Victory Over Debt, Credit, Frugality – Which Of These Qualify As A Good "Success Story"?

J. D. over at Get Rich Slowly is celebrating 18 months in the personal finance blogospere and as part of the celebration, he asks his readers to share their personal finance success stories. I thought for a while about what to write. First I wanted to brag about going from over $40K in debt to a healthy positive net worth in just six years. But somehow that didn’t feel right. Frankly, I am itching to brag, but I don’t think I will be able to sleep the sleep of the righteous if I do :) So next, I thought of talking about the success we have had with credit card arbitrage. I consider it a bit of a success story because we have gone from being ignorant and piling on debt, to leveraging the credit card to make money from it. But then, I have already talked about it several times before. So, I thought maybe I should talk about my success at an effort to a frugal life style. But, I don’t think I am quite there yet. I am definitely making progress, but not yet at a stage where I can write about it as my “success story”.

And then it occurred to me - my real success story is that I have grown up and become mature in the way I handle my finances. And that is far more important than any individual success stories I can share.

Personal finance and money management is more about attitudes than anything else. Without the right mind set you could be making a $100,000 a year and still not get anywhere. On the other hand, if your have the right mentality, you can still manage to live a proud self-sufficient life right through retirement, even if you have an income of $30,000 and feed a family of five.

I have come a long way from neither knowing nor caring much about money matters. Statements like “spend less than you earn”, “pay yourself first”, “save some for the rainy day”, “don’t try to keep up with the Joneses” to me are no longer just rote catch phrases, but have become a form of secret guiding lights. They seem to influence my decisions without me actually being aware of it. While I still get tempted to buy stuff just because some of my friends have them, I have learnt to rationally think about my temptations and make a conscious decision about whether to buy or not. And during the times when I decide not to buy something, instead of feel deprived, I feel a sense of pride in making the decision that is right for us. And this has helped me to stay free of envy about what my friends own too.

When you start thinking about money all the time (which you do, when you are addicted to personal finance blogging), there is a chance that you could go too far and forget to enjoy today in the attempt to save for tomorrow. We have been fortunate enough to not get into this trap. Tomorrow, if I were to be run over by a bus, I am sure my last thought won’t be “Alas, I have so much money in my savings account that I never got to enjoy” :) Recently, we decided to buy an expensive-ish car. It went against all the best personal finance advice I have ever read. But it was a conscious decision. It has been our dream car and we wanted to buy it some day. So when my faithful 14 year old car died we sat down, took stock of our financial situation and decided to go for it, surprising even ourselves with our decision. It’s been over a couple of months now and we have no regrets. Every time we drive that car, it reminds us of what we have achieved and motivates us to do more. And we have already started paying off the auto loan very aggressively.

On the career front, I have learnt to value my salary whereas earlier I used to only care about the kind of work I did. I still don’t know if this is a good thing or not. But if you are obsessive about the quality of work and tend to get depressed when you aren’t doing something special, it is good to have an alternate thought that brings some satisfaction. I have gone from being disgusted by those that were proud of the dollar amount of their salaries to being one who uses it to calm myself down during times when quality of work just plain sucks. On the frugal living front, I have learnt to enjoy some of the simpler things in life. Why bother paying a heck of a lot of money for something that you can enjoy at a much lower cost? On the relationship front, we are a lot more in tune with each other. On the investing front, we have got over our stock market phobia and dipped our feet into index fund investing. We are aggressively chasing our dream to own property in our home country while at the same time paying off our mortgage here as soon as possible. So, knock on wood, overall we have made a fair amount of growing up and becoming mature. And that I am proud of and have no hassles bragging about :)

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1 Comment:

Frank said...

Nice story and congrats on the Wii!