THE EVERYDAY CHOICES THAT ADD UP"This shirt looks pretty good but it costs $150. Should I get it? Yeah, maybe I should. It's a small part of my pay cheque and you can never have enough shirts right?"
And that's how I got that $150 shirt and 10 others like it.
"Mmmmm.. that Salmon belly sashimi plate costs $16. And I really like it. There's other stuff on the menu but.. Salmon belly sashimi, man, I could really have some of that."
And that's how I ended up having $20 lunches most days.
"That's a $5 coffee.. mmmm I like coffee. It's a bit expensive but.. I need coffee to work. Okay, I'll have this coffee because it helps me work better."
And that's how I ended up having 2 $5 coffees a day.
"It costs $10 to get to the office by cab and it takes 5 min. It will take me 25 min to get there by train. I need to take a cab. It will save me more time to make important work decisions."
And that's how I spent $20 a day taking a cab to and from work.
At that time, I was 28 and a partner in a relatively successful game company. I drew a monthly salary of $5,000 but I saw very little of it by the end of each month.
"It's okay, we'll sell the company for lots of money later on. Right now, my time is important and I need to pamper myself, so I can make good decisions.
Nobody makes good decisions when they're uncomfortable." This was my mantra, what I thought and it was how I justified most of my purchases.
But, have you ever had that feeling that even though you had your creature comforts, that you weren’t at peace? Have you ever felt like you were chasing something? A better life, perhaps? But what does a better life mean, exactly?
Looking back now, I was spending 12 hours a day at work, chasing the HOMERUN dream but.. Was I really happy?
THE SHOCK
Then, 2008 came. The company was close to sealing a $1m investment and I thought I would finally be able to have a big pay cheque after all my hard work, then I would truly be able to live THE lifestyle.
But by July, the US financial markets had bottomed out and venture capital firms had started to issue warnings about the economic uncertainty and the impact on startups.
By end 2008, our investors had pulled out and my business partner and I were left with $100k left in the company account, 5 staff to support and potentially $150k in upcoming project costs for a game we were making to be finished and shipped.
The investors pulling the plug was a big blow for us. We'd already committed to a large project on the Nintendo Wii in anticipation of the investment being closed and we were already halfway through the development cycle. We were caught off guard and had to decide what to do with the remaining capital.
Both my partner and I decided not to draw salary. I would fund my own expenses and cover some of the costs to further develop our PC online game, which was doing relatively well, and he would fund the Nintendo project as he had more finances in the bank.
Having $0 salary, you would think that I would have changed some of my habits.
Let's see..
"It costs $10 to get to the office by cab and it takes 5 min. It will take me 25 min to get there by train. I need to take a cab. It will save me more time to make important work decisions."
"That's a $5 coffee.. mmmm I like coffee. It's a bit expensive but.. I need coffee to work. Okay, I'll have this coffee because it helps me work better." But I now needed because there was more pressure.
I didn't have $20 Japanese lunches anymore but I would have $10 sandwiches.
Yup, not much had changed. There was $0 coming in, but the outflow wasn't that much different.
THE RECKONINGThis all began to snowball and by the end of 2009, I found myself $20,000 in debt. I remember the day reality hit me. I'd maxed out both my cards with ~$10k limits and I realised I had no way of paying. I could not even afford to pay the minimum sum and I had $0 coming in.
There were things I couldn’t control (like the economic cycle) and there were things that I could (like my own spending, and the choices we made within the company).
There were things that I needed and things that I wanted.
Looking back, I don’t think I could tell the difference and I don’t think I took the time out to make the effort to think through my choices. I was always on the go and always reacting.
THE TURNAROUND
I had hit rock bottom.. Kind off.. And had to clean up.
I left the company and took a job.
I simplified my life and had $5-$8 cai fan daily (motivated by my colleague who was budgeting for $3 a day). Wore only black t-shirts ($25). And took a bus to work.
I paid off my debts in 3-4 months.
REFLECTION
I wasn’t happy with my work choice.. Actually.
The indulgences were ways to help me feel better.
The daily expenses and indulgences depleted my bank account, especially when times were bad. Imagine having $0 in the bank in the late 20s and then credit card interest accruing.
I’d tried to justify things and stayed longer than it was financially healthy for me to (this was both a reflection of personal and business finance conversations that needed to be had).
Dramatically simplifying my daily expenses helped me to pay my debts off within a short period of time.. But it only made sense by that time because I was single..
