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[–]segue1007 202 points203 points  (3 children)

Link to the last post for the lazy.

Thank you for sharing your story. And congrats for facing your troubles head-on, two days later. I wish you the best, but it sounds like you're on track for that... Good luck!

[–]duhhobo 7 points8 points  (0 children)

OPs situation would be much worse if he didn't have a decent income. Many people are way over his debt load on student loans alone, and have a way lower earnings potential.

[–]MotherOfDragonflies 145 points146 points  (9 children)

I agree with your FO. I read your original thread and saw all the people saying you should be driving $2,000 car or that a $3,000 total monthly spending was too high for a $125,000 salary and couldn’t help but roll my eyes. The people in this sub can be extreme, but you took it all well. You don’t need to drive a beat up car or save 50% of your monthly income. What you need is to be financially healthy and prioritize what areas you want to spend money on, after your bills, investments and savings are taken care of. And like you said, intentionally saving for those fun purchases.

[–]MattsFinanceThrowdow 9 points10 points  (0 children)

be financially healthy and prioritize what areas you want to spend money on

This.

So. Much. This.

I didn't care for The Millionaire Next Door. Too "frugal" for me. I'm a "car guy", and when the author praised the millionaires for "buying their cars by the pound" I knew the book was not for me.

I read The Wealthy Barber when it first came out in the 1990s, and that's the book that influenced me. IIRC, its general philosophy was to first make sure you are saving what you need for retirement. After that, just enjoy the rest.

Sure, OP is currently living beyond his means and not paying attention to the expenses that add up. But once he gets that under control, there is a vast middle ground between irresponsibility and a Dave Ramsey lifestyle.

Life is meant to be lived.

[–]raznog 5 points6 points  (5 children)

Wait how would 3k/mo be too much for a 125k salary. That’s what my family budgets and it’s tight and we make less than half that.

[–]Vladthewarrior 59 points60 points  (3 children)

Because if you don't drive a 90s civic, live in a broom closet, and eat nothing but your own tears, youre not saving enough according to this sub.

[–]nephrine 16 points17 points  (2 children)

Omg yes lmao. I don't follow this sub closely but do come time to time for interesting posts, and I used to think this joke was an exaggeration.

But no, some of the ppl are really that ridiculous! In the OP's original thread, a lady gave advice to model her own lifestyle - she made 200k+ herself, but lived in a one bedroom apartment with her husband, didn't take vacations, drove an older Hyundai. Good for her for being frugal, but Jesus - when are those people going to live a little?

At some point on the income & age scale, purposefully looking for a beater car and never letting yourself out of the house because most hobbies cost $$ becomes ridiculous and insane, instead of smart.

[–]dmcnelly 6 points7 points  (0 children)

Seriously. Being financially secure is great, but living like a miser with the expectation that "one day I'll get to see the world" is putting an awful lot of hope into the unknown. I keep seeing it happen with family and friends. Save for retirement, never go on trips or buy themselves anything "frivolous" they'd like, then wind up stroking out at 55 and spend the rest of their lives in a Lay-z-boy or a hospital bed.

You've gotta live a little along the way, because you never know if some moron is gonna run a red light and take you with them. You don't have to be extravagant, and you absolutely have to have a plan for the future, but no one is guaranteed tomorrow.

[–]raznog 0 points1 point  (0 children)

Seriously. I get the car thing for some. Like me I don’t care about my car it’s purely about functionality and practicality. But I have other hobbies. I do choose inexpensive ones.

[–]Also_bender 2 points3 points  (0 children)

That's what people were suggesting, but this comment says such strict budgeting is not necessary in this situation.

[–]1101010100010011 112 points113 points  (5 children)

Hey Man, I gave you a bit of shit in the other thread (and totally would again) but it's great to see you actually listened. Too many people come here for advice and end up being combative.

Glad to see you also downloaded YNAB and will give it a shot. Yes, it is work, but you of all people should know that work pays off. If you're forgetful to enter transactions then put a bit note in your wallet to remind you every time you use your debit card. Put a note or reminder in your calendar to reconcile every night. I'm telling you, after a couple months you'll have the habits down and you'll get addicted to watching your net-worth graph grown.

I agree with your finance officer, you DO need to enjoy life now and should be able to buy things you want. It just needs to be a balance. I see too many people here ONLY thinking about retirement and swinging too much that way. You can get hit by a bus tomorrow and never touch all that savings.

[–]BlondieeAggiee 11 points12 points  (4 children)

Amen to living now. My dad saved his whole life for retirement. He and my mom were going to live big in their golden years.

He retired 3 years ago. Mom’s been in a nursing home the last 2, and the first one her health was so poor they couldn’t do anything. Dad is letting himself rot and there isn’t anything I can do to stop it.

[–]happygolucky66 5 points6 points  (2 children)

Man, I'm really sorry about their situation.

My dad passed away in 2016 at the age of 59. He was really broke so there wasn't a retirement, but it makes me stop and think.

I fund my retirement enough that I will be fine, I keep 10-15K for emergencies, and I spend the rest (not needlessly - mostly on travel). People with families have to prioritize other things, but fuck dying with three million dollars in the bank and no life experiences to show for it.

I don't know if this sub is just younger people who haven't run into the "oh yeah you can die before you're 60", older people with families who want to make sure they are taken care of (understandable), or just people scared of being broke, but I disagree with this sub a lot.

I spent 5K on a month long trip across the US and I still have 20K in student loans. This sub would tell me to never take that trip since i have debt! But it's low interest and will be paid off in less than five years. Just not going to stop living until that happens.

Plus, my dad loved that I traveled. I received 8K from a small life insurance policy he had. He would have loved to hear about that trip. I wanted to do something meaningful.

[–]MacanS2017 1 point2 points  (0 children)

I'm in similar boat as you. My dad passed away in 2016. He worked his behind off 6 days a week and saved his money. Although he enjoyed work, I don't think he ever got a chance to experience life to the fullest. So after passing, my brother and I have both just been living life to the fullest. I have student loans, mortgage, car note, but I REFUSE to spend the next 5 - 10 years trying to be aggressive and pay it all off and sacrificing life experiences to do so. Life is short! Really short!

[–]itallmatters610 0 points1 point  (0 children)

I agree with you on the student loans. Mine won't be paid off for another 15 years. But the interest is under 5% and they are all federal loans. If I die, they disappear and wont be a burden on my family. I'd rather use my extra money for living now and saving for the future.

If the rates were higher or they were private loans, I would be far more motivates to pay them off.

[–]amglu 4 points5 points  (0 children)

that is so sad wow. Im sorry.

[–][deleted] 24 points25 points  (7 children)

He taught me a few things that PF may disagree with, but I'll tell you anyway. He said to me there is no shame in wanting or having nice things. People are different and have different vices. The most frugal people you know may have the strangest love for cigar cutters, and may be willing to collect expensive or hard to find cigar cutters for them selves. The extravagance may not present it self like a nice watch or a pricey car- but everyone has the right to be happy materially and emotionally as long as it is not harming your financial potential and future. If you are making 250k, a $700 car payment may not hurt you or even be a dent in your pocket- some people will say it's too high but if it makes you happy and it's not effecting your financial goals negatively- live it up, to a limit.

I don't think anyone here will disagree with the sentiment that money exists only to allow you to live your life. However, our culture has a pernicious and dangerous belief held as sacrosanct that I will call "You Deserve It" that I think we all need to consciously counteract in order to be financially secure.

"You Deserve It" says that your personal happiness can always be enhanced through purchases. You have a decent couch now, but it's a middle-class couch. It's kind of homely, don't you think? You deserve a fancy leather sofa. It's $3000 but hey, you deserve it! You work so hard! When you buy that new sofa you will feel great.. for a few weeks or months. Then it becomes just another sofa. Just another thing in your home that gathers dust, pet hair, and so on. The magic of the new purchase does not last forever.

"You Deserve It" says that not just having new things but the act of buying itself can enhance your happiness. This is a dangerous idea if followed to its logical conclusion.

[–]prettyplum32 2 points3 points  (5 children)

Very true. Does this car at 700 a month bring the same happiness as a car at maybe 500 a month? 400? 300? Most definitely. It’s all about finding that balance between “x makes me happy” and “x will make me happy”. Actual happy people know what makes them happy, and they don’t blow tons of money/effort/stress above that threshold because they understand it won’t increase their happiness at all.

The couch is a great example, actually, because I just bought a new couch. My Husband and I have had our couch since we moved in- 8 years or so? And it was bad. Not only was it past its years in terms of comfort, we found we couldn’t both comfortably lounge on it, it was too small. So we shopped around and found a screaming deal on a couch with a chaise. There is nothing really different about this couch, and the couch itself doesn’t bring any happiness, it’s not that it’s new and not beat up by our cats (yet) and has new fluffy pillows etc- my husband and I can now both lounge comfortably when we watch the tv shows we follow together, and THAT is what brings us happiness in this instance.

[–]plasmastic 39 points40 points  (0 children)

Agree, you don’t have to not spend money on things you enjoy, just don’t do it at the expense of your ability to provide a savings/investment in your future.

Congratulations on the plan and I wish you nothing but the best.

[–]chevymonza 5 points6 points  (0 children)

Visit r/anticonsumption for some possible motivation on buying less!

Also, read reviews of nearly everything before you buy it. If you don't buy something ASAP, chances are extreeeemely good that you'll have a chance later on. Usually, after reading product reviews, I see something that puts me off and I end up not wanting it.

Anyway. Congratulations on these important first steps!

[–][deleted] 6 points7 points  (1 child)

I think you should look at your company’s expenses as well.

It’s not uncommon for some minor theft to be happening in their company’s finances when they are a bit clueless about their own finances.

[–]124boxer 2 points3 points  (0 children)

True, thankfully my FO is someone I trust with my life. He's worked with me since I opened my first business, and previously worked with my in laws.

Even if he was stealing a bit or expensing somethings...I honestly would consider it a cost of doing business at this point.

[–]PsychometricGen 22 points23 points  (31 children)

Great story in the sense that you're recalibrating your outlook on personal finance without falling into a deep, dark money hole.

I just recently commented on a recent post as well that I'll share here. In addition, I believe that the topic of personal finance is fundamentally tied into the perception of self-worth, self-value, and expectation.

Do not be afraid to express yourself in reality. This is an essential 'skill' that takes much introspection. A 'good' and 'bad' situation is derived from comparison and relativity. For quick scope, I'm a C level executive in a multinational organization that spreads from Canada, the USA, China, and the UK. I make in excess of 400k per annum as a base salary with very large performance bonuses, I live in Southern California, I have a multimillion dollar portfolio of investments and savings and I'm in my very early 30's. No doubt about it, I do NOT live ultra frugally, I enjoy nice things (see below :)), but I live dramatically below what I am able to do along with the expectation of how I should be living. My major splurge is the home that I live in, which is in a premiere community and is a very sizable house, so to speak. I have 0 debt, including my house.

In my early 20s, I was making good money and let the lifestyle creep impact me. In retrospect, I spent money to shore up my inadequacies in ego, self-confidence, and self-worth. I thought being a certain position means living a certain way, and what a mistake that was. The cars, the clothes, the luxury items are all designed towards brand association and living a certain lifestyle with certain expectations. I began to realize that other people designed these items, people marketed it towards me, and I got suckered into drinking the kool-aid that drives these types of company's bottom lines. It was not and could not be representative of ME. WHO I was and WHAT I was all about. How can an assortment of material items in combination 'create' who you are. To me that is not and cannot be the fundamental human experience. Perhaps more importantly I learned that I would not make that my human experience.

Freedom is oft a very difficult and nebulous concept open for interpretation. A short bite sized look into how I view freedom is given a scenario in which one has the capability to decide between options of food, what does one choose? In my bracket, I can easily dine at whatever restaurants I want, but to me, I prefer a Big Mac meal compared to a 18oz Tomahawk simply because I have fond memories growing up (who didn't, and don't worry I'm typically very healthy :P), so given a choice, I will choose the Big Mac meal 99/100 if it's just my choice. To me, that's freedom. Freedom from societal pressure and perceived expectation to simply make the decision that YOU want to make. Openly, I never grew up eating Wagyu A5, foie gras, and truffles so I have no association with it. I grew up eating home cooking and cheaper fare, that's part of my life experience growing up with my family and loved ones so I will ALWAYS hold that more fondly to my heart. I work in a fast paced, high level environment with high pay, and my employees and the rest of the C staff of my current company found it my choices and the way I view my personal decision makings in regards to personal finance very unusual during my onboarding phase but it didn't matter to me and as I speak candidly with other executives they've found my method extremely admirable. Just be real and true to what you want to do.

"Much of the pressure points derive from expectation, stereotyping, and marketing to keep up with the Joneses. I have extensive experience in marketing since my industry is in fast moving consumer goods and from this side of the lens, the pressure and design of marketing really shapes internal decision making (hence the efficacy and use of marketing). You are NOT in a lesser position if you choose a 2005 Camry over a 2018 GT3RS, but the societal expectation created from marketing campaigns, brand association, and the idea of self worth/value create this primary pressure to 'spend into an expectation of who you should be.' I live in a very high CoL community, one of the most expensive communities in California. My neighbors drive, easily, multiples of 100K+ (Actually, about 150k+. The amount of G-Wagens, Porsches, and Maseratis is staggering) and yet I don't give a damn what they think that we drive reasonably outfitted, still (to me) luxurious cars that are a pittance in comparison to what they drive. Honestly their wheels and seats probably cost more than my vehicles. I wear Timex exclusively, my current watch is $45 because principally I want to know the time, not how much my watch costs. Frankly, I am not a prototypical spender in my bracket, but I also don't care. My SO makes 65K a year and has an even more spartan spending habit than myself, so we spend no money on gifts to each other, we will go out and spend money on a nice dinner or a quick weekend trip. Even more so, I have a personal assistant (what a luxury, I know) at work and my budget on lunches is quite literally less than $5.00 a day. I'm an executive eating dollar sandwiches, kids meals (they are well balanced and affordable), and cheaper fare purely by choice or I will prepare my own meals to bring. I refuse to patronize coffee shops (as I am not a big coffee guy), so I buy caffeine pills bulk for my pick me up. I refuse to buy expensive alcohol for home or eating out since I don't pretend to have the palette to understand the difference."

[–]124boxer 3 points4 points  (1 child)

Great examples, thank you for that. And congrats on all your success thus far!

[–]PsychometricGen 2 points3 points  (0 children)

Thanks! Success is a phase, and in this case, it's in relation to money.

[–]planet__express 1 point2 points  (0 children)

Is your company hiring? I'd love to work for someone with your way of thinking.

[–]azuresou1 6 points7 points  (21 children)

You are NOT in a lesser position if you choose a 2005 Camry over a 2018 GT3RS

I don't agree with this part. Safety standards have SIGNIFICANTLY improved since 2005, and driving an old ass car should not be a badge of pride.

[–]PsychometricGen 36 points37 points  (0 children)

You are correct, that is a mistake on my part. You make a great point that I didn't consider. Perhaps a more relevant comparison is 2018 Camry over a 2018 GT3RS.

[–]MeiFrancis 3 points4 points  (8 children)

Weeelll, I find my 2008 Sebring to be a badge of pride. It’s the only car of this sort parked at work, between Lexus’ , Audi Quattros etc. BUT here I am, with pretty solid confidence and money to spend on things I care about more than proving people something by the car I drive. Safety matters, sure. I wouldn’t jump as far as 2005 but 2008 Camry was a good model. My rule is buying up to a 10y old car. Anything older might just be a negative based on repairs and maintenance. 6-7 year old car is my personal sweet spot! It all comes down to: are you happy with yourself or do you need to flash people of how happy you are?

[–]twolvezfan 1 point2 points  (3 children)

I love my 97 Lexus and it's been very reliable.

[–]Reigningchamp4eva 1 point2 points  (2 children)

Cool, but it’s a death trap compared to cars today lol. It’s honestly shocking how much safety has improved and how bad older cars are/were.

[–]twolvezfan 0 points1 point  (1 child)

I doubt it. Things a tank. Put a 68 charger head on with a smart car at 60 mph and see who walks away.

[–]fragilespleen 7 points8 points  (8 children)

But paying 800 bucks a month on a car lease should be a pretty good sign you don't make good financial decisions.

[–]kingchilifrito 5 points6 points  (0 children)

Yeah that's not the point

[–]Micaylacathleen 0 points1 point  (0 children)

Absolutely loved everything about your response, thank you

[–]haltingpoint 0 points1 point  (3 children)

Would you be able to share more of your story? Is it your company? In struggling to break into the executive level at a similar age and don't know what I'm missing. I feel like there aren't any great books on making that leap and the main way to get there at such a young age is to have it be your company or a super early employee.

I'm in an area with a very strong job market, but hate the idea of needing to continue jumping around to grow. Likewise, I have dreams of starting my own business some day and being FIREd and I'm not sure if that is compatible with the executive track. I'm on the marketing side if things fwiw and am consistently viewed as a top performer. I've managed teams of various sizes in my career. I don't have an MBA but definitely can hold my own against any marketing exec I've met, and then some on business matters and strategy. I just can't seem to take this next step.

[–]PsychometricGen 1 point2 points  (2 children)

In my formative years, I was fortunate to be able to start up and run my own companies while working in middle management. They were small, less than 5 people, and I eventually shuttered them, but it allowed for a greater insight into the very essence of entrepreneurship from genesis. I started in the small business sector of my industry, had fortunate positions, and rose quickly. The company in which I worked first for exploded in growth (which in small business isn't quite as dramatic as you'd expect) around the beginning of the 3rd year and I led that division and expansion, eventually taking the most senior management position in that company by the end of that 3rd year. Around that time a medium sized business in my industry terminated their Director of Operations, I had a relationship with their President from business engagements from my last position and his vision of his company's direction aligned with my skills, experience, and most importantly youth (this was possibly the most fortuitous event). I onboarded and it was jumping straight into the deep end of the pool to what I had experience wise. This was the critical transitory period that broke the glass ceiling if you will. Simultaneously, our sector hit a market slump across the board while my company vastly outperformed our competitors and posted growth across Nielsen channels. I would like to believe that I had a pivotal role in that, but experience lends a little wisdom in that mechanisms often move beyond your direct control and positioning yourself appropriately can be all the difference and you just happen to be on the single boat that rode the rising tide. I then moved into a larger company where I am today. I doubt I would be in the position I am today if I hadn't been given quite an extension of faith.

I cannot define what will be the best path for you as that is far too difficult given the stochasticity of life and the vast amount of variables that have to align to be in a position that is beyond the expected norm (in this case an officer in a sizeable enterprise). If a sequence of events in my career changed, where I am today could be diametrically opposite to where it is.

Working from the small business and start-up side and up, it broadens your scope of knowledge immensely. Whereas in larger enterprises field of expertise and scope of responsibility is typically more dialed in and more narrow in focus, the inherent nature of small staffs somewhat dictate a coalescence of 'silos' in that senior management typically have to wear more hats and have to be, at the least, conversant in more fields such as staffing, accounting, operations, compliance, etc. Positions that require more overarching responsibilities typically require an elevated understanding of many fields at once in order to form concise, precise, and effective decisions. From one viewpoint, reaching that position is just the start of the journey as once you step into that role, the next step may be to be, quite literally, the top performer in your entire industry. Today, I am not the highest paid executive in my industry nor am I, by whatever standard, the best at what I do. There are far larger companies in my field with much larger operations, revenue, brand recognition, etc. There are individuals slightly older than I that hold equivalent positions to mine own in these companies. 'Keeping it real' and being true is also imperative and conducive to self-growth and continuous improvement.

Your career and you yourself improves iteration by iteration. An important mentality to hold is the continuous groundedness of self, the desire to learn, to evolve, and to analyze yourself as truly as possible throughout life. Titles, authority, and pay should not empower you to do your job but rather be the result of your ability to empower the environment around you.

edited for grammatical mistakes

[–]Reigningchamp4eva 0 points1 point  (1 child)

“Yeah but can I have that life without any of the risks of actually starting businesses myself?” - Reddit.

In all seriousness that was a good read, thanks!

[–]PsychometricGen 1 point2 points  (0 children)

Heh, well I would say yes to that statement. There's nothing open and shut, black and white, formulaic. Typically it would require you to follow a more traditional career track towards whatever you are attaining for. If you want to accelerate beyond the norm, you have to be willing to do things and be successful beyond standard expectation. So yes, you can! But it'll most likely require some incredible display of skill, the right company environment, the right industry, and everything to fall into place. So odds are, of course, against you as they typically are.

Risk and how you demonstrate striving in environments and engagements of high risk are an essential skill. If you aren't willing to risk your own time and future, it's a bit difficult to say you are in position to do the same for a company and all of the employees, but that's what high level business will put you into. You can track the successes and failures of campaigns and decisions of companies so it's important to understand that someone or a group of people had to make that decision.

[–]jerseycash5 5 points6 points  (0 children)

I hate vanity, I think it’s one of man’s most shameful vices. That said it sounds like you’ve learned this on your own. All I’d say it doesn’t matter what kind of car you drive if you can’t sleep comfortably in bed at night. Status is worth nothing.

[–]PlayWithPanache 4 points5 points  (3 children)

Congratulations. Glad you got there before it was too late. My stepdad didn't, made a 6 figure income and blew it all trying to impress people, lying to everyone about having a nest egg the whole time. Now he's too sick to work and they're trying to scrape by on Mom's income plus ssdi. At this rate there will be no retirement.

You did the right thing, is what I'm trying to say. Of that, have no doubt.

[–]bearposters 0 points1 point  (2 children)

How could your mom not know there was no nest egg?! Not her fault but my wife knows about every dime that moves in and out of our accounts. Sorry for the hard times.

[–]craisinfan 0 points1 point  (0 children)

My dad is like this. It's a bit of denial. He just accepts that everything is alright because my mom says so. His brain created a nice denial of reality veil for his eyes.

[–]PlayWithPanache 0 points1 point  (0 children)

All I can say is my dad is an expert at deception and manipulation, and also as we discovered a compulsive liar. There were a lot of farfetched but plausible stories about having a lot of pre-marriage assets tied up in commodities and intellectual property, supposedly to keep it out of the hands of his ex wife, and very little of which actually seems to have existed for any real length of time.

[–]Omikron 3 points4 points  (1 child)

How is your wife so clueless about your finances? I don't understand that at all.

[–]124boxer 1 point2 points  (0 children)

I wouldn't say clue less, I'd say that it wasn't a conversation that dominated our relationship considering we have always had enough.

[–]Hobbes_XXV 4 points5 points  (2 children)

This story sorta reminds me of the office when michael asks oscar for financial advice and oscar looks over his expenses and goes...wow.

[–]124boxer 4 points5 points  (1 child)

lol I thought of that myself. Luckily I don't spend hundreds in magazine subscriptions a month like Michael.

Or promise 25 kids college tuition- cringe.

[–]Hobbes_XXV 0 points1 point  (0 children)

Hahaha, that was a great episode lmao

[–]PhonyUsername 3 points4 points  (0 children)

I doubt anyone would shame you for spending a percentage of your income on luxuries if you weren't upside down. It's that luxuries shouldn't be prioritized over bills, debts, savings, retirement.

[–]LebronShades 3 points4 points  (2 children)

This is pretty normal dude. It may not be for you, but its normal.

[–]124boxer 1 point2 points  (1 child)

I don't understand?

[–]WeAre0ne1 23 points24 points  (8 children)

Damn OP. Crying on an airplane reading this. You done good. You put your wife first by bringing open accountability into your marriage. Celebrate that love Best wishes!

[–]124boxer 17 points18 points  (5 children)

Same here I was crying talking to her.

[–]brainchasm 36 points37 points  (3 children)

Don't be surprised if you start to notice that she thinks this whole thing is the most attractive thing you've done in a looong time.

You admitted to not being perfect. You made a plan. You took action.

You showed vulnerability, and then showed strength and intelligence, without hubris. That's being "the man". And women love that shit.

[–]124boxer 5 points6 points  (2 children)

I sure hope so!

[–]Callmedory 0 points1 point  (0 children)

Damn! That is a very attractive feature in a person!!!

[–]Mr_Robotto 8 points9 points  (0 children)

This is more relationship advice than PF, but as a long-time married man I’d suggest you bring your wife into the conversation earlier with future decisions. It seems like your approach was to come up with a solution and then tell her about it, but if you truly have a supportive wife who’s financially literate then you should go to her before your CFO next time. That first conversation is the hardest, so you’re already over the hump, but it sounds like she might be your most valuable resource for figuring out how to stay out of this mess.

Good luck OP!

[–]sometimesihelp 2 points3 points  (0 children)

I don't think any PFers would agree that there is shame in wanting nice things. The importance is knowing when we can or cannot really afford those things.

If you earn more you can spend more just remember to keep it in proportion so that it is affordable (like the frugals who have cigar cutter tastes).

I'd love a luxury car; technically I can even afford one. But I don't buy one because the reality I wouldn't have much left afterwards and that isn't good for my overall financial health.

In your case you found you could technically afford your old lifestyle but that ultimately it wasn't good overall. You have the opportunity to change and have started down that path - I hope you enjoy the journey.

[–]luizereal 5 points6 points  (0 children)

you found a keeper! don't lose her

[–]feelingmyage 1 point2 points  (0 children)

Good for you! You’re doing great already! Best wishes. :)

[–]chrisb5583 1 point2 points  (0 children)

Good work. Automate as much as you can. Decide your savings rate and have that immediately moved to savings each month. You can continue to work hard and enjoy the things you really love, but now you have an actual idea of what your disposable income is.

[–]MaximumCameage 1 point2 points  (1 child)

Good on you for getting it under control and getting honest with those around you before it turned into an absolute house of cards and spiraled out of control and beyond help.

You did what Ponzi schemers don't do. You looked at everything and said, "This isn't going to last, I need to fix this now." And you actively made steps to fix it.

For clarification, I'm not suggesting you run a Ponzi scheme, I'm saying the people who do have the mentality of, "Instead of fixing the problem, what can I do to keep the charade going?" and that's how little old ladies in Idaho get bilked out of their life savings. So you deserve extra credit for getting honest with your personal situation and coming clean to your wife. That shit is hard.

[–]124boxer 0 points1 point  (0 children)

Thank you so much!

[–]One_Left_Shoe 1 point2 points  (4 children)

First off: congratulations! Stick with it. I think you're going to be fine.

The most frugal people you know may have the strangest love for cigar cutters, and may be willing to collect expensive or hard to find cigar cutters for them selves. The extravagance may not present it self like a nice watch or a pricey car- but everyone has the right to be happy materially and emotionally as long as it is not harming your financial potential and future.

That is the truest shit ever, and it's true for virtually everyone I know. Broke or not, if it's something saved up for or within their financial ability, they have some kind of vice they will spend money on. Just make sure that those loves/vices are still within the realm of financial reason.

Finally, I just want to empathize with you on feeling like a sham or living a lie. I also own my own business and am therefore, for better or worse, the face of the company (well, my wife and I) and therefore have to look the part to the public. The truth is that we're pretty broke most of the time. However, we can't put that image forward because no one wants to do business with someone that looks/acts like they are financially struggling. Bad for public image. I'm working on it and building savings, but just wanted to put out there that you aren't alone in living/looking like you're financially sound or wealthy when you are, in fact, not as wealthy as others perceive.

Good luck.

[–]famousmike444 1 point2 points  (0 children)

Do you think your employees may be suffering from something similar? As a financial planner I will tell you that many of them are.

Considering including financial planning as an employee benefit or usuing a retirement plan provider that offers actual planning resources for your employees, they need the help too!

[–]wilsonw 6 points7 points  (1 child)

Um... congrats I guess.

[–]124boxer 5 points6 points  (0 children)

Thanks, I guess.

[–]cacille 2 points3 points  (0 children)

Why is Dave Ramsey's really informative, down to earth, plain as day, clearly spoken, basic English, free to watch hundreds of Youtube Videos on this subject not even casually mentioned yet? OP, his baby steps are great. Go look on Youtube under Dave Ramsey and just watch like 10 videos in a row or whatever. Some people here don't like his investment advice and kinda snub him but really they are picking nits.

[–]reddituser0071 2 points3 points  (0 children)

If you are making 250k, a $700 car payment may not hurt you or even be a dent in your pocket

if your making 250k why do you need to have debt on a car at all?

This woman makes the same amount I do, and has not a dime in debt, a $400 car payment which is over next march

A car payment is debt.

[–]Mad_Scientist_565 9 points10 points  (8 children)

250k household? Stfu and stop being a childish brat. Not many people are fortunate enough yo own 2 companies at 29 or have a spouse that makes as much as they do. You have a duty to act like a responisble adult and quit wasting money. And You have a duty to your employees to have enough cash on hand to see through a couple months of slow down.

[–]EventHorizon67 3 points4 points  (0 children)

Wealthy people can still have money problems just like us poor folk. I know it's hard to imagine.

[–]124boxer 10 points11 points  (2 children)

Not being childish, I was being irresponsible. I didn't realize the position I was in, privileged or not.

One of my mentors told me that 2 Granny Smith apples should in theory taste identical. However give one to a starving child and give one to a man who eats an apple daily- who will enjoy the taste more and say theirs tastes better? The child of course.

Point being, yes 250k is a respectable household income- that doesn't deny me the right to make mistakes, feel fear, or search for ways to improve.

[–][deleted] 1 point2 points  (1 child)

Seriously! Couldn't agree more.

[–]romanticheart 3 points4 points  (0 children)

I try to give people the benefit of the doubt but I have a hard time feeling sorry for people being bad with money when they make $250k/year in the household.

[–]bigmoneywoes 3 points4 points  (9 children)

Why did you cut up your credit cards? Why is that good?

[–][deleted] 11 points12 points  (7 children)

a lot of people can't resist using debt if it's ready available in their wallet in the form of a plastic card. when you cut them into little pieces it renders them useless, thus preventing the unnecessary usage of credit. hope this helps

[–][deleted] 2 points3 points  (0 children)

Because he had a hard time abusing it. For every one person that get's a few miles and earns a few bucks with a credit card, there are dozens that spend WAY too much with it and need to get rid of them.

[–][deleted] 0 points1 point  (0 children)

Wow! Good for you! Super proud of what you are doing!

[–]eightdrunkengods 0 points1 point  (0 children)

Yah, Happy Ending! Or possibly Happy Beginning!

Well done.

[–]pompousfucktwat 0 points1 point  (0 children)

Congratulations! I read your original post as well and I am proud of you!

I used YNAB for a long time. Don’t underestimate their training sessions, they are seriously useful. Also hit up r/ynab, super helpful people when you have questions. Best of luck!!!

[–]groovy94 0 points1 point  (0 children)

Hey, I'm a little late to the party, but thought I'd chime in. I'm also a small business owner with around $100k in take-home pay plus whatever my business profit and cash situation calls for in any given year - some years may have lots of profit that all goes back into equipment purchases, some years the cash just piles up with nothing to be spent on, and others the profits are much lower.

Before buying my business, I spent 20 years or so in corporate America making $50k to $80k, and I find there are significant differences in how to approach finances between those two cases.

Depending on the success of your business, a significant portion of your "wealth" at any given time may be tied up in your business - the value of the business if you were to sell, the cash the business has on hand, etc. This rather changes how the personal finance guidelines you'll read in books apply to you, I think. For example, if you own a successful business, the amount of money in your retirement funds may be lower than someone else who makes the same money you do in a traditional salary because they don't have that business value asset sitting there. Likewise, you might get away with a smaller emergency fund if your business already has a cash buffer and an empty line of credit available at any given time - obviously, this will depend on how likely it is that your business can fall on hard times. If you're selling designer purses, you're probably in a more precarious situation than you are if you're the only local player in a recession-resistant niche, so you have to factor all of that in.

Anyway, long story short, the way I approach all this is to pay myself the same amount in a pay check every week of the year that's feasible for the business even in a down year and do a budget based on that, which includes maxing out my Simple IRA (like a 401k for very small businesses), a Roth IRA and my wife's traditional IRA, all of our living expenses, and hopefully having just a little left over. Then whatever extra profit distributions I can take cover things like bigger vacations, home renovations, etc.

One helpful trick my wife and I do is we each have a 'fun money' checking account with debit card and with overdrafts disabled and dump $X into them every week. Then we each buy lunches out, toys and whatnot out of those. That might be an easy way to help pace yourself.

Sounds like you're on the right track, though, and good luck!

[–]thebigFATbitch 0 points1 point  (2 children)

This is totally not the point of your post but if your wife has a $400 car payment then she has debt. But good for her for not having credit card debt!

Anyway - do you guys combine finances? Because you could easily pay off your student loans and all your debts by combining finances.

[–]gab_monet 0 points1 point  (0 children)

Just want you to know, i’m really really proud of you. Financial problems or worries can be awful to talk about, but there’s no shame in doing it. You are one brave human :)

[–]Anonomonomous 0 points1 point  (0 children)

Get the audiobook version of 'The Richest Man in Babylon'.

You're in the perfect place in your life to learn the awesome mindset it teaches. I'm 56 & this book did more for me than the 5 decades of life beforehand.

It addresses financial issues but the mindset is what will rock your world.

[–]Bearly_Their 0 points1 point  (0 children)

Congratulations on the steps you’ve taken to change your mindset and move in a new direction.

Personally, I agree with your Financial Officer. There is nothing wrong with having nice things and treating yourself, if (and only if) those are the things that add value to your life, you consciously choose to have them in your life (i.e. you’re not just following trends or impulse-buying), AND they don’t have a negative impact on your finances. It’s about living a rich life, whatever that means to you.

For example, I just paid for an industry conference out of pocket. Anyone who learned that I was personally funding the trip balked at my decision. But, I personally value industry conferences. I believe in the value to my employer, for my own professional development, and my own personal enjoyment. It’s part of what a rich life means to me and was something I was able to do while keeping my personal finances on track, so why not?!

Of course, all of this comes AFTER you change your mindset about money, which it sounds like you’ve gotten a good start on. I missed your original post, but I get the impression you’re younger than I am. If that’s the case, despite your setbacks, you’re still ahead of the pack.

[–]LanceBOON 0 points1 point  (0 children)

Stoked on all the changes you are making! There is definitely something to be said about being proud of being frugal. You gain more appreciation for the things you have and start to realize how much shit is shoved into our faces that isn’t needed at all. Your happiness will start to feel much more genuine and that is a good place to be. Only thing I would say is I’ve heard you never want to stop using a credit card completely or else you will lose all credit associated with that line, I’ve heard making a small purchase like a pack of gum every couple months to show activity is good for your credit score while you pay it down. Other people on here will probably be able to tell you if that is true or not with more certainty, but if having a credit card available is too much pressure then it probably is a better thing to just have it cut up. Wish you the best!

[–]chevymonza 0 points1 point  (0 children)

Even if you have the "look" of wealth, you're probably not fooling those who know you.

But there's no rule that says you have to wear shabby clothing and look homeless if you're on a budget. A little bit of style can go a long way.

[–]Happy1899 0 points1 point  (0 children)

So do 90% of Americans. They buy cars and houses that they can barely make the payments on to “seem” like they are higher class than hey are. It’s sad people feel the need to do this

[–]funobtainium 0 points1 point  (0 children)

He taught me a few things that PF may disagree with, but I'll tell you anyway. He said to me there is no shame in wanting or having nice things. People are different and have different vices. The most frugal people you know may have the strangest love for cigar cutters, and may be willing to collect expensive or hard to find cigar cutters for them selves. The extravagance may not present it self like a nice watch or a pricey car- but everyone has the right to be happy materially and emotionally as long as it is not harming your financial potential and future.

The last part of this is the key.

Whether you are a high earner or somewhere in the middle with some disposable income, if you're already saving for retirement and have an emergency fund and your needs covered, yes, you can have some things you want.

Just not everything you want.

A person with many millions is able to travel much more than the average earner, but buying and maintaining a private jet still might be an unworkable extravagance. You've got to be realistic.

[–]WorldlyTraveller 0 points1 point  (0 children)

Regarding YNAB, there is a useful sub at /r/ynab. Also, YNAB does free online live classes for people that need help with using it.

https://www.youneedabudget.com/learn/

Not sure what the benefit of using Mint & YNAB would be. I've never used Mint before but from what I gather it's more of a retrospective rather than one that actively plans going forward.

[–]luibot 0 points1 point  (0 children)

You’re an inspiration , I have been financially shitty to say the least and not truthful it cost me the love of my life. (Gf) I hope every one that read this takes it to heart.