Someone once said to me: “You have to look after your nickels and dimes before you can save your dollars.”
I was nineteen years old when I was heard this little nugget of wisdom. Of course, I completely ignored it. I was way too immature at the time to appreciate how the little money decisions in the moment can lead to big financial successes in the future. It took a long time for me to figure this out for myself.
What can I say? I want to share my story so others can learn from my mistakes and make better decisions. I’m not twenty-something anymore and while I’ve made lots of good decisions, there were plenty of bad ones too. It’s important to me that people have an opportunity to think critically about their life and their money.
Here are some things I’ve learned:
– Compound interest is your retirement friend, start early.
– Think carefully about post-secondary education. You need to think beyond the four years of “pursuing your passion” at University and research your options thoroughly.
– Be mindful of what you’re doing when you are applying for student loans. They’ll fund you for four years but potentially haunt you for ten years post-graduation.
– A child is a blessing, no matter what the circumstances, but planning your family with finances in mind is a priority. “Affording” a child doesn’t mean a big house, two parents, and a six figure salary but take the time to appreciate what your life will look like – you might have to take the bus because owning a car is too expensive, for example.
In the beginning…
I started my family young and had my daughter in my early twenties. Having my daughter taught me a lot about how expensive life could be and I went to University with the hopes of improving my earning potential. After taking out several student loans to support myself and my daughter, I owed more than $40,000 when I graduated with a B.A. in Psychology.
Fast forward seven years – past some questionable decisions, plans gone awry, a failed relationship, and a couple moves across the country – and I was dire financial straits. In total, my debt was on the higher end of five digits including my recent car purchase.
I needed to make a change. A drastic change. I did my research and found a way to consolidate my $50,000 of debt (student loans with some credit mixed in) with five percent interest over eight years. It didn’t help my credit but it was one of the best things I could have ever done for myself. Instead of trying to live up to the unrealistic expectations I had created for myself, I was able to come to terms with the reality of my situation and live within those means.
Since then, I have paid off over fifty percent in four years and have three more years to go. I have read a lot of books, written a number of budgets, and learned a lot of tips and tricks to live my life. Even still, I have stumbled and fallen several times in trying to figure out how to make all this work.
I am not a financial consultant or an expert of any kind but if you’re interested in some learning something from someone who is the quintessential “learn the hard way” person – I am your girl.
About Cents, Sense & Sensibility
Cents, Sense & Sensibility reflects my focus on financials and borrows from Jane Austen’s book of the same name. Before you think you have to read it before you get it, I’ll simplify it:
Cents = The many many of these that I need to get under control.
Sense = Responsible, thoughtful, and considered
Sensibility = Emotional, impulsive and idealistic.
I always had way too much sensibility and not enough sense in my life. I never stopped long enough to really consider the larger implications of my actions. Needless to say, I ended up in debt. Now I have to use my sense to get back on my feet and not repeat the same mistakes that I’ve made in the past. If you want to read more about it, go here.
Cents, Sense & Sensibility is for anyone interested in learning how to do things the right way without having to do them the wrong way first. I am not a financial expert: I can’t predict stock market trends; I won’t be able to advise you on how to invest for your retirement; and I really have no idea how much life insurance you should purchase considering your debt to asset ratio.
If you are interested in getting advice (or in my case –thoughts and observations) from someone who has the advised six months of salary in the bank and who has never gone into debt – this might not be the blog for you.
In summary, I have made some really dodgy financial choices and had some bad luck over the years that landed me in a pretty grim financial situation. It was a tough place to be.
Sense to the Rescue!
Why would you be interested in reading anything I have to write then?
Because I’ve learned from these mistakes and I have successfully paid off half my debt in the last four years. Now I am now paying my bills; building a retirement fund; monitoring my spending; and finding ways to both diversify and increase my income. I want to lead a balanced life built upon sound financial decisions.
I can’t offer you any answers to your own financial quandaries but I can certainly tell you what did and did not work for me. I still make some mistakes and lose track of things at times but I have made progress towards the person I want to be in this area of my life.
How did the blog come to be? Well, I stumbled upon a great blog called Making Sense of Cents while contesting (see here for more on that) and read one of Michelle’s articles on “how to start a blog”. I loved her blog and the idea of sharing my journey towards becoming the financial ninja I know I can be. And so, here we are: Cents, Sense & Sensibility.