Over a year ago, I quit my steady well-paying law firm job. Despite not having a full-time job for almost 14 months, I haven’t worried about money. Here’s how I afforded my year off from legal work.
We Are Not Saving Enough
The savings rate for middle-class Americans is low. The rate jumped to 7.6% in 2019, but that’s still far below what it needs to be to put Americans on solid footing. Now that we are in unprecedented times and unemployment rates are up, savings will likely fall back. It seems easy to just give up. After all, even if you save 7.6% of your salary, it will take 13 years to save a year of expenses for an emergency fund. Thirteen years is a long time! But even if the savings are small, there are many benefits of saving even small amounts.
My inbox’s tone has been very gentle lately. The newsletters tell me, it’s a big scary world and I shouldn’t feel bad staying in my fetal position and only resurfacing when the world is better. Drinking more wine, spending time alone, and vegging out are encouraged, perhaps even celebrated.
Most of my newsletters are directed at women. This is not a coincidence. We teach women to retreat; we men to take charge.
Setting a budget may is tough already but following a budget requires a never-ending slew of decisions and judgments. Budgets are cruel dictators, mean CEOs. They don’t care about us, the little guys, the minions that are carrying out their wishes. But even though we may all complain about how arbitrary and unhelpful our bosses are (I know I do), we may not all question our budgets. Even the best laid plans need to be evaluated and revised as conditions change. Budgets are no different and this is the perfect time to determine whether your budget is ailing from one of the following three mistakes that mess up budgets for lawyers.
It’s not helpful to scold anyone for not saving for the present moment. And it’s a lot of people. 50% of Americans don’t have the emergency savings to live through the Covid-19 pandemic. Maybe you’ve just started your job or just started to get your financial life under control. Or maybe your financial situation was never in control. Whatever your situation, if you find yourself in an emergency situation without an emergency fund, here’s how to handle it.
There are so many financial tasks that we “know” we should do, but who has the time to even remember them, let alone do them. But now that we are all in social distancing, do we have a lot of excuses?
I’ve compiled a list of 50 quick and simple financial tasks you can complete in quarantine to get you jumpstarted on your money goals. These aren’t all clearly “financial” but every part of your life impacts your finances – your health, your relationships, etc. I wouldn’t do them all in a day, but any one of them is feasible in a day. These are all beginner tasks but stay tuned for another post with more advanced tips.
It’s always been easy for me to save money. I would love to congratulate my self-control, but I never realized there was any other way. I saw how my parents and their friends managed money, and I just followed suit.
My environment fully formed my spending habits. It made me consider that we are wrong to congratulate themselves and shame others too much. There are many reasons why it’s hard to save money that have nothing to do with self-control. Let me explain some of the reasons why it might be hard for you to save money.
When people talk about personal finance, they usually want to know how to save money but start talking about budgets and it’s all sorts of panic.
It’s a little odd that people would be more interested in saving money, i.e. how NOT to use money, then how to use it. Money is a tool. It’s not enough to know what inappropriate uses are – you have to know when and how to use your tools to get the maximum benefit. So let’s take some of the stigma out of spending and talk about how to spend money to create a better life.
When I first visited China as an adult, I was really surprised to see Chinese people (over there they just call them “people”) drinking and smoking, wasting time, and being below-average violin players. =P Chinese Americans are not like that. It was then I realized, Chinese and Chinese Americans are fundamentally different people. After all, it’s the group of people who stayed versus the group who left.
I guess this is the fundamental problem with stereotyping over a billion people. In retrospect it seems silly to characterize so many people in a certain way, without really understanding what causes them to be that way. That’s where we start mistaking cause and effect. For instance, let’s start with killing this stereotype: Asian Americans are not cheap. You may see Asian people refusing to spend money on certain things and having high savings rates, but I’d argue it’s not because they’re cheap but because they’re different.
On February 4, 2019, I quit my job. February 19 was my last day at work, and February 20 was my first day of freedom. On this one year anniversary, I’d like to look back at what happened the year that I retired at 35.
I read another blogger’s early retirement post and he could quantify a great deal of accomplishments. And I guess I can rattle off things I’ve done, but that seems like running a different kind of rat race.
I kept busy on my time off. I’ve traveled a bit – to L.A., New York, San Francisco, Redmond, Capetown, Johannesburg (South Africa), Lisbon, Porto, and Sintra (Portugal). This is what I would say if people asked me what I had done with the year. Travel seems to be the only “real” accomplishment worth noting when you’re retired. And to be fair, South Africa was eye-opening, especially after listening to Born a Crime: Stories from a South African Childhood. But to me, the really interesting changes were when I was home.
What I’m focusing on in this post is not necessarily my choices during the year, but the repercussions. I often would made one choice that led to another choice and all those choices led to a different trajectory. It’s like when I started this blog, then I started Twitter to promote it, then I met friends, and two of those friends were the duo that started Chain of Wealth, who will figure significantly in some of these adventures. You just never know where things are going to take you. And the oddest part of any journey may be where you end up.