I was looking through some draft posts I have lying around, and found one from the middle of 2013. That's 2.5 years ago. Reading over it, I feel satisfaction for a few reasons:
- Old Josh (from July 2013) wasn't a train wreck. As soon as I think about myself in highschool and college, I usually cringe thinking about the way I acted/thought. I don't feel complete shame thinking about 2013 Josh.
- The goals I had in 2013 have pretty much all happened. We didn't have much knowledge over our finances then, but we do now. (I discovered YNAB, which completely transformed our relationship with our money)
- This affirms my suspicion that lots of small steps taken over a long time can make good things happen.
I've been reading and thinking a lot about money over the last two years. I'll compile a recommended reading list here soon, but the cool thing is this: I enjoy managing our finances. I'm no longer embarrassed or shamed by them.
And if we got to that place in 2.5 years, I think most people can. Here's what I wrote then:
Josh's thoughts on finances circa July 2013
[2016 Josh notes: I’ve included commentary in-line with what I wrote then. It is all called out like this.]
I write this July 27th, 2013, and I don't know when I will publish it. [2016 Josh notes: Perhaps in January, 2016]
Currently, I have no plans of publishing this within six months, but eventually I hope this post meets the internet. Money scares me. Having it is scary, but losing it is even worse. Kristi and I have been married for 13 months, and we have alternated between me being the sole income-earner (on less than $30,000 a year, in one of the most expensive cities in America) to us both working (she's a kindergarten teacher in PG county - not lucrative, but way more money than zero dollars) to Kristi being the sole income-earner (I got fired). [2016 Josh notes: I could write extensively about being fired, but right now I'll summarize it as the best work-thing that has ever happened to me. It was an opportunity for enormous growth.]
I was able to get unemployment (through the business, not the government) but it was still stressful. It was almost six months before I got another full-time job, earning about $34,000 a year.)
Then, we both were working, and it was great! I could know exactly how much was deposited in our bank account every two weeks. Our lifestyle inflated, and we found ourselves spending more. Or, rather, I found us spending more. I'm in charge of managing our finances, and sometimes it sucks. [2016 Josh notes: It sucked because I did not know how much we spent, and was not able to know if we were generally improving our financial position, treading water, or losing ground.]
During the summer, Kristi's not receiving a paycheck, so we're temporarily back down to one income. But we're used to spending like we had two incomes. A few large expenses have come through (a few plane tickets, an awesome family vacation with 15 extended family members, but it was a half-block from Rehoboth Beach, and cost what you would expect - a lot)
So, right now, I've dipped into our savings to cover our expenses. There's nothing wrong here - we knew she was not going to be earning money over the summer. [2016 Josh notes: Partial lie. We thought she was going to be paid over the summer, but turns out PGCO bobbled the paperwork. We "knew" this when her paychecks stopped in April.]
I still have this inexplicable sense of discomfort, because I don't know some pretty basic details of our own spending. I'm embarrassed even as I write this. Income in per month (easy to know) compared to spending per month - also fairly easy, but the afore-mentioned big-ticket items have drastically skewed our "average spending". [2016 Josh notes: We knew our expenses retroactively, I.E I could look at a credit card statement, but we never had planned our expenses, or managed our spending based on goals or expenses. Yikes.]
I'm looking forward to living on just one income, and saving half of our take-home. This is a huge milestone. The steps, as they look right now, are these:
- Identify current income/expense ratio
- Identify low-hanging fruit to reduce expenses
- Reduce said expenses
- Repeat step two, until we're unwilling to further reduce expenses
- Boost income without inflating lifestyle, so all extra income can go into savings.
And, well, that's my plan.
[2016 Josh notes: For the most part, we've done all this. A significant portion of our income goes into savings, and I know our income/expense ratio, and can PLAN our spending well in advance. We've boosted our income but reduced our lifestyle from 2013 levels, so more money goes into savings/investments.]