It's about what you do with it

I have to admit, I'm a sucker for testimonials. I recently spent hours on Dave Ramsey's website reading the "I did it" section about how people got out of debt, how much, how much they made, and how long it took them to do it. When I come across a new blog, I often decide whether or not to subscribe to it based on the author's 'about me' section.

This is why I try to create a balance on this blog between 'objective opinion' (quite the oxymoron-- I mean opinions and explanations of issues outside myself) and personal issues. There are a lot of things on this blog (and more to come) that most people wouldn't share with their best friend, but I chose to share them because I want to help and inspire people to be more and do more with their finances and lives.

With that in mind, I want to offer a little bit of inspiration today by encouraging you to take a serious look at what you have and what you really do with it.

I have to smile, laugh, or shake my head (depending on my mood) when I hear people talk about what they've been able to accomplish with only $3,200/month take-home. Now, I understand that $40k is a decent middle-class income. Still, my husband and I count any month we bring home $1,600 as a good month. That's half of the above-mentioned figure!

Do not get me wrong; I am happy for anyone who is making progress to get out of debt and save for their future, et cetera. What I want to know is, "where is she spending all of that money so that she thinks she is barely able to live on double my income?"

Do you know where our money is spent? Of course you do: on bills, groceries, gas, and some debt. I've posted that information for all to see. Even with some of the glaringly obvious omissions from our budget (such as health and car insurance--we have them, just not in our current monthly budget), $1,600 would cover them all. Whatever we make above our minuscule budget is gravy we use to advance our financial goals.

What would you do if you had to live on $1,600 a month? What would get cut? Before you go crying that it is impossible to live on so little where you live, let me tell you that I live in a big city-- not NYC, but not Podunk, USA either.

What would I do with $3,200? I would pay off my car yesterday, have a close-to-funded Roth IRA for 2008, have two maxed-out Roths for 2009, dollar-cost-averaged, add $7-10k to our savings, and start saving for a nice, 7-day Caribbean cruise to be taken some time next winter (because, after that much saving and investing, we deserve to take a vacation!).

So ask yourself, what do you do with the money you have? Really, the above scenario sounds like the testimonial of a rich person, but it's actually the testimonial of a lower-middle-class person who tells her money where to go rather than wondering where it went.