Jim, a reader of our Facebook page, shared some of his personal finance journey in Facebook comments a while back, and readers commented that they’d like to hear his story. We reached out and asked him if he would elaborate so we could share his story with the Get Rich Slowly website readers. This is part 1.

Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income. Want to submit your own reader story? Here’s how.

First, let me be clear, I never went hungry in the extreme “poverty” sense. But I did have a few mustard-and-sugar sandwiches in my life because that is what we could afford between paychecks. My parents had always given my sister and me “just enough.” If we wanted more, we needed to save our meager allowance because they were living paycheck to paycheck and couldn’t afford more. To this day, I believe it’s what helped me get to where I am today. I realized at an early age that it was all on me. I knew going in I was never entitled and that has been very helpful in this journey.

There were two lessons I vividly remember growing up concerning money. First, around 8 years old, I remember saving weeks and weeks for a large Lego set because Dad told me, even at that age, if I wanted something, I’d better save for it. He may even have had a deal with me that he would pay half and, knowing him, he would count it as one of my birthday presents because that is how he is. Anyway, it seemed like I must have saved $50-plus for this set of Legos back in the ’70s. Well, I clearly remember playing with it years later and thinking, “Boy, I worked hard to save that and for what?” The joy was gone, apparently. This was a very important lesson that I carried into my adult life (thankfully).

Second, I will never forget sitting at the bank drive-thru with my latest paycheck in hand when I was 16. It was a measly $76 for two weeks’ work (part time at a bowling alley). Even then, my parents made me use this money to pay my bills and reminded me to “use it wisely because that is all there is.” I remember waiting in line, looking at those numbers. I thought, “How am I going to live off of this in two years?” It was then that I truly realized that life is going to be difficult because it’s all on me. After all, my dad constantly would remind me “you better have a plan when you are 18.”

Over the next few years, I would need car payments, insurance/fuel and upkeep, a new transmission, a new windshield, college tuition. (My parents would help pay but kept a running tally of the debt I owed. I never had a student loan.) Some of the emergency purchases were my fault, like when I was driving a little too fast and hit the curb, destroying my wheel and tire. I was definitely a little foolish, immature and slow to learn about how to live responsibly. It seemed like every few weeks, something would break or I would do something stupid and would need to dip further into debt.

Now I was 20 and about $7,000 in debt and making a little over $3 an hour in the late ’80s. My life was spiraling out of control, it seemed. I was in college, but I had no idea what I was going for, where I wanted to be when I finished. I just knew this was the next step after high school. Deep down it was a frustrating pattern and I wasn’t smart enough to get out of it on my own.

Financial counseling at 20?

Sometime during this confusion, I saw a pamphlet about free financial counseling. I don’t know what it was that caught my attention, but I believe things happen for a reason. The counselor changed my life and I know that, because of him, I have changed a few people’s lives too. Hopefully, out of this story it could change yours.

Honestly, I don’t remember most of what he said. But the one thing I do remember has stuck with me for the last 23 years. He said the secret to changing your life financially is to track every penny for two months and live within your means, which I diligently did.

I vividly remember the small notebook that I kept on top of my dresser so that each day I would be reminded of my task at hand. Each day, I marked each and every single expense down to the penny. (That was the secret — “to the penny.”) So I wrote it down.

  • Day 1: .25 for a soda; 1.67, hamburger and soda; 4.50 for bowling; 6.99, CD.
  • Day 2: .25 for a soda, 2.23 for a meal, 7.50 for gas, etc.

Then I added it all up. I was shocked how much I spent on eating out and sodas and realized a lot about myself.

That was the goal of the exercise – shock value. I quickly realized everything you spend goes into an abyss. If you take an ATM withdrawal for $40, how many times do you say “Where did all that money go?” and then head back and withdraw again or, worse yet, go to the nearest bank (out of network) and pay the $2 fee? Oh, by the way, don’t forget to write that fee on the piece of paper. This was the beginning of what some would call my “cheapness.” It seems now, no matter the size of purchase, I am thinking about that notebook (not that that’s a bad thing). It was the beginning of a behavior change, which is absolutely necessary if you’re going to change your life. I always questioned myself: “Will this purchase or decision get me to my goal?”

After a while, I would take my notebook and forecast my expenses — one month out, two months out, six months out. It was actually fun. It was like I was my own comptroller controlling the company’s finances. I would write it all down in the notebook: income/expenses, strategic goals, and the positions I wanted to be promoted to within the company. I’d think to myself, “If I spend only X on food this month, I could put the difference against the credit card and this pay raise (all of it) would go to paying off this old car loan.” I wouldn’t reward myself just because I had been sacrificing and I “deserved” it. I hadn’t reached my goal yet. Any found money or new money would go directly against debt. As you can imagine, there were lots of numbers, plusses and minuses, percent signs for interest rates, and mental notes in that notebook.

Beyond finances

Because it was on paper and I was consciously thinking about it, I soon found I became more focused, and my bosses at work noticed it too. After starting out in the warehouse, they gave me a few raises and promoted me around the company. I found a lot of inspiration as well, and I felt more responsible, and people saw me as more mature. Soon I believed that I was starting to get on the right path. It was hard to ignore the naysayers. A few called me “brown-noser.” Even more would call me “cheap” and look down on me or mock me. Still, I stuck to my new goals that were in my notebook. In my mind, I knew where I wanted to be someday.

It became a game to me. As I paid off each obligation, I put that money toward the next most expensive debt — and so on and so on. I never rewarded myself for paying off another debt; I just felt more and more relief from the burden of debt. The reward was the success of achieving a small goal. And it was all being tracked in that notebook. I could look at my notebook and see my hard work in action.

Setting goals

The other part of the game – a challenge I gave myself – was to reach a milestone each month. At the end of each month, I had a set balance, for example, $100 for my checking account. Whatever my balance was above that amount, I would allocate half of the difference to savings and the other half to the debt at hand. Putting monies in a savings account was my reward because, at the time, 9 percent was the going rate for a regular savings account. (It’s hard to believe compared with today’s rates of .04 percent, if you are lucky.) Also, convincing people back then that my way was the path to success, when interest rates on savings accounts were 4 or 5 or 9 percent, was a whole lot easier than it would be today.

I also educated myself on the difference between interest paid monthly, quarterly or annually because it makes a big difference when you are trying to make your money work for you. I would advise you to do this as well. I would scour the difference between bank accounts and CD rates to ensure the bank was providing me the most to help me in this journey. Today, I am not sure the effort would pay off as well, but the effort would be worth it to prove the commitment to the end goal: financial independence

Night after night, I would sit down with my notebook and I would do the math and forecast my monthly interest payment in my savings account so that I knew I would have $236 at the end of the month, way before I received my monthly statement. And you better believe, I would never pay a penalty fee to the bank. I would watch my money like a hawk.

Granted, it was hard and boring. I bought nothing except the basic necessities. I remember opting for water instead of the much-loved soda. Definitely no more music, and new clothes were non-existent. No more regretting a purchase like I did my Lego set when I was 8. I dropped out of college because I didn’t know where I was going with it anyways. I questioned all purchases and asked myself how I would feel three days from now — would I still be happy with this purchase? I still bowled, but instead of practicing 10 games, I cut it to two. I cut out bowling leagues, which was hard, but I found I loved saving money more because I had a vision. It was not easy and I sacrificed. Some would consider it boring and definitely being cheap. But somehow I knew what I was headed for…no guarantees, but I believed.

For three years, I diligently tracked where all money went. It was no longer difficult and became part of my life. I have read that if you want to break a habit, it will take three weeks typically. I definitely broke the habit of foolish spending. I stopped buying “stupid” stuff and slowly started building my net worth.

Finally, it happened. I paid off my Dad (lowest interest rate) last and I felt relieved. “I have a clean slate,” I remember thinking. “I can go anywhere from here.”

Reminder: This is a story from one of your fellow readers. Please be nice. It can be scary to put your story out in public for the first time. Remember that this guest author isn’t a paid or professional writer and is just learning about money like you are. Unduly nasty comments on readers stories will be removed.