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Why I’m a money multitasker

by Karen on April 19, 2010

Last week’s post about holding off on paying down debt sparked a little controversy in the comments. I wanted to clarify some of my views, because there seems to be some confusion about my financial philosophy.

First of all, I am not debt free. I have never claimed to be. Like most 25-year-olds, my husband and I both carry student loan debt. I’ve written about it before. I don’t regret a day of my education, but I do regret some of my financial choices during that time. But it’s done now.

My husband is a graduate student. I earn an entry level salary. We’ve been blessed with a few pay increases over the past few years, but our income remains pretty low by today’s standards.

When I started this blog, I was depressed about our financial situation. We had credit card debt, student loan debt, no savings, tuition to pay, and we still felt like we didn’t have any money left over for fun. I wanted to learn to save without sacrificing fun.

Since then we’ve adapted to spending very little money in our daily lives. We don’t eat out. We shop the clearance racks (when we do shop). We meal plan. We share a single vehicle. The result is that 30% of our income goes directly into savings. Another 10% of our income goes toward debt repayment.

As my husband prepares to graduate next month, and we prepare to close this chapter in our lives, we have been spending more than usual lately. After three years of frugal living and hard work to pay off credit card debt, build an emergency fund, save for our move, and save for our vacation, we are rewarding ourselves.

I did not ask for permission. I don’t think any of you should ask for permission from anyone when you make decisions about how to manage your money. The point of my blog — from the beginning — was for my husband and I to learn to live on less than our already low income so that we could have enough money to pay debt, save, and enjoy life. Those are my priorities.

I have never subscribed to the Dave Ramsey philosophy. I understand that it’s worked for many people. I admire them, and would never ever judge their choices. I’m happy for them, because they’re happy. But putting every single penny of my extra income toward debt repayment doesn’t make me happy. I don’t want to wait until I’m debt-free to have children, own a home, or see Europe. So I’m using some of my extra income to save for these goals while I pay down our debt.

I admire the commitment to debt-free living, I do, but there is room in my budget for more than that. Dave Ramsey’s baby steps philosophy is focused on one thing at a time — save, then pay debt, then save some more. Only after you’ve saved and paid debt is there room for fun. I just don’t believe that.

I come from the generation of multitaskers, and I think if you’re smart about your spending, you can do a lot even with a very limited salary — without increasing your debt. You can save money, have fun, and pay down debt at the same time. It will take a little longer, but it’s worth it to me. I will eventually be debt free. That low-interest debt will be there waiting for me when we get back from Europe. And we will pay it off — on our own terms and our own timeline.

What Dave Ramsey takes for granted is that we have all the time in the world. But what happens if you spend your young life doing nothing but saving and paying down debt, and then your life is cut short by tragedy? You’re left with no time to enjoy the riches you’ve accumulated. I’d rather multitask now and know that I won’t run out of time before I can enjoy the fruits of all that saving and hard work.

When we get home, it’s back to counting every penny, just like we have for the past three years. It’s back to saving for our goals through very limited spending. We can’t forget about why we’re doing this, though. We want to build a better life for ourselves, and sometimes that means spending a little money.

The whole point of budgeting is making your money go further. If there’s something you’ve been wanting to save for, don’t wait for permission. Start saving now. I think you’d be surprised at just how far your money goes if you spend carefully.

Photo by amagill

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{ 20 comments }

1 Quinn April 19, 2010 at 8:26 am

LOVE this post, and your philosophy!

2 The Non-Student April 19, 2010 at 9:19 am

Love this post, too. I found that there is a way of living too frugally and not enjoying life because of it. Moderation is key. And yes, as a young person, I have the privilege of time and I want to enjoy it with friends, going out sometimes and not being afraid of spending a little money doing so. Great post!
.-= The Non-Student´s last blog ..Did I Just Dance on a Bar? =-.

3 from the desk of ...me April 19, 2010 at 9:35 am

great post…first of all, you and your hubby are doing a great job at sharing what works for you. while i am a dave ramsey fan, i don’t think everyone has to follow his road to debt freedom. thank you for being so open and honest and willing to let us all into a very private part of your life/marriage. i applaud you for your efforts and for having a fantastic blog. at 35, i’ve learned so much from you and was quite surprised that you were only 25. pat ur selves on the back for doing a wonderful job!!!!!!

4 Cathy April 19, 2010 at 9:50 am

Great post! You are so right. We only have so long to enjoy life and sometimes even that gets reduced due to unexpected health changes that occur earlier in life than expected. Your posts are always motivating me. I only wish I could do as well with my budget as you do…..but I am getting there!
.-= Cathy´s last blog .."You Look So Good" =-.

5 Lindsey April 19, 2010 at 10:41 am

Nicely done! I’d have to say I have a similar philosophy to you as far as finances go. My husband and I are very young, with three kiddos, and have a little debt. But we’re comfortable, don’t live outside our means, and are able to do all we need to do with a little extra. Debt is being paid down steadily, and we’re okay with that.

6 Brittany April 19, 2010 at 12:15 pm

I think I will now say I subscribe to the Karen Green (err… Sams) method of financial living!
I tried to the whole Dave Ramsey thing once when they were doing it in my church, but I agree, it’s too strict. I mean I understand that we all took on this debt knowingly and willingly, but like you said, we shouldn’t have to suffer thru all of our 20s/30s and have no lives just trying to pay it all off sooner. I’m willing to live with a couple extra years of paying knowing that I can still enjoy my life while I’m at it.
Kudos to you all for meeting so many goals already. You deserve your trip to Europe and it’s going to be awesome and you guys will love it and never regret it! (I just hope that darn volcanic ash cloud will dissipate by the time you leave!)
.-= Brittany´s last blog ..Dalian Half – 1:58:59 =-.

7 Kacie April 19, 2010 at 1:04 pm

Love this post! You are doing a great job.

People who really seem to succeed with Dave’s philosophy either have higher incomes or lower debts and are already in a house — or are just really really motivated to pay it off.

Dave would probably have me wait until I have 20% saved up for a 15-year mortgage. I’m just not willing to rent that long, though I do see the wisdom in doing that.

Being frugal doesn’t mean depriving yourself of every fun thing. If you could get out of debt in just a couple of years, that’s one thing — but a decade or so is another story.
.-= Kacie´s last blog ..Putting a raise toward 401k contributions =-.

8 Angie April 19, 2010 at 5:28 pm

I AM PROUD OF YOU!! You have paid of your credit cards and saved for a vacation without going further into debt!! I think that you are wise person and are doing great!! Keep up the great work and one day you will have the student loans paid off as well!!!!!!!!

9 Marie April 19, 2010 at 5:40 pm

We have 40k left in student loans earning 0.65% interest. Which even though ING pays nothing right now, its still earning more than my student loans. We plan to live while paying these off. I think the beans and rice philosophy make a lot more sense when the interest rates on your debt are crushing.

What we are trying to figure out right now is how much emergency fund do we need. We have 3 months expenses. Plus another 4 months expenses in an account earmarked for a new to us used car (which will hopefully not be needed for 5 years). Our mortgage company finally got back to us after 2 months of back and forth and they will not let us drop PMI without an appraisal which would necessitate 50k we don’e have to drop it so prepaying our mortgage isn’t motivating either. We’ve been asking ourselves, when do we get to live?

10 Karen April 19, 2010 at 6:31 pm

Marie – Live NOW! As long as you continue to put some of your income toward savings and some of it toward debt, it’s okay to budget some money for fun. Just make sure you’re living within your means, but I absolutely think it’s okay to live a little while you’re saving and paying debt!

11 Tierney Stevenson April 19, 2010 at 10:04 pm

Great post Karen! Loved reading about your success and philosophy. :) Have a fabulous trip. You have earned it! Good luck packing and moving. We are about to do the same thing!

12 Jill April 19, 2010 at 10:06 pm

Karen, I don’t think you owe an explanation to anyone, so don’t let anyone make you feel as though you do. If you go blow every penny you have on this trip, it is really none of our business (I know that won’t happen, I’m just saying…).
.-= Jill´s last blog ..I cannot get it together =-.

13 Derek April 20, 2010 at 9:34 pm

I really appreciate the last statement in your post. Also, you may have just coined a new phrase “money multitasker”… better get a patent on it!

14 Briana's Mom April 21, 2010 at 5:56 am

Karen, I love your blog and visit it a couple times a week. I agree with you, in that only saving is not healthy, anymore than only spending is not healthy. Moderation in all things. You have learned the secret to financial stablity: a budget and living within your means. Life is for living, and vacations are special times that create wonderful memories. We can’t predict the future and if we live only for the future, we miss out on the present. You have prioritized what is important to you, saved, planned and are ready to go. Have fun.

15 Angie April 21, 2010 at 10:36 am

“I’d like to thank the a-hole who left a nasty comment on my blog today for making a bad day just that much worse. Thnx, a-hole.”

“Jerk commenter harassing me for the second day in a row. Seriously, dude, why do you care so much about my vacation? Get a life.”

Sweetie, if you’re going to open a blog up to the world about how you choose to live “Simply Frugal” you have to have a thick enough skin to accept criticism (and/or people who challenge your method) without taking it personal. To show your “tweets” on your website about how someone pushed you over the edge, and then to call them an a-hole (twice!)… is not so, uhm… professional? classy? mature?

Such a risky step when looking for a job. IMO.

16 Karen April 21, 2010 at 10:28 pm

Angie – I make no apologies for who I am, and I always encourage my commenters to disagree with me. I am open to challenges and criticism and I absolutely welcome them. Hearing other people’s thoughts are my favorite part of this website. But I draw the line at personal attacks, especially when certain commenters leave hateful remarks and then return later to attack me more. Challenging me and even criticizing is one thing, but I will defend myself when I’m unfairly attacked.

If a potential employer doesn’t want an employee who can stand up for herself, then I’m not the right candidate for that job anyway, and would likely end up unhappy there pretty quickly. I’d rather they disqualified me over something as superficial as a tweet about a nasty blog comment than go through all the way through the application process or even accept the job only to find out later that it’s not a good fit.

17 Jennifer April 21, 2010 at 6:55 pm

Living frugally is about pinching pennies in some areas to spend in other areas that matter to you. I agree that if you want to do something or buy something, then start saving. I adopted that mindset about 7 years ago. I wanted to go to the beach and we had no money and lived thousands of miles from the ocean. My husband laughed at me as I saved our change and deposited it in a special account for my trip to the beach. Well, last summer we went. I know some people didn’t think we were spending that $3000 wisely, but we had so much fun and I don’t regret it for a minute. It took years, but I did it, I saved the money and we went. Even though we had just taken out a large van loan, we went to the beach. I think y’all have a good plan, but I would hate to be saddled with that much debt for so long. Good luck and have fun in Europe.
.-= Jennifer´s last blog ..Passing by the deals =-.

18 Carla April 23, 2010 at 8:55 am

Very well said, and excellent point. I do want to pay down my debt, but I don’t want to miss out on living while I do it.

19 Emily May 2, 2010 at 9:46 am

I totally agree with you. I’ve always found Dave Ramsey’s advice to be too cut-and-dry, without taking into account personal goals or situations. I think his advice really works for someone who has no plan and feels like they’re drowning, but you have a plan! So more power to you!

20 Jessica May 17, 2010 at 10:46 am

Thank you!! Your blog came up while I was googling “living on less”. My husband and I are both in graduate school, we’ve lost our house, and we are buried in credit card debt. Now, we are expecting our first baby. It was a relief finding someone else that is 1. in our position and 2. making it out alive. Have fun in Europe…that’s our dream to go back to Europe when we finally get out of school. Thanks for sharing this :)

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