When Self-Denial Gives You Freedom

Editor’s Note: This article previously appeared in a different format as part of The Atlantic’s Notes section, retired in 2021.

Not all of the reader entries for our “true money stories” are ones of financial woe; fiscal conservative Lori Miller offered various tips with the kicker “with enough money saved, you can tell them all to piss off”; another reader described how her sex work was both lucrative and empowering; and a “Financial Independence Obsessive” detailed her track record at length. The opening anecdote from this next reader, Chris, is a great illustration of how his parents instilled fiscal responsibility at a young age—and, as you’ll see, he carried those values into adulthood:

I’ll never forget my first lesson in personal finance. When I was 12 years old, I wanted to go to the movies with my friends. They were all going unchaperoned, and I couldn’t stand the thought of saying no because an adult had to be there. I asked my parents, and they said, simply, “If you don’t need an adult to go with you, you don’t need an adult to pay for you.”

It was simple; it was easy for me to understand; it stuck with me ever since. If I wanted freedom—true freedom—then I needed to be able to pay for it.

When I was 14, I got my first job, as a camp counselor. I got to keep half of my earnings, but my parents took the other half to put toward my education. They sacrificed to put me through private school, but I needed to have some skin in the game as well, even though $400 doesn’t really go so far.

When I turned 16, I wanted to drive. My grandmother sold me her car for a dollar, so that was squared away, but I lived in a city with astronomical car insurance rates. If I wanted my license, I had to pay my fair share, so I spent my summer job money coming up with $1,200 for insurance. When I was 16.5, I got into an accident and had my first lesson in unexpected expenses: $500 for the deductible and a premium that rose to $2,600 a year.

I went to a top tier university—one of the ones that has conspicuous wealth, and one of the ones where, when I said I couldn’t afford to get the newest, most advanced gadget, my classmates encouraged me simply to put it on my student account. How could I, though? My parents were already paying for my education; wouldn’t it be dishonest of me to charge something to a credit account for which my parents couldn’t even see the line items?

My friends often went on extravagant spring break trips, while I worked over my spring breaks. A student group I joined traveled every year, and we did get to go to far off lands, but I was only able to go because I saved all of the money I could scrape together to pay for it myself.

Many of those friends are wildly successful, mostly due to a combination of natural ability and drive as well as some good breaks, but many others are not so successful, even with that natural ability and drive.

When I got my first job, I was thrilled, but my pay was pretty average for my location. It’s been five years since starting that first job, and my coworkers and I have all done relatively well. As I got to know them more, most of whom were my age or a couple years older, I saw them spending lavishly; they got top tier apartments and nicer cars; they ate out five nights a week and bought their lunch every day; they went on at least one foreign vacation a year.

I found myself thinking, those coworkers must make a ton more than I do! But I learned a few things about them along the way. First, they all made roughly the same as I did, and their pay has tracked roughly with mine. However, half of them contributed nothing to their 401k; the other half contributed 5% or less. None of them established emergency funds; all of them financed their lifestyles on credit cards. Many of them want to make the next step in their lives—starting families—but are hamstrung without financial reserves in case of emergency. They will eventually get there, but later than they want.

All the while, I was saving 12% of my income for retirement, and though I couldn’t save much, I forced myself to put away at least $200 a month toward savings, increasing that number any time I got a raise or bonus. I didn’t go on vacations, and I cooked for myself most of the time (developing some pretty awesome cooking skills!). Every so often, I challenged myself to be more frugal without sacrificing my 20s, and it has paid off without question.

Today, I am married with no student loans of my own, and my wife and I are working on paying off hers. Together, we have multiple credit cards, but we use them strategically. We put all of our expenses on them and pay them in full at the end of the month, meaning that since we get a minimum of 2% cash back, we are always earning a 2% discount on our purchases.

We bought our first home last year, for less than half of what the bank approved us for. We have modest cars, which we financed only because the interest rates were lower than recent inflation rates, and we carpool to and from work most days. We have taken a few vacations, but only because we earmarked savings to do so. We save 16.5% of our take-home pay in Roth retirement accounts and dedicate 17.5% of our take-home pay toward building emergency reserves. Each time we have gotten a raise, we allow a little bit for ourselves and put the rest toward our savings.

By the time we hit 30 years old, we will have six-figure retirement reserves.

The part about surprise expenses is absolutely reality to us. Last month, my car was hit while I was at work and the person who hit me didn’t leave a note. The insurance deductible was $500, and due to a variety of reasons, we realized it was best to buy a new car. (The dealer gave us a reasonable trade value on it.) To keep payments reasonable, we tossed in an extra $2,500.

The next week, we took our dog to the vet for an ear infection, only to learn that she had cancer. The next week, she had surgery. In the past three weeks, the vet has cost upwards of $2,000.

And, almost on cue, we discovered that we had an infestation of yellow jackets, the lawn mower broke, and the dishwasher quit. After all was said and done, we wound up with $6,000 in unexpected expenses in just over one week.

Thankfully, we had been given sound advice and had planned for just this sort of series of events. We absorbed some of the cost into our monthly budget by sacrificing some of our typical expenses, and the rest came out of our emergency fund, which will take about four months to repay.

The point of all this is to send the message that it is possible to build a nest egg. It feels daunting when you are fresh out of college and with debt, but you start to see results after a while. The first milestone is a positive net worth. The next is knowing that your retirement is on track. The next is knowing that a job loss wouldn’t mean your ruin. And on and on until you realize that your hard work has given you what you always wanted: your freedom.