Don’t Be Afraid to Run!

Welcome to our experience with The All Powerful Motivator….FEAR!

My wife and I lived in Illinois our entire lives…until February of 2014.  We grew up in the same small town of 5,000 people, on the same street even, less than six blocks away from each other.  A town where everybody knows everybody.  Three stoplights.  After being together for a few years, we then moved two hours from home during the summer of 2010, remaining in Illinois, in order to attend college.  We had this idea that small town living wasn’t for us anymore and, while in college (in a town of about 90,000 people), decided that once we graduated, we were heading for the city…Houston, TX to be exact.

You see, my wife knew early in her teen years that she wanted to live in a city.  I, on the other hand, always felt like a more rural area suited me better.  My grandparents live near the Garden of the Gods in Illinois and, spending a lot of time with them as I was growing up, that type of area is what I always thought I wanted.

The Garden of the Gods – Illinois

My wife and I love concerts, live theater, and other amenities that are most often attributed to the urban scene and, due to our many adventures during the early years of being together, my desires for rural living began to wane.  So, as we approached graduation, we began developing our plans to move to Houston.  I couldn’t immediately apply for nursing positions there because I had to take boards first and then, to be quite honest, getting a Texas license is a little bit of a P.I.T.A. and the process took some time to complete.  Because of this, we temporarily moved back home and I took my first job in Indiana, to which I commuted most days (nearly two hours each way :-|…otherwise, I stayed in an extremely cheap/sketchy motel, somehow managing to avoid getting loaded with bed bugs :-S) while working to secure a job in Houston.

During that time, I had also applied for every Indian Health Service (IHS) position I was qualified for, primarily due to the Loan Repayment Program, but never heard anything for months.  Finally, two hospitals in Houston wanted to interview me so we drove down in January of 2014; I was offered a position and moving plans kicked into overdrive.

Within a couple weeks, we were all set to move and then, late one evening, my phone rang…literally six days before packing the U-Haul and heading to Houston (thank God we hadn’t signed a lease yet!)  It was an IHS facility in South Dakota.  Fear of changing our plans paralyzed me, kicking my “fight-or-flight” response into overdrive.  I stammered through the initial call, nearly turning down the chance for an interview in lieu of holding true to my prior acceptance of a job in Houston.  Thankfully, my wife was sitting there with me and told me to take the interview.  Within a 36-hour window of time, our plans went from moving to Houston to my participating in a phone interview, receiving a job offer, accepting it, and adjusting our compass to the middle-of-nowhere South Dakota…exactly the type of rural area I had always envisioned.

The moral of my story:  if the opportunity is right, take a step (or a leap) outside your comfort zone and be prepared to run the hell away from what you think is your dream.

Image result for we buy shit we don't need fight club

Don’t be so dead-set in your ways and risk-averse that you lose sight of the opportunities staring you directly in the face.  It would have been far easier and less horrifying to stick with our original plan, play it safe, and move to Houston.  But honestly, we’d be friggin’ miserable if we were living in Houston right now.  We’d be near our best friends, which would be incredible, but between “normal” bills, higher rent, student loans, and the like, we’d barely be treading water.  Worse yet, I’d probably be working two jobs or my wife would HAVE to work just so we could make ends-meat.  F.I.R.E. wouldn’t be anywhere on our radar and, without a doubt, I sure as hell wouldn’t be writing this blog.

Instead, we took a chance and ran away from what we thought was our dream.  We have been immensely fortunate that  our roll-of-the-dice has paid off tremendously well and we couldn’t be in a stronger position because of it.  Because of our willingness to adapt our plans and take calculated risks, we are able to position ourselves in such a way that we will one day have the freedom to go anywhere and do anything we want, whether that may ultimately be living in Houston or, quite literally, any other spot on the map…or globe, for that matter!  Having that freedom is both motivating and incredibly empowering.  It has taught us a lot about ourselves, our willingness to do whatever is best for our family, and has brought us incredibly closer and stronger in our relationship.  My wife and I are an incredible team and I know, without a doubt, that we can achieve anything we set our minds to…even if it’s out of shear stubbornness!  😀


If you’re part of the personal finance or FIRE community, new to the game or a long-time veteran, I’m sure you can relate to our situation.  You are choosing to live outside of what has become the societal norm.  No more do we accept the notion that we must work until 65 and beyond, saving a mere average of 5% of our income, succumbing to the whims of marketing and spending the remainder on frivolous crap that continues to rob our future selves of freedom, with ever-increasing lifestyle inflation, and thereby keeping us on the never-ending hamster wheel of chasing the elusive and almighty dollar.


Tell me about a gamble you took that paid off.  On the flip-side of that coin, what have you done that didn’t quite go as planned?  If you’re facing a big decision in your life right now, I’d love to hear about it.  What’s holding you back from making a big move in your life?  If you’re not up for sharing publicly in the comments below, please feel free to e-mail me at nurseonfire@outlook.com.  While I may be out of fairy dust and magical wisdom to truly solve your concerns (nor am I really an expert at much of anything,) or necessarily ease your fears about whatever decision you may be struggling with, I’d be happy and honored to be your sounding board and give you my honest, impartial view of whatever situation you may be facing.  I look forward to speaking with you soon; have an awesome weekend!

– Brandon

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The All Powerful Motivator

Think back…what’s the most intense memory you have?  Oftentimes, the events of our lives that we tend to remember the most involve intense emotional responses (good or bad) to the events themselves.  We owe this to an area of the brain known as the limbic system; it consists of several structures that are heavily involved in the formation of our memories.  The amygdala, a piece of flesh the mere size of an almond, is responsible for what is known as fear conditioning and the cognitive processes that our bodies experience when we develop a fear of something.

Additionally, the limbic system consists of several other structures such as the hippocampus, responsible for long-term memory storage, the olfactory complex (which is why it is often said that smell is the sense with the strongest tie to memory) and the hypothalamus, whose job entails maintaining a state of homeostasis throughout the body by producing hormones that regulate the production and inhibition of other hormones from our other organ systems.

For the purpose of this article, I’m going to focus on the endocrine system.

Within the endocrine system itself, to narrow things down even further, we find, among other organs, the adrenal glands.  You have two of these glands, one sitting on top of each of your kidneys.  One of the hormones that each of these glands produces, you are undoubtedly familiar with:  epinephrine, or more commonly known as…ADRENALINE!

Adrenaline is the hormone that results in what is known as the “fight-or-flight” response that we experience during a stressful or fearful situation.  Stimulating the sympathetic branch of the autonomic nervous system, adrenaline results in our heart beating faster, our airways opening to allow more vital oxygen into our cells, our pupils dilating, the release of additional glucose (ENERGY!) from the liver, and the diversion of blood flow from non-essential organs, such as our bowels, to our brains and muscles…prepping us to scissor-kick some shit if necessary!

You see, the human body is amazing.  Bones, muscle, nerves, skin…individually useless.  But, stitched together into a interconnected web, they have the capacity to make one hell of an incredibly well-oiled machine, powered by the greatest super-computer the world will ever know…the brain.


Writing this, I can’t help but be reminded of my experience with these very processes last July.  I had backed our Jeep out of the garage early in the day to allow our housing/hospital maintenance guys to get to our basement to check out the AC that was on the fritz.  That afternoon, before moving it back into the garage, I busted out the BBQ and, deciding to take the grates out and give them a good cleaning before firing it up, I rounded the front of the car and, coiled up under the front passenger tire, was a rattlesnake…hands down, my greatest physical fear.  I immediately stopped dead in my tracks and could literally feel the physiological changes happening within my body.  I experienced tunnel vision as my eyes became hyper-focused on the snake and its location.  My heart began racing, I could feel my hands become moist with perspiration.  Blood flow was shunted away from my skin, causing me to experience a wave of cool over my body, my breaths deepened, and I could feel a rush of blood to my brain, resulting in a lightheaded feeling.

There was no conscious thought that had to occur.  The fact of the matter was, plain and simple, one of us was about to fucking die.  I certainly had no intention of experiencing the bite of a snake or the subsequent trip to the Emergency Room in my own backyard, followed by an air flight to a larger hospital with an Intensive Care Unit.  Therefore, never breaking eye contact, I sat the grill grate down, grabbed my shovel that, thankfully, happened to be right next to me in the corner of the garage, and got down to business.  After it was over, I went over to the door and yelled for my wife…who, of course, thought I was full of shit.  I could then begin to feel the effects of the parasympathetic system kicking in, prompted by the hypothalamus working to bring me back to that state of homeostasis.  My heart rate began slowing down, my respiratory rate began to relax, my hands began tremling, and I suddenly felt the urge to pee…thankfully, my body prevented me from pissing my pants at the sight of the snake!  🙂


This anatomy lesson was all a preface to my next post, in which I will discuss my encounter with fear from more of a personal finance standpoint, entitled Don’t Be Afraid to Run!  I really hope you’ll decide, if you haven’t already, to follow along with my family’s journey to financial independence.  And definitely come back for my next post, which will be coming on Friday!

Please comment below and share your own adrenaline-induced memory.

– Nurse on Fire

Anatomy & Physiology of Personal Finance

As a nurse, part of my job is to educate patients on various subjects ranging from medication benefits, uses, and side effects to disease processes and rationales for doctor-ordered treatments.  This got me thinking about how I could interweave these lessons with a Personal Finance twist.  Here are some analogies I have come up with so far:


 

In the womb, the developing fetus grows in what is known as the cephalocaudal and proximal-distal fashion, meaning that it develops head-to-toe and from the near-to-far (center-outwards.)  Starting at the top, we have the brain, which begins to form around the fifth week of development, along with the spinal cord, heart, and other organs.  In the realm of personal finance, we, ourselves, are the brain.  We choose what we do, how we educate ourselves, how to spend our time, energy, and money, and we control everything that we do in pursuit of our personally determined goals and desires.

 


Our heart begins beating around the sixth week of development and in the realm of personal finance, I liken our budgets to the heart.  Money from our respective jobs flows into the budget, where it is then pumped out and utilized to destroy our debts and/or feed our investments with vital, oxygen-carrying nutrients.

 


Debt can be compared to Diabetes.  The analogy I use when educating patients on the effects of uncontrolled blood sugar levels is that the sugar molecules circulating through your blood vessels and capillaries can be likened to a golf ball making their way through a garden hose that gets progressively smaller as it reaches our hands, feet, and eyes.  These large sugar molecules don’t like to fit, in essence get stuck, and result in decreased blood flow to the extremities, numbness/tingling (neuropathy) of the hands and feet, and diabetic retinopathy of the eyes, which can ultimately lead to blindness.  Debt, likewise, when allowed to get out of control, can lead to this progressively downward spiral and have detrimental effects on our health and well-being, financial and otherwise.


Pancreatitis, or inflammation of the pancreas, is a condition in which the pancreatic enzymes amylase and lipase are elevated, resulting in intense upper abdominal pain for the patient…pain that, from my nursing experience, is generally only relieved with morphine and being NPO, an acronym for nil por os, a Latin term meaning “nothing by mouth.”  Eating/drinking results in a process known as peristalsis, which moves food and fluids through our GI system, and causes digestive enzymes, such as amylase and lipase, to be released, stimulating the pancreas and resulting in increased pain.  This is comparable to the idea of selling in a down market…it only increases the pain!


 

To bring up the proverbial rear, market forecasters could be viewed as the bowels of personal finance…they’re generally full of shit and give me a stomach ache.  🙂  Just eat your fiber (pick a solid index fund) and enjoy regular relief in knowing that history has shown a general upward trend in the market.  And remember, in the event that doomsdayers are ever actually correct, our money will be toilet paper anyway (pun intended…but don’t actually do that…EVER…money is literally disgusting!)  Besides, if they’re ever right in saying that our financial system is collapsing, you’re still better off investing in the market because hoarding cash under your mattress or burying it in the backyard is only going to result in the loss of your purchasing power due to inflation.


Well I certainly hope you’ve enjoyed my cheesy analogies for the day; in the event I come up with more, you’ll be the first to know.  Have an awesome day!  😀

– Nurse on Fire

 

We’re in the Black!!!

Ladies and Gentlemen, mark your calendars!  As of this 8th day of April in the wondrous year of 2016, the Nurse on Fire Family officially has a POSITIVE NET WORTH!

I’ve had this post in the works for the past month because I knew this day was quickly approaching.  However, I must laugh at myself because, yesterday, I had an epiphany and realized that it has, in fact, already passed!!!

For the past year-and-a-half, I’ve had an account with Personal Capial (PC) in an attempt to track our net worth.  However, we constantly had issues with my wife’s student loan accounts; i.e. whenever PC would attempt to update her loans, it would result in failed login attempts and her being locked out of her account.  Having to call Fed Loan and have them reset her password umpteen million times finally became far more of a hassle than it was worth, so we deleted them from the account and PC has gone by the wayside in our house.  In February, I started playing around with Excel, came up with my own system, and am now tracking our saving, spending, investments, and net worth.  In doing so, I was surprised to find that we were far closer to a positive net worth than I ever realized.

The epiphany came yesterday when I realized that, while I’ve been adding my automatic contribution to my Federal Employees Retirement System pension fund in our savings percentage, I failed to add my contributions into our net worth!

If I work for the feds for at least five years, I can leave my contributions in place and apply for a deferred retirement; then, once I reach 62, I would be eligible for a pension based on my high-three average base salary and number of years of service…OR I can remove my contributions and invest them elsewhere on my own whenever I leave government service.  However, if I leave before five years, then the latter is my only option and I’ll have to move the funds elsewhere.  Whenever we decide that our time here is done, we’ll play with the numbers to see which will be the better option.

In full disclosure, I do not factor my current student loan debt into my calculations because it is being paid for, over the course of a few years, in exchange for my ongoing service with the Indian Health Service here in South Dakota.  Since the yearly loan repayment funds are dispersed directly to me, I make a large payment at the beginning of the contract year and deposit the rest into a dedicated bank account, from which monthly payments come out of automatically.  This requires essentially zero effort on my part…I LOOOOOOVE automated finances!  Back to my point…I do not count this cash-on-hand as part of our assets, either.  Rather, I essentially pretend these loans and the cash do not exist so that neither have any effect on our net worth.

With all that said….

The Nurse on Fire Family’s current net worth is $4,146!!!

Now, if we could only figure out how to survive as a family of three and a dog on $14/month, I’d truly be on FIRE!

To celebrate, I’m heading over to Rockstar Finance and submit our net worth to be added to The Ultimate List of Blogger Net Worth.  This will put us, as of the current posting, at number 185 on the list.

The scales have finally tipped in our favor and our net worth is only heading up from here.  Thank you for all your support and thank you for joining my family on this incredible journey.  If you haven’t done so already, please follow along with us and say hello.  You are all truly amazing and inspiring; thank you, again, and have an amazing day!

 

– Nurse on Fire

Saving Money with MORE Credit Card Debt?

You read that title correctly; the Nurse on Fire family just took advantage of an opportunity that is going to save us several hundred dollars…by taking on additional credit card debt!  Say what?!?!

We made our semi-weekly post office run this past week and I was thumbing through the typical junk mail when I got to an envelope from one of our credit cards.  I nearly tore it up because I knew it wasn’t a bill, as I keep track of it online.  Thankfully, I opened it to find those lovely/tempting/seductive/dare-I-say-slutty? convenience checks!  0% interest until September 2017 with a 3% up-front charge.

Typically, I would shred those things faster than the Cubbies lose in the post-season.  This time, however, I got to thinkin’…

We are currently working on paying off my wife’s student loans, which are both federal loans and private loans through Wells Fargo.  The Wells Fargo loans are compounded daily at 5.75% interest.  By utilizing one of these checks to pay off Wells Fargo, this is going to save us (by my calculations) $450 in interest over the next 18 months.

While putting those loans on the back-burner for a little while, we can begin funneling even more money towards her federal loans, targeting the higher-interest unsubsidized loans first, thereby saving us even MORE money in interest!  #HappyDance

Sure, all we’re doing is moving our debt from one hand to the other.  The 3% charge dips into the savings by a couple hundred bucks but I still call it a win if it saves us a few hundred more on top of that.  All-in-all, I’m happy with this decision and am looking forward to getting the letter in the mail telling us that we no longer owe Wells Fargo any more money.

Smart decision?  Dumb decision?  We’ve already written the check and mailed it off, but I’m still curious as to what your honest opinion on the matter is.  I know that credit card debt, no matter the reasoning, can be horrifying but, if you had the opportunity, would you do this?  HAVE you done this?  Let me know what you think in the comments below.

– Nurse on Fire

Personal Finance & The Lion King

Inspired by Vic over at Dad is Cheap‘s post regarding personal finance messages hidden in Beauty and the Beast, which was initially inspired by Sarah at The Yachtless, I’ve decided to write up my own observations from one of my personally favorite Disney movies of all time…The Lion King.


I was about 8 when this movie first came out so, of course, I grew up loving it.  Now, all grown up with a child of my own, I can’t help but notice the more philosophical aspects of the dialogue within the movie.  Recently, I’ve been watching/listening to it while playing with our son and realized that, while there are numerous life lessons to be gleaned, there are at least a couple lessons to be learned that can be applied to the realm of personal finance.  Here they are:

First, I’ve made countless mistakes in my past, both financial and otherwise…and Rafiki the wise baboon is right, they can hurt like hell.  While I still hold on to a certain amount of regret over past decisions, some of which will never subside, it’s a fact that there’s nothing I can ever do to change it.  The only option I have is to learn from those missteps and apply them toward better decision making as we move forward.  In doing so, speaking from a financial standpoint, I will avoid debt whenever possible and continue to set us up on the path to financial independence and early retirement.

 

 

 


 

Secondly, Timon and Pumbaa’s attitudes and nature are what I envision FIRE to be like.  When they first show Simba their backyard view of paradise, Simba says something like “you guys live here?!” to which Timon replies, “we live anywhere we want.”  Having the freedom to not be tied to a particular geographical location based on a job or specific responsibilities, accompanied by a nest egg capable of supporting our chosen lifestyle for the seemingly indefinite future will certainly lead to a life of “no worries!”


 

Have you noticed any other parallels between The Lion King and personal finance that I’ve missed?  Please let me know in the comments below!  And if you aren’t already, don’t forget to follow along with my family’s journey; we would love to have you along for the ride and learn about whatever journey you may be on, as well!  🙂

– Nurse on Fire

Day 4: Personal Finance Goes to D.C.

Before continuing…if you haven’t already, be sure to start with my post regarding the Obama Administration Budget Proposalfollowed by Day 1 in this series.


 

What if I started a petition through the White House website regarding the Constitutional amendments I suggested yesterdat?  Would you be interested in signing on with me and sharing the petition with everyone you know?  We would need 150 signatures to get the petition into the public search area of the site and then we have to get 100,000 signatures in THIRTY DAYS in order to force a response from the White House.

While it is not the job of the executive branch to propose legislation, this would at least bring our united voices to Washington that we are tired of the same-old-same-old that continues to bury us under a deeper and deeper mountain of debt.  To note, there have been several legislators over the years that have put forth various forms of legislation calling for term limits; however, and most unsurprisingly, they never gain much traction and, from my searching, appear to just get buried in subcommittees where they never again see the light of day.  Shocking, right?

term limits, Jefferson, Thomas Jefferson, collage, photomontage, elephant, JGill, Paul Jacob, Common Sense

So does obtaining the necessary number of petition signatures seem doable?  Also, if you are interested, do you have any suggestions for additions to the petition?  If you are on board, I will get the petition set up and put it in a new post to be shared.  Please let me know what you think in the comments below.


Knowing all of this, is it safe to say, revisiting the words of Thomas Jefferson, that we have effectively been swindled by prior generations?  What breaks my heart is that we continue to do the same to our children and future grandchildren.

God Bless America,

-Frugal RN

 

P.S. – Thank you so much for following along through this series of posts.  Please don’t forget to follow along via WordPress, or with your e-mail in the right-hand column, to ensure you don’t miss any future posts.  My family and I would love to have you along for our journey; have a wonderful day!

Day 3: Personal Finance Goes to D.C.

Before continuing…if you haven’t already, be sure to start with my post regarding the Obama Administration Budget Proposalfollowed by Day 1 in this series.


So how do we go about reigning in government spending, allowing for the opportunity to get ourselves on the path to debt freedom and financial independence?  I would really appreciate your comments on the matter, as well as your thoughts in relation to the options I am about to present.

I believe one step in the right direction would be for the passage of two Constitutional amendments:  1.) limit the number of terms (for life) that any one citizen may hold office as a United States Representative and/or Senator, and 2.) require that budgets be truly balanced (but preferably with a surplus that is then directed to paying down the national debt,) eliminating borrowing being necessary to fund operations.

As we individual citizens do, in our own private households, if we don’t have the money, we don’t buy it…or fund it.  If our credit cards are maxed out and yet we continue to borrow money from Aunt Martha (aka China, Japan, etc.) to fund our extracurricular activities and pet-projects, we will never get back on track to debt freedom.

A FABRICATED balanced-budget amendment proposal, attributed to Warren Buffet, circulated the internet a few years ago after Buffet, during a CNBC interview in 2011, said that he could fix the national deficit in five minutes, stating “you just pass a law that says that any time there’s a deficit of more than three percent of GDP, all sitting members of Congress are ineligible for re-election. Yeah, yeah, now you’ve got the incentives in the right place, right?” (Truth or Fiction.)  While Buffet has never seriously and actively called for such an amendment, how is this not a good idea?

If politicians know they’ve only got a set amount of time in office, they could focus on accomplishing things that are beneficial to the country as a whole, as opposed to focusing their efforts on getting reelected.  Limiting the number of terms they can serve would help with this.  While I find the 3% in Buffet’s statement to be too lenient (i.e. I say ZERO deficit,) if you tack on losing the eligibility of reelection if the budget is off, our elected leaders may actually pay more attention to where all of those dollars are going and utilize them more diligently.

government, incentives, flow chart, folly, results, illustration, meme, Jim Gill, Paul Jacob, Common Sense

While I am sure there are good-hearted, well-meaning Congressmen/women out there, by-and-large, the majority seem to refuse to stand up and do the responsible things that need to be done to ensure a strong financial future for our children and future generations.  They are simply too busy pleasing specific groups of people, no matter the cost, to ensure their reelection.  This stresses the importance of educating our children, and every possible person for that matter, in the matters of personal finance so that we may usher in a new generation of leaders who may one day stand up for what is right and have the capabilities of bringing our balance sheets back into the black.


Just for funsies and a chuckle…if you’d like to help get us back in the black ASAP, please utilize one of the following options to make a contribution to reduce the national debt:

  • At Pay.gov, you can contribute online by credit card, debit card, PayPal, checking account, or savings account.
  • You can write a check payable to the Bureau of the Fiscal Service, and, in the memo section, notate that it’s a gift to reduce the debt held by the public. Mail your check to:Attn Dept G
    Bureau of the Fiscal Service
    P. O. Box 2188
    Parkersburg, WV 26106-2188

As of the writing of this post, the national debt stands at $19,007,500,000,000.  Divvied up between the approximately 323,000,000 men, women, and children in the United States, your personal share is currently $59,000…but hurry!, the debt total has climbed another $10 MILLION in the time it took me to type this sentence!  I can hardly imagine how high it has climbed by the time you are reading this.

Maybe I’ll suggest we try this with the next baby I help deliver!   JUST KIDDING!!!


Tune in tomorrow for the final post in this series, where I will be asking for your help, if you’re interested.  If you’ve been following along and feel like I do, I hope you will be.  As always, don’t forget to follow along via WordPress, or with your e-mail in the right-hand column, to ensure you don’t miss the remainder of the series or any future posts.  My family and I would love to have you along for our journey; have a wonderful day!

 

-Frugal RN

Day 2: Personal Finance Goes to D.C.

Before continuing…if you haven’t already, be sure to start with my post regarding the Obama Administration Budget Proposalfollowed by Day 1 in this series.


 

Federal Debt Held by the Public

Graph obtained here.

The Congressional Budget Office (CBO) is an independent, non-partisan organization that analyzes Congressional policies regarding budgetary and economic issues.  According to the CBO, the federal budget deficit this year will rise in relation to the size of the economy for the first time in the past six years.  While it almost sounds good to hear that the deficit had been decreasing, the fact of the matter is that the CBO estimates the 2016 deficit at approximately $544 BILLION – that’s HALF A TRILLION DOLLARS…in a single year.  Decreasing or not, that still leaves us in the red.  This is projected to increase our debt load to about 76% of GDP by the end of 2016, an increase of 2% since last year.  From the chart above, you can see that the debt-to-GDP ratio has, in fact, been higher in the past (i.e. during WWII) but our current trend continues to raise our debt higher and higher, pushing us to a projected 86% of GDP over the next decade.  Overall deficits for the next decade are estimated to total $9.4 trilion with growth of government spending outpacing revenues, as liabilities for Social Security, health care, and interest on the debt continue to grow, further compounding with the addition of more debt.  The CBO report goes on to detail that, if current policies remain unchanged, as that is what their predictions are based on, then our debt will rise to as high as 155% of GDP in the next thirty years.  Please read the full CBO report here; I honestly find it to be more than a little horrifying.

 


Please tune in Monday for day 3 regarding my thoughts on ways to combat the growing problem, in the hopes of reigning in government spending.  Don’t forget to follow along via WordPress, or with your e-mail in the right-hand column, to ensure you don’t miss the remainder of the series or any future posts.  My family and I would love to have you along for our journey; enjoy Valentine’s Day tomorrow.  Give your sweetie and/or loved ones a smooch, tell them all about my blog, and encourage them to follow along!  🙂

 

-Frugal RN

Day 1: Personal Finance Goes to D.C.

Before continuing…if you haven’t already, be sure to start with my post regarding the Obama Administration Budget Proposal.


It is my hope that this will not be viewed as political in nature, as that is not my intent.  I am simply looking to engage others in a conversation regarding the financial future of our great country (the United States) and/or whatever country you may call home.

I do not pretend to believe that what I am about to discuss is some the only possible cure for the financial problems I see ourselves in, and I have no doubt that there are thousands of you who are likely far more intelligent on the subject, with the capacity to present a valid argument against me (and I beg, PLEASE DO!)  That being said, let’s get started…


In the personal finance blogosphere, we often go on about the basic concepts of setting a budget, telling your money where to go, and paying off debt, while also discussing the concept of paying yourself first, whereby not robbing your future self due to frivolous purchases in the present.  Today, I would like to discuss these concepts on a much larger scale.  I’m referring to our country as a whole and, while you may not call America home, I feel that the general theme of this post series may pertain to your home country, as well.


During the early days of America, many of our Founding Fathers believed that debt, while sometimes necessary, should also be remedied as quickly as possible.  America first took on debt during the Revolutionary war against the British in order to secure our independence.  Fast forward three decades, introduce the War of 1812, and our nation’s debt doubled.  President Andrew Jackson, born poor and frugal by nature, took office in 1829 and vowed to finish what his two predecessors had started…pay off the debt…and he did!  He oversaw the successful extinction of the national debt, in 1835, for the first and only time in our nation’s history.  Unfortunately, this only lasted two years, as a “speculative balloon” arose as a result of Jackson’s moving around of national funds in an effort to shut down the Bank of the United States.  He took money from this centralized bank, divvied up the funds between various state chartered banks and, with an influx of new capital, those banks became more liberal with their loan policies, extending loans to speculators who wanted to buy up western land from the government (Housing Bubble circa 2008 anyone?)  In an attempt to limit the damage of this bubble, Jackson put out an executive order stating that government land would only be sold in exchange for gold.  This order resulted in the Panic of 1837 just as Jackson was leaving office, setting off a recession that lasted into the mid-1840’s.  Unfortunately for his successor, Martin Van Buren, the government began borrowing again and our debt has continued to climb to where we find ourselves today (Teaching History.)

Since our country’s incredibly short-lived debt freedom under Jackson, our debt has snowballed in the face of the Civil War, the Great Depression, two World Wars, and the Great Recession of the new millennium.


Tune in tomorrow for day 2 covering the latest report from the Congressional Budget Office regarding their projections for the ballooning deficits to come!  Don’t forget to follow along via WordPress, or with your e-mail in the right-hand column, to ensure you don’t miss the remainder of the series or any future posts.  My family and I would love to have you along for our journey; have a wonderful day!

 

-Frugal RN