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Tipping The Personal Finance Scales In Your Favor

by The Happy Rock on June 12, 2008

climb-mountain-success I wrote earlier about the moment/idea that marked that turned around our financial journey. Today, I wanted to talk about the moment when the momentum for positive change became unstoppable.

This is the moment when I felt like our plan finally came together. Where all the hard work finally culminated in an unburdened, energized, free to pursue my dreams fist pumping YESSSSS! type feeling. 

What was the moment?  It was about 4 and half years from when we decided to get out of debt when we finally had 6 months expenses locked away in an ING direct account.  We had gotten to that limit before, but we had to tap into some emergency funds because we needed to cover adoption expenses when our second son came sooner than expected.  This time we had made it for good.

The point when we sent in our last payment on the last of our debt(besides a mortgage) was a great feeling and made us feel like we accomplished something monumental, but all we had to show for it was nothing.  We had spent 4 years paying back money we had already spent.  It wasn’t until we had $12,000 in cash that we could tangibly visualize the effects of all our efforts.

With that tangible reminder of all the hard work  in the form of an emergency fund came a host of other benefits.

  1. Hundreds of dollars a year in interest.  Our money was working for us rather than against us!
  2. A peace that came from knowing that we could handle almost every situation, even job loss.
  3. A motivating freedom that made all our dreams in life seem possible.  I know it sounds a little Hallmark, but it really is true.  I don’t feel like there are any barriers to hold us back.  We have accomplished so much already by 30 that we really need to sit down and repopulate or life goals list.
  4. Cash Flow.  As it stands now, only 50% of our income needs to go towards actual expenses. We have complete freedom over they other 50% of our income.  What does that mean?  One example is that I think it is quite possible to save close to 20% for a new house down payment in just a year.  That sounds like freedom to me.

If that isn’t a motivating list, I don’t know what is.  I really am not exaggerating for effects of the culmination of 5 years of hard work either.  I would have thought that once we reached a milestone like that we would have ‘slacked off’, but getting over that mountain opened a world of new possibilities that  is spurring us to even greater heights.  Having no debt expect for a mortgage and six months of expenses stockpiles for emergencies really does feel as good as it sounds.

{ 7 comments… read them below or add one }

J Dawg June 13, 2008 at 11:28 am

I am not there yet but I am starting to feel the same way. I got the debt paid off, $2500 in my ING account. It is nice to know that if I lost my day job that with my savings and part time job I could get by for at least a couple of months.

Freedom gives you choices.

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Sue June 13, 2008 at 11:55 pm

Great job! I do have to give some credit to reading these financial blogs regarding my car buying decisions. Up to the day before we bought our preowned minivan I was still looking at leases as a viable option. Some how I just don’t see leasing as going into debt as much as a car loan.

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Pete June 16, 2008 at 11:21 am

I think I’m starting to feel things turn around now that we’ve saved up an emergency fund and 6 months of expenses. Watching the interest grow is oh so nice!

We just decided to take a cruise this fall, and we’re paying cash! In the past we probably would have put it on a credit card, but now we’re loving the whole ‘save up and pay cash’ mentality. It’s an awesome feeling not being in debt to anyone (ok, except our mortgage company).

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The Happy Rock June 17, 2008 at 9:30 am

@J Dawg – It took us a little while too, but when you get there it is a really great feeling. Keep attacking!

@Sue – Not leasing is a positive gain in your financial health! Nice job.

@Pete – I like the interest too, but it is the freedom and security that is the most invigorating!

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Gloria June 19, 2008 at 9:55 am

Telling the true in most cases I try to pay only cash. I really prefer not to be in debt and do my best to avoid such things.

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robert November 19, 2008 at 2:17 pm

Wow, fantastic advice. Thanks for the posting.

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efile December 25, 2008 at 12:41 pm

I think I’m starting to feel things turn around now that we’ve saved up an emergency fund and 6 months of expenses. Watching the interest grow is oh so nice!

We just decided to take a cruise this fall, and we’re paying cash! In the past we probably would have put it on a credit card, but now we’re loving the whole ’save up and pay cash’ mentality. It’s an awesome feeling not being in debt to anyone (ok, except our mortgage company).

Reply

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