You Have No Money
It wasn’t until I hit my 30s that I really started thinking about saving money and about more than the instant gratification that comes with buying something. Looking back I wasn’t that much in debt – I had a $2000 credit card debt and a $8000 personal loan. $10,000 isn’t that much by today’s standards but I was renting an apartment, had a go-nowhere job and, although I was self-sufficient, I wanted more out of life.
I started reading some stuff online about budgeting and it was about the same time as personal finance blogs really started taking off online. I dove into those and while they all made sense, it was hard for me to change my negative spending habits. So I struggled with budgets, saving, spending, working out what money would go where and who to pay first. I tried dozens of different budgets but nothing really stuck.
That was when the travel bug caught hold of me. It was late July 2005 that I started thinking about backpacking across the USA. I remember the date as I wanted to head over that same year in September but new almost immediately that I would not be able to afford it.
So, I set the date of September 2006 as the date I would leave for America.
It was only then that everything clicked budget-wise. I started saving a small amount of my pay each week (at the time it seemed like a modest start but it wouldn’t be long before I would realise that I could save a lot more!) From memory I believe it was $50 per week as I was getting paid weekly back then.
I was working for a small self-owned store with four other employees and was getting paid cash each week. The first thing I did was to ask my boss to pay my wage directly into my bank account and then set up an automatic transfer online to another bank account I opened up with INGDirect. At the time INGDirect was the leading provider of high-interest online savings accounts and was not my usual bank, which turned out to be one of its strengths.
So now I had $50 per week automatically going into a savings account which I didn’t see very often and mostly didn’t think about (out of sight, out of mind). I didn’t miss the money and I started to delve into planning my USA trip.
I soon realised however that even though I was going to be backpacking around and staying in hostels, the scope of my travels across the USA would cost a lot more than I originally thought. Not to mention actually getting there and back again (which in 2006 wasn’t as cheap as it is today).
Save More. Spend Less.
So I started to save a little more. I increased it to $75, and then to $100. This would of given me the $5000 I needed to get myself over to the USA and to travel around, but something happened to me – I got addicted to saving money!
I remember the moment I realised it. I was crossing the road to my local supermarket to do some food shopping and I started thinking about how I didn’t want to spend too much money so I could save a little more that week.
Bingo! I was well on my way to saving more.
It was a great feeling – knowing I was saving so much and knowing that it was going to get me closer to my goal of travelling. I started to cut back on expenses. I stopped buying so many toys and gadgets, cut back on my food bills (after realising that that was where most of my money was going), and generally tightened the purse strings. It helped a lot that I stopped going out as much as I used to in my 20s and that transport costs dropped to near ero as I started working across the road from where I lived.
I started adding to my automatic savings each week, paying that as a priority first and then paying my bills and living on the rest. Paying yourself first really does work! I can’t remember what percentage of my wage I was saving each week now but it would have been around 40%. That’s a great feeling and it really helped me reach and exceed my goal.
Are You Money Wise?
Looking back now that was probably not the most money-wise decision, but it was the one I made and I don’t regret it at all – it allowed me to head overseas, have some great adventures, and meet some amazing people.
I had made the decision that after I came back from overseas I would not move back to Adelaide, where I was living, but instead to Brisbane, where most of my oldest friends were. That was both a good and a bad decision. Good in the long term but terribly hard in the short.
When I got back from the USA I had no job and no place to live, but luckily I had some great friends. I stayed with three different friends over the following weeks as I found a job and moved out to a townhouse in Ferny Grove – the furtherest I had lived from the city (I was used to living close enough to walk to the city).
The first 6 months was a struggle. I was working in a job I didn’t particularly like, was living in a place I couldn’t afford and was struggling financially. The townhouse was two-bedroom so I advertised for a housemate. I was lucky enough to find one pretty quickly and she had moved in within 2 weeks.
With less rent to pay I was in a better situation and I started to pay off accumulated debt and save a little. With that sorted, I started pro-actively looking for a better job and got one in the same company after 12 months of being there. I was in the right place at the right time but if I hadn’t started the ball rolling nothing would of come of it.
Now I was earning more and living comfortably. I started thinking seriously again about my financial position and what I really wanted to do with my life. I started another budget and started paying off my debt. I didn’t do as well as I could of though and while I was in a pretty good position, I was still living pay-to-pay with small amounts of savings but nothing big. And still no investments – which I really wanted.
I started thinking about buying my own place too but that seemed out of reach on one income. Then I met up with and started going out with a girl I knew from many years before and after about 6 months it got to the stage where we were living together and were starting to think about buying a place together.
Luckily for me she already had a good deposit and so after looking around for a few months we bought a house and I am now helping to pay the mortgage.
Which brings me to where I am now.
I am still paying off that personal loan, but I will have paid it off in 12 more weeks. My credit card balance is zero and I am looking at cutting it up and not owning a credit card at all any more.
Once I have finished paying off the personal loan, my partner and I will be heading off for a short holiday (which we will both be paying cash for) and then it will be time to start saving again, and finally investing my money.
So that’s my story up until now. I would love to hear yours as well so feel free to write as much as you want in the comments section below. Or if you want it to be private contact me any time.
Image Credit: Jeff Keen, Martin Kingsley, Strevo.
Author Info
This article was written by Russ – the founder of MonoMoney.com and total geek. Feel free to contact him via this website and let him know how well he is doing. Or just leave a comment below.
No related posts.