Time For Change
The New Year of 2015 had just passed and I found that I was
ruining everything messing lot's of stuff up.
Let me account for the stupid stuff that I was doing at the time:
- I was renting an apartment that was beyond my means, featuring two swimming pools (gotta have an indoor and an outdoor pool), a sauna, fitness center, private hiking trails, private dog parks, and private off-road parking.
- I was throwing endless parties at my swanky pad, never resting enough to even save a little of my paychecks, and always relying on VISA to cover what I couldn't.
- I had about $7000 in credit card debt.
- I just spent my whole holiday bonus (over two thousand of dollars) on an engagement ring for my then-girlfriend.
NOTE: SHE SAID YES and we've now been happily married for about a year. The expenditure was stupid, not starting the process of making that PYT into my wife - which is among the best decisions I've ever made.
- I had recently encouraged my new fiancée to lease a brand new Honda Accord with leather heated memory seats with electric lumbar support, keyless entry, and bluetooth.
- I also had an company-provided vehicle that was being leased on my behalf that would require me either pick up the lease (which I thought was a good idea at the time) or purchase a new car within the next 10 months. And believe me when I say I was thinking brand new car.
- I had nearly no money in my savings or checking accounts.
- I had no retirement accounts at all - not even company-sponsored ones because my company does not offer any.
- I was about to lose my Obamacare free insurance as I would be turning 27 and losing access to child coverage under my mother's employer's insurance.
- I had over $50,000 in student debt.
- I was generally dumb.
I intend to write an article about each and everyone of these items to further elaborate about why each of them is hideously destructive to saving and building wealth. Suffice it to say, I was really messing up my future and the future of new fiancée and I didn't even know it at the time.
Then something truly amazing happened. My boss recommended an extraordinary book that changed my life and the way I look at money and living. Though it was just the first among many personal finance books that I would read, The Millionaire Next Door truly indoctrinated a very important point into me. Spending all your money is a way to show that you are living high, but not a way to become wealthy.
We decided it was a time for change.
The immediate transformation was sudden and painful. My PYT and I left the apartment we had loved so much in favor of moving into my mom's house. We borrowed a box truck from a business friend who ships thousands of cartons of shoes and packed up our swanky apartment into boxes and then into that truck. We moved all our personal stuff into my mom's modest home and stayed in a single bedroom at the back of the house for 9 months.
Because my mom's house is truly modest and not very large, about 95% of our stuff remained in those boxes for the full time that we were there. We even started giving away many of the things we had previously thought we simply could not live without. It taught us a very valuable lesson about the importance of our stuff, parties, and spending money.
That stuff doesn't even really matter.
I used the first months of this time to immediately pay off all of the credit card debt I had. I crushed all of the credit card debt in about 2 and a half months. I just checked my old card history and, as of this writing, I just officially completed 2 years of never carrying a balance on a credit card. With that consumer debt paid off, my wife and I switched into saving for a modest home and a basic car for me to replace my luxury company lease car - as a place to live and a way to get to work were immediate needs.
In November of 2015, we saved enough to buy a very modest home. It was a distressed foreclosure that needed lots of TLC. Let me tell you that my wife and I have loved the living HECK out of it - fighting infestations, discovering missing load-bearing walls, and countless other love battles.
With our ongoing efforts, this home has given us a near-immediate return on our investment as I know we could now turn around and sell it for at least 25% or more than we paid for it just 18 months ago. All this despite spending only a tiny minority fraction of the 25% appreciation and doing nearly all of the repairs and improvement ourselves (with some occasional friend/family laborers).
We also bought a well-used 2007 Toyota Prius for me to use for work which improved on the gas mileage of my previous luxury car and better reflected the lifestyle I had achieved up that point in my life. This car has worked very well for me and is one that I would recommend to any young professional who wants to look good and fit big stuff in the car - thanks to the lift-back hatch.
NOTE: We once fit half of a free couch we found in the back of the Prius. My wife drove the car down the street at about 4 MPH with the other half of the couch being carried by me. Awesome car and awesome couch!
Everything else on my stupid stuff list has finally been addressed, too, (except for me being dumb) but I don't want to get too far ahead of myself. We will go over (in detail) what my learning has taught me and even some of the things that I could have done better in that transformation.
For now - if you find you are not saving enough to ever retire in comfort, or worse yet, like the Us of the past, you are spending into deficits and trusting VISA to bail you out, then join us as we rethink life and how to live it.
We Save Us and hope to inspire you to save you, too.