There were definitely times when I found investing intimidating or even discouraging.
Seeing my investments grow due to compound interest has been gratifying. Once I paid off the debt, I reviewed my budget and increased my contribution to 22% of every paycheck. So I made sure to contribute 10% of my paychecks to my retirement accounts throughout the process. And I've found that actively practicing gratitude has helped me identify and pursue new opportunities.Įven though my main priority was paying off my debt, I wanted to make sure that I was still investing for my future. Last year, I turned that into something more tangible, and started writing down 3 to 5 small, specific things I'm thankful for every morning. Those small steps over time made a big difference.Īround this time, I also started reframing the way I thought about money, and approaching it with more of an abundance mindset. But these changes didn't feel like sacrifices, because I knew I was working toward my vision of being debt-free.
I also took an inventory of my closet and pressed pause on clothing and shoe shopping for a few years, and rarely went out to eat. So I gifted the machine to a friend who I knew would like it. Spending an extra $10 per week added up to over $500 each year, which was $500 I could use for something I actually needed or enjoyed. That machine hadn't cost me anything, but I realized I was spending $10 every week on Keurig cups. One example that sticks out in my mind was a Keurig coffee machine that I'd been given. Being intentional about my spending meant looking at all of my expenses, even seemingly small ones. In addition to tracking my debt, I also tracked my spending. You also have to be able to pay off the balance within the zero-percent term, otherwise you will get hit with more interest. There is usually a fee associated with transferring balances. If you decide to go this route with consolidating your debt, I would keep some things in mind.
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In addition to the refinancing, around the time my duplex sold in 2013, I decided to move some of the debt balance to a series of zero-percent interest credit cards over the course of the next couple of years. In 2016, I sold the fixer-upper, which helped me finally pay off all of my loans. It took over a year to sell the duplex, but it was ultimately a move that made a huge difference, because within two years of starting this journey, my debt balance was now at $177,000 and my annual interest expense was down to $6,500. As a result, I was losing money every month and spending a lot on interest. It also soon became clear one of my biggest expenses was a duplex I had purchased as a real estate investment back in 2009, before I really gave my finances much focus. Once I saw in my debt tracker how much interest I was paying, I refinanced my home, and consolidated one of my student loans into the refinanced mortgage. Because this was a customized loan, I initially had a higher interest rate. When I started my debt pay-off journey, I was living in a fixer-upper I had bought in 2012 with help from a construction loan. Today, thanks to some key strategies, I paid off that $260,000 of debt in five years, started focusing on building wealth, and this year I reached a net worth of $1 million. Here is how I got started. When I took the time to write out all the details of my debt - total balances, monthly payments, interest rates, and annual interest expense - I was shocked at where my money was going, particularly how much I was paying in interest every single year. That was the second turning point that inspired me to start doing things differently. But I knew I wouldn't be able to make any changes without first knowing exactly what I owed. And I started wondering if there was another way I could approach my finances. But I had never seen it laid out quite so clearly before. Logically, I understood that every time I bought something I didn't need or truly enjoy, I was trading it for cash. But the visual simplicity of Orman's example got me thinking. She said the cash, and I agreed.Īt the time, I had planned on working until a traditional retirement age and thought that I would be making various house, car, and miscellaneous payments for the rest of my life. She asked the woman which one she preferred to have. Orman brought a woman on stage and showed her a rack of clothes and a pile of cash. One day, I was watching a Suze Orman special and a light bulb went off.