My Net Worth is Finally Positive!

Apr 26

Milestone Achieved!   It’s important to have milestones for every major goal. Obtaining a positive net worth is one of those milestones for me on my journey to financial independence. I went from $75,000 in student loan debt to a positive net worth in less than four years. At the same time, I’ve increased my base salary by 37% and cut my housing and transportation costs dramatically which will help compound my savings and net worth growth.   What’s Changed Now that My Net Worth is Positive? Although I’m still budgeting, I’m not obsessing over it like I did the first couple years out of college. It’s always good to have a road map, but it’s unhealthy to obsess over money each day for long periods of time. I’m at the point now where I don’t count pennies and I am able to grab wings with a buddy at the local pub without feeling guilty. Yes, many decisions like this on a daily basis would throw me way off track, but having a healthy social life is part of a fun and balanced life. Additionally, I’m giving in a bit to my inner desire to travel both internationally and locally. However, these trips are saved for in advance.   Does it Feel Different? To be honest, it doesn’t feel much different. When I formed my 2016 budget, I knew I’d have a positive net worth in April as long as I followed my plan. Although I’ve been over budget, the first few months of the year, it wasn’t enough to materially impact where I thought I’d be in April. This is why planning and budgeting is so important. Once the plan is set up, you become comfortable with your situation and the mental relieve occurs at the time you understand the plan, not on the day to day execution of it.   Conclusion It’s a great feeling knowing my plan is working and I am worth as much as I would have been if I would have just done nothing after high school. However, my future earnings power is dramatically greater than if I had done nothing. Although I have achieved this milestone, I still have a long way...

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How to Save for a Vacation while Having Student Loans

Apr 20

Learn how to save for a vacation with student debt.

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Why It’s Good to Graduate with Debt – 7 Lessons I’ve Learned from Graduating with Student Loans

Mar 29

Why It’s Good to Graduate with Debt – 7 Lessons I’ve Learned from Graduating with Student Loans

Most of the articles on the subject of student debt in the main stream media are negative. It’s the next major financial bubble, it’s delaying home buying, it’s making people miserable, etc.

In my opinion, a student graduating with $50,000+ in student loans doesn’t need to read another article about how F’d they are and how terrible their choices were. Either they already understand their situation or soon will be forced to understand their situation as soon as their first student loan bill reaches their (parents’) mailbox.

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How To Get Your Significant Other To Be More Frugal

Mar 01

It’s common knowledge that the number one relationship killer is money.

So how do you convince your significant other to be frugal in order to become financially free at an earlier age while still living happily ever after?

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What To Do In Early Retirement

Jan 26

It’s weird to think about retirement at the age of 26.

When my grandpa retired, he sat around and played chess against a computerized opponent and my grandma stereotypically was into knitting.

Both enjoyed those activities, but is that what my future holds?

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Beware of Binge Budgeting – The Budget Hangover Effect

Jun 25

As you know from my why you need a budget article, I am a proponent of budgeting and tracking expenses. It can be an exciting time when you begin tracking your expenses and budgeting. Immediately you realize how much wasteful spending is happening each month and that by simply cutting back on a few categories, you can begin saving, investing, and paying off debt. However, if you go too extreme too fast, you may fall victim to what I call the Budget Hangover Effect.   Willpower There are theories on Willpower suggesting you start out every day with a limited amount of it, and each decision you make depletes your willpower in direct proportion with the toughness of the decision. When your willpower is running low, your decisions will tend to deviate to the power of habit, whether good or bad. Spending decisions have a HUGE impact on willpower. When I first brought in the reins on my financial life, I had several swings of great improvement and great failures. When reflecting on the failures, I believe it was because I was biting off more than I could chew. When I first reviewed my spending, it was clear I could save substantially by cutting all of my non-essential expenses and begin increasing my savings rate. Anyone can cut back for a month or two, but month three, four, and five become substantially harder.   Why is this? First, think of a calendar month as the minimum amount of time to measure a success or failure in the financial world. It includes most of your expenses/bills and semi-annual or annual expenses such as insurance can easily be converted into a monthly expense. Compare this to a diet where you can measure your success at the ‘per meal level.’ A diet can be easy at first. Eat a banana and a small bowl of Cheerios for breakfast on Monday? Win #1. Lunch comes around, you’re likely hungrier than when you weren’t dieting, but you overcome the food cravings and eat a salad. Win #2. Dinner rolls through, you get a call from a friend to go out to Olive Garden and your turn them down for some lean protein and veggies. Win #3. Not...

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