Living on What We Earn: A Learning Process

For the last three years, my husband and I have had a very low income, well under the median income level of the average American family.  This was a result of my decision to launch a freelance writing career and my husband finishing his Ph.D.

We live in the suburbs of Chicago, so living expenses aren’t low.  Simply put, we couldn’t live on what we earned the last three years, which is why we incurred credit card and student loan debt and went through our $12,000 emergency fund.

Things Should Be Looking Up, But. . .

Now, however, the tide is changing, and our income is increasing.  My husband has a post-doc position, and my freelance business is growing.

We now are almost at the median income level of the American family in 2009, which was $60,088 according to the U.S. Census Bureau.  While this should afford us some comfort financially, it doesn’t because we are still cleaning up the financial mess from the past.

Preet Banerjee, author of the website, Where Does All My Money Go, in a recent speaking engagement, classified the ability to incur debt as the bank allowing you to borrow money from your future self.  As he says, “One day you will be your future self, and you won’t be happy.”

This is where we are at.  Three years ago when we took on student loan debt and credit card debt, we were borrowing from our future selves.  The selves we are now, and as Banerjee says, we aren’t happy.

Avoiding Mistakes of the Past

My husband and I both feel that we are in an important phase of our financial life.  If we can get through this period of paying down debt and growing our income without incurring any more debt, we should be in a comfortable financial position a few years from now, ideally debt free and with an even greater income.

However, that means a few more years of struggling now.

For instance, we are facing $2,000 in car repairs, and we just don’t have the money now.  A few years ago we would have put the expense on our credit card, but we refuse to go that route anymore.  Instead, we are scrimping and saving for the repairs, and meanwhile, I’m trying to walk rather than drive to buy us more time until we need to make the repairs.

I find it a bit humorous that credit card use allows people to fool themselves into thinking they have more money than they do.

Using credit cards now would help us float through for another year or so until our income increases greatly, but we won’t do that again.  We are living on what we earn and paying down debt even though it isn’t a comfortable process.  We are done borrowing from our future selves.

Banerjee puts it succinctly when he says, ” Think of borrowing money today as negotiating a pay cut with your future self.”  He also asks, “How much money do you want to pay to spend your earnings earlier?” i.e. pay interest on borrowed money?

Our answer is clear.  We aren’t going to negotiate any pay cuts with our future selves.  We are struggling now, so our future selves can have a more comfortable life.


Bathroom Remodels on a Budget

DIY home projects are not for the faint of heart. They require extreme patience, determination, and time. If you have these things, you can save yourself alot of money-especially when you start thinking about selling your home.

The bathroom is one of the easiest rooms in your house because it’s usually the smallest. Redoing a guest bathroom can sometimes be done within in a day or two. With the help of some paint and a little ingenuity, you can renovate your bathroom without ever picking up the phone to call a contractor.

Redo The Fixtures

Change the light fixtures to revamp the bathroom. I found an old chandelier at a Salvation Army and ended up redoing it and using it as the focal point of our master bath. Don’t let the process scare you-it is actually an easy fix.

Look at bathroom faucets for inspiration: you can mount them on the wall or make them appear seamless with your sink. I like to look at home improvement sites to check for trends and see if I can duplicate them on my own. FYI: This is a great idea if you’re looking to sell your home.


I can’t stress this enough: painting is the most economical way to change the look and feel of a room. You can choose to paint the walls or the hardware. The beauty of paint is that if you decide you don’t like the color once it’s on the walls, you can try another one!

Choose a mood. Going for warm and cozy? Choose rich, deep colors like ruby and gold. Going for a peaceful and tranquil feel? Stick to cool and muted colors like periwinkle blue. If you have more of a vibrant style, go with reds, blues, and yellows.

Change The Mirror

Whether you’re adding a frame or switching it out with another mirror in your house-it will make a big difference. Find one that inspires you and design the bathroom around it. Try a modern frame and make your bathroom a “spa getaway.” Find an ornate oval style mirror and go vintage.

Buy Second Hand

Need something extra to make the space really pop? Stick to Craigslist ads and thrift stores. You can find anything from shelving units to vanities for the sink. By the way, you can turn a regular piece of furniture into a vanity by cutting a hole in the top for a drop-in sink.

This is the best way to get creative with your bathroom. Just keep in mind, the less clutter the better.

Add Finishing Touches

Flowers, framed art, decorative vases and bowls. All of these touches add something to your bathroom. If you have the space, add a small chair or an oversize ottoman.

The Joneses and Jealousy

We spend a lot of time, while talking about finances, talking about the Joneses. We often talk about how most of us make the mistake of trying to keep up with the Joneses by buying cars that are new, houses that are bigger, and generally spending our way into oblivion.  What we seldom talk about is what really is motivating us to keep up with them.

The Joneses and Acceptance

The reasoning that most people assume is really being put to work is that of acceptance.  And, surely, it does play a part.  Humans are, at our most basic, a tribal animal.  We’ve long been conditioned to be that way.  Historically, we lived in tribes, and what was good for the tribe was also good for the individual.  If any individual of the tribe stepped out of the accepted norms, it was likely to get that individual killed, or other members of the tribe killed.

In more modern times, we talk about it taking a village to raise a child.  We talk about how we’re all “in this together.”  We, as children, are thrown into sub-tribes (classes in school) where we quickly learn that it’s easier to get along with the majority of the other children and not be one of the children that’s ostracized for being a bit “weird.”  As we get older, that need for acceptance grows.  We get to college, and the further splitting of our peers into sub-tribes begins.  Graduates from college quickly find that their college tribe has broken up, and they must find a new tribe.  We begin in the place we spend the most time; at work.  In true tribal fashion, we quickly begin attempting to appease those with the most power in order to gain favor, and thus, not be cast out from the tribe.  We call it getting fired.

And, in trying to appease those with the most power (perceived, real, or otherwise), we learn to buy cars that are similar to theirs.  We learn to buy houses that are as big as theirs.  We learn to eat at the same restaurants, drink the same drinks, and hang out in the same social circles.  All because we have a deep rooted desire to be accepted in our “tribe.”  And because we know that humans have a natural attraction to people who are most like us.  We accept them.

The Joneses and Jealousy

The issue of tribal acceptance is almost a genetic issue.  It’s been conditioned into the human psyche for centuries.  But, there’s another, equally powerful reason that we all try and keep up with the Joneses.  Jealousy.

Masquerade BallThe very same urge that we feel to try and gain the acceptance of those with power (again, perceived, real, or otherwise), also is driven by jealousy.  Survival depends on our acceptance.  And our acceptance is given by those we see as having the power.  And the power we see them with is one that we’d love to wield.  For two reasons.  One, we want the power because those with the power aren’t thrown out of the tribe.  And, two, because those with the power have the ability to throw out those they are enemies with.

It’s a story we’ve seen played out in the news many times.  Some guy (or girl) climbs the corporate ladder and finds him or herself at the top (or near it).  Years later, they have some event that brings them down.  Corruption, greed, or some other malfeasance.  On their way down, we start hearing stories about how all those years they were at the top, they were taking the ideas of those below them and claiming them for their own. Their friends got all the promotions. People who disagreed with them would suddenly find themselves the subject of an internal inquiry and then were summarily fired.  In short, they held the power.  They dismissed their enemies from the tribe.  And, while they eventually fell from power, they wielded it to their advantage for a long time.

Few among us haven’t tasted the desire to have that power.  Whether we intend to use it in a bad manner or not, we’ve felt it.  That desire to have the power.  That jealousy of those that do have it.  And, through our jealousy (and need for acceptance), we learn to buy cars that are similar to the car that those that do have the power have.  And we learn to buy homes that are as big as theirs.  And we learn to eat at the same restaurants, drink the same drinks, and hang out in the same social circles as they do.  All because, you guessed it, we have a deep rooted desire to be accepted in our “tribe.” And what better way to guarantee our acceptance than to be the one who does the deciding?

Replacing the Joneses

Whether it’s through a desire for acceptance, or jealousy of their power, we try to be the Joneses.  We try to be the ones with power.  I’ve felt it.  I’ve done it.  Sometimes I managed to accomplish it too.  Maybe not financially, but socially.  Heck, I’ve still got some of the debt to prove it.  And, I’d bet that there are plenty of you who do too.

Replace the Joneses.  – click here to tweet this.

The only real cure, as many of my fellow personal finance bloggers will attest, is to give up chasing the Joneses.  To stop trying to gain their acceptance, and to let the jealousy go.  But, something that deeply ingrained into our human nature isn’t easy to do.  I’ve gone through times where I’ve done really well with not caring what the Joneses are doing.  And the next thing I know, I walk around the corner, and there’s one of them.  And it comes flooding back in a momentary flash of natural instinct.  Before I know it, I’m looking at big fancy houses that I don’t need, eating at restaurants all the time, and buying gadgets like crazy.  And then my senses return, I realize what I’m doing, and the remorse comes.  Remorse for forgetting that I don’t need that big fancy house.  Remorse at the money I’ve squandered.  And remorse at the lack of will power I displayed.  In times like that, I try to remember that it’s only natural to feel those pangs of jealousy and the need for acceptance.  And I try again.

Giving up the Joneses isn’t an easy thing to do.  In fact, it’s nearly impossible to do.  What you’ve got to do is to replace them instead.  Get a different tribe.  That ladder climbing, socialite-ing, money spending tribe isn’t the only one out there!  Just like our ancestors, the modern human race is divided into many tribes.  Find one you want to be in.  Find one whose leaders are living the life you really want to be living, and gain your acceptance there.  Surround yourself with people who have the same passions as you do, and make them your tribe.

Replace the Joneses.

img credit: Jaguar Ahlan! Masquerade Ball 2012 by jaguarcarsmena on Flickr.