“The time to save is now. When a dog gets a bone, he doesn’t go out and make a down payment on a bigger bone. He buries the one he’s got.” Will Rogers
This article is three years too late, but I’ll write it anyway.
Over-extending your finances hurts your freelance career. It could put an end to it, if you were one of the masses that bought too much home on too little income. If you were wise with your money, you are free to take more risks.
Risks like a new business venture, writing a book, starting a huge project that will reap big rewards further down the line. This the gold, the good stuff, that will propel you into greatness. But you can’t do it if you have to worry about how to get your next meal.
The economy is hurting. I drive down the streets of my little town of San Clemente, California and every day there’s a new store that’s shut down. “OUT OF BUSINESS” signs are everywhere. Just last week I was in Cocoa Beach, Florida and was saddened by the number of empty storefronts. In one area, an entire three-blocks was taken up by empty buildings, all with “Lease” signs on the doors. It’s going to be years before those spaces are rented again.
And I thank God and myself that I never lived beyond my means or tapped into home equity to buy useless things like nice cars, clothes and big-screen TV. sets, because I’d possibly be out of business too.
For some people, this is the best time ever to start a new business. Consignment shops are thriving, since people want to spend less on clothes. Bob, the guy who repairs my car, said that he’s been busier than ever and has hired new employees, since more people are opting to get their cars fixed rather than buy a new one.
Even artists and writers are benefiting from large companies laying off in-house designers and copyrighters and instead, opting to use freelancers. This is the bright side.
But the reality is that people are spending less. And that means they are buying less from ME! In 2008, my gross sales just from the online store of DrewBrophy.com brought in $10,000 – $15,000 per month. Now it’s $3,000 – $4,000.
Luckily, I’m not going to lose my home or anything else. I can weather the storm, because of my personal hatred for owing money. My obsession with not taking out loans has served me well. I haven’t tapped into my home equity and so my mortgage is cheaper than it would cost to rent an apartment. My car has been paid off for 6 years. I don’t use cable or watch t.v.
If I ever “blow” money, it’s on good wine, fine dining and travels. You won’t see me carrying a Gucci bag or whatever the latest designer thing is. (But give me a cheap bottle of wine, and you’ll hear some complaining!)
Over-extended people cannot take risks. They can’t afford to. And it’s the risk-taking that leads you to the gold.
Your amount of financial rewards equals the amount of risk you take. Take a big risk – reap a big payout. Take a small risk – get a small payout.
It’s hard to take risks when you are barely surviving. For all those people who bought huge houses and got big loans for things they really didn’t need, I feel sorry. They may have been misled by all the others who were doing it. They were excited at the amount of wealth that seemed to be right at their fingertips. They were following the status quo, which said “get all you can right now!”
But the bottom has dropped out. I’ve watched friends as they’ve lost the home, the car, the job, the wife. And their freelance business is suffering – they are taking any job, without discretion, even selling out, to just survive.
I might not have seen this coming three years ago, but I had an instinct not to overspend. I have the luxury of continuing to take risks that will reap rewards. I have that freedom, because I’ve kept my expenses low.
There are great things up ahead. The economy is slowly improving. But I urge all of you this time around, don’t over-extend yourself. It doesn’t matter if you have a nice car or a big house. THE HAPPY is the real stuff in life.
Focus on your art, your family and your projects. Allow yourself the freedom to make a few mistakes and continue to take risks. That’s where the rewards are.
Maria xxoo
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10 Responses
Maria… sage advice. We’d all be better off practicing delayed gratification and focusing on wanting just a few choice things that don’t put us way under, debt-wise.
My husband insisted that we never have any debt other than a mortgage from the day we were married. It meant building out furniture out of cardboard boxes and plywood and not eating out for a year, but it was the right choice.
We’re doing much better now 😉
Thanks for reminding us of these truths.
Lori
Maria:
Nice post, as usual. Your tips are valuable, to be sure.
Nice picture of your happy family. Your kitchen looks cozy, homely.
And your tips are valuable. Your suggestions are right on the money.
Glad to know you have money in the bank. You saved up for that rainy day. You have a wise head riding on your shoulders. Cheerio!
Maria,
Just want to encourage you to post more photos in the future.
I think you are a natural and have a photographer’s instincts.
That’s one more feather in your cap and the cap is bursting at the seams.
You are a generalist and quite versatile. Congratulations.
You can fine-tune images and words: the two complement each other, me thinks. We want to see more photos/images about your home life, your family, your office and the small town where you live.
That would be great, if you would be so kind as to do that for us.
Just a suggestion, that’s all, from one of your fans. Cheers!
Archan, thanks for the encouragement and the flattery! I agree, including personal shots of our lives is of interest to others. And for me, it helps to demonstrate that one can design their life just as they want, if only they make that decision. Glad you liked the photo. I love my little house – it’s tiny, but warm and homey. Thanks!
Hi Maria
A timely warning.
With the economy in such a terrible state it really is time to make savings and not take chances.
Don’t know how long the economy will struggle but I see no signs of it getting any better.
BTW – your little house looks great!
To me the people that make a business work are the ones that now or in the past had very little to invest into a business. These are the people who are or had to live by scratching from paycheck to paycheck just to eat.
These people who now or had to live next to pre-existing life styles and had no money giving to them by their MOMMY or DADDY to start their business.
Kenneth c Young
Maria,
This is such an important reminder. Prior to graduating from business school without a penny to my name, I used to always live beyond my means. But if there was one lesson I learned it was exactly what you’re talking about here. In the last year I’ve made a point to be religious about saving money in an emergency fund.
When I return to the US in August, I’m going to go back to my parents house. Some people my age might see that as lame. But I realized if I really want to build a business, then dipping into my emergency fund to spend it all on rent would be really stupid. I figure the sacrifice of 3 months at my parents will be worth if it ultimately means I build my business and get to spend the year traveling the world surfing. That way I’m not over-extending myself.
Amen Sister. DH and I have been hanging out in our happy little dump for years. Right now, even with the housing market down here in Phoenix, you still can’t rent for what we pay on our mortgage including taxes and insurance. Our vehicles are in the “don’t laugh its paid for” category. But our modest living is what is tiding us over during DH’s continuing unemployment. My biz is way down, but not out, which is a lot more than I can say for some of my clients. Life is still good…
Great article Maria! We’ve lived the same life style as you and Drew. We have a house we can afford, I work a full time job, and the art is a part-time labor of love. I drive a beater truck to Atlanta everyday and the only thing we’ll splurge on is a good bottle of wine and an occasional trip. It’s comforting knowing that we are living well within our means. We haven’t had cable in over 3 years and spend our time listening to music, having conversations with our kids and hanging out with our two dogs. It’s not a glamorous life by any stretch, but the simple life suits us just fine. Don’t get me wrong, we’d love to have all of the luxuries, but we’d rather have security first. Took me a long time to come around to that way of thinking, but knowing what I know now, I’d never go back to the old life. Thanks so much for your raw candor and best of luck to you and Drew with your art endeavors!