Reality is a many faceted thing
I’d like to think I live in the real world, but the real world is scary when it comes to money.
The real world would have us believe that every holiday is a reason for gift giving, that every part of our lives should be insured, that credit cards are a necessity, that consuming is the only way to save our economy… The list goes on.
I want to take exception to the latter item I mentioned. Doesn’t the real world realize that consuming is what got us to this point?
I consumed my way through a car, a camper, a house, a vacation, a lot of gifts, and plenty of insurance, and I did a lot of that consuming with credit cards. Not so much lately, but a few years ago, I wasn’t working while my kids were still too young to be in school and sometimes I even paid the bills with credit. I mean, why not? I had always planned to go back to work and pay for it all then.
Bad, bad, bad idea.
My husband became self-employed somewhere in there and we had to pay for our own health insurance. I set it to an automatic payment, and ended up using a credit card for that too.
In those days, credit cards were a necessity in my household.
I went back to work, but only part time. So we sold our house and built a new one. The new one cost 2.25 times more than we planned, so the equity we cashed out of the old house went to pay off credit card debt and pay down only a small portion of the new house. We ended up with a mortgage 1.8 times larger than we’d had, which I admit is still better than the 2.25 times it would have been without that equity.
Lucky for us that I had gone back to work.
We have health insurance, dental insurance, prescription drug insurance, auto insurance, disability insurance, homeowner’s insurance, camper insurance, and life insurance. The amount of money we’ve spent on insurance this year to date is over 11.2% of our income to date. Insurance takes some of the risk out of life and has its purpose, but that 11.2% hurts.
I’m done consuming. My husband thinks he isn’t, but these days I hold the purse strings and I’ve put us on a cash diet. When he runs out of money, he’s done consuming. He’s really doesn’t cause me that much trouble these days when it comes to money. He just wants to know where he stands—but our day will come, because he and I have a few very different opinions on the feasibility of living a cash-based existence. I believe it’s very possible, and he thinks I’m crazy.
He thinks:
- if you can afford the payment, you can afford the item
- he’ll be too old to enjoy the things he wants if he waits until he can afford them with cash
I think:
- if we don’t have the cash to pay for it, we can’t afford it
- if we haven’t met every other financial goal we have that could possibly be considered a need, we can’t afford it
- a person doesn’t deserve to enjoy something he hasn’t earned
Our cash-based budget that we’ve been following for the past few months has made a world of difference to our relationship issues related to money. I love my husband. But our money fights became our bone spur.
Next week, let me tell you about our cash budget and how it’s helped us live within our means without adding stress to our lives, and how easy it has turned out to be. It’s even saved me hours, quite literally, in front of the computer doing my checkbook and bills.
You know, I said I was done consuming, but I should rephrase that. I’m done consuming what I can’t afford.
I’ve got my own ideas of how the real world should work, and I’m not going to let anyone else’s ideas of when I should give gifts, what parts of my life should be insured, whether or not I should have credit cards, or if I should do my part to save the economy by consuming even more stuff get in my way.
Leave a Comment