Week # 2
Debt is the new normal:
Unless you make a conscious effort to minimize or eliminate debt, you will find yourself consuming an overwhelming amount of it. With historically low interest rates and a desire to ‘keep up with the joneses’ many people are looking to debt to fund their lifestyle. Those that succeed financially in the long term take the first step towards reducing/eliminating debt that does not result into an appreciation of assets.
Life inflation will keep you from being financially rich:
I know people that don’t necessarily get into a lot debt, but they are not doing a whole lot to plan for the future. Finding a balance between living for the moment and planning for the future becomes more important as you get older. Life inflation is when someone increases their standard of living on depreciating assets & expenses as their income increases. They get a raise, so they buy a second car on payments, or they get a bonus so they blow it all at the mall buying things they don’t need. Money flows through their fingers like water and at the end of the day, they don’t know where it all went. To avoid life inflation, one must have a financial end goal in mind and be content with keeping their standard of living the same until they reach their financial goal.
The more stuff you have, the more you have to lose:
When my husband and I moved to Calgary from Ontario 4 years ago, we put most of our contents that we didn’t/couldn’t sell in storage until we were able to settle ourselves in Calgary. Our intention was to go back and grab our belongings once we settled. About 4 months into living in Calgary we were informed that our storage unit got broken into and all of our contents were stolen. We were able to sell a lot of the heavy stuff like furniture & tables before we left but all of our electronics we wanted to keep as they were more expensive, but easier to ship we lost. Of course not being financially savvy at the time, we opted out of the getting content insurance so we had to eat the loss.
Of course that was an unfortunate incident and I am not saying people should not be without nice things, but that experience did teach me something. It taught me that living simply not only provides financial benefits but emotional and psychological ones as well. Of course my husband and I repurchased some of the things we lost, but not nearly as much. We have our basic electronics and home essentials & décor, but nothing extravagant. Quite frankly it’s a relief knowing that we don’t have to worry about protecting & maintaining a lot of valuable items. I don’t know if I would have felt the same if this experience didn’t happen to us.
Don’t worry if your plans don’t go the way you wanted. Life is about the process, not the destination
From birth until we graduate post-secondary school, most of us live a structured and routine life and our lives leading up to this point are put in place this way. If you think about it, the education system is set up so that when you successfully complete one grade, you progress to the next. No one finishes grade 7 and says, what now? No, they just simply move on to grade 8, then 9 and so on and so forth. Of course I understand why this is the case. We are there to learn and amass knowledge so we can become effective and productive citizens in society. But something happens when we graduate post-secondary. There is no one to tell us what to do next. The best case scenario is that we get a well-paying job in the field we studied and our life is uninterrupted. But for most of us, our ‘structured life style’ is broken and expectations may be shattered. We scramble to figure out what to do next and what to make of our lives. Keeping in mind this is the first time something like this has happened to us. Over time though, we realize that whether we take the straight path or the scenic route in life, we all get to the destination somehow.
Relationships become more valuable as we get older
The older we get, the harder it is to forge new and lasting relationships. Not because we become anti-social but because the demands of this world and the responsibilities put upon us shift our priorities. People move cities/states for work, some get married, start a family or just lose touch with the passing of time and distance. Contrast this to grade school when we probably hung out with the same friends from elementary to high school and never had to think whether we will see them tomorrow…they were always there.
When you find a genuine and deep relationship with someone, you should treasure it. Find the time to spend a few hours with this person every once in a while. Bridge the gap of geography and pay them a visit every few years. Building lasting relationships as you get older becomes harder, but the ones that are forged may be the strongest.