For years, I wallowed in debt. I had no fiscal discipline. I used credit to buy what I wanted, when I wanted. My money skills were abysmal, and my life was in financial ruin.
In 2004, I decided to turn things around. I started teaching myself about personal finance. I attacked my debt with vigor. I learned about saving and investing and frugality and thrift. I discovered the basics of self-discipline. Gradually, from the ruins, I began to construct the foundations of a solid financial future. In December 2007, I repaid the last of my $35,000 in consumer debt.
It took about 3-1/2 years for me to get out of debt from the moment I began to take the task seriously. It's now been about 3-1/2 years since I became debt-free. In that time, I've built on the financial skills I'd already acquired.
I've learned how to:
- Boost income while also reducing expenses.
- Cut costs on the things that don't matter so that I can spend on the things that do.
- Save a substantial portion of my income. (I now have more in savings than I had in debt when I started!)
- Invest carefully so that the odds favor the growth of my retirement savings.
- Use targeted savings to pursue multiple goals at once.
- Adapt to my changing dreams and desires.
Today, I have a robust emergency fund, a growing retirement nest egg, a job that allows me to work from anywhere, and enough self-discipline to resist falling into my former habits.
It's time to start the next part of my financial adventure.
To boldly go…
In just a few weeks, I'll be shifting the way I live and work. I plan to spend several weeks at a time traveling, visiting cities and countries around the world. I'll be traveling cheaply (documenting my adventures at Far Away Places), and I'll be working from the road. In theory, this new lifestyle shouldn't be too costly. (In theory. Reality may be different.)
To make this happen, though, I'll need to put all of my financial skills and resources to the test. For the past few years, I've been able to coast along because 80% of the time I'm doing things right. My small mistakes have been absorbed by my large successes. Now, though, I'm wanting to do things close to perfectly. To that end:
- I'm automating as much as possible. Because I've adopted a paperless personal-finance system, much of this work has already been done. I still need to set a few bills to autopay, and I'll probably set up some automatic investments. Some of my income still comes in by paper check; I need to see if I can have these checks deposited electronically instead. Also, I need to figure out how to pay rent on my office. (I'll probably just write a big check in advance.)
- I'm creating a master document with account numbers, passwords, and other important information. Though I hope never to need this, it could be handy on the road. But this isn't just for me; it's also for Kris in case something goes wrong.
- I'm cutting back on all non-essential expenses. Subscriptions are getting axed. I've stopped buying books and comics so that I can use that money for travel instead. (I keep reminding myself: “One comics compilation is two nights in a hostel!”) Kris and I have been eating out less, and I'm not going to lunch as often on my own.
- I'm preparing to purge more Stuff. I keep telling myself, “Okay, J.D., don't think of these things as objects you might need someday or items that might have sentimental value. Simply ask yourself if you'd keep it if you were moving into 500 square feet. If not, then get rid of it.” This is a nice idea, but I'm still struggling. I need to shut my brain off and just do it.
Lastly, based on the advice of Get Rich Slowly readers, I'm looking at ways to “outsource” some of the chores in my life. After I wrote about wanting to move to a smaller house, many of you suggested that I outsource the yardwork. I'm not sure why, but there's a mental barrier that's tough for me to leap here.
Just as I felt guilty hiring a housekeeper, I feel guilty hiring a gardener. This is work I can do, after all, and have always done in the past. But I know that I no longer have the time nor the inclination to prune and weed and mow. Besides, it's more profitable for me to spend my time writing. (Plus, it'll be tough to mow the lawn if I'm in Ecuador or Singapore.) After asking around, I've learned that tons of people hire yard services, so we're going to give it a try.
One small step…
Though I've made major life changes in the past — like quitting my day job to blog full time — I've never been this methodical before. I've learned to be cautious, to be careful with my money. I'm reluctant to make moves that might compromise my financial health.
But I feel good about my plan and my progress. I've spent the last seven years building systems that work. I don't intend to alter these systems so much as I want to use them in new ways. Instead of using my money to buy books and comics and dinners at nice restaurants in Portland, I'll be using the money to stay in hostels and ride trains and buy cheap eats in Europe and South America. And really, I'll probably only be gone for a few months out of each year. From a rational perspective, I know things will be fine. But there's a part of me that's worries things will simply fall apart.
There's only one way to find out, I guess. It's time to move forward with my plans and see what happens!
Author: J.D. Roth
In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.