Every time you get paid, I want you to buy yourself some “No!”
Whatever are you talking about, Blue Lobster?
It’s simple. When you receive your paycheque, endeavour to not spend all of it.
Now, I know that there are those who are barely surviving from one payday to the next due to a low income. It’s very tough to survive when you don’t have enough money. It must be an awful and harrowing way to live. If I had a simple solution to solving the poverty problem, then I would shout it from the rooftops… sadly, I don’t.
For everyone else, there’s enough money to buy the option of saying “No!” to what you don’t want in your life. You may have heard of this concept by its more traditional phrase – pay yourself first. This is incredibly good advice! And I’ve yet to hear of anyone suffering any kind of adverse consequence by ensuring that they feathered their own nest before dispersing the rest of their income to Everybody Else.
When you save some of your paycheque, you’re buying a quantum of power. That power is related to your ability to buy back some of your time. Think about whether you love your job. Are there days where you just don’t want to work, whether “at the office” or from home? When you’d rather garden in your own backyard or spend the day enjoying the fresh spring air?
Or how about that vehicle payment? The financing company has you over the barrel. If you stop sending them several hundred dollars every month, they’ll repossess your vehicle. How nice will it be to stop sending them money every month? What else could you be doing with that payment?
Whatever your monthly payment is for, does the payment bring you joy? Are you excited and thrilled to see the money leave your bank account every month?
No? I didn’t think so.
Cruel Ironies
You can make more choices about how to spend your time when you’re not as dependent on working for an income. The cruel irony is that there’s no incentive for your employer, your creditors, or the Ad Man to explain this to you. As you’re already aware, your employer needs your labour to enrich the corporate bottom line. This means that your employer has little incentive to encourage you to save for the time when you have enough money to re-direct your labour to your own life’s desire.
Your creditors just want you to continue paying them interest, since they make money off the financing and not the doodad on which you spend their money. (And make no mistake – it’s their money. If it had been your money, then you wouldn’t be paying interest on it.)
Finally, the AdMan is paid by the companies that sell you whatever shiny object that has currently caught your attention. The AdMan really doesn’t want you to save any of your paycheque, because then the AdMan hasn’t convinced you to buy stuff…which is how the AdMan gets paid.
Stop Spending All Your Money
I understand how capitalism works. I really do. Yet, the older I get, the more I also understand that unbridled spending and the yoke of debt are impediments to a happy life.
Want a foolproof plan for getting a tax free raise? Stop going into debt.
Once all your payments are done, then more of your paycheque stays in your pocket. No more $700 monthly vehicle payment? Transfer that $700 to your RRSP. No more $400 student loan payment? Invest that $400 in your TFSA. Mortgage payments gone? Awesome! Start contributing the money to your non-registered investment portfolio. Credit cards all paid off? That’s great – save that money in the bank so that you can pay cash for the next thing that you want.
And a funny thing will happen. When you’re finally out of debt, you’ll really, really enjoy the absence of debt payments.
“Wish I was still sending money to my credit cards!” said No One, ever…
All of that money that was being siphoned off to debt payments can be used to buy yourself some “No!”
That Will Take Too Long!!!
I’m not a magician! And I never said it would happen overnight. It’s going to take as long as it takes. The more debt you have, the lower your income, the longer it will take.
The question is how long you want to continue being indebted to Others. You’re the only person who can decide if you’re willing to make the short-term sacrifices necessary to buy back some of your time freedom.
Alternatively, you can keep your current spending patterns yet still buy yourself some “No!” through increasing your income. You could get a side hustle and devote all income earned from that source to saving and investing. (Back in my day, a side hustle was called a part-time job.) You could invest in real estate and start house hacking. You could start buying dividend-producing exchange traded funds, set up a DRIP system, and just watch your dividends compound over time. You could bust your ass at work and get a promotion, whether with your current employer or with a new one. Either way, your promotion should come with a raise. So long as you don’t spend that raise, you’re heading in the right direction.
You Get to Decide.
Yes – that’s right. The choice is yours.
- When your current vehicle is paid off, are you going to drive a paid-for car or are you going to go back into debt?
- Do you need all the streaming channels right now? Could you pay for one for a few months, then switch to another one later?
- When the pandemic is over, is your gym membership really necessary? Maybe you could walk outside instead of on a treadmill?
- Is being able to live without a paycheque for a few years worth learning how to cook?
- Is the hamster wheel of living hand-to-mouth bringing you joy? Would you appreciate a lot more wiggle room in your budget?
Money buys you the option to say “No!” to what you don’t want in your life. Harness its power by investing a chunk of your income every time you’re paid. The sooner you start, the sooner you’ll be able to walk away from situations that no longer serve your purpose or no longer make you happy. You’ll have the peace of mind that a financially firm foundation allows. You’ll be able to walk away from employment that no longer aligns with your values…without wondering how to feed/shelter/clothe yourself. You’ll have the comfort of knowing that you’ll be alright even if it takes you a little while to find your next job, if you even want one.
And believe you me… the more “No!” you have, the less often you have to do un-desirable things. I’ve yet to meet anyone who hated having control over how to spend their time and energy. Unless you’re already quite wealthy, the only way to obtain this power for yourself is through carefully investing your own income until your investments allow you to be independent from a paycheque.