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Going broke by earning more money

guest post
The following is a guest post from Jason, a.k.a “Frugal Dad.” Jason writes about frugal living, personal finances, and a few other topics at his blog, FrugalDad.

One of the more challenging aspects of handling money is figuring out what to do when we get more of it. If you are like me, in the past I’ve spent every dime of additional “found” money, raises, and small windfalls. It’s bad enough to fritter away the additional cash, but often we do something even worse–we ramp up our lifestyles to match our new income.

Earn More, Spend More

Back when I started out my career I used to think, “If I only made $10,000 more. I’d be set!” Well, that was a couple ten thousand dollars ago and I’m still not “set.” In fact, in many ways I became worse off over time as my spending increased beyond my new earnings, leading to the accumulation of debt and payments for stuff I really couldn’t afford. You know how it goes: Just got a raise and promotion so I’ll need to dress nicer. Off to buy new clothes. Now that I am a manager I’ll need to upgrade that beater I’ve been driving or people might think I’m still broke. And no more motel vacations across from the beach for us, we are renting that condo that’s been blocking our view all these years. It’s a never-ending pursuit of something bigger and better.

Upgrading Lifestyle, Downgrading Our Future

The steady upgrading of our lifestyle eventually caught up and soon we owed nearly as much as we earned. It was a wake up call of sorts. We agreed at that point that our expenses would not increase, even if we doubled our income in the following years. We would stay in the same house, never have another car payment, and learn to live within our means based on our current income. Anything above that would be saved for our future. Of course, this is easier said than done. Temptations abound for ways to separate us from our money. But if we live like no one else, we know that eventually we will be able to accumulate enough wealth to enjoy a life free of the burden to earn an income only to pay for more stuff.

Drawing a Line in the Sand

My grandfather was born and raised in the Great Depression era. I’ve long considered him my “frugal mentor.” He had a successful military career, retiring from the Marine Corp after nearly thirty years of service. Soon after retirement he and my grandmother bought a house in their hometown. They owned that home for over thirty years. During that same time span my grandfather owned exactly two vehicles. In fact, I now drive his second vehicle, a 17 year-old truck in relatively good condition. For thirty years my grandfather maintained a standard of living that never changed, even though he probably could have afforded to increase it as cost of living increases and social security eventually raised his income. However, he reached a level of contentment early on and never saw a need to upgrade his possessions. I should have paid closer attention to his living example of frugality.

Frugal Dad is one of my new favorite sites about frugality and personal finance. He writes in a very laid-back, down-to-earth way, and I like that he’s a daddy blogger! If you haven’t yet, I recommend subscribing to his feed.

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  1. Blessed

    You said it right when you mentioned your Grandfather didn’t increase his lifestyle because he had reached contentment… if we just quit striving for more we could learn to be content!

    Blesseds last blog post..Early Bird Giveaway & an announcement!

  2. Pete

    I think this post hits it on the head – you need to find contentment first, and then you’ll be able to save more and live below your means. Great reminders!

  3. Ivy

    Thank you. This comes at the prefect time for us b/c my husband just got his first job after finishing his PhD.
    I can already see that making a better income isn’t how you get out of debt like we thought.
    It is a decision we have to make.
    This is such a great way for us to think about it.

  4. happyathome

    You can learn a lot from people who lived through The Depression Era. Everything we focus on now is how easy it is to buy something to make our lives easier. I think we did pretty good without a lot of the things that are now available. Big example is toys at a very early age, the box is usually more entertaining to babies! Great post, thanks!

  5. Rachel

    I remember one moment in college when I looked around and realized that I could be completely content if I never owned more. That was back when my rent was $175 and my other expenses were about $100. Every now and then I try to remember that, just to keep perspective.

    Rachels last blog post..Summer Fun with Little Ones

  6. Dana

    Thanks for the ah ha moment when you wrote about your Grandfather’s cars. I’ve gone through too many just in the past 5 years!

    Exodus 14:14 The LORD will fight for you; you need only to be still

    Danas last blog post..Facing Reality

  7. bee

    Wonderful post… taken very much to heart.


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