So I was just listening the latest episode of Beginning Balance, a podcast by Jesse Mecham and Mark Butler.
Right now our budget is very tight. I wouldn’t say I’m living paycheck to paycheck, but it is much closer to that than I would like. A lot of our money goes to food, and a significant portion of that in fast food because my wife just doesn’t have the energy to cook at home. I have a significant amount of debt, mostly in our cars. As someone who has dreamed of financial freedom since high school, my situation stresses me out.
Every time something unexpected happens – something breaks, we need a new something for the house, we overspend a budget – I freak out a little. Every time this happens I respond by throwing myself into some business venture/software product. That’s really not surprising. I’ve been a student of business since I was in middle school, and I am a strong believer in the potentials of creating your own business. But the podcast got me really thinking about why I do that. I mean, yeah, I am a business-focused person. But this happens every time something comes up.
I don’t like the feeling of impending financial disaster. Sure, it’s just slightly overbudget on clothing, but what if we can’t roll with it and it becomes debt? What if for some crazy reason I lose my job or the economy collapses? What if I suddenly don’t have the money to feed my family? Looking at this logically that’s ridiculous. I’m not worried about the hard work. I mean, we’re planning on retiring to a homestead for goodness sake!
To be fair, we can’t move to a homestead right now even if we wanted to. We don’t have the money for it, and I can’t afford to not have a job. Back of napkin, even if we produced every bit of food we eat, we would probably need to make around $4500 pre-tax to cover the rest of our expenses. If we can eliminate our debt, we would need about 33% of that. One of our goals right now is to do just that. (I know the invest vs. pay off debt argument. I’ll get into that another time.)
After that comes luxuries (though the expense number above includes some of those). My wife loves traveling and a quarterly trip somewhere would be a dream. So an additional exorbitant $2000 a month would allow for some crazy traveling as well as equipment, supplies, and other fun stuff. So all together something like $3500 a month for a very comfortable even luxurious life. That’s totally manageable even with some very small businesses. It’s also not urgent. I have no reason to panic. I have no reason to believe I’m about to lose my job.
So I have a target number of $3500 per month to be comfortable. But it’s not really about the money for me. The only time it is is when something unexpected happens and I get scared of failure and scared of the discomfort and embarrassment. Other than that I never talk about making money when I talk business ideas with my wife. I talk about how I can help customers, how I can build and support a team, how I can make a difference. Money is a means to accomplishing those things.
So I think my conclusion is this: If I want to build a business, that’s cool. If I want to increase my income, that’s cool too. But if I feel the need to build a business and increase my income because there’s a minor stress on my budget that has me panicking and I would like to avoid that discomfort, I need to stop. Unexpected things will always come up. Challenges will always surface. If I can’t figure out how to handle the stress and discomfort that comes with those now, it’s not going to get better with more money. If anything it will get worse. It is much more important to learn to manage your stress and emotional responses to money than it is to try to avoid it. If you can’t manage that stress, it is just going to sabotage you later.