What would it take to sink your financial ship?

As we often do, especially around the end of a year and the beginning of a new one, my wife and I were recently talking to each other about our finances. During the conversation, we began using the analogy of comparing our financial situation to a boat; and pointing out that if there are leaks in our boat, then the ship will eventually sink. Regardless of how small the leak, it requires attention in order to maintain the integrity of the vessel.

Thus, leaving us with this core idea that it’s imperative to maintain our financial ship.

What’s interesting is that for a lot of people, they don’t even know whether or not their financial boat is taking on water. But as that water continues to pour into the boat, those small leaks can very quickly create an alarming situation - especially if they are never addressed.

My wife and I first became aware of how serious the leaks in our [financial] boat were in the fall of 2017. And by that time, we had already racked up well over $100,000 in consumer debt and were paying over $2,100 a month just to meet our minimum payments.

I mean, how did we not know that the leaks had gotten that serious?

The answer is simple: we weren’t paying attention.

We just knew that we were uncomfortable with our financial situation. We constantly found ourselves feeling like there should be more money than there was. We had no idea where it was all going. We only felt that something was wrong. And that feeling had to eventually become strong enough to prompt a change.

Before we ever started budgeting, my wife and I took a look at our bank statements to better understand where our money had been going. We noticed things like: we were spending about $200/month at Starbucks, had subscriptions to things we never used, and were spending more than $1,200/month eating out, and so on.

So by the time we realized that there were leaks in our boat, we needed more than just a little Gorilla Paste to patch it. We were in need of some major repairs.

And this is where the conversation with my wife got interesting…

We started thinking about how we repair our financial situations. Because the way we choose to repair something directly affects the overall integrity of whatever it is we’re fixing. For example, if you tear a shirt, it will last longer if we sew the tear back together as opposed to using tape (even though tape is faster and cheaper).

Throughout Covid, my wife and I watched as many of our friends and acquaintances began repairing the leaks in their financial boats with whatever the quickest fix was. It became less about changing their lifestyle spending and more about increasing their income. Now, I’m not suggesting that what people were doing was not important. I’m only demonstrating the trend we noticed. And this is important because the “leaks” had more to do with the lifestyles people were living as opposed to needing more income.

Seeing this trend, my wife and I decided to do what I call, “Spiking the Kool Aid.” We knew that we needed to do both - we would need to find a new source of income (due to the entertainment industry being decimated) and we also knew that we would need to adjust our lifestyle. And we knew that all of this was going to take a longer amount of time than just going and finding a J.O.B. It was going to take a series of bigger, bolder moves to build these longer-lasting effects we were looking for. It wasn’t necessarily an “easy” decision, but it was definitely made easier knowing that where we were going was ultimately more important.

We became more focused on the long-term rather than the short-term.

There was a video I posted back in November 2023 on TikTok that shared information about Netflix raising their prices again. I had never shared a video about the streaming service before, but felt the need to share the updated pricing with my audience. Little did I know that the video would end up going viral - getting over 1.4 million views.

There were so many comments about hating Netflix. And the comments discussed multiple reasons for feeling that way, in addition to the company’s decision to raise their prices. However, they are not the only streaming service, or even company, raising their prices right now. From my perspective, Netflix just became a common enemy; and the engagement on my post rallied around that idea.

What’s more ironic is that I didn’t share the video with the intention of canceling my subscription. My wife and I still pay for Netflix. There is enough content on their platform that we enjoy watching, so we decided to keep it. I mean, if you think about it, even the most expensive plan (currently around $22.99/month) is about the same price as two people going to see one movie. So if there is more than one movie on the platform that you and your significant other would watch, it essentially pays for itself (not to mention the concession and transportation savings).

Netflix, or any streaming platform really, is an example of what I would call a “little expense” that could also be considered a “small leak” to some. And as we’ve discussed, those small leaks need to be addressed.

I found it fascinating that so many people had such anger towards this “little expense.” I guess it’s kinda like people losing their minds over gas prices going up $.20/gallon. On a 15-gallon tank, that’s an additional $3 to fill up the entire tank. What I think people really rally behind is the principal of a company raising their prices and it not feeling justified from a user’s perspective.

Whatever the reason, you want to be aware of these little expenses within your budgets. And you want to know that they are valuable enough to keep within your budget. After enough of these little expenses, you’re easily going to spend a lot of money.

According to Next Gen Personal Finance, most people believe they spend around $86/month on subscription services; when in actuality, they spend closer to $219/month on subscriptions. That’s a difference of $133 per month that the majority of people are not aware they are spending.

This is why managing your money, and budgeting in general, is so important. When you look at your budget, you are actively taking control of what it is you spend your hard-earned money on. You have to own the choice to spend, because you are the only one who decides whether to spend your money or not (and what to spend it on).

Here is another example:

My wife and I pay for term life insurance. While my wife’s payment is $26/mo and mine is $52/mo, to many people, that would seem like a lot of money per month to be spending. I know for me, I initially thought that paying for life insurance was too expensive. But for us, it’s less than 1% of our monthly income. And the value it adds to our overall financial picture (and lives) is overall more important to us than spending that money on something else.

Your budget is a list of your priorities, your goals, your passions. That’s what makes your budget so powerful. So don’t listen to everyone else telling you what to spend your money on. Spend your money on what’s important to you. But make sure that you’re prioritizing yourself in the process. If a streaming service doesn’t bring you value, then dump it. But don’t hold onto it for the sake of holding onto it. You’re choosing to spend that money each month. So stand behind your decision and decide to keep it.

When you own the choices you make with your money, you create a stronger financial ship.

In essence, maintaining our financial stability often boils down to awareness, choices, and priorities. Our financial 'leaks' - whether they be subscriptions, streaming services, or other seemingly 'little expenses' - can quickly add up if left unchecked. Recognizing these leaks and actively deciding what deserves a place in our budget empowers us to steer our financial ship more effectively. What matters most isn’t what others say we should spend our hard-earned money on but rather what holds value for us individually. It’s about owning our choices and steering our financial vessels toward calmer waters. Each financial decision we own reinforces the integrity of our ship, making it stronger, more resilient, and better equipped to weather life's financial storms.

So here’s to you. Happy financial sailing!

Stay Curious,

Kyle