Going into 2014, I had some really lofty savings goals. Don’t worry, I’m haven’t given up on them already! Quite the opposite, really. Although we re-evaluated our budget and income right before the New Year and agreed that we could save 40% of our income to put toward our investments this year, I couldn’t leave well enough alone. I went a little nuts with my side hustle in January and was able to boost our savings rate over 70% for that month. And then reality swooped in this month for a swift – and honestly, much needed – kick in the pants.
Let me explain. I got it in my head that if we were able to be frugal and smart with spending in order to save 40% of our income, then surely I could work really hard on my side business in order to get us way over that rate month after month after month until I was able to make my side gigs my full-time work. For some reason, I starting thinking 40% was small potatoes and I had to do better. (For those of you who don’t know me in real life, yes, I am a manic perfectionist, and yes, I am obsessive-compulsive, in case you were wondering.) This is, of course, crazy talk, and a recipe for getting really unbalanced in areas of life outside of finance. It’s hard for this personal finance blogger to remember that there’s more to your goals, and more to life, than just the stuff that involves money.
But that’s where reality recently stepped in to remind me that there has to be more than busting one’s tail with extra work and then hoarding that extra income. Another use for money made from side hustles? Spending it to make sure your original savings rate stays in tact and your baseline financial goals remain on track! I’m trying to
bring balance back to the Force accept this and realize that spending money on some things isn’t inherently bad – but yeesh, it still hurts me.
Suddenly, I Had to Start Spending Money
Part of what put a dent in my dazzling savings dreams was the unusually cold winter we’ve had down here in the South. We’ve had actual snow accumulation, an ice storm, and plenty of days where the temperature never rose above freezing. We even experienced wind chills of below zero, and that kind of cold is pretty much unheard of in this part of the country. As a result, our utility bills were through the roof this month. Our gas bill doubled and our electric bill was about 1/4 higher than normal. I know we can’t be the only ones, because our most recent bill had a little note that said, “Higher bill than normal? Blame Mother Nature!” So obviously, our gas company has been flooded with angry Southerners who usually don’t have to worry about the heating bill at all.
The beginning of the year is also when we have to deal with a lot of costs associated with owning a home. For example, HOA fees are paid annually in January and we have a termite warranty that costs $185 per year, due in February. And of course, tax season is right around the corner and we’re looking at owing around $1,000. I know that’s not necessarily a bad thing since it means the government gave us an interest-free loan instead of having it the other way around, but writing a check to the IRS on top of everything that was already withheld out of my check still grinds my gears.
These are the kinds of things that didn’t occur to me when I was plotting out the possibility of becoming a savings superhero this year. Which is, of course, kind of stupid. These expenses are part of living and maintaining a comfy home, and just because they don’t crop up every month doesn’t mean you can forget to consider them when thinking of how much you could save! Lesson learned here.
What Was I Saying about Experiences Being Worth the Cost?
I know I’ve vocally advocated for the idea that experiences and relationships are far more valuable than material goods. I have to admit, I’ve been guilty of sometimes thinking, yes, but saving it all is even better… And sure, some months that might be the case. Then there are going to be other times, where you need to head off on a weekend getaway with your significant other. Or you want to reconnect with friends and you go out for coffee or grab dinner a few times.
I had to relearn that these things are more than okay this month. Close friends of ours got engaged – and asked both me and my husband to be in the wedding party. We both were honored to be asked and were so excited for both our friends and that we got to be involved. But my money-conscious mind immediately started adding up the costs and I got panicky. Bridesmaid dress and shoes, tux rental, days off work, travel expenses, a hotel stay since it’s a destination wedding, and gifts?! Yikes!
All I could think was, oh my god, I am going to be spending money like crazy! This is going to throw us so far off track from our savings goals! And that’s the proof you all need that I am a total dingbat sometimes, because this could not be further from the truth. Yes, it would prevent us from reaching my self-imposed and overly-ambitious 70% savings rate goal. But it would have absolutely no bearing on our ability to save the original 40% that we agreed was our goal for 2014.
Again, I need to remember that my side business provides us extra income. Yes, some of that money should be saved. I can even save all of it if it works out that we don’t have additional expenses that month. But I have to accept that it isn’t a crime to allocate another portion of that extra income towards experiences like traveling to the beach to see good friends (finally!) get married.
Spending Money Hurts – But Being So Hard on Myself Isn’t Much Better
No, I don’t like spending money. I feel so anxious and guilty about any kind of spending because I feel like every dollar that leaves my pocket pushes me farther and farther from building our net worth and reaching our financial goals. And while that’s true to some extent, it’s completely unreasonable to think I can get away with something like, I dunno, never having to spend money on anything but food and shelter for the next ten years.
This is especially irrational considering three important factors:
- I’m so young and have time to continue to save.
- I have no desire to completely stop working in the next 1o years, so setting a hard “retirement” goal within that range and then worrying I won’t meet it is kind of silly. I set a lofty goal because I like challenges and working hard for things; setting the bar high is my way of pushing myself to achieve. But it does kinda backfire when I forget that I’m simply aiming high and I start thinking that’s a critical point I have to reach or else.
- This whole saving or spending money thing works both ways. Some months I won’t be able to save so much – but that won’t happen every month! My ability to save my minimum – 40% – and my maximum – about 70% – will be in flux and that’s fine. It’s a give-and-take situation, like just about any other healthy relationship in life.
It is hard to remember that there are more goals that just the ones that deal with our finances. And it’s not easy to cut ourselves some slack when we don’t hit amazing markers of success at every turn. But for our own sakes, we must try to do these things. Achieving financially is a great thing – but understand that even small victories are still victories.
This past month has served as a much-needed reminder of these things. I’ve been reminded of the fact that money can be both saved and spent, and it’s all good. I’ve been reminded that constant perfectionism isn’t reasonable or fair. I’ve been reminded that, as much as it pains me to spend money, it’s not a sign of weakness or failure. Spending money is not inherently bad. And continuously pushing your goals to extremes isn’t always so smart!
Do you find yourself getting too caught up in financial goals from time to time? What do you do to bring yourself back to reality or to remind yourself that you don’t need to constantly tweak your goals to make them harder to reach?