Saving Change to Make a Change: A Start to Getting Out From Under
It was twenty years ago, 2003, when I sat in my accountant’s office as he looked over the numbers I was presenting to him. I had lost my steady job the year before (the company went under) and, because I was running my own (non-lucrative) business on the side, I wasn’t allowed to collect unemployment benefits. I had no safety net and the debt was growing.
“I think you should declare bankruptcy,” he told me. “With what you’re making, there’s no way you can pay this off,” he continued. “The law was made for people like you. Take advantage of it before it becomes more difficult to do so.”
I had such shame, I broke down in tears in his office. I was brought up with a strong work ethic and my bankruptcy was not due to laziness. I certainly didn’t have a fancy car or trendy clothes or a vacation home or luxury travel. No, my debt came from pursuing my dreams of a music career over the preceding five years. Recording, doing gigs, advertising: It all adds up to a lot of money and the amount I was taking in was no match for what I was spending. There’s a reason why the experts say that whatever it costs to make your product, double that for your budget — advertising is half the budget. Nearly impossible for an independent musician to do, especially before the ubiquitousness of the Internet came along, where one can put out content all day long, mostly for free.
But I don’t want to make excuses. I failed. My only choice was to pick myself up, dust myself off, and start all over again. (Thank you, Dorothy Fields.)
If I was to prevent the same fate from happening again, I needed to change my habits. I didn’t really change my career in any practical way. A few years later, I went back to graduate school . . . for Creative Writing. Another moneymaker! And in recent years, I’ve gone back to music again.
But, in the meantime, my income had improved, often with two jobs, and I had moved up from proofreader to editor, from law to medical, in my main income stream, which resulted in a higher salary.
While that was important for my overall financial picture over the last twenty years, it was really the small habits that made the difference in preventing another financial collapse.
It started with — are you ready for this? — saving my change! Now, these days, so many folks don’t even use cash. (Don’t get me started on the recent trend of eateries that have become non-cash establishments. I will not patronize them. They basically say, “If you aren’t wealthy enough to have a credit card, we don’t want your business.” FU.)
Now, I like the convenience of Venmo and PayPal like anybody else. I use them for business, to either get paid for my freelance gigs or to pay others. But I have a general rule: If I am buying something for under $20 (and often more than that), I will use cash. It is my belief that if we don’t see actual money, we don’t value it; it’s almost not real to us.
So, if I make a purchase and it comes out to $12.48, the bills go into my wallet and the change goes into my pocket. At the end of the day, all the coins go into a jar. The lid on the jar is like a force field; I know that I will not open it to take money out (until it’s time to roll up the coins to bring to the bank).
At the end of the year, for the past twenty years, I’ve banked an average of $400 a year, or $8,000. To the many who make a lot more money than I do, that seems like silly chump change. But I save that money effortlessly, on top of whatever else I save as part of my monthly budget. The coins go into an emergency fund or maybe toward a vacation. It’s $8,000 that would have disappeared otherwise.
It is easier to find five hundred ways to save $1 than one way to save $500. By saving my change, I’ve accomplished the latter without even thinking about it.
I sometimes tease my mother, now in her 80s, because my parents have retired comfortably and they are in their final years, and yet she’ll still buy the on-sale brand over her preferred brand just for the savings, which often amounts to cents. Yet, they each have a high school education and, although she worked part-time here and there, mostly they relied on my father’s income. My father, who worked for AT&T, took the buyout when the monopoly was dissolved and was able to retire at 55! (I have now passed that age and still have many working years ahead of me.) To boot, they raised four kids close in age and somehow contributed to our college educations.
I want my Mom to get her preferred Red Rose tea over Lipton, but old habits die hard. Old habits also allowed them a long, comfortable retirement.
I still don’t always live up to my own rules (who does?), but I have adopted the Suze Orman mantra when I shop: Is this a want or a need? And usually I put the family-size bag of M&Ms back down — not good for my wallet or my waistline. At this stage of my life, I’d rather spend my money on big-ticket items like travel. In order to do so, I have to let the little pleasures go.
Looking back twenty years ago, I am still filled with shame that I had to declare bankruptcy because of my failed business.
But, as author and philosopher Vernon Howard once said, “Disillusionment with yourself must precede enlightenment.”
If we can’t learn from our mistakes, what’s the point of life?
