This post was inspired by the recent Get Rich Slowly article on pushing vs. relaxing in personal finances. A “pushing” phase is when you are super intense about your finances and making sacrifices in other areas of your life, like relationships and health. Circumstances that should bring about pushing are living beyond your means, feeling a lot of stress about your finances, or when you are nearing default on a loan. Similarly, Dave Ramsey would say that you should be “gazelle intense” while paying off non-mortgage debt. A relaxing phase is when your finances aren’t stressing you out and you can moreover coast. The author suggests that the normal course of events is to push for a period in your life and then relax for the rest.
I think there are circumstances besides debt payoff that could bring about pushing in one’s financial life, like saving for a big goal or living on one income when one had been accustomed to two.
In thinking about my own life, I can’t point to a period in the past when I pushed so intensely that I sacrificed in other areas. I have a pretty tame debt payoff story. However, I can fully anticipate that we will have some periods in our future when we might want to push with our finances. For just one example: We want to buy a home in San Diego (if everything goes exactly how we dream it will), which will mean saving up a huge down payment and then taking on a ginormous mortgage. While saving for the down payment, we’ll probably live somewhere tiny and cheap to free up cash flow, which to us would be “pushing.” We also want to have kids, which could certainly introduce some “push”-worthy circumstances regarding balancing employment with childcare.
But I don’t think we’re completely relaxed now – more so automated. Or maybe that is balanced between pushing and coasting? Perhaps, to other people’s eyes, we even look like we’re pushing. We’re certainly doing a lot better with saving and spending in high-value areas than we did when we first started grad school. We increased our retirement savings rate from 10% (me) and 0% (Kyle) to 17.5% now. An $80/month eating-out budget is not exactly “you don’t see the inside of a restaurant unless you’re working there!” but it could be challenging for some people. Not everyone is cut out to have a Republic Wireless smartphone, either. 🙂 But we’ve made all these changes so gradually that we have been able to assimilate each one with relative ease. That doesn’t feel like pushing but it’s not nothing, either.
I would say that if we are really putting effort into any area of our finances, it’s budgeting/tracking and our targeted savings accounts system. We’re regimented in the way we use money from our targeted savings accounts, treat extra income, and zero out every month. But this isn’t a deprivation issue or anything like that, just a system that we’ve put in place.
What areas of your finances do you push in and which do you relax in? Have you pushed in the past or do you see pushing in your future?
photo from Free Digital Photos