“I’m financially set as long as I avoid emergencies, like headphones breaking or running out of toothpaste” – @Ron_Flem (from /r/standupshots).
I think that most people have lived this way at some point in their lives, sort of on the cusp of Economic disaster. Most of my student life was spent on the brink like this, but because of irresponsible spending of my student loans, I never really felt the financial pinch too much. I left school with about $25,000 in student debt – more debt than some people, but not as much as others. If I were to allocate where I spent all of the money, probably less than half of it would have been on actual school related expenses, while the rest of it would be classified as “leisure activities”.
At the time I was accruing all of this debt, I don’t think I felt I was doing anything improper – I was pretty ignorant of personal finances, and felt that I was in decent shape. I also knew that if I got into too much trouble, I could probably get some money from my parents to get me through the school year, before I could start another minimum wage job over my summer vacation to build up my cash reserves.
As I get older, my idea of being financially set is much different. I don’t think I would be overly secure living paycheque to paycheque anymore. I would worry about what would happen if my furnace conked out in the middle of a couple of weeks of -20 celsius days, or my car being “unfixable”. I don’t think I would enjoy the stress that this kind of lifestyle would cause, relative to my current, more secure circumstance.
I can see myself heading into retirement being even more conservative financially. The transition from working a paying job with a fairly dependable salary to retirement will be fairly drastic. The thought that the money that my wife and I have saved in our working years has to last us until we die is also fairly stressful, and will definitely result in some rethinking and doubt I’m sure. It seems like when it’s time to retire, it will be a situation where I will review and recheck my retirement budget calculations and hope that “Real Life” follows the assumptions I’ve made.
For now though, most of the things I look at spending money on are unnecessary extras, like video game systems, golf clubs, and other toys, rather than necessities to life, like rent or food. We are (by my definition) “Financially Set”, which is a good, stress-free feeling.
Do you see yourself as “Set”? If not, what could you change or what would need to change in your life to put you in this situation?