Money can be a very sensitive topic. It is called personal finance after all. But there is something empowering about sharing your financial mistakes and milestones with others because, really, there is no shame in making a poor decision about money. It happens. My guess is that nearly everyone has made at least one financial decision they regret in his or her lifetime.
Over the last two years, I have become very open to the idea of sharing my story, experiences and goals with others. If at all possible, I want to help other people to avoid some of the mistakes I’ve made and get on track to becoming financially organized and successful. I wouldn’t consider myself a financial wiz or anything, but I’m certainly savvier with money than I was just a few short years ago.
Money Mistake #1
I am 23 years old and only very recently did I actually start to SAVE my money. I started babysitting when I was 10 and was hired at a restaurant upon turning 16. During my teenage years, making money meant instant gratification for me, whether it was buying my first car, going out to dinner or a movie with friends or shopping online. I had a basic checking account, but never did I think to put money away into a savings account to be left untouched.
Money Mistake #2
When I went away to college, I had trouble finding a part-time job that would enable me to keep up with my course load. I ended up finding seasonal work at a restaurant and then a clothing store, but neither provided me with very much of an income. The money I did make was put toward food, textbooks and sometimes take-out dinner during stressful exams. I never even thought about trying to put what little money I was making toward paying off the interest that was rapidly accruing on my student loans. To be honest, in the first two years of college, I barely thought about the fact that I had loans. Having to repay those seemed so far away that it wasn’t really important. I’m (literally) paying for this now, by having accumulated so much interest.
Money Mistake #3
Then I did a really silly thing and took out a credit card in my name to purchase an expensive laptop for school. I knew that I would need to make monthly payments, but my balance skyrocketed because I was sitting on about $3,000 worth of debt after a year of having the card. I also charged monthly expenses to this when I was out of money (this makes me cringe just thinking about it.) I was EXTREMELY LUCKY to get a refund check in my junior year of college and wise to pay off my entire balance and then cancel the card.
Money Success! #1
It wasn’t until I was in my senior year of college that I actually began to put money aside in a savings. I was offered a paid job at school that helped me earn a steady income while working toward my journalism degree. Most of the money went to groceries, gas for my car and a few extras here and there, but I managed to have a steady $100-$200 in a savings account just for emergencies.
When I graduated, I left with one bachelors degree, $65,000 in student loan debt and zero job offers. Luckily, I found a summer job to keep me afloat, and was then hired full-time with benefits, which I was very fortunate to find. At that point, Austin and I had already moved in together and we were planning to move to California within a year – something that required a huge savings account if we were going to be able to afford it. This meant getting serious about my finances and dedicating myself to setting aside money each week from my paycheck that I would not touch.
Money Success! #2
I started to track my expenses and compare this total with my take-home pay. I finally understood the importance of living within your means, and consciously thinking about where my money was being spent. When we set a goal of saving $10,000 in one year, we started to track our savings in a Google document, and saving became a really good feeling as we watched our balance increase week after week.
Money Success! #3
Six months after graduation, my loans were entering repayment and they were hanging over my head like a swinging pendulum. I hadn’t even taken a look at what I owed to each lender, nor did I know what my monthly payments were going to be. But I finally told myself that enough was enough and I buckled down one Saturday afternoon and signed up on each lender’s website to receive my statements and payment confirmations electronically and started another Google doc to help me keep track of my balances, interest rates, payment amounts, and to see my progress in paying down my loans.
I am proud to say that I am on track to paying off my loans WAY sooner than 25 years from now. I pay the minimum balance on each of my four loans every month and sometimes more if I can afford it.
A Small Triumph
The other day while updating my loan spreadsheet, I noticed that two of my loans (the biggest and the smallest) were both close to flipping…meaning that my $22,108 loan is soon going to be in the $21,000’s and my $5,297 loan will soon have a pretty manageable “4” in front of it. This may not seem very encouraging at all, but to me it means progress; my loans are decreasing and that is a huge motivator to keep going.
My financial transformation was mainly inspired by several important and influential websites/blogs that I found while researching about debt, student loans, and personal finances. Hopefully one or more of these sites will offer some useful ideas, experiences, information and advice if you’re thinking about making some changes in your personal money habits: