I crossed a very humbling threshold this past month when I finally got my net worth up to zero.
In other words, as of November 2015, the amount of money I have in retirement savings is more than the amount of money I owe — $3700 more, in fact. This feels like a huge step because a few years ago, the difference between the two was a staggering $153,000 after borrowing for school and some admittedly frivolous living.
There have been hurdles and stumbles along the way, and more than a few dumb mistakes that I’ve learned from.
My apologies if none of these sound particular exciting or if they sound particularly obvious, but here are some important points in my timeline:
- I decided to change. It was a 2013 new years resolution in which I decided that I was going to fight aggressively against my debt and build my nearly non-existent retirement savings. In hindsight, finding the motivation to make big lifestyle changes was important because there’s no way I could have gotten this far by tinkering around the edges. I kept a positive attitude by focusing on my progress rather than what was still left to conquer.
- I got a job. I got lucky when I was accepted into an internship in a new field, then worked hard during that internship to get hired afterward.
- I spent less than I earned! Maybe this sounds obvious to you, but it sure took me a long while to figure his out. Over the past two years, I’ve spent 40 percent of my take-home pay and sent the other 60 percent to pay off debt or add to my retirement savings.
- I kept my housing reasonable. After living in an enormous apartment during school, I moved into a much smaller place with two roommates. This allowed me to keep my rent under 17 percent of my take-home pay, which let me send even more to debt and retirement. I’ve since moved again and now spend only 11 percent on rent.
- I learned to love cooking. With a busy schedule and endless food temptations in New York, it’s way too easy to splurge on a budget-busting
- I got aggressive. I began treating my credit card debt — which had rates as high as 22 percent — like an emergency and attacked it with every spare dollar I could find. Any non-necessity was critically weighed against being rid of that debt sooner. With this mentality, I paid off all $35,000 of that credit card debt in one year.
- I took free money. All the while, I took advantage of every bit of every bit of free money my company offered me for retirement, whether it was a match for my 401(k), employer contributions to my health savings account, or a performance bonus.
- I kept learning. I’ll continue to make mistakes, but it’s important to learn from them.
Considering the alternative, it feels pretty good to be worthless
Hope you all have a great week.