It’s occurred to me in recent musings that a privileged upbringing and a high income aren’t always beneficial in the journey to financial independence. Don’t get me wrong – I’m not preaching the poverty gospel, and I’m definitely not trying to glorify being poor.
I made the comment to my husband today that in terms of thinking about wealth, I’ve always been more keen to approach the income side of the equation than the spending side. Part of that is because I’m not actually an insane spender – I hate buying new clothes, my husband and I rarely go on dates, my trip to see Bestie a few months ago was the first non-work trip I’ve taken in several years, etc.
The other part of it is that I have a horrible money mindset – so take the above line that I’m “not an insane spender” with a grain of salt.
Here’s the thing – $20 doesn’t sound like a lot to me. Hell, $100 doesn’t sound like a lot to me. Not that I’m dropping hundreds left and right, but when it comes to SAVING money, I have a hard time, because I have a hard time visualizing how the small investments will add up to something worthwhile – or rather, how small expenditures will add up to a big problem.
(Side note: that might also explain why I have a hard time losing weight. So many tiny sacrifices for EVER just for tiny changes that also take FOREVER to accumulate. Hmph.)
I have more than doubled my income in the past three years. I made a solid salary, especially considering our age. Yet our debt load hasn’t significantly decreased over the past three years – frankly, the biggest drop has been in the past three months.
Why is that? We can go through our entire financial backstory in a future post, but there are a few things we can point out initially.
- I am remarkably careless with “small” expenditures. I’ll buy lunch out a couple of times a week, we eat out on the weekends, and I generally go out for drinks with coworkers once or twice a week. $12 or $15 for each of these lunches, $45 for a family trip to Mellow Mushroom, $45 for a family trip to our favorite BBQ joint, and $20 for apps and drinks – none of these expenditures are extreme in and of themselves. It’s the cumulative effect that it insane – look at that, for the week I just mentioned, that’s $150 of wasteful spending. That’s what privilege looks like – NOT NOTICING that you’re blowing through $150 a week, and wondering why you’re broke all the damn time. Urgh I feel DIRTY right now. AND MAD. JESUS.
- Despite being a spending GLUTTON, as we just discovered together in my previous example, our childcare costs are OUT OF THIS WORLD. I honestly do not know how lower-income folks with kids do it (well, beyond the obvious of not wasting A MILLION DOLLARS A WEEK), but we spend nearly $2000 a month in childcare. That’s nearly two THOUSAND dollars, just in case you thought I misplaced a zero. To put that in perspective, the rent on our 2 bedroom, 2 bath, sunny duplex is less than $800 per month.
- Our commuting costs are ridonkulous (get ready for another bout of first world, ultra-privileged expenditures). Our next largest expenditure after childcare and rent is transportation. As you’re tired of hearing me complain about, we currently commute 2-3 hours a day. I left work at 4:30 the other day to pick up the kids, and arrived at their school at 6:20, 20 minutes late, and nearly 2 hours after leaving work. Generally, Hubs picks up the kids, but that particular week, he was quite ill and couldn’t drive. When Hubs picks up the kids, he uses a special paid fast lane on the highway, just to ensure he makes it to the kids by 6, even though he always leaves work at 4:30. His fast pass costs $8-10 per working day. Add that to the costs of gas, insurance, and general wear and tear, and the commute is not just killing us, but also not cost efficient.
Enough whining – what the hell are we going to DO about it?
- Do a “plug-the-holes” audit. How poorly are we really doing? I think we’ve been telling ourselves the story that “we don’t spend that much” for far too long. I can earn all the money in the world from side hustles and raises, but if we keep spending it all, we’ll never get ahead.
- Come up with a “plug-the-holes” plan. I know that part of those expenditures are made out of exhaustion – it’s a lot easier to go get a drink with coworkers than sit in traffic for two hours. It’s also might easy to go through the drive-through. However, I’m pretty good at sticking to a plan if I have one. I could start keeping some fruit and granola bars on hand, for example, instead of buying drive-through food that’s not good for my health or wealth. I’ll also make a plan to limit the number of times I go out with coworkers to Starbucks, drinks, dinners, etc.
- Childcare expenses will be going down in August once our oldest starts Kindergarten. I can’t believe my little man is 5, but he is, and I’m mighty glad that we’ll only be paying $240/month in aftercare for him, rather than the ~$895 we’re spending right now.
- Our new home will nearly ELIMINATE our commute. I think this will have a larger impact on our budget than hubs is expecting. There is a lot of on-the-road eating and general impulse purchasing that happens because our asses are glued to car seats for so many hours a day. An extra 2-3 hours (EACH!) in our day means more time for cooking, hanging out with kiddos, etc. The will also eliminate a storage unit we currently have. It also means a lot more energy for working over-time and side-hustles.