This guest post from Jackie is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes. Jackie writes about learning to love your financial life at MoneyCrush.
Seven years ago I was divorced, unemployed, in debt with a negative net worth, and struggling to build a small business. I made $4,621 that year from a combination of business income and unemployment compensation. (And no, there aren’t any zeros missing from that total.)
Today, I’m married, employed in a full time job that I enjoy, debt-free-but-the-house with a positive net worth, and running a (different) small business that’s starting to take off. I made approximately $56,000 last year.
What changed?
Well, you might think it was outside factors, like these:
- The economy improved — and then tanked again.
- I received a small inheritance when my mom died.
- I got married.
- I eventually got a temporary job doing something I’d never done before, after not getting past the interview stage for job after job.
Those are all important, but what really changed was something much simpler — something that anyone can do or get help doing:
I started paying attention to my finances, and then I did something about what I saw.
In other words, I finally had enough.
After a desperate plea of “Isn’t there anything I can do where you work?” to everyone I knew, I got a temporary “one or two day” contract position that later turned into a full time job.
Suddenly, I was flush in comparison to my recent past. I read Joe Dominguez and Vicki Robin’s Your Money or Your Life, which left a huge impression. I immediately began tracking my spending, and from that moment on I began to focus on my finances like never before.
I paid off a student loan that had languished in deferment and forbearance for years. I built an emergency fund, and began contributing to my 401(k). I got a better job, and upped my retirement contributions. Each step along the way has been an improvement, and things have snowballed in a positive way from there.
Of course, I didn’t do this in a vacuum. Having a husband and son who are willing to listen and who urge me on as I work to get my business going has been critical. Reading ideas from books and bloggers made a big difference too, as did joining and participating in several groups.
It’s not enough to read or write about personal finance though. It takes paying attention and then taking action — continued action on one goal after another, despite setbacks or struggles. If I can do it, you can do it.
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Congratulations!
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Congrats, Jackie on your tremendous progress!
I think this post sounds like an intriguing introduction. The dual themes of your mentality has to change and you have to start paying attention to your finances are comparably critical as your income resonated with me a lot. However, what does paying attention mean? Did you routinely review your bills? Did you do a budget/spending plan for the first time? Did you write an exhaustive list of your liabilities? When you married, did you make sure your partner was on the same page with you financially? If so – what questions did you ask, what conversations did you have? How are your newly incorporated habits different from your old ones? Did you have goals?
I think a prime opportunity was missed to delve into this more substantively. The basics are not basic for everyone. An admonishment to pay attention does not help someone who feels helpless and is mired in mounds of consumer debt. I think one can reasonably infer you were in a desperate place financially and emotionally when you were unemployed and divorced with a negative net worth. How did you get out?
Blog posts have to be constrained by length but not substance. A guest post or Reader Story should stand alone. I should not have to click on that person’s blog to find out more.
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I agree. I would have liked to hear the answers to some of the questions posed by Dreamchaser57.
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I had always routinely reviewed my bills and planned out my spending — they were top of mind because I had to be very careful with all of my money. I used to stare at them, my bank balance, and my checking account at least daily. So that part wasn’t different.
Actually having some regular income that I *could* pay attention to probably made the biggest difference.
I realized that I needed to go beyond just figuring out how to survive financially. So I focused on reading and writing daily about personal finance (to learn what I needed to do) and then (once I had some ideas there) I began working on one thing at a time, starting with what seemed the most doable to me now that I had some money. (Which was paying off my student loan.)
Before we married, my husband and I did spend a lot of time talking about how we viewed money, where we wanted to be, and how we hoped to get there. We talked about what had and hadn’t worked for us in the past, and what we felt comfortable with now. We thought it would be best to continue to keep separate finances and to provide moral support to each other. We also agreed on which bills would be considered “joint” bills, and had opened a joint account to pay those from that we each contributed to equally each month.
I wish I knew how to explain it better, but really the biggest differences in my old habits vs. my new ones weren’t the habits themselves. Rather it was making the habits a priority and paying attention to them every day and acting on them.
For example, I’ve always known that setting aside money for retirement was important, but it was a vague thing out somewhere in the distant future that I didn’t really think about. By paying attention to it, I mentally increased its importance and acted on it. I went and set aside something like 1% of my paycheck for retirement, to start with. I knew that wasn’t enough, but it was something, and I kept thinking about it. Because I was thinking about it, I acted again and increased my percentage by maybe 2%. I kept doing that til it felt like “enough” to me. (I’m at 35% now, which feels like enough since I started out so far behind.)
Hope that helps…
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Many thanks, Jackie! I so appreciate you taking the time to offer a very detailed response. That filled in a lot of informational gaps for me. Like you, I went through an “education” phase where I started to devour a lot of personal finance resources, books, podcasts, magazines and blogs. It was quite revolutionary for me. Just the notion that you don’t have to have a car note for the rest of your natural life was mind-blowing, LOL. Best of luck in all your future endeavors.
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I too was disappointed by the depth of the post. Thanks for adding some information Reader stories are one of my favorite GRS features.
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Congratulations Jackie! Moneycone here – one of your regular readers!
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Thanks Moneycone
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Congratulations. I have become very tempted lately to purchase a high-dollar item, but I also feel guilty with all the debt I currently have. I decided this morning just to write down everything to get a handle on my finances too. What business are you in and what steps did you take to get started?
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Thanks, and congrats on your decision to make changes in your own financial life too
During the time of this story, I had a web design business that I started as a sole proprietorship. (Which basically involves announcing that you’re in business and getting clients.)
Currently I have an LLC which sells (and has a free version of) a debt snowball app. Getting that started was more involved. In addition to designing the app and getting it coded, I had to set up the LLC, open a separate bank account, get things set up with Apple, etc.
Steps for setting up a business vary depending on where you are, but I think the most important part is to not assume that things will go as planned. (Because do they ever?) Make projections based on worst-case scenarios, and test the market.
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The key component being conveyed is to ‘pay attention and do something about what you see.’ You are absolutely right. Nothing ever changes without action. I only wish the post were longer.
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I applaud what you’ve been able to do, but like dreamchaser57 I’d like to see a little more substance – more of the “hows” rather than stopping at the “whats”.
I’d also respectfully suggest that the circumstances you minimized as “outside factors” are in fact a larger contributor to your turnaround than you may realize.
When I was in financial dire straits, I was tracking everything, I knew exactly where I was in trouble and where my limited resources were going, and I knew what I needed to do. That simply wasn’t enough.
For you, my condolences on the loss of your mom, but receiving a sudden windfall, getting married (as it sounds like your spouse has an income) and finding what finally became a full time job were the things that made it possible for you to make some progress on your debt and savings. At least that’s how it appears to me, based on my experiences. You’d still be floundering if not for the “outside factors” you dismissed.
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You know, one outside factor that wasn’t mentioned here that DID make a huge difference was this: I didn’t grow up in poverty. I KNEW that it was possible to get ahead and live a good life. Knew it deep down because of having grown up with a good life and having done it myself before (and really, despite a ridiculously low income for 4 years, having essentially maintained it — just with a lot of struggle added.)
I’d had a good job before those lean years, and never really gotten ahead. In fact, I’d fallen further behind despite that good job.
So maybe what made the difference was being WITHOUT the good job for years, and then finally getting a part time job making about $15 an hour. (It’s the old “you don’t appreciate what you have til you lose it” kind of thing…) Suddenly I appreciated having money, and this time I paid attention to it.
Now I should have used the inheritance to pay off my student loan, but instead I used it as a down payment on a $76,000 condo and went further into debt. (Yeah, I bought a condo with no job and almost no income. That was back in the day where breathing was the only requirement for a loan.)
My husband and I have always kept separate finances and split all joint expenses equally, so his income did not impact mine, except that I no longer qualified for the social services I wasn’t taking advantage of anyway. Basically it had the same effect as having a roommate, which I’d already had in the past.
For sure, I’d still be floundering if I hadn’t started making changes with my money — and continued making them to this day.
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Congrats! It really is the little things!
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Congratulation Jackie! It takes action to get out of a bad spot. So many people complain about their situation and do nothing about it. Nothing is free in life.
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Congratulations Jackie! I’m glad you were able to turn your life around and get on the right financial path.
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Hey, folks. My fault for not asking for more depth. I edited this story and one from a couple of weeks ago at the same time. People complained that that story, too, lacked depth. I was intentionally going for lighter stories, stories that were purely motivational. But it’s clear that I need to make sure to ask for more meat when stories are light. I get that now. Sorry for the miscalculation.
And thanks to Jackie for dropping by to add more details. I appreciate it.
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Good idea!
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JD, it’s very gracious of you to apologize, and I mean that genuinely. I made it a point to make my criticism constructive, I hope that showed. Last point -it’s your own fault for spoiling the GRS community the way you do. It’s clear by the consistent quality content that you generate that you hold yourself and the contributors to quite an exacting standard, so now we just help you with that. *smile*
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When I read these stores, I am looking for inspiration as well as potential strategies. This story is inspirational, but it doesn’t connect the dots.
This story is about “Taking Action” but other than contributing to a 401(k), what changes were actually made? In the comments, Jackie said she had previously “routinely reviewed my bills and planned out my spending,” so tracking spending was not a new step. What actually changed? Was it making debt repayment a priority? And if so, why didn’t that happen earlier when she was tracking spending every month? How do you track spending and not become aware of debt repayment?
Also, how did you support your kid(s) when you made only $4,621? Wouldn’t that be worthy of it’s own blog post? You indicated in the comments that you didn’t take advantage of social services, so how did you make ends meet? How did you pay for food, housing, utilities, transportation, and health care? Did you rely on family? Were there child support payments?
You indicated that you spent the inheritance on a condo — not toward a debt snowball. If the cash flow numbers were essentially the same as before, what caused the big difference? What did you remove from the budget to make progress?
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Actually tracking spending *was* a new step for me, but staring at my bills and planning out how to use my money to get them paid wasn’t. Tracking really does make a huge difference though, because in general what we think we’re doing with our money often isn’t really what we’re doing with it.
Making debt repayment a priority was something that I had done in the past when did have a good income, and then it got put on hold. For years. But I got super fired-up when I was able to repay my student loan.
As far as supporting my son went, I did receive $200 a month in child support so that helped. The rest came from my small earnings, unemployment (at first), and what I had saved up when I saw the writing on the wall prior to becoming unemployed. Also, I put off as many expenses as possible, and already had minimal expenses (no car payment, for example, and I drove as little as possible, and increased deductibles, etc.) My son and I each had individual catastrophic health care policies, and luckily we didn’t get sick.
I didn’t start making real progress until after I got that part time job. As I said in the other comment, the biggest differences in my old habits vs. my new ones weren’t the habits themselves. Rather it was making the habits a priority and paying attention to them every day and acting on them.
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Thanks. Best of luck toward continued success.
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Awesome Story!
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Congrats Jackie!
This is a truly moving example of how someone can take a bid situation and turn it around. With so many people in fiscal hell right now, you story is one that can provide hope
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Paying attention to your finances is so important. If you don’t know how much you bring in versus how much you spend, how do you expect to grow your nest egg?
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Thanks for sharing!
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Thanks for sharing! I absolutely agree with you. Your Money Or Your Life is a class book on personal finance. And I’m sure there’ll be more good books to come. You drive the point straight home—reading and doing are two different things.
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Congratulations, inspiring post.
I read that book some time ago but have pretty much forgotten everything in it. I am going back to read it again.
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First: the author of this article should be commended for all she has been through and has done. Congratulations and keep up the good work.
And… I think the original article was not too thin. It was just right.
If the author had put in more detail, there would have been clamor for even more details, or arguments over the details that were skimped on, or critiques over the details that were given, and other distractions.
What these comments allow, and the author’s responses show, is that an initial article with general experience is a good thing to start on. Then if a reader wants more, there could be an opportunity to read more.
The current state of affairs is that an article is published… all or nothing, and then the comments fly, sometimes with an author’s feedback, and sometimes not, with JD arbitrating to whatever extent he can.
So that’s my take on the situation.
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Thanks, I appreciate it.
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Maybe I read too fast or it wasn’t clear – did you get an inheritance, get married and get a temp job?
How did you turn your 1-2 day contract into a full time job?
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Yes to all of the above. And the temp job was only supposed to be for a day or two, but they decided there was more work available, so I started working part time. After I’d been doing that for a few months, I started working a few more hours. Eventually I went to the manager there and asked if they’d like to hire me on full time, and they agreed.
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nice story. I, too, have started tracking my expenses last year. But only at the start of this year did I do something to reduce my level of spending.
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Nice story! Great job Jackie, inspiration for being able to effect positive hcnage in ones life. I do think that the ‘good things’ that happened were connected to your sucess. Yea, the inheritence wasn’t probably linked in any way, but being proud of yourself, and doing what’s neccesary to take care of yourself and your child certainly had some bearing on your ability to attract and retain a mate that shared your current values. Your willingness to take a ‘temp job’ seriously surely had some bearing on why they chose to keep you on for more work instead of getting another temp.
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Jackie, I admire that you didn’t let your negative net worth crush your entrepreneurial spirit.
You are spot on regarding how a lot of little actions can turn things around 180 degrees.
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