It's Easier to be Broke

Has anyone else ever felt that way? Sure, it sucks to be broke, but when you have no money, you know you can't spend. If you have a little bit of money, then you have to pick and choose where it goes. It requires a lot more thought and effort than just knowing you can't afford to spend.

Do you save it? Where/how do you save it? Do you spend it little by little? Do you save it up for one big purchase? Do you invest it?

Even if you are good and save, it seems like you could always save more and do without something. Did I really need that coffee? Why did I buy those brown pants? When you make the committment to frugality, even if it's a change you want to make, there's still the lingering guilt occasionally of not being frugal enough, or not being able to go without something that someone else seems to never think about. It's kind of like the tea bag situation all over again.

I read an article the other day about a local lottery winner. He had been laid off from his janitorial job for nearly a year, but continued to play the lottery twice a week. He actually won last week, and his take-home was $680,000. It's one of those heart-warming stories that we don't get enough of, made all the nicer by the fact that he really needed the money and it's right in time for christmas. Certainly I'm very happy for he and his family, but I immediately started thinking about what I would do with that much money and started freaking out a bit.

Naturally, I would pay off my student loans immediately. I'd still have over half a million dollars then. FDIC insurance is only for $100,000, so I'd need six different savings accounts to store the money that way. I guess I could buy a house, or two, and renovate them; I could travel, but I don't want to quit working....

Obviously, I will never have this much money, but just the idea of it completely stressed me out for about 30 minutes. It doesn't take a genius to see that that is probably an unhealthy way to think about money, but I may not be as crazy as you think. My primary concern is to use the money well, which should always be primary. My secondary concern is to save/invest it in a sensible way where it will either earn interest or grow in another way (like real estate investments used to do). Tertiary is not giving up my career and earning power just to live a life of luxury that certainly will not last.

Even though such a large sum is overwhelming, I think my three rules are pretty sound. Yes, it's easier to be broke, but it's also easier to live with your parents and sit around the house watching tv all day, which is certainly not preferable.

What would you do if you won the lottery?