I’ve been listening to the “What We Spend” podcast lately. In it, the host interviews a normal person about their financial situation (expenses, education, job history, earnings etc.). For the next week, that person records an audio diary of all of their spending. The host then does a final interview with the guest discussing the week.
So far, there’s been a common thread among every guest (with one notable exception who retired with a $5k monthly pension). They all spend more money than they earn.
As I listened to their diaries, it took me back to when I was living that way. For decades I struggled to provide for my wife and her kids by financing our monthly living expenses with high interest credit cards. We certainly did not live a life of luxury. Looking back though, we spent far beyond our means.
It created years of financial precarity. I was constantly dreading the next unexpected expense. A flat tire, an appliance repair, an increase in car insurance rates or even an unanticipated school expense was enough put us over our credit card maximum, triggering even higher interest rates plus penalties.
It made my stomach hurt remembering those days, triggered by the podcast guests’ diaries detailing similar circumstances.
There were some significant differences between me and them though. I switched jobs and looked for opportunities to earn more income constantly. I didn’t whine about that my low paying jobs were “unfair” or that I deserved to be paid more. I didn’t have parents who paid for my education. Nor did I take on huge amounts of student loan debt for a bullshit degree in the hopes that I’d be rewarded with a high paying dream job that fulfilled my passion.
I ended up choosing a stressful career in sales because I was able to work my way into role without a college degree and had a chance to earn more money. It was about as far away from my dream career as imaginable.
Even then, it took me nearly 30 years of working until I earned enough and reduced our spending so that we could finally payoff our debt and have a financially secure comfortable life.
Ironically, when I was at my peak earning years, we were not doing our peak spending. Been there. Done that. I learned that living beyond our means was not worth the stress.
Today I spend well below the federal poverty level. I intentionally keep my living expenses small. And yet, I have a fantastic life with very little stress.
Barring a windfall fantasy bail out (winning the lottery, inheritance from an unknown relative, unexpected business success, marrying a multimillionaire) there is only one solution to this problem – spend less and earn more. Simple, yet not easy.
I hope the guests on What We Spend come to this realization even faster than I did.
Right now, they seem stuck in a deep hole that they are still digging.