The call I was dreading had arrived.
Our van was vibrating and making a weird noise. The mechanic was calling to tell me what was wrong and how much it would cost.
I knew it would be a lot, but it was still more than I expected.
“Why can’t I ever seem to get ahead?” I thought. “It always seems like every time I start to move forward I end up taking a step back.”
The Financial Pinch
We’ve all experienced the feeling that I call “the pinch.” It’s where you feel hopelessly trapped in your financial situation. Where you worry if things will be okay. When it seems like you don’t have enough.
What’s fascinating is that you can feel the pinch even when your finances are in objectively good shape.
At the time I got the call about the van, my net worth was on a steady upward climb. I had a large cash cushion in the bank for situations exactly like this one. I was (and still am) doing fine.
But that didn’t prevent the sting of a large, unexpected expense.
The Pinch Never Goes Away
Unfortunately, you will never get away from the pinch entirely. It’s human nature to get used to absolute levels but remain highly sensitive to changes in condition. It’s why you can fall asleep at 75 mph but wake up as soon as the driver starts braking.
Like it or not, we don’t keep score by absolutes. Your money situation might look good overall, but you feel the pinch if you were better off yesterday.
While you can never escape the pinch altogether, you can work to diminish its impact over time.
When you focus on the setbacks instead of the things that are going well, it’s a dead giveaway that you aren’t grateful enough.
Here’s an honest-to-God miracle: You’re not going to starve to death. I’m not even remotely in danger of hyperbole here; either about the facts themselves or their significance. You won’t starve to death. And the fact that I can say that with complete certainty is b-a-n-a-n-a-s.
If your financial situation isn’t what it should be or what you want it to be, you can change it. It won’t be easy, but it is possible. People no smarter than you have gotten their financial house in order. But even if your financial situation is a mess, you live a life with more comforts and even luxuries than most people could ever dream of.
Necessities, Comforts, or Luxuries
One of the problems in modern society is how prosperous everyone is. Yes, I said that’s one of the problems.
One of the symptoms of the disease of affluence is that yesterday’s luxuries are today’s comforts and tomorrow’s “necessities.”
The last time I really felt the financial pinch, it was due to this prosperity creep. Our third child was on the way and we needed to upgrade to a minivan and save some money for the delivery.
Notice how carelessly I just used the word “needed.”
A minivan and a hospital delivery are luxuries. Don’t get me wrong, we were dead-set on having our baby in a hospital. But access to a birthing center where modern medicine is practiced is a blessing.
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The part most related to this section is the fulfillment curve:
Stick to the Strategy
The personal finance philosophy of this site is simple: Spend less than you earn and invest the difference. This will help you gain freedom and build a margin of safety.
As you make progress, you’ll feel the pinch less and less often
Poverty, Voluntary Deprivation, and Abundance
Being poor sucks.
When you’re poor, you feel the pinch constantly. You have no buffer, no margin of safety, and no guarantees of your ability to provide for your family.
That part is obvious.
What’s less obvious is that the level above poverty can often feel terrible as well. This is the stage of voluntary deprivation, and it’s where I’m at now. There are many things that I technically can afford, but voluntarily deprive myself of to improve my money situation.
The disciplined practice of voluntary deprivation can lead to a state of abundance.
As we’ve seen, you can still feel the pinch in a state of abundance, but it should be confined to rare events like major car repairs or unexpected medical bills. In poverty, the pinch is the daily reality.
It’s important to remember that I would feel the pinch less often if I didn’t pay extra on my mortgage or invest. But I do those things because they are important.
Beating the pinch involves a financial battle and a psychological battle. You need to improve your finances and your mindset.
Unless you have all the money in the world and achieve full enlightenment, you’ll lose a few battles. But with effort over time, you can win the war.
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