What Does Financial Security Mean to You?
It’s scary out there. Plunging stocks, massive debt, and dismal job growth. A quick scan of the headlines can test faith and make one wonder if the US economy can completely fail. We all know that something has to change – we can’t sustain our current spending and it seems with each passing day we’re loosing our footing on the world stage.
I’ll be the first to admit that I am nervous. After all, I am currently a stay-at-home-mom so this means that we’re a one-income household. While Clay earns a comfortable income, things aren’t as cushy as when I was helping bring home the bacon. That being said, we’re doing just fine and have enough diversity in our assets that we’re not walking through life with our eggs in one basket. But this whole mess of an economy has made us (and a lot of other people) reevaluate our priorities so we don’t end up the people who were living beyond their means.
Our Smartest Financial Decision
As many of you know, we still own our house in North Carolina. This means that for about 7 months, until we decided to pull the house off the market and rent it, we were paying both our mortgage and rent here in Oklahoma. Seeing that much money go out monthly felt like a punch in the stomach but we were able to do it without too much difficulty. This is because of an extremely smart decision we made in 2008 – we bought our first house at a price that only factored one income.
Sure – we could have been able to afford a bigger house with nicer upgrades if both of our incomes were considered for the mortgage but we decided that we didn’t want to live that life. Our reasoning was simple – we didn’t want our financial security tied up in a house. The housing market had already begun to fall at that time so we knew we weren’t going to make a killing if we had to sell. Plus, I wasn’t sure if I wanted to stay home when the time came for kids and buying a ‘lesser’ house gave me the freedom to make that decision. I put ‘lesser’ in quotes because it was still a very nice house – 2500 square feet, 4 bedrooms, 2.5 baths – a typical new suburban house. It was scooped up on the rental market after 4 days and we will probably rent it out for years to come. It has become a nice little income property for us and will be a happy home for many people.
Realizing We Enjoy Living with Less
And now, 2.5 years later, here we are in Oklahoma, renting a 1400 square foot house with 3 bedrooms and 2 bathrooms. And we have learned that we enjoy living with less. We sold a lot of our furniture, donated about 40 boxes of our possessions, and have never felt more free. When we buy our next house (wherever that may be) we will not focus on size, but rather location and how it fits into our lifestyle. And yes, we will buy it on one income, regardless of my work status.
How We Like to Spend Money
Don’t get me wrong, I am not knocking anybody that has a big fancy house that they can afford. More power to them. I love gorgeous houses! I am just saying that our experiences over the past 7 months have made us realize that what we thought mattered to us, actually doesn’t really at all. Life can be funny that way, I suppose.
For example, one thing that is very important to us is having the ability to travel. So if living in a smaller house is what it takes for us to have the financial freedom to see the world with our little guy, than that is what we will do. We leave for Alaska in a little over a week and we can barely contain our excitement. We’re already starting to plan a trip overseas that we hope to go on in the spring and I have an idea for the fall. Plus a bunch of weekend trips in between. I am sure that some would see travel as a frivolous expense, and that is okay. Different strokes fo’ different folks.
Another area where we spend money is food. Not so much going out to eat (thanks to the little guy) but spending money to buy fresh and local ingredients. Eating healthy is important to us and I make sure to spend the time and money on products that don’t contain junk. I will never have a super cheap grocery bill and I am okay with that.
The Biggest Lesson I Have Learned
It should come as no surprise that I have struggled with this transition to Oklahoma. The move was painful for me. Very painful. And now that the sun is starting to shine again, I have realized something. Our lives are not defined by possessions, but rather our experiences. I now know that I would rather spend money on experiences (travel, food, etc…) than certain stuff (bigger house, tons of clothes, etc…) and work to achieve a balance between both. I am not about to give up my desire for the latest technical gadget, after all.
In the past, I’ve been caught up in the keeping up with the Jones attitude that seems to pepper our society (although hopefully less so nowadays). I thought because we made a certain amount of money, we were supposed to live a certain way. How wrong I was. Life can be exhausting when you’re constantly comparing yourself to others. I still struggle with this at times, and I am sure I am not the only one. That’s okay. I figure wisdom comes with age. Seeing as how I am only 28, I still have a long way to go.
Update: While I appreciate this guy’s commitment, 78 square foot is way too small for me! :)