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Saturday, July 9, 2016

Money Screw Ups: And the Frugal Living Lessons that Will Save You - 1



Personal Finance Wipe Out Avoided by Frugal Living Lessons


2015 was quite a money ride.  Some of the progress toward financial freedom made following my own frugal living tips (outlined in this post "Can I make it on $3k per month?"  got tossed overboard.  
  

Cushion the Body Blow with Frugal Living 


I can recover because my frugal living ways helped me saved.  That and the personal finance software addiction and fascination with minimalism and aggressive downsizing

But my pride and confidence hit the surf and it felt like I slammed into concrete.   Worse, it may have derailed complete financial freedom by a year or more.  

And some of it I could have avoided by listening to those much wiser than myself.     

Surfing Lessons From the Sages


1.  Retirement really is a psychological journey and you might want to prepare for that.

The first time I retired was about 15 months ago.  

As the retirement sages on www.earlyretirement.org said might happen,  I experienced a sudden depression. 

I wasn’t ready psychologically or emotionally, which affected how I dealt with the other surprises to come (i.e., not great). 

Just like every one said -- a great deal of your self ­perception can be tied to your work identity and title.  

In the past party talk - "So, what do you do?"  

My answer  - "Oh, I am a marketer and public relations professional."  

Notice - I didn't say what I do.  I said "this is who I am."   

It took about a year to adjust.  Therapy helped.  So did part-time work and volunteering for professional associations.  

There are plenty of resources on the web about transitioning to a new life phase, even AARP has a coaching service available.    

2.  Sound financial planning is not an exact science.  

I asked all the wise ones on the early retirement forums for advice as to "don't I have enough to pull the plug on this job?"  

The answer wasn't as positive as I expected.  As much as I had saved, they still said, "you need more of a safety cushion, nobody gets this stuff right on the money.  Hold on!  Give yourself a 5-10% margin of error."