Going broke by earning more money
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.
You May Also Like:
Join thousands of readers
& get Tsh’s free weekly email called
5 Quick Things,
where she shares stuff she either created herself or loved from others. (It can be read in under a minute, pinky-swear.)