From One End to the Other

I was talking to a friend the other day who makes significantly less than I do and we happen to be talking a bit about money.  What struck me as I listen to him was the fact that when you are almost living month to month how expensive it is.

This was a interesting realization for me since I haven’t been there for such a long time now.  When you living that near the edge life really is just more expensive.  It’s hard to buy some items in bulk and save some money in the long run on food.  It’s hard to avoid extra fees when you are almost always paying everything on a monthly basis.  For example, my insurance for my car is 2% cheaper a year since I pay it off in one lump sum.  Then if anything goes wrong it ends up on a credit card where it takes months if not years to pay off.  To get out of that situation really takes a lot of work at paying back debt and then focusing on creating a small emergency fund.

On the other end, I can’t believe that families making $100,000+ are not saving more.  Since starting my second job our combined family income will now exceed $100,000 on an annual basis and I’m almost overwhelmed by how much money I can save in a month.  Yet families making this much still manage to get in over their heads in debt, if you don’t believe me watch a few episodes of Til Debt Due Us Part (one of my wife’s favorite shows).  How do you waste more money in a month than most families even take home?!?  I mean really folks at that kind of income level even with taxes saving 25% of your tax home pay should be drop dead easy.  Yet it isn’t for a lot of people.

So what gives?  I suspect the two sides are more related than people realize.  At lot of people spend some point in their early life as a student living month to month or start at a low paying job.  At that point a lot of your money habits get formed (let’s face it when you are young you are so impressionable it’s not even funny).  So once you get older and start making more money I think people don’t realize the options they have to save money.  They have always paid their insurance month to month and don’t think about it.  Not to mention we often fall into the trap of “I’m worth it” where we buy things just because we can rather than really wanting or needing the item.  Compound that with a lack of interest in their finances (after all you are making good money) and before you know it people are spending thousands of dollars in a month with not much to show for it.

So in the end it’s all about bad habits compounded on bad habits that stretch back to your first job.  The difference between saver and spenders is savers realized some of their bad habits and fixed them.  Spenders on the other hand still haven’t learned.  So what bad habits have you overcome to start saving?

6 thoughts on “From One End to the Other”

  1. That is SOOOO true. Once people are done with their studies, they often start spending money like crazy to compensate for all of their years of misery. However, they carry this habit of spending too much money for the rest of their lives…

    Good post!

  2. I think you hit home with the comments “When you living that near the edge life really is just more expensive” and how its very easy to get caught up in a bubble of going about life for literally years thinking ‘well, I deserve to splurge because I spent four years doing post-secondary and ate Kraft dinner the whole time’ or ‘I only live once’, or ‘I didn’t have much growing up and therefore I’m going to live it up to the fullest at whatever cost’. I think a lot of this can be true and valid to some extent, but as time goes by we realize that we are not getting any younger and the sooner a good plan (which involves spending in moderation) is in place, the sooner one can end the rat race (no pun intended 🙂
    At any rate, I like this post mostly because it reminds me of some of the bad habits I used to have such as having to rent a sports car on vacation no matter what, having to have the newest electronic gadget, and the word budget wasn’t even in my dictionary. I don’t really know when my ‘TSN turning point’ was for me, but I do recall looking in the mirror and realizing that sacrifices today translates to good times down the road!
    Nice thread

  3. Til Debt Due Us Part

    Heh, little Freudian slip there, eh? 🙂

    One of my big pitfalls that I had to overcome was the “I’m worth it” one. After being broke during school, when I graduated and got a good job I started to buy things that I hadn’t been able to afford for the previous 6 years.

    Another was the problem of wanting what my parents have, but not wanting to wait until I was 50 to have it.

  4. Exactly that.

    I’ve overcome the bad habit of wanting more things, varieties and clothing

    Now, just ONE of the type of clothing (a winter jacket) is sufficient.

    Then again, it’s also my move towards becoming a minimalist…

  5. Caitlin: I do have this same problem! Good for you if you got over this «Because I’m worth it» (Ah… L’Oreal… and all these women little creams, pots and stuffs) I am slowly getting this done, but I do admit it is really hard (to me).

    The fact that a lot of us want what our parents have, but not wanting to wait to have… I think is linked to our «microwave generation»… we want it, and we want it as fast as possible. We want to get thinner, so we turn to a pill at 100$ for 50 that promise us we will loose these damn 20 last pounds in 2 weeks instead of changing our eating and exercise habits. Same things with financial habits 😉

    CC: hello there! Nice to see ya on this blog 😉

  6. CC,

    Oh I think just about everyone does some stupid spending after school. To date I’ve only met one person who didn’t do it.


    Ops! It is a funny slip up. I’ll have to leave it up now so your comment makes sense.

    “I’m worth it” is a bad one to deal with since it sort of implies that you don’t think your worth it with buying it. It would be nice some days to just buy those things in a store “Hi I would like a medium self worth with a side of courage and yes hold the fries with that.” *grin*


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