The Debt Slave: Do You Feel Trapped in Your Job?

wage slave

It’s 5:45 in the morning and your weekday alarm clock sounds, abruptly yanking you out of a peaceful and cozy slumber, AGAIN. How do you feel? Bright-eyed and bushy-tailed? No? Perhaps groggy, but functional? Or do stress hormones start flooding your body before your feet even hit the floor? A concrete cloud of obligations, expectations and deadlines weighing you down during your hour long commute to your cubicle?

You’d like to take that alarm clock and smash it against your bedroom wall, pull the covers over yourself and quickly slip back under the surface of consciousness. But you can’t. You’d like to have control over your own time, but you can’t. You need that job. You live paycheck to paycheck. You have bills to pay and a standard of living to maintain.  (Wage slave). If you have debt, it’s even worse. The wage slave can downgrade lifestyle and change their job. A debt slave MUST.KEEP. WORKING. at the highest salary possible.

I can relate. This is my life right now.  I hate debt.  I HATE debt.

stress

My workload ebbs and flows with production cycles.  A while ago I was facing burnout; pulling weekenders and all-nighters, taking forever to get basic work done, getting daily tension headaches, body-aches. I was eating asprin like candy. More crows feet and laugh lines greeted me in the mirror. I was so stressed, that I ended up doing something that I only did one time before in my life. One day I had to take a sick / mental health day off  from work. I was a wreck.

Fortunately, the workload lightened; sometimes by a lot, and the world was ok again. Unfortunately the crows feet and laugh lines didn’t lighten. Sigh.

Now, I’m squeezed between two very large, high profile projects with senior executives watching, and I’m dropping the ball. Co-workers are rushing in to do work that I should have had mostly done by now. Goodbye to any possibility of a salary raise.  I’m spending this weekend working to catch up and getting headaches again. Ugh.  I want off of this stress roller coaster, but the price of exit is too high. I must keep working at this job. I don’t want to paint my job poorly, most of the people are quite nice and good to work with. I’ve learned from personal experience that that is worth its weight in gold. I’m not in an abusive job (anymore), so I’m not looking to leave. There are things that I really like about my current job and I’m grateful to have it.

work-stress-depression-400

It’s just that debt reminds me that I have no choice. I’m not here because I want to be. I’m here because I have to be. I’m working, but not enjoying the benefit. Seeing others my own age and younger with their spouses, homes, cars and exotic travel destinations makes me feel like a failure.

They say that depression is born in the gap between where people want/expect to see themselves in life, and where they actually are in life. This is often the case when we magnify and give too much importance to our perceived failures. Maybe that’s what I have. Or maybe I’m just coming to grips with reality. Maybe the vestiges of my youthful optimism have been burned away.

If you have a lot of debt – deep debt – then you know what I’m talking about. When you look ahead, all you see is a long dark lonely road of debt slavery where you realize how trapped you are. You realize that, if you are fortunate enough to have a job, for the next X years of your life, you will work to make others richer. You realize that you will have no choice but to drag your tired body out of bed every morning, get in your car / on the bus and go to work when you’d rather do anything but. You are a debt slave.

At nearly 40, I’m renting a room and riding the bus to pay back debt. I’m putting off life experiences… I’m right back where I started in life. My standard of living will be lower than my mom’s was. At least she could afford her own apartment and car when raising my siblings and me.

I am accepting that this is where I am and trying to deal with it. I’m serving my time.

Enough of this. Time to catch up on my work.
Where’s my asprin?

What about you? Has your job gone to the dogs? What are you doing about it?

careerdog rwbayerscpa com

“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

Extreme Saving and Early Retirement

mmm financial independence chart

Image Credit:  andhigherstill.com

Are financial freedom and financial independence still possible for me? Are they possible for you?

I’ve started thinking that once I’ve eliminated this mountain of debt, I could keep my savings rate high for a few more years to try to do some catching up on retirement savings. I know its too late to catch up to 20 lost years of compounding interest. I know that Financial Independence (complete retirement) may never be possible, but at least I could get to place of ‘Financial Freedom’ (aka ‘working retirement’) within the next 10 years.

Meaning that I’ll have to keep working after 50, but I can work where and how I want, knowing that I’ll have enough return from my investments to always have money to afford a basic place to sleep and food to eat. No staying at a terrible job out of desperation. For example, once in Financial Freedom, I could do contract work for 6 months each year and then travel and relax the other half of the year, or get a job overseas, or take a lower paying job in a cool environment with less stress, or hell, work for myself. It’s easy to get giddy at the possibilities.

What do I mean by Financial Freedom and Financial Independence? The image below shows my (over)simplified definitions.

Freedom vs independence

Image credit: doubledebtsinglewoman.com

 Image term definition: * FU Fund = F@%% You! Fund – This is the money that you keep in savings to protect you if your good working environment suddenly becomes toxic/unstable/etc., and you have to leave before lining up another job.

Want to learn more about extreme saving and early retirement?  Two of the best known sources on this topic are Mr. Money Mustache and Jacob @ Early Retirement Extreme. Both of these men ‘retired’ in their early thirties as a result of living on little and saving a lot.

Mr. Money Mustache:

The Shockingly Simple Math Behind Early Retirement

Getting Rich from Zero to Hero in One Blog Post 

How I Retired at 32 (Yahoo Finance Article)

Jacob @ Early Retirement Extreme

 How I became financially independent in 5 years

How I live on $7,000 per year

As you can tell, Jacob is the more extreme of the two. Both of them have great information-packed sites including forums and other resources.

Could I save 75% net income for 7 years to reach Financial Freedom?  I’ve seen this table in a few places online, so I’ve re-created it here.

Retirement Chart

At this savings rate, I could be out of debt in 3 years, and ‘working retired’ (financial freedom) 7 years after that at 50 years old. Wow!  Is this even possible for me? Right now my living expenses account for about 23% of my net income per month for a 77% savings rate. Yes, it is possible with sacrifice. Is this reasonable for me over the long-term (several years)? Hmmm.

Therein lies the rub. At this rate I don’t know if I will last in this career for 10 years. I don’t even know if I’ll last in this job for another year. The last few months have been quite stressful. I don’t know what the future holds. Even so, it’s still a goal to aim for and food for thought.
Anyone else consider extreme saving for early retirement?

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

Renting a New Room and Writing a New Budget

rent-room

(This is not a picture of my new room. My room will not be as nice as this, but it’s somewhat similar.)

As you may know from my past posts, I have been sharing (one roommate) an overpriced apartment for the past year. One of my goals for 2014 was to find a cheaper and cleaner place to live once my lease ended.  Well, the good news is that I have! I found a room on Craigslist a week or so ago that I went to see.

It was not love at first sight.  The picture in the ad left much to be desired, but the rent was affordable so I had to at least check it out. It is  a few towns over from where I live now.  I decided to walk there from the public transit station along the busy main street. It was unusually hot that day and there were a couple of  points where I thought I’d miscalculated the distance on the map and wanted to turn around and go back home, but I didn’t and eventually found the place.

There are three roommates, all women in 40s/50s, pleasant, so that may be a positive change. The room, like the house, was small, old, and a little dark, but neat. At first I didn’t like it at all, but the more I kept thinking about it, the more it made sense to rent the room.

purple-flowers
Image credit: photographymad.com

I went back a few days later to drop off the deposit, sign the lease and see the room again. Talk about a big difference! I took a different route to get there by walking along a green walking and biking path that I’d learned about thanks to Google Maps. It was cool, breezy, and calm. I got there before I knew it, and realized that the house is within a few blocks of a small public library (win!), a popular local natural grocery store (big win!) and a small gym.

One of my long-standing goals is to find a way to get in shape. For the first time in my life I have developed the dreaded muffin top. My skin, which was never clear to begin with, has gone completely to crap, and I have the ironically named ‘laugh lines’ exploding all over my face.  Why? It’s not from laughing, I assure you. I’ve been stressed out to the point of burnout over the past year.

I’m hoping that being near a good grocery store and a running path will make it easier for me to make some much needed health improvements.  I don’t know if I’ll spend money to go to a gym, but if I can at least start running that’s half of the first battle. Anyway, as I said, what a difference a few days made. I’m glad that I didn’t pass this place by because of the Craigslist picture. I’m glad I didn’t turn around on my way to see it that first day. I can make this room work. As long as its  safe, clean, and bug free, I’ll be fine.

stack-of-money
Image credit: stackthatmoney

I’m mostly excited about the rent. Did I say it was affordable? It is only $500 /month INCLUDING all utilities and wi-fi!!

Depending on where you live, $500 per month may not seem special, but where I live now, rent that low is RARE to find. So my housing costs will drop from $1500 /mo. to  $500/ mo. for a $1000 savings each month! I can’t wait to start throwing all of it towards this credit card debt. With this housing shift, I will be back on track to kill this credit card debt entirely this year!

I won’t be living high on the hog, or even low on the hog. You all know I’d MUCH rather have my own place, but by doing this I’ll have less and less debt to stress out over. I hope to be in the room as little as possible and spend more time outside for once, so that’s another goal.

After this credit card debt is gone, I’ll reformulate my basic budget

 MY AUG – DEC. 2014 BASIC BUDGET

Q4 2014 Budget

Yeah, that phone charge is out of control. I felt like I had to go unlimited because I currently work from home 2 days per week and with all the conference call meetings i’m on everyday – I kept running out of minutes and getting slammed with extra charges.  (I don’t get a company phone.) I will be looking into how to reduce this.

I really hope this new room works out for me and I can stay for a while. This may be the best shot that I have for while to cut down this debt.  I’m finally getting back on track to follow my own advice.

Cutting down on housing and transportation expenses are the quickest ways to save the most money. If you’re thinking about taking the leap yourself…

Do it  credit - thetaline dot org
Image Credit: thetaline.org

“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

Is Extreme Frugality for You?

frug coneslayer

When I talk about extreme frugality, I’m not talking about ‘Extreme Cheapskates’ who take risks with their health and safety.

I define Extreme Saving or Extreme Frugality as living on 20 to 40% of one’s take home income. I am practicing extreme frugality, living on 25% of my net income, not as a lifestyle, but out of necessity.  When I am out of debt, I will always retain a frugal mindset, although I will not practice it so extremely.

Are you the extreme type?  Here’s how to tell if you are ready for extreme frugality to get out of debt. You are are ready if the following principles resonate with you.

1. You Can’t Outearn Stupidity

Dave Ramsey is fond of warning anyone who will listen that when you are in debt, you have to change your lifestyle. You can’t simply get two or three jobs without making adjustments in how you think about money and how you manage it. In other words, you can’t outearn stupidity.

2. You Are Not Your Crap

You must be willing to give up materialistic things and stand on your own with out them. This doesn’t have to be forever or for all things, however you need to know who you are without them. You need to learn what you mean to people without them. You have to break the  consumerist, materialistic mentality that got you into debt in the first place. You need to really know that you can live without any of it. You are not the labels on your clothes or the hood ornament on your car. You need to give it all up for a period of time. You are not your crap.

I always thought that I was not materialistic, but now I can see that I was, at least somewhat. Digging out of debt is teaching me to be very conscious and very selective about the things that I want to buy when I’m out of debt and what they will mean to me. I’ve also learned that I’m more interested in experiences than stuff.

3. You Need to Live the Lesson

burner

You are the type of person who needs to experience something in order to truly understand it. You need to feel the pain of the consequences of your past bad decisions. Most of us have learned the lesson of our financial mistakes mathematically, but there is more to learning a lesson than just math for some of us. For some of us, we need to LIVE the lesson. Some of us need to metaphorically feel the pain of the hot stove on our hand, to learn at a deep visceral and permanent level not to ever make the same mistake.  We need to live through the consequences of being financially illiterate, gullible, and uneducated about personal finance.

Everyday when I wake up and go out into the world, I am keenly aware of the gulf between where I am and how I present myself, and where I feel I should be and how I’d like to present myself.  It’s depressing.  When I’m down, I remind myself of why I’m living this way and what got me here. When I’m taking crap at work I remind myself that my poor decisions with money, and resulting debts, have trapped me in this situation. I am living my lesson, thoroughly. And once I am out of debt, this is a lesson that will NEVER be repeated. EVER.

4. You Need to Get On with Life

By being an extreme saver, you get out of debt faster. You are ready to rip the bandage off quickly, to live with more discomfort, but for a shorter period of time.

I don’t want to pay this debt for 30 years and into my old age. Even the 10 year repayment plan for my student loans is too long. I’d like to save money and live abroad for a year. I don’t want to be in my 50’s before I can afford to do that. Debt carries too much risk for me. At any point in a 10 year or 20 year repayment plan, I could become injured or ill or unemployed and we know what happens to people who default on student loans. Life becomes a living hell. My goal is to be out of $140,000 debt in 3 to  5 years, depending on how much money I can make and save. I’ll be in my early 40’s by that point and still young enough to let my hair down and have a good time while I save for retirement.

well travel

These are just a few reasons that attracted me to temporary extreme frugality. It is not for everyone, nor should it be. Is extreme frugality right for you?

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

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Photo credits:

Frugality – ConeSlayer @ Flickr

Well Traveled – Andy Barrow @ Flickr

Burner – Muffet @ Flickr

The 3 Types of Extreme Savers

There are many types of savers, but I want to talk about three broad categories of extreme savers.

They are:

1. Those who extreme save for the sake of saving

Image

Cue Extreme Cheapskates theme music here. These are people who practice extreme frugality as a lifestyle. They oftentimes, (but not always), have some type of neurosis caused by a traumatic event in their past. Kate Hashimoto, (pictured above), began extreme saving / cheap-skating after being laid off from her job some years ago. Nowadays, although she is fully employed as a very well-paid accountant, she refuses to spend money on anything and often takes risks with her health to save a buck. This type of extreme saver gets the headlines and television shows. Depictions of this group in the media often turn the general public away from frugality altogether.

The second two types of extreme savers do not approach frugality as a way of life.

2. Those who extreme save to catch up financially

People in this group approach saving as a means to an end. They practice extreme frugality to get out of debt and/or to shore up investments to ensure a comfortable retirement. These savers are in it for the long haul as it usually takes several years to reverse years of bad financial decisions.

3. Those who extreme save to bide time

People in this group view frugality as a temporary condition to be tolerated until conditions improve. Generally this person is someone who is medical or law school etc., or be someone who lost a high paying job. They are cutting expenses for a few months or years until graduation or the next job comes along at which time their income will explode. It is uncertain whether frugal principles will remain with them or whether they will return to their old ways.

Also Read: Is Extreme Frugality for You?

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)