Editor’s note: Jeff was one of my very first internet friends, and is one of my favorite people on the internet. His blog is approachable, and his story is interesting, especially the part where he talks about his 60% savings rate. He wanted to check back in with everyone here, so enjoy!
Hey, Frugal Portlanders (and frugal residents of other cities too). You may remember me from the “Get to know another blogger” Series. Well, the good news is I’m back and have some more awesome stuff for you today.
I wanted to talk about why focusing on getting rid of debt (and saving a lot of your income) is a worthwhile endeavor.
Many people think that my family and I live like paupers. I ride my bike everywhere, our family entertainment is walking around the park, the library, and Netflix, and we don’t have cable TV. We’d probably have only one car if I could convince my wife to let me sell the truck I’ve got. We don’t go out to dinner that frequently (~2x per month) and we don’t spend money on other forms of “entertainment”. Many people wonder if we feel deprived and honestly, the answer is no. I am constantly finding that I’ve got too many fun things to do, and not enough time to do them.
It wasn’t always that way though.
My wife never had any debt, but I did, and that’s the reason that I started blogging. I wanted to be held accountable, and I wanted to cross the finish line after a few years of false starts. I knew that what I was doing was not working so instead of try the same stuff (for the 3rd time) I needed something else. It was time to get drastic, and start questioning everything. We cut cable TV, switched to a cheaper phone plan, car insurance and lived in a place that cost less than 10% of my monthly income. I spent nothing on gas to get to work and food to eat for the better part of 2 years and was able to take my debt from $55,000 to $15,000 or so. It felt great and I didn’t feel like I was at the edge of a cliff anymore, so we shifted priorities and started saving for a house.
After purchasing a house and moving, we got back into debt repayment mode and knocked out what was left. The feeling of being debt free (except the mortgage) was new to me, and it took a few months to sink in. When it finally did though, it opened up the door for many changes in our lives.
I was able to move from a stable government job into a new position with far higher upside (though a lower base salary). I earn a bit less now, but it doesn’t matter because we aren’t servicing a ton of debt. My wife was able to transition to part-time work so that she could stay home and care for our daughter – something she always wanted to do. Not having debt gave us freedom to make choices, and since we were used to living lean, it’s also helped us save quite a bit of money too.
We’ve transitioned from debt repayment mode to savings mode (and started tracking everything) and have been enjoying watching our wealth build. We are currently on pace to save ~60% or so of our income in 2015, and hope to increase that next year.
We’ve also been able to dream bigger than we were when in debt. We have more leverage with our employers since we can live off of savings for a significant amount of time. We’ve dreamed about taking a long-term vacation, living in another part of the country for part of the year and more – none of which would have been possible if we were still stuck in debt.
Our finances have changed so much from the time that I started blogging (2009) to now, I’ve decided to change the direction of my site, sustainable life blog. It will still have tips and tricks to go green, but getting out of debt isn’t something that it will focus on. It’s will move to focusing on freedom through financial independence – because that’s what we are trying to achieve now. If that’s something that appeals to you, I encourage you to drop by and check out the new sustainable life blog.
If you’re wondering if all the sacrifices that you’re making now are worth it, I’m here to tell you that they are. You’ll open yourself up to things you never knew possible and will be able to do things you’ve always dreamed of. Keep going, and every time you get stuck, remember that you’re buying your freedoms and your dreams for your future self from your past self.