Money: Degrees of Separation

 Outdoor Thermometer

Flickr Photo Credit: Notratched

We’ve all heard about the idea of degrees of separation when it comes to how far removed we are from knowing a particular person. For example, you have a friend who’s aunt works on a committe along with a specific public figure . . . something along those lines. But have you ever thought about applying this line of thinking to financial decisions and how far away or close they bring us to a particular goal such as long term travel?

I once heard the comedian Jeff Foxworthy say during a TV interview that he was two decisions away from putting up dry wall for a living. I’m not saying there’s anything wrong with that, and I daresay neither was Mr. Foxworthy. My point is this: our financial decisions have the power on a daily basis to bring us dramatically closer, or further away from that which we value or desire. 

It’s very easy to get bogged down in the perceived length of time it might take to achieve a goal, particularly if your salary is far less than you desire and your only available strategies appear to be to those that save smaller increments at a time such as coupon clipping, ice tea making, etc. But how many of us surviving on even a moderate income make larger decisions several times per year that could pay for a travel or other type of dream immediately?

Here’s an example I was discussing with a friend this week who encouraged me to post about it: Less than a year before our around the world trip and David’s retirement from government service, we knew we would have to purchase a newer vehicle with less mileage for him. We owned his current vehicle outright, having paid cash several years prior. We also had a reasonable amount left over from that year’s tax return. Long before we knew we would be desperate for a new auto, we started looking around and let friends know that we were looking as well. It’s important to note that THIS TOOK EFFORT. Shopping properly for any large ticket item is a job, not a hobby or something you can expect to achieve  in an afternoon with no prior research. After a few weeks, a friend who had been reading the paper one morning (we were half down with the flu and had skipped it) called to say she saw something she was sure would interest us. An elderly woman who was no longer able to drive was selling a practically new (30,000 miles) small-sized SUV for several thousand dollars under the blue book in order to unload it quickly. Even sick, we knew we needed to make viewing this vehicle a priority. So off we went, and had a new vehicle within  24 hours. We took the needed balance out of another account and priced the older Jeep to sell quickly. It did, and we replaced the savings with that.

How does this relate to taking an around the world trip, you ask? I’ll tell you. Nearly every other vehicle we were interested in was closer to 20,000 dollars. This one sold for 10,500. We were very close to purchasing one of the other vehicles because we were transitioning on so many levels (house sale, cross country move, military retirement, new property purchase, long term trip, no next job) that we just didn’t want to have to make room for an unpredictable car. Have we gotten vehicles before for less than 10,000 dollars? Yes. I’m still driving one of them and it’s doing quite fine, despite being nearly 16 years old. My point is, we spent over 9,000 dollars less than we were about to. Our approximate total for all the months we spent on the road, excluding air fare? Roughly nine thousand dollars.

Applying the degrees of separation model of thinking, we were only one degree / financial decision away from a lifelong goal. Think about this for a minute. Are you in the middle of a major home remodel and think you can’t do both that and another goal? Can you bump down your decision on a designer faucet, paint color or antique Persian rug in order to free up money for another goal? Can you pick up some fabulous furniture at a moving sale (trust me, living in Tucson for several years taught us that this does not have to result in owning the cheap stuff) rather than buying new at a showroom on credit? That can easily result in at least 10,000 dollars worth of savings. Think making your own curtains or even hiring a local stay at home mom to do it for you is a trite way to save money? With a small cottage it may only result in a savings of one to two hundred dollars. While that’s certainly nothing to sneeze at, those of you with a larger executive style home know that designer drapes for a large multi-story structure can add up to big bucks. Hire it out or make them yourself to carve out money for an additional large cost goal. I promise you, they won’t have to look chintzy or cheap.

Once you’ve shifted your mind set to realize the power of the financial decisions you make every day in your life and home, I think you’ll start to see how easy the dream of long term travel can be to accomplish. Travel isn’t your thing? There are many other ways you can rechannel monies saved to honor other priorities and goals you have set for yourself. How about a college education for yourself or your children, staying home to be a parent, caring for an aging or ill parent, writing your first novel or album, pursuing art or even charitable interests?

The friend I was discussing this with actually got the ball rolling by saying she was looking at various vacation packages she was interested in and some of them shocked her by being priced as high as some vehicles she had owned. She also went on to say that she had taken the time to search on the internet for the vehicle she wanted, a Jeep Liberty. She got a practically new one (less than 3,000 miles) for approximately 3,000 dollars less than other more abused, higher mileage versions of the same thing. For some people, that’s a decent month’s salary. Still think you can’t save up that three month emergency savings total? You may be separated by fewer degrees from that and other goals than you think.