go. Sometime I wish it would be over already.
Partnership is definitely important. However, like you inferred, one partner CAN be a spender while the other is a saver but only if there is a compromise between the two partners. When the spender purchases things without the consent or understand of the saver, things can get pretty sticky.
BTW, I was expecting to read how not to retire by 40, not what to do in order to retire by 40 🙂
LOL Maybe you need to re-read the post. I definitely wrote about why I cannot retire by 40. 🙂
Thanks for the top billing! 😀
Good job on paying off 13k last year! Keep working at it and your debt will be gone soon. You need one of those debt progress bar on the side. I don’t know where to get them though.
Yeah, I saw those debt progress bars on some other blogs and have no idea how to put it on the site. I have one in our budgeting spreadsheet and it is moving really slow. Or… lets put this way… not fast enough. 🙂
I think all of your suggestions are tied up with one another and can be achieved as a consequence of the other. When we earn more than we spend we have the available cash to get rid of consumer debt. Having the right person at our side helps us spend less… so a little bit of luck, added to order and clarity can take us to a great future… as your post says!
I hope so. I just wish that I would have started earlier.
$13K in one year, that is quite an accomplishment. Instant gratification like you say is the undoing of many people. Instead of thinking in terms of spending less than we make, maybe we could turn it around and say we have to produce more than we consume. Not as catchy, but maybe more effective.
If you think about it, we do need, in fact, produce more. And consume less. But some of us will increase consumption when production increases. It is the same as when you make more money, you spend more as well.
Congrats on paying down 13K, that is nothing to sneeze at. It got a little spooky at the end with all the devil talk. 🙂 But if everyone treated debt as seriously as you do now, we’ll be all in a better place. When you look back at your spend happy self, do you see a stranger or you see yourself with just a bad habit?
When I look back at myself I don’t see a stranger. I don’t even see a bad habit. I see an insatiable desire to have something (clothes, shoes, bags) that I never had before. Years later, I calmed down qiute a bit and realized that all of these things will be a round for a long time. I don’t need to go crazy in debt to have something that I want just this instant. I have different goals now.
Great post and great job on paying down that 13K! No matter whether you are….3K or 30K…in debt; when it gets paid off its the best feeling in the world! Kudos! You cannot go forward until you know where you are at. Knowing where you stand is priceless!
Well… yes, at least I know where I stand now!
You’ve turned the ship around and you’re making things better; that’s what counts! 🙂
Spending less than you earn is easy, but that’s only if you started out on the right track to begin with and didn’t dig yourself into a debt hole. It’s the digging out, while trying to turn around is when it’s easier said than done. But that doesn’t mean it can’t be done…
I would love to be on the path to be retire by forty. But, you know, my twenties weren’t very organized.
PS: Glad you’re back.
Thank you for the welcome!
My early twenties were more orginized than my late twenties. Early thirties were out of control. LOL I am glad I am back on track. But there is no way I can even dream about retiring by 40.
Fortunately or unfortunately time flies. Those good habits will compound themselves over the years and before you know it, you’ll be debt free. I still can’t believe I’ve been out of school for 15 years. How the heck did that happen>
I hope good habits will compound over the years. It is about time… as we speak. 🙂