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It’s one of the worst feelings you can ever have. That moment when you see there is still a week left until you get you next paycheck and you have no money, little food and you have no idea how you are going to make it. Your mind starts racing trying to figure out where you might be able to get a few extra dollars and it’s not long before you hit full panic mode as you scramble to figure out what, if any, options you have. I was there years ago when I was just out of college and just after my fiance had moved in with me. I found out she had $80,000 in credit card debt that I hadn’t known about until then. While we scrambled and were able to make things work until the next paycheck came, we made the decision that the situation would never happen again and it was the steps we took to resolve the issue which were far more important than securing the money until the end of the month.

As soon as I realized we didn’t have enough money to last until the next paycheck, I treated it as a major emergency. It entailed a number of long nights with a lot of crying, denial and shouting before we came up with a plan that we both were on board with. We took some drastic steps that went far beyond what most people would do, but it did allow us to wipe out the debt in less than two years (and taught us the great importance of an emergency fund).

The first step was acknowledging that this was a major issue. My fiance had always lived paycheck to paycheck and that had become her norm. Even though we were in the process of planning the wedding, I said that I wasn’t willing to get married until the debt was gone (you can imagine how this went over at first). Once it became clear that this was not a negotiable point, we started to put together a plan to actually tackle the underlying issue of the debt that was causing the paycheck to paycheck problem.

In the end, we ended up making three huge sacrifices that neither of us would have chosen to do, but are sometimes the choices that need to be made when an emergency appears. This included moving out of the apartment we had into the basement of her parent’s house (something that I really didn’t want to do, but did to show that I was willing to make as much of a sacrifice as she was). We both also took on additional work, her doing a job that she didn’t especially like, but made a decent amount of money. We also cut things back drastically so that we were living on about 60% of my old salary, even while all the additional money was coming in.

To tell the truth, I don’t remember a whole lot about those two years and it seemed to go by in a whirlwind. With two jobs and doing some extra work on the side, I was working far too many hours which made the days all run into one another. They were tough, but somehow we managed through them and came out in a situation where we would never have to worry about facing the “I have no money” until the next paycheck scenario.

The lesson here is that while the fact that you have no money at the end of the month may seem like the emergency, it really is only a symptom of the true emergency — the underlying situation that created the issue of not having money at the end of the month in the first place. How that situation gets solved depends a lot on your particular situation and the options that you have (and are willing to take), but chances are it is going to mean disrupting the norm that you have had until that point and making some major sacrifices to change things for the better. Most of all, you are probably going to have to find a reason that will motivate you to make those changes (not being able to get married until the debt was gone was highly motivating to us) which will give you a reason to endure the tough times ahead.

While I was far from happy about the decisions that we had to make at the time, in retrospect they were a great learning experience. I know that I can do things that I had never imagined that I could do before then, and that has stayed with me until this day. Learning to make the difficult decisions, coming up with a plan to make the goal attainable and then following through are all lessons that apply to many other parts of life that has served me well, and although I would never wish anyone the situation of having to figure out what to do when there is not enough money at the end of the month, if you are able to lift yourself out of that situation, you will have given yourself a number of useful skills that can be used throughout the rest of your life.

(Photo courtesy of danielmoyle)

I’ve noticed that some respondents to my previous articles seem to think that I’m living a life of deprivation because I choose to save money aggressively and live debt free. I want to set the record straight: A debt free life is not a poor life; it’s not a life of deprivation and suffering. It’s a rich life full of things and experiences that are important to me, personally, which may not be the same as what is important to you.

When we were young and first out of college there was some deprivation simply because we had no money. We were making entry level salaries and we had nothing saved up. In those early years we scrimped and saved so we could get ahead. We didn’t buy anything that wasn’t necessary to live. We watched every penny and learned how to cut all the excess from our budget so that we could save enough for an emergency fund, a home, and cars that didn’t have rust spots. Thanks to aggressive saving and living “poor,” that period of our lives lasted only about three years. We could have taken on debt and lived a fabulous existence, traveled, and had all kinds of toys, but neither of us wanted that. We were willing to trade a couple of years of relative hardship for a much better life down the road.

Now that we’re in our late thirties, things are markedly different. We make a good income for our area, which is also a blessedly low cost of living area. We are not living “poor,” contrary to what some may think. Many of our money saving strategies and habits started when we were young and had no other choice (besides racking up credit cards). We continue those strategies today, not so much because of the money we’re saving, but because we’ve found that these strategies also support some of the deeper values that we hold. The money saved is a bonus at this point.

Do we use coupons and shop for sales? Absolutely. Why do we do that if we have the money to pay full price? Because we learned long ago that there is simply no need to waste money, even if you can. Those pennies and dollars can all be used for other things and there’s no sense in paying full price if you don’t have to, no matter how much money you make. I’d rather put my grocery savings toward a vacation. I’ve always tried to adhere to the old adage, “Waste not, want not.”

Do we conserve energy and water to lower our bills? Absolutely. Why do we do this if we have the money to pay for much more utility usage? Because we believe that the world has finite resources and that it is good to conserve. If a cheaper bill is the result, then great. Those are more dollars that can be used for other things, but we act now out of a sense that we should do our part to conserve.

Do we use things until they die and refuse to upgrade things just because there’s a newer model out there? Absolutely. Why? Because neither of us can stand waste and throwing out a perfectly good TV just because there’s one with a better picture out there smacks of waste to us. Same with clothes. It seems wasteful to get and dispose of a closet full of clothes every season when the ones we have are in classic taste and still in good repair. The landfills are full of perfectly good items that people just had to upgrade and that’s not something we want to contribute to. We don’t like to waste, therefore we use and reuse things until they die. That it saves money in the process is a bonus.

Do we refuse to pay for expensive add ons, subscriptions, and things we don’t need? Of course. Why? Because if we don’t need it and aren’t going to use it, there’s no point in having it and paying for it. It may make us look cool to others to have a cool cell phone with an unlimited plan, but since we don’t need that kind of phone or plan, it’s wasted money. And more “stuff” of any kind just clutters up the house.

Do we shop thrift store and other second hand outlets for some of our “stuff?” Sure. Why? It goes back to the waste argument. When we buy used we are helping to keep items out of the waste stream. Much of the merchandise is in great condition at a rock bottom price. We’re able to get things like DVD’s, CD’s, books, clothes, and other things in “like new” condition for very little money. Do we buy everything there? No. We only buy when we know it’s a great deal and in great condition. The things we do buy save us money, but the bigger reason for us at this point is to help keep things out of the landfill.

Do we miss out on experiences and fun because we choose to save money rather than blowing it on lots of things? Absolutely not. For those who think our debt free life is somehow devoid of entertainment or fun, let me show you what fun we have with our savings in a typical year.

We take four week-long vacations per year: We cruise, go overseas, visit domestic destinations, or head to a national park. We don’t stay in the Motel 6, either. We don’t go overboard with luxury, but these trips are quite comfortable. (For example, I refuse to fly anything less than business class these days because it’s much more comfortable to me, even if it’s cheaper to fly coach. It’s one area that I no longer scrimp on.) We’ve visited almost every country on our “dream list” – only Australia and the Asian swing remain.

We take at least ten weekend getaways each year: We go to the beach, the mountains, theme parks, and any other destination within an easy drive. We go simply to get away and recharge.

We frequently enjoy entertainment: We go to many concerts, theater productions, and sporting events.

We do eat out, but we choose to save it for special occasions and head to restaurants where it’s worth it: We don’t go to many fast food or chain restaurants because I can make that sort of thing at home and it generally tastes better. But there are some fine restaurants out there that we do patronize. We also save a lot of our eating out for our vacations where we get to try things we can’t find at home.

We don’t have cable, but we do buy a lot of DVD’s of movies and TV series that we love: We could probably launch our own cable network from this house. But we do shop for sales because we can get more for our money when things are on sale. We get more value from watching the things we like rather than paying for hundreds of channels and only watching two or three.

We rescue animals: This is fun for us and not something we could do if we were living “poor.” Animals are expensive to care for, but we love the work and the joy these critters bring us.

We participate in a full slate of hobbies: Photography, woodworking, art, reading, camping, scuba diving, games, various sports, and needle crafts are just some of the hobbies that go on in this house. We spend money on good equipment and supplies that make our hobbies more enjoyable.

For those who worry that we save too much, let me tell you this: The question in our house now has become, “What else are we going to do with the money?” There are only so many trips we can take in a year because of vacation time limitations. There is only so much stuff the house will hold (and that I’m willing to clean). There are only so many concerts to see, shows to take in, and sporting events to go to in any given year. There are only so many hobby supplies I need at any one time. I love my current home so I’m not willing to go out and buy another just because I can. Same with our cars. There are only so many charities that I can/am willing to give to. Neither of us cares much for things like classic cars, luxury brands, spa treatments, or other extravagances, so there’s no spending money there, either. We could spend on those things, but they aren’t fun for us.

There comes a point when you have no debt and you are comfortable in every other way that saving the extra money becomes the only choice. So when I say I’m pounding money into savings, not all of it is because I’m some kind of saving machine that is saving money to the exclusion of all other joy in my life. It’s because at this point with no debt payments, there simply isn’t anything else to do with the money. It is nice to know that the money is there if we get very ill or we have some other catastrophe. And all of the extra we’re socking away means that we’ll be able retire in about five to seven years, if we want to. Maybe we will and maybe we won’t, but the decision won’t be about money as much as it will be about whether we really want to stop working.

I hope I’ve clarified the point that a debt free life isn’t about deprivation and suffering. It is about making choices that are in line with our values. That those choices happen to save us money, so be it. Between having no debt payments sucking up our income and our money saving strategies, there is more income than we can spend at this point (at least without going against our values or cluttering up our house with piles of stuff we don’t really need). That is why we save so much. We don’t deny ourselves much of anything that we really desire, but we are very clear on exactly what it is that we do desire. We don’t spend simply because we can. Even though we have money to blow, we still believe in not wasting, not taking more than we need, and not buying things that hold no real value for us. That’s not a life of deprivation, that’s a life lived with common sense.

I Have No Money

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