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As you might’ve guessed, I often scour the internet to read what’s hot in the personal finance space. You could say it’s a little obsession of mine. What always seems to amaze me is how many young people are getting it right when it comes to their money. Don’t get me wrong, I think it’s wonderful that the FIRE/FIOR movement is so powerful that it’s starting to infiltrate the mainstream media and affect so many people. What I can’t seem to stop thinking about is how much further ahead I would be, financially speaking, had I found this community long ago.
Although I still consider myself relatively young, if I had this information in my 20s, I’d be crafting this blog post from a beach in the Caribbean, or from the comfort of my GMC conversion van, or, well, anywhere in the world!
Unfortunately, I didn’t find the FIRE/FIOR community until I was in my 30s. But, hey, better late than never. I constantly remind myself that it’s not a competition, but it’s still difficult to not compare myself to my peers. After all, it’s basic human nature.
Financial Woes In Our 20s (and 30s)
Since Mr. MMM and I didn’t meet when we were in our 20s, we had plenty of time on our own to royally mess up with money! That was both good and bad.
Good because we were young when we were making big financial mistakes, and bad because instead of making money missteps, we could’ve been focused on eliminating student loan debt and building wealth for the future.
Not surprisingly, we made all of the standard money moves that most normal people make in their adult lives.
When we finally met and joined forces, we had a bunch of financial failures and successes under our belts. But you know what, we still made bad money moves! We were going out to eat a few nights a week, spending money on cars, and still carrying student loans. Blah.
On top of that, just before we had our amazingly awesome (and frugal) wedding in an underground cavern, we went under contract to buy a house we couldn’t really afford. At least not comfortably. Fortunately, we were able to walk away due to a poor home inspection report and reboot our lives just before the wedding.
Right around that same time, we committed to living a frugal lifestyle and making the state of our finances a major priority in our lives. What we wanted most of all were options. And we realized that money gives you options.
If only we had realized this a little bit sooner, we could’ve avoided some of the stupid things we did with our money. Oh well, you live and you learn.
So without further delay, go ahead and feast your eyes on some of the ways Mr. MMM and I have messed up with money and, subsequently, the steps we took to fix our finances!
Some Of The Ways We Messed Up With Money
- No Emergency Fund: Having an emergency fund wasn’t always part of our financial plan. We lived on the edge – and it sucked.
- Credit Card Debt: We both had massive CC debt at one point.
- Student Loan Debt: We both carried student loan debt for way too long. Our balances weren’t out of control, but we didn’t make paying them off a priority.
- 401K Loan: Yes, I took a 401k loan in the past. #eyeroll
- Car Payments: We both had ’em.
- Buying A Rental Property: I overpaid for a rental property at the height of the bubble in 2007.
- Eating Out: We used to think nothing about dropping upwards of $100 a few times a week in restaurants.
- Spending Foolishly On Entertainment: Spending money on movies, meals, and trips were our normal.
- Frequent Clothes Shopping: There was a time when I bought a new outfit every week. Every. Week.
Steps We Took To Fix Our Missteps
- We Stopped Digging: We stopped using credit cards and financing stuff, including cars.
- Sticking To A Budget: Tracking our expenses and sticking to a budget helped us take control.
- Eliminating Debt: We eliminated all of our debt, except for the mortgage. We’re working on it.
- Refinancing Our Home To A 15-Year Mortgage: After our home renovation (using cash), we refinanced to a 15-year mortgage at 2.7% interest. Oh, yeah.
- Adopting A Frugal Mindset: Frugality has allowed us to determine what we truly value and what makes us happy. Hint: It’s not money.
- Spending Only On Things We Value: We only spend money on things we deem important to us.
- Investing, Investing, And Investing Some More: All extra money now goes toward our mortgage debt and into low-fee index funds.
- We Started Tracking Our Net Worth: Tracking our net worth is super easy and it’s been our single biggest motivator for building wealth. If you’re not already tracking yours, I highly recommend you start.
So, if you’re buried in a series of financial missteps and you feel like there’s no way out, Stop, Breathe, and Take Inventory. There is always a way out. Like my mom always said, where there is a will, there is a way. That adage has helped me many times throughout my life.
It might not be easy. And it might not happen overnight. But, with determination and time, you, too, can fix your past money mistakes.
We’re living proof that you can royally mess up with money and still retire early, really early.
Other articles you might enjoy:
- Why I Love My W-2 Job And You Should Love Yours Too
- Our Surprisingly Lazy (and Free) Money Management System
- 9 Money Hacks That Took Us From The Poorhouse To The Penthouse
- How We’re Achieving FIRE/FIOR Through Selective Frugality
Our FIRE/FIOR Journey
These days, we’re firmly planted on the path to FIOR – Financial Independence Optional Retirement. We actually realized that, although we love the idea of FIRE, we’re not exactly chasing an early retirement – we just want it as an option.
Did you mess up with money but have since turned it around? If so, tell us about it in the comments!