In 2008 when I first started working for myself as an independent contractor, I went from a decent salary to a very decent salary almost accidentally. I had just left a terrible work situation that put a dent in my self-confidence and was feeling shell-shocked*. I was fortunate to return to work at a former employer to help with a merger project. It took a few weeks for me to get back to my normal rhythm but I did eventually. Better yet, I began receiving some nice pay checks.
In the early weeks of my new job I was still feeling the sting to my self-confidence left by my former employer so I partook in a classic American pastime: retail therapy. On one of my work trips to Chicago, I came upon a pair of fantastic $600 shoes at Nordstrom’s. I became obsessed with these shoes. I needed to have them. They would prove that I’d made it. They would prove that I was worthy**. So I bought them.
Buck obviously thought I had lost my mind. He was so embarrassed that I was instructed to never tell anyone in his family now much I paid for the shoes. My argument in return was, “Suze Orman would say that I could afford it!”
Suze Orman does a section on her show called “Can I afford It?” whereby listeners send in details of something they want to buy, how much it costs and how they plan to play for it. Then Suze proceeds to tell them if they can afford it or not. There was no need for me to go on the show, Buck and I agreed that we could afford the shoes and left it at that.
This interaction pretty much described our former approach to buying things: Can we afford it? Do we need it, or really, really want it?
Yes? Okay then, buy it! After all, we were in good financial shape maxing out retirement accounts, contributing to 529 education plans, had an emergency fund, paid off cars, no student loans, and still had money left over. Why not spend it?
This is where Mr. Money Mustache (MMM) comes in. Buck turned me on to Mr. Money Mustache’s story early in 2013. MMM and his wife socked away over 70% of their income during their early work years and retired around age 30 before starting their family. They continue to keep their annual spending low, and fill their time with a slew of personal interests. MMM is pretty hardcore and doesn’t put up with complainypants.
I started reading the blog and was intrigued. We suspected that we were on a typical life treadmill that looked like this: go to college, buy some stuff, get a job, buy some stuff, get married, buy some stuff, have kids, buy some stuff, etc. Even with our typical American mindset we were unique in that we were maxing out retirement savings early in our careers. We had effectively hidden money away from ourselves which would have otherwise gone to buying more stuff.
As the years went by this retirement nest egg grew like crazy. We were starting to feel like we were really “bucking the trend”. What we realized in looking at Mr. Money Mustache’s blog was that we were still on the corporate work treadmill. We were still looking at retirement as beginning in our early-50s, which is fantastic by any standard measure, but maybe the standard measure was screwed up? Maybe instead our current middle-class life was, as MMM puts it “an exploding volcano of wastefulness”.
Back to the shoes. At the time my purchasing habits were geared like the Suze Orman show, Can I afford it? In 2013, my purchasing habits evolved so that now I’m asking myself, should I buy it or would the money be better saved to give our family life options down the road?
We are not a family that will get down to MMM annual spending amounts soon, but it definitely gives us pause to think about how we are spending our money and whether our money is helping us achieve our long-term life goals. We’ve spoken openly with many friends about tightening up our spending so that we can buy our year-long family sabbatical to Spain. Several have readily said that they can think of plenty of spending that they could trim from their budgets. What they lack at this point is a greater goal or greater motivation. It took some big family goals and some hardcore bloggers to make us question what we thought of as status quo, we’re hoping that our story helps some others do the same.
What is your Suze Orman vs. Mr. Money Mustache purchase?
* The terrible work situation steadily got worse for most of my former co-workers and it turns out that I happily escaped a quickly sinking ship and landed on a wonderful new career path.
** Yes, I realize the ridiculousness of these thoughts and am happy to report that I no longer base my professional worthiness by my shoes.