The Three Month Test

While the job I just recently retired from was considered white collar, I’d worked my way up to that position including seven years as a union member. Until actually joining a union I was a big supporter of the concept. I was, however, completely unsatisfied with the union experience. In 1998 the company I worked for locked my union out for 11 weeks.

Julie and I lived together, she had a good job so we weren’t too concerned with the lack of income. But without knowing how long this would last or even if I’d have a job after it was all over, we decided to plan for the worst.

You can’t always live in fear that the worst will happen but you can’t live as if nothing bad will ever happen either. You have to find balance between being prepared and enjoying life. At the time of the lockout I decided to test my will. I decided that other than fixed costs such as my mortgage and utilities, I wouldn’t spend any money on discretionary items. That meant no eating out, no take-out, no movies or even video rentals (it was a long time ago). The lockout occurred just as winter was beginning and I had recently begun skiing, but until we were allowed back to work, there would be no skiing for me. I didn’t buy any music or take any trips. I didn’t spend money on anything unless I absolutely had to. This was not the easiest thing to do, to deny myself the little pleasures in life, especially with all the free time I had.

Over those 11 weeks, almost three months, I lost over $13,000 in income but when it was over and we returned to work, my bank accounts were lower by only $4,000. By the end of the lockout one co-worker declared bankruptcy and others were precariously close to calamity. I also know people who counted on the union winning an arbitration award that would give us back pay, but that never happened, and those who expected back pay were in much worse shape than those who assumed the money would never come.

The greatest lesson from this event was that I realized that I could live much farther below my means, that a sudden shock to my income such as a job loss, wouldn’t be the end of the world. Can you say the same thing?

If you’re serious about being prepared for the future, serious about doing what it takes to get much farther ahead in life, then you have to make a commitment to do whatever is necessary. You can get rich no matter what your income but the less income you have the more you’ll have to do. Keeping track of your income and expenses is crucial, spending less than you earn is an absolute requirement. Discipline can be learned.

I found that the three months I was locked out, and my subsequent choice to eliminate discretionary spending, gave me the discipline I needed to really concentrate on building wealth. I call this time my three month test and I suggest that you might want to try the same thing.

That’s right I’m asking you to stop spending money on anything other than essential items for three months. You obviously have to pay for your mortgage or rent, your utilities, groceries, and other necessities, but if you’re serious then you have to give up everything else for three months.

Ok. I’ll stop here and give you permission to do a trial run. Three months might be too much to ask and could just set you up for failure, but how about three weeks? Are you willing to try this out for three weeks to see if you have what it takes to really build wealth?

The rules are fairly simple. You can keep the services you currently have like cable, cell phone or magazine subscriptions. You can keep any recurring bills but you can’t upgrade those services like the cable, for example. You can’t add any channels, subscribe to any new websites, magazines or newspapers.

This test is not meant to see if you can live like Scrooge but it’s also not meant to be easy. You’ve seen in the news the low paid worker who dies leaving behind millions of dollars? Well how do you think they got all that? Ok, you’re right, they probably lived like misers but there can be a balance if you just try. After all, what good did that money do them now that they’re dead?

This test might crimp your social life but that’s the challenge. How can you still enjoy yourself for less money? That’s the key to the test. Once you see that you can do it, you’ll think twice before getting together with friends at a bar and instead invite them over to your place where the alcohol and food costs significantly less.

If you choose to take this test, and treat it seriously, you can find out a lot about your spending habits. You’ll see how much that coffee at Starbucks is really costing you. You’ll notice that stopping to get a donut on your way to work is a significant amount of money (and fat) over even three weeks. Oh yeah did I mention the other benefit? You might lose weight (if that’s something you want) since you’ll be either eating at home or not eating because even a quick stop at McDonalds is out the question for those three weeks.

Do you have what it takes to commit to a better future? Are you up to the challenge? I did it because I felt the pressure of not having an income for an unknown period of time but it turned out to be a great test. Now it’s your turn — you can do it.