Financial Responsibility - What? Why?
What it Means
It means changing the way we have been thinking about money the past twenty to thirty years. It means taking a fork in the road as a debtor nation and becoming a nation that starts living within its means. It means...
- A family of four does not need to have two new gas guzzlers in the driveway.
- You do not need to buy a new car every three to five years.
- You need to stop thinking about your home as an investment or a bank account that you can tap into.
- Putting at least 4-10% of your income away per year for retirement.
- Saving another 6-10%.
- Having a six month nest egg.
- Only spending what you make.
- Using credit wisely.
It means a lot more things. It means making changes in your lifestyle. It may not seem possible, but it is. Not only will you be doing the right thing, you will begin to adopt a way of life that is less about consumerism and more about things in life that are really important.
The Road Out is Not An Easy One
I am here to talk to you about what digging out means for you and your family. As time goes by I will add pages to this topical area. Until then I would encourage you explore the rest of this site. The content here has been about wisely managing your money long before it was fashionable to do so.
Why Should you Listen to What I have to Say?
For one, I live on main street just like you. I have lived the lifestyle this site preaches about for the past twenty-five years. But, it was not always like that. There was a time when we were up to our ears in debt. We saw the light, we responded, dug out and have never looked back, or wanted to look back.
How We Conserve our Finances
- Consistent contributions of 3-16% of gross income (not counting matching) into 401k since 1987.
- Lived in same home since 1990. Mortgage paid!
- We save (not including 401k) 20% of net income
- We give 10+% of our gross income to charity
- Paid 100% of Daughter’s college expenses (In-state, public university).
- Transportation costs are 4.5% of net income. This includes: insurance, gas, preventative and corrective maintenance. Both vehicles are paid for.
- We have accomplished all of this from our income. No lotto winnings, no inheritance. Just hard work and executing this plan over 25+ years..
While we feel extremely blessed with what we have, this is not to say that we do not have to make tough decisions regarding our situation. For example, when our daughter began student teaching she required a vehicle. While she was good with her money she did not have the resources to buy a car outright or to take on debt for one. To assist her we let her use one of our vehicles and moved down to one vehicle. Fortunately we are in a position to do this. She was responsible for paying the insurance and for gas. We also required her to keep $800.00 in reserve in case the car needed to be repaired.
Sacrifices we had to make in our early years
Understand my wife and I do not see any of these as sacrifices. In fact, we are quite content and feel very fortunate and blessed to have what we have.
- We do not have large expensive vehicles that we trade in every 3-6 years.
- We do not own an RV, Boat, or other high-ticket items like these though I must admit it might be fun to.
- We only eat out 1 to 2 times a month at the most. When we do, it is nothing extravagant.
So I think my curriculum vitae allows me to proctor some advice in this area. If you are looking to live a more conservative financial lifestyle wouldn’t you want to get your advice from someone walking the talk? You certainly would not consider signing up to learn piano from someone that cannot play piano.
What is in it for you?
If debt is ruling your life…
If you are willing and can accept making some lifestyle changes…
If a situation similar to ours appeals to you…
Then you have the answer to this question. If is does not then you have likely stopped reading some time ago.