Personal finance is about money, but more importantly, it’s personal. We each have our own financial history, motivations, values, goals, and circumstances. Today I’d like to tell you a bit about me personally, about why saving money is so important to me, and how that influences my finances as well as this blog.
I grew up in Philadelphia many long years ago. While my family didn’t have a lot, I was fortunate that we had enough. Both my parents worked, and with my mother as the shopper of the house, I learned that stretching your money as far as possible was important.
When I grew into a young man, I settled in New Jersey with a family of my own and I focused on my career. I worked my way through retail management and financial planning. But along the way I learned that the daily grind for more stuff wasn’t really what I wanted, and that I’d be happier earning and spending less while living a more simple life.
At age 47, after a long marriage and two children, I went through a painful and costly divorce. With so many marriages today ending in divorce, it’s not uncommon, but amicable or not, it is expensive and puts a dent in your assets after years of building them. When you add in alimony and child support, financially it feels like you’re back at square one.
When I remarried at age 56, I decided to go into retail merchandising and price auditing, where I could set my own schedule and work my own way. My wife, who was dealing with an autoimmune disease, worked an office job, and between us we were comfortable as long as we budgeted and tracked our expenses. But then life happened, as life is prone to do.
Just before our wedding, my wife was diagnosed with rheumatoid arthritis on top of her existing condition. Despite trying a variety of expensive treatments for this systemic disease, she was getting worse and having trouble working. A year and a half later, she had to stop working completely and go on disability. Fortunately, she had long-term disability insurance through her employer, as it took two worrisome years for Social Security to approve her claim. But this only provides a fraction of the income she had from working, and it was a big cut to our modest budget at a time when our medical expenses were growing.
Then life happened some more. When I was 62, I suffered a heart attack and underwent a cardiac catheterization to implant a stent . This should have been my wake-up call to change my lifestyle, but instead I continued on as before, only with more medication. Now my medical expenses were climbing as well. I tried to continue working over the next year and a half, but it was too much for me and I reluctantly took an early retirement.
Then last year I did something foolish: I stopped taking my medication and going to the doctor. The result was a hospital stay for congestive heart failure in March, after I had gained 30 lbs. of fluid and was having trouble breathing. Luckily I got that second wake-up call, and now I’ve changed my diet and began exercising as well as stayed on my medications and kept up with my doctor appointments. I’ve lost weight and made real progress with my health but I still have a ways to go.
With both our incomes cut back and both our medical expenses high (not to mention living in a very expensive part of the country), saving money and budgeting went from good habits to critical survival skills. While the average family’s healthcare expenses represent 6% of their budget, our healthcare expenses represent a whopping 30% of our budget! Even if you’ve never dealt with it yourself, you can imagine how the costs of illness suck people into the black hole of bankruptcy.
Thanks to a combination of good financial habits earlier in life and careful financial management now, we’ve managed to avoid that black hole. We track all our expenses to the penny, have a tight budget, maintain an emergency fund, savings and investments, a mortgage and a car loan, but no credit card debt. So far we’ve managed to remain comfortable enough in a very uncomfortable situation, but it is a constant balancing act and that’s why saving money is so important to me.
While most people don’t share these particular circumstances, most of us would like to stretch our money further for a variety of reasons and that’s why I decided to start blogging about saving money. I want to share what I know and what I’ve learned to help others to avoid catastrophe and reach their goals. We all have challenges to overcome and aspirations for something greater, and when we learn from each other, we have a better chance of getting there.
So why is saving money so important to you?