‘Tis the season to be thankful and I certainly owe a debt of gratitude to this sub. Apologies in advance for the length.
One year ago today I made a resolution to get my finances in order, devise a plan to payoff my student loans, and ultimately track every single dollar I spend in 2017.
I wanted to share my financial journey as so many others here have motivated me with their own stories.
A bit of context: Spending decisions were always dictated by the balance in my checking account. If I had the money, I bought it. Throughout my twenties I made marginal efforts to save. I had a fair emergency fund and took my employer match on my 401k but that was about it. At this point last year I had 36K in student loan debt spread across 4 different loans. I had resigned to just paying the minimum for so long I kind of forgot I even had them. It wasn’t until I told my partner about the debt that I realized this was something I needed to prioritize and knock out.
That’s when I stumbled upon r/personalfinance. After a bit of research and a fair amount of vicariously living through other peoples’ success stories, I devised a plan and got to work:
1 Create a budget.
I found YNAB and within a week I gameified my budgeting and was completely addicted. How far in advance could I budget with the money I’m making today?
2 Control spending.
My partner and I agreed to control our spending and set soft limits on things like dining out and other forms of entertainment. She had recently quit her job to start her own photography and coaching businesses too so controlling our spending was all the more important. The discipline was tough at first but this sub encouraged us to stick to our plan and simply spend more quality time with each other.
3 Cut unnecessary costs.
We also moved into a cheaper apartment saving $800/month.
4 Take advantage of what life gives you.
We were in a car accident and our car was totaled. We could have gotten a new car but chose to see that as an unnecessary expense since we live in a city with ample public transportation.
5 Get a new job.
A touchy subject in this sub when you read success stories. I worked hard to land an interview for my dream job and was lucky enough to get a little boost my pay.
6 Change health insurance.
I’ve always been a PPO guy but with the new job I switched to a high-deductible plan. It comes with an HSA to which my employer contributes every month. Free. Money.
7 Follow the money (Lester Freeman voice).
I followed the money flow in this sub religiously and confirmed paying off my moderately high-interest debt was going to be my main priority. I created a budget category to payoff my student loans and put in $1200 a month. Any extra income each month went here as well. My goal was to pay off the loans by February 2019.
8 Maintain the momentum.
Eventually the balance on a single loan would be low enough for me to completely pay off if I borrowed from the money I had budgeted for future months. I had a decent emergency fund saved so out of sheer excitement I’d occasionally drop in a payment for a few thousand just to scratch it off my list. The feeling of paying off these loans was contagious and what was once a dream was becoming reality.
By September I had paid off 3 of my loans and was staring at a $10K balance on the remaining loan. I took all of my future-budgeted money and dropped the final loan payment. Wells Fargo even said they’d pay the interest that would accumulate until the payment posted. Okay it was $14 but I’ll take it.
I’m now sitting here in December looking back and completely dumbfounded at what I was able to accomplish in a single year thanks to the guidance and support of this community. Now that all my debt is paid off I’m saving for a max IRA contribution come April. I’m now also trying to take out the max (15%) for an ESPP - a personal challenge that until this year I would have thought was a financial impossibility.
And whatever strategy and discipline I managed over the course of this year is COMPLETELY owed to this community. The questions, challenges, guides, resources, and success stories were an inspiration and motivated us to keep going even when things got tough. To think just a year ago today I had no idea where to start.
Thank you to everyone in this sub. You’ve truly changed our lives for the better and I only hope that my story can help just as so many others have done for us. Thank you.
EDIT: Grammar. It’s always the grammar.
One year ago today I made a resolution to get my finances in order, devise a plan to payoff my student loans, and ultimately track every single dollar I spend in 2017.
I wanted to share my financial journey as so many others here have motivated me with their own stories.
A bit of context: Spending decisions were always dictated by the balance in my checking account. If I had the money, I bought it. Throughout my twenties I made marginal efforts to save. I had a fair emergency fund and took my employer match on my 401k but that was about it. At this point last year I had 36K in student loan debt spread across 4 different loans. I had resigned to just paying the minimum for so long I kind of forgot I even had them. It wasn’t until I told my partner about the debt that I realized this was something I needed to prioritize and knock out.
That’s when I stumbled upon r/personalfinance. After a bit of research and a fair amount of vicariously living through other peoples’ success stories, I devised a plan and got to work:
1 Create a budget.
I found YNAB and within a week I gameified my budgeting and was completely addicted. How far in advance could I budget with the money I’m making today?
2 Control spending.
My partner and I agreed to control our spending and set soft limits on things like dining out and other forms of entertainment. She had recently quit her job to start her own photography and coaching businesses too so controlling our spending was all the more important. The discipline was tough at first but this sub encouraged us to stick to our plan and simply spend more quality time with each other.
3 Cut unnecessary costs.
We also moved into a cheaper apartment saving $800/month.
4 Take advantage of what life gives you.
We were in a car accident and our car was totaled. We could have gotten a new car but chose to see that as an unnecessary expense since we live in a city with ample public transportation.
5 Get a new job.
A touchy subject in this sub when you read success stories. I worked hard to land an interview for my dream job and was lucky enough to get a little boost my pay.
6 Change health insurance.
I’ve always been a PPO guy but with the new job I switched to a high-deductible plan. It comes with an HSA to which my employer contributes every month. Free. Money.
7 Follow the money (Lester Freeman voice).
I followed the money flow in this sub religiously and confirmed paying off my moderately high-interest debt was going to be my main priority. I created a budget category to payoff my student loans and put in $1200 a month. Any extra income each month went here as well. My goal was to pay off the loans by February 2019.
8 Maintain the momentum.
Eventually the balance on a single loan would be low enough for me to completely pay off if I borrowed from the money I had budgeted for future months. I had a decent emergency fund saved so out of sheer excitement I’d occasionally drop in a payment for a few thousand just to scratch it off my list. The feeling of paying off these loans was contagious and what was once a dream was becoming reality.
By September I had paid off 3 of my loans and was staring at a $10K balance on the remaining loan. I took all of my future-budgeted money and dropped the final loan payment. Wells Fargo even said they’d pay the interest that would accumulate until the payment posted. Okay it was $14 but I’ll take it.
I’m now sitting here in December looking back and completely dumbfounded at what I was able to accomplish in a single year thanks to the guidance and support of this community. Now that all my debt is paid off I’m saving for a max IRA contribution come April. I’m now also trying to take out the max (15%) for an ESPP - a personal challenge that until this year I would have thought was a financial impossibility.
And whatever strategy and discipline I managed over the course of this year is COMPLETELY owed to this community. The questions, challenges, guides, resources, and success stories were an inspiration and motivated us to keep going even when things got tough. To think just a year ago today I had no idea where to start.
Thank you to everyone in this sub. You’ve truly changed our lives for the better and I only hope that my story can help just as so many others have done for us. Thank you.
EDIT: Grammar. It’s always the grammar.