WMT Content

By Amy, from Women Who Money

My 20’s were very different from my business partner, Vicki’s. While she was making smart money moves right out of college, I was juggling responsibilities as a working single mom living paycheck to paycheck.

Married to my high-school sweetheart, I had my first child at 20. At the time I was the breadwinner in the family. Through hard work, I’d been promoted a few times at the company I’d started with right out of high school and I was fortunate to be earning a decent salary with benefits – even a 401k!.

Unfortunately, my marriage dissolved and I became a single-mom just shy of my daughter’s 1st birthday. The next couple of years my goal was to survive and not take on too much debt.

I married again and with a second child by 25. As our household income rose so did our lifestyle. Then my then-husband started working at a Jaguar Dealership. Game on! We fell into the “keeping up with the Jones” trap.

While we weren’t totally irresponsible with our money, our 30’s were very much like Vicki’s – a lot of money moves I’d change if I could.

• We didn’t increase our 401k contributions as our incomes rose
• We sold our starter house for a larger one, and then an even bigger one
• Didn’t track our expenses carefully, or have a budget or financial plan
• Leased a new car every two years
• Used HELOC’s to put a new kitchen addition on the 1st house, and then to remodel kitchens in house #2 and #3!
• Sent our kids to private schools but didn’t start saving for their college expenses

Hitting the 40’s and Making Changes

Ah, mid-life. I’d love to tell you once I hit my 40’s everything fell into place. But it’s a bit more complicated than that.

My early 40’s were similar to prior years. Save a little, spend a lot. Family vacations, college and high school tuition for the kids, new vehicles every couple years, gadgets, and more stuff to fill a 4,000 square foot house. 

Then my 20-year marriage crumbled.

Then, I rebuilt my life following a different path.

• Bought a sensible house (less than 2000 sq. ft.) that was a foreclosure property
• Finally finished my bachelor’s degree, graduating just after I turned 45
• Began maxing out my 401k contributions
• Opened and funded a Roth IRA 
• Married again (yes, that’s number 3)
• Found the financial independence retire early (FIRE) movement and consumed article after article to increase my knowledge of personal finance. As a result, we then made a number of lifestyle changes including:
  • Making job changes to increase income
  • Selling expensive vehicles and buying older used cars
  • Eliminating all debt but our mortgage, and refinancing a 30-year mortgage to a 15-year loan
  • Establishing an emergency fund equal to 6+ months of expenses
  • Diversifying investments including the purchase of a rental property

At 45, my husband and I believed we’d need to work until we were 65 or more. But after learning about FIRE, our pursuit of financial independence took much less time. 

I left the cubicle shortly after my 50th birthday. And he’ll join me before he’s 55.

Better Late than Never

The earlier you begin on your path to financial independence the better of course. But it’s never too late to start on the journey.

The rewards are too great to miss, and failing to get your financial house together can keep you chained to a job when you want to be enjoying your last phase of life.

Whether your path to FI is long and winding or short and bumpy the important thing is to start. Make those first steps on the and keep your focus on the end goal.

Owning your time. Having the funds to care for yourself and your family. Feeling free and secure.

It will require patience, tenacity, humility, and faith.

The bigger the lifestyle changes you can make, the better – downsizing your home, driving older vehicles, eating in, staycationing, eliminating unnecessary expenses, trimming the rest. Paying off your debts, saving and investing.

Start now. You’ll thank yourself later.

By Vicki, from Women Who Money

It always feels good sharing smart decisions you’ve made. But people won’t trust you if you don’t own up to mistakes too. While I made some great money moves right out of college, there were definitely things I could have done differently in the following decade.

Now, I can share the financial lessons I learned with my adult kids. But I also want to share them with others who might learn from my mistakes. 

While none of these were huge errors, it wasn’t just too many lattes or avocado toast. 😉 Some of these choices cost me hundreds of dollars, but others set me back thousands (and more) over the years.

Reflecting on choices I made in my 30’s twenty years later, I can see how I could have protected my finances better, grown my net worth faster, and diversified my retirement portfolio more. 

7 things I did in my 30’s that weren’t the best financial moves

1. Didn’t increase my 403b contributions. Luckily someone in human resources suggested I fill out paperwork to start investing for retirement when I first got my job at 22.

After that, I just kept checking my statements for years but I didn’t increase my contributions for almost a decade. I always thought increasing it “down the road” as my salary grew made sense. I didn’t know about the magic of compounding. 

Money Tip #1: Now that I’m in my 50’s, I can see what a small increase in contributions each year could have done for my investments over my 30+ year career. I wouldn’t have missed $25 or $50 a paycheck at all.

Make sure you understand what compounding is to avoid the mistake I made. You’ll quickly learn why time is your “BFF” when it comes to investing!   

2. Sold my starter home. The first house I bought was a small ranch with a big yard. When I moved to a bigger house, I used it as a rental for a year and sold it after that. But since I still live in the same town today, that house could have been a rental for the last 25 years.

I ended up buying other rental properties, but still regret selling my first house.

Money Tip #2: Many people who want to try real estate investing start out with single-family rentals. I obtained a mortgage at a decent rate when I bought it and the rent I was charging beat the 1% rule. 

Since we live in a resort area with good schools, this house was not hard to rent. It paid for itself (and more) each month, and would have been paid off years ago.

While real estate investing isn’t for everyone, it is a way for many people to diversify their portfolios. It could be something for you to consider too.

3. Didn’t track expenses or use a budget. I’ve always had money in my bank account and paid my bills on time (including paying my credit card in full each month), so you might think I didn’t need to track expenses or use a budget.

But I also didn’t add to my emergency fund as my expenses grew or add to my investments regularly because I knew we always had to keep some extra money in the checking account “in case” something happened.

Money Tip #3: Creating a simple spreadsheet or using a tool like Tiller to keep track of where money was going and using a budget would have helped me better fill other “buckets” of money for my future.

Instead, I kept a large balance in my checking and savings accounts where it basically lost money due to inflation. And didn’t earn market gains because it wasn’t invested.

4. Bought a brand new minivan. Buying a minivan wasn’t the issue because it was a great vehicle for our family. But there was no reason we had to buy a new minivan.

We used a great local mechanic for years and he also bought/sold used cars with his business. I’m sure he could have got us a deal on a nice used van for half of what we paid (or less…) 

Money Tip #4: If you think you’re someone who can walk into a car dealership and “just look” – think again. That’s exactly what I believed.

We had no intention of buying the first new van we looked at. But after driving a new car with all the “bells and whistles” – and seeing a monthly payment we could afford at a low-interest rate, we bought it. And we even got talked into the extended warranty. (I blame it on the lack of sleep during those baby years!)

5. Used a Home Equity Line of Credit (HELOC) for a kitchen remodel. The second home I bought was on a great street but it required some updating. While nothing needed to be done right away, I wanted a new kitchen. So I got one.

I also got the stress of having two young children in a house under construction and a makeshift kitchen in a small closet for over a month. And more debt.

Money Tip #5: Rather than using a sinking fund and saving up for the remodel I went to the bank. Of course, my bank gladly gave me a HELOC loan – and the payments to go with it.

While I could afford the payments, there was no reason to rush to remodel the kitchen. I paid more than I should have because of the interest payments and really got no benefit from getting it done so quickly. 

6. Paid PMI when I bought another home. Not only did I buy a house that needed some remodeling, but I also bought it quickly and didn’t have a big enough down payment saved up.

While I bought it at a good price in the exact location I wanted, I also had to pay private mortgage insurance (PMI) for a couple of years. 

Money Tip #6: Private mortgage insurance cost me thousands of dollars before I could have it removed. While I would have missed out on the house I bought waiting to save a bigger down payment, other houses on the same street came up for sale every year. 

7. Didn’t start saving for my kids’ college in my 30’s. I always assumed my kids would be going to college but saving for it wasn’t a priority. I had 18 years before they’d leave the nest. Right?

Well as you can guess, time flew by and while I did end up saving quite a bit for them – the money wasn’t invested early enough to benefit from compounding over the years.

Money Tip #7: There are many ways to save for college. But starting to save early (even with small amounts) will help the money grow as your kids grow. Just like I could have increased my own 403b contributions each year, I could have started saving for college earlier too.

This is another example of how tracking expenses and using a budget could have helped me through the years!

Final Thoughts

While making these choices didn’t prevent me from becoming financially independent, all these decisions certainly slowed my progress and affected growing my wealth over time.

If I hadn’t been a disciplined saver and fairly frugal in other areas of my life, I could have ended up with lots of debt. 

I really wished I would have learned the importance of investing early and not just saving. There are plenty of sayings about learning from your mistakes, but don’t discount learning from the mistakes of others. It’ll save you a lot of time and money. Two things we all value! 

By Vicki, from Women Who Money

I was lucky enough to land the first job I interviewed for after graduating from college. A month after my 22nd birthday, I packed up the apartment I shared with my college roommate and started hunting for an apartment in a new city.

While I was excited beyond belief, I’ll admit – I was a little terrified too. 

The number of decisions I had to make in just a few weeks was overwhelming. And many of them could have really set me back financially. 

While I’d have a “real” income coming in soon, I was a first-year teacher. It wasn’t exactly a “big” salary.

• Where would I live? 
• Would I make enough to pay my bills? 
• What health insurance should I choose? 
• How much should I put into a 403b? 

I guess you’d call it #adulting now – but when I was 22, hashtags weren’t a thing.

While you might just google the answers to those questions today, the internet was pretty new when I got my first job. Can’t imagine life without Google and a cell phone? (I can’t either now – but believe it or not, there were some real benefits to not being “connected” 24/7!)

I had to use a newspaper to find an apartment. There were no “find a roommate” or “meetup” apps.

The only information I could find about health insurance and retirement accounts was the paper booklets human resources gave me. You guessed it. #notveryhelpful

Now that my own kids are in college, I’m in the position of helping them answer many of these same questions. While I know they go to their phones to get information, they still ask my advice once and a while 😉

As someone who believes that financial independence should be a goal for everyone (first from your parents/family, and then from your employer), I took some time to consider what I did when I got my first job that helped me start my path to “FI”. 

While none of these are a big deal alone, the combination of choices helped me build an emergency fund, invest in a retirement plan, and buy a starter home. And then purchase my first rental property (a foreclosure) the month I turned 26.

8 Things I did Right Out of College to Start Down the Path to Financial Independence

1. Rented a studio apartment. I picked the cheapest apartment I could find in the nicest neighborhood in the city. I didn’t have much to put in an apartment, and I knew I wouldn’t be home much because I’d be incredibly busy with work.

A big place and the rent to go with it wasn’t practical for me. Nor was buying a bunch of furniture I would hardly use and paying higher utilities than I needed to. 

I’d lived in a dorm room and a small apartment with roommates for four years. Having a place to myself was priceless! 

Money Tip #1: Always try to negotiate the rent too! While the answer may be “no” – an extra $10 or $20 (or more!) a month in your pocket adds up over the term of your lease.

2. Focused on my job. Of course, you focus on your job when you first get hired – right? But I really focused on my job. It was my dream job in a wonderful district and I was going to do everything I could to keep it!

I sat in on classes of veteran teachers to see how they managed their classrooms and answered student’s questions. I stayed late many days to prepare for the next day. It was incredibly hard, but it made a massive difference in my confidence and success. 

Money Tip #2: As a science major, I could have chosen profit over passion. But I didn’t. The best way to grow my bank account in a field with lower pay was to keep my job and focus on what I could control.

3. Side hustled when I could.  I was hired to coach, in addition to being a science teacher. So I was hired to “hustle” in addition to working full-time.

During the summer, I also worked at a busy lakeside restaurant. It wasn’t all work and no play though. I enjoyed my summer days! But working just a few nights a week allowed me to bank extra money – rather than hit the mall and spend it instead.

Money Tip #3: While it’s important to build in downtime to take care of yourself, working a side gig a few extra hours each week can help you pay down debt or provide the cash for your vacation sinking fund.

4. Drove an older car. It would have been easy to justify going out and buying a new car when I landed my first job. After all, I didn’t want to be late for school because my car broke down.

Luckily, I was so busy preparing for school, finding a place to live, and getting familiar with my new city that I didn’t take time to test drive new cars. My old car held up fine for 3 years and I didn’t have to take on another payment.

Money Tip #4: Paying for repairs and routine maintenance on your car may seem pricey, but you might regret taking on car payments that last for years. (And keep in mind you’ll still need to pay for maintenance – and maybe even repairs – on a newer car too!)

5. Kept on learning. Our district offered professional development days in the summer, and I took advantage of them. We also got paid a small stipend for those days, so it was a double win for me!

Money Tip #5: Make sure you understand all of the benefits offered by your employer. Take advantage of opportunities to grow – and make more money – whenever you can!

6. Built relationships in my new community. I volunteered at different functions at school and in my new city. Parents and other community members got to know me, and while it was great to make new friends, it also helped me earn more money.

People hired me to tutor their kids and I was tapped to direct a new grant-funded summer camp. My visibility and willingness to help others “opened doors” to new opportunities.

Money Tip #6: Changing my mindset from focusing just on my needs to the needs of others was good for me in so many ways! I felt good about helping and even though I had no intention of it “paying me back” – it certainly did.

7. Focused on needs not wants. As the paychecks rolled in, I could have started to splurge on plenty of wants – and not just needs. But I didn’t have room in my small apartment for a lot of extras.

Plus, I was too busy to go shopping when it wasn’t really necessary. Remember there was no Amazon Prime or any other online shopping when I started working.

I also didn’t compare myself to others on social media, get targeted online ads, or have one-click ordering to help part me from my money. It’s definitely more challenging today!

Money Tip #7: To build good money habits, have clear short- and long-term financial goals. Also, consider the money behaviors that are stopping you from saving.

Are you an emotional spender? Take apps off your phone that allow you to spend money quickly. And if you haven’t used a budget or track expenses yet, that’s a great place to start your path to FI.

8. Made my health a priority. I was an athlete in college but I certainly wouldn’t say I was focused on wellness those four years. Beer and late-night pizza took priority over healthy eating many days!

But when you have to be up in front of 24 high school students at 7:30 a.m. to teach, you have to be at your best. I made sure I packed a healthy lunch every day and I used the workout room at school to try to stay physically (and mentally) fit.

Money Tip #8: Bringing some snacks and lunch to work every day was a healthier choice for my body and my bank account.

When you have a 30 minute lunch period often interrupted by meetings or by helping students, you don’t have time to go out for lunch or deal with ordering something in. And using the school fitness facilities before students arrived saved me from paying for a gym membership too!

Smart Choices

While it might sound like I did everything “right” and didn’t make any mistakes out of college, that couldn’t be further from the truth. I made plenty of them!

But the smart choices I did make outweighed many of my bad decisions. 

No matter where you are with your money, making small changes can definitely pay off. And the more changes you make, the bigger the payoff will be!