I don’t like writing posts about money. Why? Because I haven’t reached the level that I want to regarding money. I’m not debt-free. My budgeting practices are not the best. Still, I have a plan.
The first thing I’d like to say about money is that I think we put too much importance on it. Maybe that’s why I shy away from writing posts about money. I don’t like to put the emphasis on it. After all, it’s just another form of stuff.
Still, money is a necessity in our modern culture. Without money, we’d freeze and starve. So we need to pay attention to how we keep our finances.
Some First Thoughts About Money
Many minimalists are frugal. I lean toward frugality myself, but not to an extreme measure. Sure, I’d like to pay off all my debt and retire early, but not at the expense of living like a pauper.
I choose a balanced approach to money matters. Life is too short to not have a little fun. You only get one chance to make memories with your loved ones. So on one hand, if I have to spend a little extra money to share lifetime experiences with my daughter, so be it.
On the other hand, I believe we should be prepared for our future. To spend all our money and have nothing for emergencies or retirement would be foolish.
My Financial Situation Is The American Average
Let’s start with the bad news:
- I have a mortgage: I bought a home for $140K on a 30-year loan in 2013. That means I’m paying out a little over $1000 a month to keep a roof over our heads.
- I have an auto loan: Payments suck, but it’s better than breaking down on the side of the road. I recently sold my Golf TDI back to Volkswagen. It was a good deal for me. I wound up with a newer model and a smaller payment, about $250 a month.
- I have a personal loan: Eight years of college and a custody battle add up. Some of that debt wound up in a personal loan through my credit union. That costs me $400 a month.
- I have credit card debt: $20,000. Yes that’s a lot, but the majority is still a throwback to divorce and student loans. Add another $600 a month to the equation.
I have a couple of smaller debts that I won’t go into. Let’s say they add up to another $150 per month. So add it all up. I’m paying out about $2300 a month. And this doesn’t include other monthly bills like phone and utilities. That sucks, right? Yes and no.
My Financial Future Looks Much Brighter
I run a blog. But I’ve chosen to stick with my teaching career to bring home the bread. My income is slightly more than my outgoing bills. So if I keep my belt tight, I slowly pay down the debt. Still, I could be debt-free in five years or less if I choose.
- Home equity: It wasn’t planned, but I bought at a good time. My house would currently list for $210K. That would leave me with at least $50,000 to pay off debt.
- Retirement funds: I’ve been saving money through my work for over 15 years. There’s more than enough to pay off my mortgage. That could double in the next five years.
- All the stuff: I know minimalists don’t put much value on stuff, but it’s still worth something. Although I own less than the average American, I’d guess that I could make a good $10,000 or more if I sell it all.
When my daughter is ready to go off to college in 5-7 years, I’ll likely make some big changes. Who knows, maybe it will happen sooner. But I can clearly see the way to paying off all debt and buying a small home outright in the next 5-10 years.
In the meantime, I’ll still may use my credit card when needed for the things that matter most: My daughter, our home, and our health.