From Financial Integrity
Rose - Small steps every month
- Rural Northwest USA
- Multi-adult household
- No children/dependents
When I first created my Lifetime Earnings Estimate, I was shocked, but I think not in the way most people are – I just couldn’t believe how little I had made in my life, and how relatively rich a life it had been so far! It seemed to me that with a little more wisdom and focus, I could live a very rich life indeed.
My balance sheet was pretty sad, though. Due to a series of serious health and business setbacks over the previous year, I had more than half the amount in short-term debt than I had in my mortgage balance. Even owning property in an appreciating market, I had a negative net worth! Keeping my balance sheet updated and watching my net worth change each month was a key to keeping me on course to get rid of that debt in short order. By updating the value of my assets versus my liabilities on a regular basis, my net worth went from $-3,000 to $91,000 in two years, which helped me realize how much I could accomplish when I put my mind to it, and how soon I could have a financial life that was totally stress-free.
Although I have always kept track of my finances, I never did a wall chart before 2005. Since then, my wall chart has been my best friend & cheerleader! I charted my debt balance, which necessitated a whole new scale for the chart. It was so exciting to watch that line fall all those inches down to zero, and then watch my savings balance start to climb. I made it very colorful and cheery, and really look forward to updating that chart every month. Even on hard months with large expenses, I can revel in the overall progress I’ve been making toward my goals, and be reminded of the freedom that comes with that.
I learned to read the fine print on every insert and offer, and to always be aware that the creditor’s goal is to make money off of you. I realized they prey off the unconscious debtor, and I was not going to be one of those. I paid just over 5% in combined interest over only about 2.5 years, rather than just adding it to long term mortgage debt, and I looked for every way to save and use that money to pay down the balances instead. Once I was done paying down the debt, my savings rate shot up faster than I ever would have imagined if I had not learned that discipline. I applied that savvy to every other “opportunity” that came my way, and went to work on getting rid of that mortgage too.
And not having specific career ambitions or a single trade means that lots of interesting opportunities come my way. I found that calculating the real hourly wage prior to accepting a job is key to making smart decisions. I don’t like to waste my time – and if my wage is being mysteriously siphoned off by work-related expenses, that’s just wasting my life energy. So I apply the Financial Integrity approach, and use that information to help choose which opportunities are in my best interest. If a job is something I want to do, but I calculate it to be expensive, I use that data to ask for a higher wage. I’ve never been turned down when I’ve got such an objective argument – it shows the employer I know how to help them watch their bottom line, too.
Having got back on strong financial footing and developed savings, I have freedom to explore new things. I have the luxury to take some significant time to focus on building relationships and learning new skills that will serve me well, even as the investor-class quakes with a crashing monetary system and looks for a government rescue! I am aware of all these opportunities available to me -- and so I feel like I’m one of the fortunate ones, who can weather financial storms and has the capacity to help others to do the same.