When I saw the light
New Year’s Eve, 2017. Uninspired, broke, living paycheck to paycheck. While trying to celebrate the coming of the new year, in my very first tuxedo, and at a very nice winery, I found myself miserable.
Most noteworthy, my amazing mother, who was visiting and I hadn’t seen in years due to living a few thousand miles from one another, is a VERY upbeat and positive ray of sunshine. As a result, she, AND my realization I was failing at ‘adulting’, were my catalyst for change. I decided that very night that 2018 was going to be VERY different.
And so it begins!
2018, Day One. My original resolution was to quit alcohol. I had tallied up what I spent a week on an unhealthy vice and multiplied it by 52. This number was staggering… I thought to myself, I could be SAVING that money! Subsequently, I ditched the vice and started doing some research on personal finance. I came across Dave Ramsey and the Baby Steps. I was interested and bought the book, The Total Money Makeover. That book lit me on FIRE! The budgeting began in earnest, for the first time in my life. I knew where my money was going and began to trim the fat. Firstly, I ditched cable, subscriptions to monthly emails on various topics. Secondly premium subscriptions to Hulu, Spotify, Pandora and more, had to GO! It was time to make this train into a bullet train!
Time passed and I got better at actually following the budget I set for myself and began to pay off my debts, one by one. Within 6 months, I was debt free. I was blown away by how much money I had left each month after all my bills were paid. It was time to build my 6 month emergency fund. As of this writing, it will be complete by March 2019.
Broadening my horizons
And here is where I left Mr. Ramsey behind. One day I literally Google’d ‘alternatives to Dave Ramsey’. Subsequently, I knew I needed to broaden my financial knowledge. Eggs and baskets and all that. My next groundbreaking discovery was the FIRE movement. Financial Independence/Retire Early. Mr. Money Mustache and his story, blew my mind! Consequently, I began to learn smarter ways to invest and have continued to learn more since.
Specifics
After becoming debt free I started calling all of the services I pay for monthly. I reached out to them to negotiate lower prices. It turned out I was using hardly any of my data plan on my cell phone, so I dropped down a service tier and lopped off $15 dollars off my monthly bill. Additionally, as a military veteran, I was able to get a 15% discount as well. As winter rolled in early, I began wearing more around the house and setting the thermostat so the heat didn’t run as often. That saved money as well. And as I continued to tighten my budget and did an analysis of its impact, I realized I was living on 50% of my income! I get paid bi-weekly, and live off ONE paycheck a month! The other paycheck goes right into my Ally Savings account that earns 2% interest, with interest compounding daily, not quarterly or yearly.
I’ll continue to make deposits to that account until this coming March, at which time my 6 month emergency fund will be complete. Then, I will open a VTSAV Index fund account at Vanguard and begin investing using the second half of my income. Imagine putting half your salary every year into a mutual fund or market index fund!
If you haven’t read or purchases The Total Money Makeover by Dave Ramsey, you seriously should, as it provides a basic foundation for personal money management, debt pay off and budgeting focus.
You can do this! Because I have done this!
I’ve started a blog to showcase my journey thus far and hope you’ll check it out.
Http://www.FightForFinancialIndependence.com
Best Wishes to you all!
Rob Loftus
