The road to financial freedom can be tough. It demands time, perseverance, determination, and full alignment with your partner. Despite the abundance of tools and solutions out there, the easy ones rarely work.
In just 21 months, I went from having $17,000 in the bank to being $52,000 in debt, and then I managed to save up $20,000 again. I was just 22 then.
This is my story, and I hope it gives you strength.
By the end of this article, I’ll share a guide to the top four money tools we used on our financial journey, one of which is completely free, so be sure to read through till the end.
Today, we have a guest post from Kevin Shryock, a financial coach, motivational speaker, and founder of InSpiritFinancial.com. His mission is to empower you with inspirational tips, so you can proactively take control of your life and finances.
I used to know nothing about money. Well, maybe that’s an exaggeration. In high school, I had a checking account and held several jobs during college. But when it came to more complex financial concepts like mortgages, mutual funds, and retirement accounts, I was clueless. However, I was pretty thrifty.
To save money, I started my engineering degree at a local community college. I worked four jobs, gave myself a $2 per day allowance, rode a bike, and saved as much as possible for when I’d transfer to a university.
When I left for university, my parents generously set up a fund to cover my last two years of tuition, which was $23,500 per year. By being mindful of my spending, I kept my living expenses low and finished college with savings from my earlier jobs still intact.
I graduated with an engineering degree but very little knowledge about personal finance. Freshly graduated, with a job offer and a steady girlfriend, I made an impulsive decision with my savings – I bought a beautiful new Scion FR-S sports car, which I named Zoey. Without thinking, I wrote a check and ended up with $20,000 in car debt, clouding my financial bliss.
Soon, the joy of the new car payment, along with my girlfriend’s student loans, car loans, and credit card debt started to burden us. Money lost all its fun. I realized that our lack of financial knowledge and mounting debt created a shaky foundation for our relationship.
So, I turned to research. The best strategy to be rich, I thought, was to mimic the rich. I discovered straightforward strategies like budgeting, getting out of debt, staying debt-free, living below our means, and building an emergency fund.
We had a total debt of $52,000! We cut our spending and started budgeting for the first time. The initial attempts were tough and led to many arguments. Date nights turned from restaurant outings to Redbox rentals. We even skipped a few family events to save on airfare. But we stuck to our plan. After 10 painfully frugal months, we paid off all our debts.
Though the biggest battle was won, the war wasn’t over. An emergency fund was essential for a solid financial foundation. So, we continued our thrifty lifestyle for another 7 months.
At the end of 16 months, we transitioned from crisis to peace. We could finally relax and enjoy our income. We were debt-free with $20,000 (six months of living expenses) in the bank for emergencies. We increased our entertainment budget and had fabulous date nights, and I even proposed to Becca. It felt amazing to buy the ring with cash.
We’ve started saving for a house. Not eager to go back into debt, we plan to pay as much upfront as possible when we buy. We’re looking for a modest home around $100,000, and plan to have it fully paid off within 7 years, just in time for Becca’s 35th birthday.
Although still young, we’re always planning ahead. It feels almost like a game now. Starting early means we will be more than prepared for retirement. We aim to retire early by investing some savings. If everything goes well, without a house payment, debt, and with a substantial nest egg ($1.4M), we could retire by my 47th birthday. If we choose to work longer, a hefty $6.5M could await us in our golden years.
Starting early has already shown benefits. But we encourage everyone we talk to that it’s possible for them too. All it takes is setting a goal and making small sacrifices to achieve it.
If you want to know the top four tools I used to get out of debt, I’m giving them away for free. Just visit my site and choose the guide you want.
As a wise old saying goes, “The best time to plant a tree was 20 years ago. The second best time is now.”
