Whenever the posts show on the internet about financial status in the country and around the world, I feel fairly blessed. While I don't live in a poor state or have a stellar paycheck, I know I am living beyond the dreams of avarice compared to most people. One faculty member told me last week that he finally caught up on his bills. Another told me a few months ago that by the end of this year they will finally be debt free except for their house. Another professor dumped his long term girlfriend because she "bled money". My bishop's son told me that he and his new bride have $15,000 in student debt between them. I have a friend who is in grad school and sometimes runs out of food. It's been so long since I was in that place, that I don't appreciate not having to worry about it. I remember it well. I was married then too.
Historically, I live better than most people ever have, including many "affluent" people of yesteryear. Most of my ancestors would consider me wealthier than they ever imagined. I have climate control, indoor plumbing, electricity, and the ability to buy whatever food I like any time of the year. Some of them never traveled at all, and few of them found themselves able to collect old books, numismatic items, historical artifacts, tools, etc. In all of history, most people were subsistence farmers, and I think they would be aghast to learn I garden "for fun". Even today, many countries are reeling in debt, poverty, disease, and famine. By the statistics, based on my per person household income, I'm in the top 10% of wealthy people even today and in the top 50% of Americans. The best financial decision I ever made was to get divorced, but that's another story.
Compared to other Americans, I live better than most despite my modest income. Many of my neighbors proudly display their belongings in an essentially vain attempt at one-upmanship. I don't mind if you own things; I rather suspect however that their things own them. I see license plate holders on fancy cars that proclaim purchases made at places that charge confiscatory interest rates, and I shudder every time I see a student drop their smartphone, knowing that those things are not cheap. I am already to the stage in expenses where I buy things because they need replacing or because I don't own enough. I was never really interested in keeping up with the Joneses or with putting on a show, so even though I have two cars, the "nicer" one is simply in better aesthetic condition and is still 11 years old. I don't live beyond my means. I have food in the pantry, clothes on my back, and money left over from every paycheck. I have coworkers who can't say that.
I learned early on that the outcome of your income matters more than the size of your income. Far too many people expand their expenses with their income. When new professors make tenure, most of them immediately finally buy their first new car or their dream car. I find it odd to commit to swim in debt just because you finally have a steady paycheck. I however get no additional satisfaction out of having $1000 extra than $100 extra, because extra money is discretionary. True, I work my way down the wishlist of "what if" and buy myself things I think I desire to travel to places I desire to see, but otherwise the greatest feeling is when the outcome of your income is that your income exceeds your outcome. One fellow I know years ago became a millionaire at 23 and immediately bought a Ferrari. Now that he's a pauper again, his friends and stuff is all gone. I rather think that some people will spend everything they earn if they can no matter how large their paycheck is, and I have very little interest in spending time with people who don't understand the value thereof.
It's been so long since I lived paycheck to paycheck, that I forget how many people live that way. I have some coworkers who, despite having two incomes in their household, struggle to make their bills and stagger under mountains of debt. Our society is awash with debt, from cars to homes to student loans to spending addictions. I already mentioned the family I helped move after they were evicted for inability to pay rent. I have a dear friend in graduate school who also barely makes ends meet. I have enough, by contrast, to not only pay all of my bills but also to do what I like and buy what I desire (within reason) every year, and even if a disaster struck, I do have six months salary in savings for use in an emergency and money in my IRA.
Extra money gives you independence because it gives you options. You don't have to decide which bill to ignore. You don't have to decide which child to leave out at Christmas. You don't have to split small amounts of food into many mouths. There was a famous Hollywood actor, the story goes, who kept $1000 in a drawer in his office. This was his "walking away money". If he was offered a role he didn't want, he knew he had $1000 in his desk and didn't have to take it if he found it illegal, unethical or immoral. He didn't have to rely on others. Now, that was decades ago, but imagine how it might empower you to know that, whatever disaster may strike, you have $1000 sitting around. You don't have to accept the terms. You have options. You can walk away. You are free.
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