Today’s guest post is from my friend Angela, at Tread Lightly, Retire Early. Angela’s story is very inspiring and I’m sure you’ll enjoy reading her story. Take it away, Angela!
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My financial story starts pretty typically – as a college graduate with $24,000 of debt. After graduation, I packed up my old car and drove across the country to South Carolina, where my then-boyfriend (now husband) was stationed in the Marines.
I had a job waiting for me, as a naturalist intern. The job was fantastic. I got to lead kayak tours, teach people about local wildlife, and generally spend my days on a vacation destination island. The downside was that as an internship, it didn’t even pay $5/hour.
Unfortunately, there was no way I’d have been able to pay for my half of the rent, groceries, utilities, auto, AND start paying the $308.44/month student loan minimum on that income. I simply wasn’t making enough to live on.
Life Savings: $212.00
Honestly, I’m not sure why deferring my loans didn’t even cross my mind, because I was certainly in a situation that would have warranted it. Instead, I looked at my bank account with just $212 and realized I couldn’t sit back and do nothing or I’d be completely broke in no time at all.
I’d never had such little money to my name since moving away for college, and it scared the heck out of me. The idea of having no money to buy groceries or gas-up my car was something I never wanted to face. And since I didn’t have a credit card, if my bank account hit zero, it would actually mean zero.
So, I started applying for second jobs. I “lucked out”, and got an interview right away for a Petsmart, thirty miles away.
At that point, I was so relieved to be hired anywhere that I didn’t consider negotiating a higher salary than the $8.50/hour offered, because it was above minimum wage, and already a considerable hourly increase over the internship that required my degree.
A week later, I was settled into my new routine of working my internship Monday – Friday, then off to Petsmart to work Friday evening and through the weekend. I joked that I worked 8 days a week, but it paid the bills.
You’ve Got to Start Somewhere
Petsmart wasn’t a bad job, but it was a bit painful getting asked where I went to high school. It was hard enough to swallow the entry level retail job with a college degree, but it was even harder to take that I didn’t look old enough to be hired elsewhere.
I felt stuck. Jobs were scarce in our area. I accepted the fact that hey, at least I had a job, even if it wasn’t remotely what I wanted to be doing.
During this time, I got engaged and then married. Since we were young and broke, we had a simple wedding and a simple honeymoon. Both were absolutely wonderful, just not expensive. When you’re barely scraping by, the thought of tens of thousands of dollars on a wedding isn’t even on your radar.
NewlywedsSix months after we were married, my husband’s time in the Marines was finally over, and we headed back home to the Pacific Northwest. Once again, I packed up my car, drove cross country, and started a new summer job, this time as a park ranger.
This job paid better. We were fortunate enough to have a family-owned home to move into, at least for a short time while we started saving for our own home. Thanks to the VA loan option, we didn’t need to worry about saving 10% or 20% of the home purchase, and we bought our home a year later.
Our new home!Our new mortgage was significant in comparison to our incomes, so we got roommates to help offset the cost. We settled in, and then I buckled down to pay off the student loans that were still hanging over my head.
Finally, a career!
During the year we saved for our home, I continued to slowly pay down my student loans, and I finally got hired for my career job. With the new job, and the new house, our expenses were somewhat higher, but so was my income.
Soon after I started that “real” job, I calculated the daily interest on my loans and just about fell over. While the $375 monthly payment felt like a lot (I’d been paying a bit over the minimum $308), the bulk of each payment was still going to interest, thanks to that awful 8.5% rate.
Punch Debt in the FACE
Once I actually saw that stomach-dropping number of daily interest accrual, I knew I needed to do something to pay off my loans faster – a lot faster. After poking around the internet for a little while, I found Ninja at punchdebtintheface.com.
I was hooked. I devoured his blog posts and found the inspiration to throw everything I could at paying off my loans as fast as possible.
A year after starting my career job, and less than 3.5 years after graduating from college, my student loans were finally gone. I didn’t have a high income, and my husband was in school on the GI bill, but I was so focused on paying them off that I threw every extra dollar on those loans.
I realized that every dollar I paid would decrease the interest that was constantly accruing. The day that balance read zero was literally one of the best in my life.
Then Came a Baby!
My list of to-dos weren’t focused on growing our long term net worth, but instead on the things I wanted to accomplish before having a baby (pay off loans, have husband finish college and find a job, finish grad school myself, spruce up the homestead…)
Again, I had a clear focus and an end goal to achieve, and once my list was checked off, we had that baby. And that’s where things started to go sideways…
He is pretty darn cute, though, ain’t he?!?I’m someone who’s always been a stellar student, avid learner, and major go-getter who had the confidence and skills to always get things done, once I committed to them. Becoming a mom, on the other hand, was the most overwhelming, challenging thing I’ve ever done.
Suddenly, I had no real control on my life and I spent my days treading water. I started back at work (very part time) just three weeks after our son was born, because I just had to get out of the house.
I went full time four months later, and life got even crazier. I didn’t have enough time in my day – not for work, not for household chores, not for making dinner, and certainly no time for myself.
I would work in the mornings, attempt to do some cleaning in the afternoon, play with our son, and then work during nap time, during the time he was with family, and then I’d open my laptop again after he went to sleep for the night. I was exhausted, our house was a mess, and I had no time with my husband (who was also working crazy hours.)
Bring the baby to work events (please don’t cry!!!)At that point, something had to give, and it did. I met with my boss, and I cut my work hours down to 80% time, and at the same time, enrolled our son into part time daycare.
All of a sudden, I was making 20% less, and we were paying close to $700/month in childcare. But life was 100 times better almost overnight. I had my mornings and afternoons with our son. I had focused time in the office during the day. And, I had time to get to household chores and random appointments during the week.
Our weekends were our own again, and life settled in to a much happier routine. We made less money – with higher fixed bills – but since we lived below our means, we knew we could make it work.
Lifestyle Inflation
Unfortunately, the lifestyle inflation that showed up that first year of parenthood didn’t evaporate with the smaller salary and the new child care expense. In order to just survive week to week, we started to pay a lot in convenience.
Grab coffee and oatmeal at the local coffee shop before work. Pick up lunch every day. Order dinner delivery or take-out multiple times a week. Eat out on the weekends. And when we did make dinner, we bought partially-prepped meals to save time.
We tricked ourselves into thinking that we were still frugal, because we didn’t have the big car payment, the financed entertainment system, or the credit card debt. But we weren’t putting much into savings any longer, and an expensive month would put us into the red.
I began reading personal finance blogs again, and started to get seriously interested in the concept of financial independence. Eventually, I decided I wanted to take an active role in the community, and I started my own blog.
I’d stopped buying new clothes, cut down on lunches out, and stopped buying coffee. Still, we weren’t seeing meaningful changes in our month to month savings. I calculated our 2016 savings rate, and it ended up at 22%, which is great compared to the general public, but not so great considering the student loan payments I’d made on a much lower salary.
Using the Emergency Fund
Then we had three crazy expensive months back to back – $8,000+ unexpected expenses – and we had to dip into our emergency fund for the first time. It felt awful.
We were making decent incomes, but suddenly it wasn’t enough to cover life expenses. Sure we would have clawed back without getting ourselves into a debt hole, but it felt bad.
Worse, because I’d just decided to start writing a financial independence blog – and here I was having to admit to spending beyond our means for three months in a row. Even the conservative FI date I’d thrown out (15 years in the future) seemed impossible.
Vet bills for old dogs can get expensiveNo-Spend November
I spent a few weeks feeling pretty powerless to make huge changes to our finances. We weren’t in tech fields with six figure salaries. And I wasn’t even working full time. I started to wonder if maybe a 22-25% savings rate was the best we could do at this stage in our lives.
Enter in the “no spend” month! I’d read from time-to-time about people doing no-spend months, and while it was intriguing, I had given myself all kinds of excuses in the past as to why it wasn’t the time to try it.
I set myself a target of $1,500 for the month (excluding mortgage and childcare), started to write down every penny we spent, and marked “no spend” days as they happened. I culled the pantry and freezer and cooked our meals from scratch.
Then we went to Hawai’i and had a trip of a lifetime, all the while tracking our spending. The good news is, there is a ton of fabulous free stuff to do there, and we spent almost nothing outside of food and gas.
We came home, celebrated Thanksgiving, got a start on Christmas preparations, and ended “No-spend” November with a 51% savings rate.
Hiking is freeFrom that point, I was hooked. A fifty percent savings rate had seemed so out of reach and only attainable to those households with two six figure salaries and no children, but suddenly, we were doing it.
I’ve even set an audacious goal to hit a 50% savings rate in 2018 – over double what we’ve done in the past. We are now telling our dollars where to go, instead of adding them up at the end of the month and figuring out where they went.
So what’s next? I’m not sure. Neither of us is ready to claim we want to retire early, but financial independence is never the wrong choice.
Whatever we do in the next five, ten, twenty years, I want it to be on our terms. A high savings rate will allow us to make those decisions based on our happiness, not what bill is due next.
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Great story Angela, you are totally doing things on your terms! A 50% savings rate is basically kicking a$$ and taking names.
I need to get to where you started – to get paid to conduct kayak tours. That’s an ideal job or side-hustle for me.
Thank you! It is a serious improvement over where we’ve been the last few years, so I’m hoping to keep it up! I can tell you some great horror stories about those tours as well if you’re interested, because it wasn’t always sunshine and rainbows to be sure. Though something I have definitely considered taking back up some time down the road.
Angela, It’s a great story and I’m really impressed with you taking charge of your life rather than letting debt control you.
But, I have a question. In hindsight do you regret going to college and incurring the debt? I don’t mean from an education and life experience standpoint, but from a cost versus benefit standpoint. I am a college teacher and see many student there, but not for good reason. Just there, because that’s what young adults “are supposed to do” in our society. Not really understanding the implications of the cost which is guaranteed versus the career benefits they may or may not attain.
When I was a graduate teaching assistant I remember asking a student about ready to wrap up his accounting degree (a field with many good paying options) what he was going to do next. He said “I have no idea”.
Tom
Do I regret it? Not one bit. I do now have a career that is directly related to my college degree, which is a big part of that. I also can’t regret going to a more expensive school, because it was a place where I got to play college softball, and I was set up to graduate early, which did save considerable money (and allowed me to move cross country when I did instead of going to my senior year of school). I also absolutely LOVED school and had a wonderful college experience. Now, if I was still paying off my loans more than a decade later, my answer might be different 😉
I love this story! It has some of the best parts: crushing debt, starting a family, and a mighty goal going forwards!
Your ending to this post is awesome: happiness should always be the driving factor. The fact that you have found a way to have this for less is inspiring!
Thank you! I sometimes forget how big of a deal crushing my student loan debt was now that I’ve a few years out from it, but it’s really set us up for the rest of our lives. Helps that my husband went to school on the GI bill too so he never had any student loan debt. Lucky guy 😉
I love it! Financial independence is 100% about living within your means and living the best life possible, and it’s so much more than just a number.
At least, I think that’s what Financial Independence SHOULD be about. I feel like too many people get stuck in the weeds of saving every last dollar without pulling back and make sure they’re still living a life that makes them happy as well.
What a great post – a story so relatable to so many readers that will come across it. Love the No Spend November concept you guys followed and am very inspired to do the same sometime in the near future!
Thank you Amy! The No Spend November challenge was really the game changer for us to be able to more than double our monthly savings rate.
Great story and awesome pics! You’re doing it right because you’re doing it your way. Love it!
Thank you! We really do have a pretty great situation for our life right now. Just have to remind myself of that on the not-so-great days 🙂
Good luck with 50% saving rate this year. That’s a big goal. I think you’re doing very well. Most people your age are not saving at all. Great job. Really nice story too. I think we all struggled when we were young.
Thank you! It sure feels like a big goal sometimes. The “doing better than most our age” was a really limiting trap we let ourselves fall into. Always best to compare against yourself and ignore what others are doing. Hard to do sometimes though.
Thanks for sharing! Yes, becoming a parent is the biggest challenge in learning you’re not always in control – it came as such a shock to me! Sounds like you’ve found your stride with reduced hours, which offset the temptation for all those convenience purchases, plus you get more time with your son. Win-win! Congrats on paying off the student loan so quickly – that is impressive.
24/7 kids versus babysitting or nannying is so so much harder than I would have ever imagined. But still definitely worth it 🙂
And thanks! I was seriously determined to pay them off as quickly as possible. I hate debt (other than our mortgage / real estate).
I feel you on the starting a blog during super expensive months. I think I had a negative savings rate my first three months of publishing my spending reports? Eek ?
Love your story so much, friend, and you’re absolutely crushing it now!
I’ve heard that from a number of other FIRE bloggers as well. What is it about finally starting a blog that suddenly causes the economic skies to open and rain unexpected expenses?!
Thanks for having me on today! I really enjoyed looking back and writing about my backstory in depth. Sure glad our income isn’t still what it was when we first got married.
Incredible story! I love hearing about your background in more detail. The part about you cutting hours to 80% time and sending your son to daycare really got to me. Obviously not the same as what Mr. AR and I are doing, but I find a similarity in that sometimes a more expensive move can be the best move for our life and our mental health. Looking forward to following your journey, Angela!
Thank you! I’ve definitely felt like you and I are on somewhat similar paths (though obviously very different as far as the childcare situation). Things will definitely change for both of us in another 2.5 years or so when the boys are in school! Though that’s still not “full time,” so I don’t expect my work hours to change then either. Isn’t it incredible how different your weekends are once you have time to get things done during the week??
I love your backstory Angela, you’ve achieved amazing things. And those intern jobs sounds awesome, even if the pay sucked!
Thank you! They were really awesome jobs. I basically got paid (very little) to do things that others did on vacation. Though hauling and cleaning 2 person kayaks is not easy work sometimes 😉
Thanks for sharing more details about your story! I love that you shared not just your highs, but also how your family pivoted and handled the lows. Looking forward to reading the updates on how your 50% savings goes!
Thanks 🙂 It’s definitely different looking back at where we’ve come now that we’re in a good, stable situation. The lows were rough financially, but I can’t really regret any part of our story so far.
Thanks for sharing! Amazing story! Inspirational.
Glad to hear it! Here’s to hoping the next decade is even better 🙂
Oh yes, getting mistaken for a high schooler, always awkward and not a compliment. Awesome and inspirational story!
Thankfully, my mistaken identity as a high schooler seems to be mostly behind me these days. I think usually having a kid in tow (or being in professional clothing at work) helps that 😉
Very inspiring Angela. I wonder what it is that makes people pivot and start attacking debt when some people just live a life filled with debt. I am always so motivated to do more after reading stories like yours. Great story. Thank you.
Glad it has inspired you! I can’t imagine NOT attacking the debt I had – or not minimizing it as much as possible – but you’re right. The norm is just to live with it. Makes for a much more stressful life.
What a beautiful story! Y’all are doing an amazing job building a life you can love and be proud of (I threw in the y’all in case you are missing South Carolina! )
Ha, y’all never cemented itself into my vocabulary, but even now my husband gets mistaken for a down south country boy quite often. No one ever guesses he grew up in the city.
Great to hear your back story, Angela! What was your degree in? Sounds like something biology/wildlife related. I studied Biological Sciences, and though I’m doing nothing (professionally) with it, I loved the experience and still read and learn about related subject now (a benefit of learning whatever you want as an adult!)
My undergrad degree was in Environmental Science, which was great because it really gave me a wide range of employment options. I’m now working in the green building field after pivoting away from the naturalist/park ranger jobs, but they all feed back to my focus on doing better for the environment 🙂
Great story Angela and thanks for sharing it to us. I’ve been there before having almost no money in your bank account, it’s a difficult time to get through because you can’t go out and buy anything. It pushes you to get out of that terrible situation and never try to hit financial rock bottom again.
Good news is, I was at a place where I really didn’t need to buy anything (granted, we had a plastic folding dining table and a mattress straight on the ground…), but it was a scary place to be. Definitely motivating to make sure I never came that close to zero again.
Thank you for sharing your story Angela! Your wedding picture is beautiful and your son is adorable. I can relate, it really feels like there is no time for anything with a baby. The only time for myself is at night time right now while baby is asleep. It’s going to get more crazy when I start work full time but I hope to get some freezer meals set up for mealtimes.
You’ve done really well and you should be proud of all that you’ve accomplished!
Babies are 100X more demanding than you ever expect, that’s for sure. Good luck when you go back full time!! If I could go back and do it over again I would have filled our freezer with meals because it would have made such a huge difference.
PS I used to read Punch Debt in the Face too, I just checked at least his website is still there but looks like there are no stick men drawings anymore 🙁
He sold it a couple of years ago :'(
Great stuff Angela keep it up – I like to punch debt and every day in the face too!
Cube – hope all is well man!
Josh! Life is good. But I need it to not be winter anymore. 🙂
Thank you!
I liked reading your story all in one go like this! Best thing I read on this site 🙂
That’s not a sideways insult at all! :-/
(Granted, Angela is a fabulous writer, so you’re probably right…)