by Seven years ago, I was drowning in red ink, living paycheck to paycheck, and weeks away from financial ruin. Fast forward to 2017, and our story has completely changed. We’ve traded red for black and green, thanks to hard work, discipline, and a fantastic partner. Our journey proves that just one year of wise money management can significantly impact anyone’s finances.
Let’s dive into our financial wins (and a few stumbles) from 2016 that kept us on track to achieve FIRE (Financial Independence, Retire Early).
Our Financial Victories
- Maxed Out Our 401(k)s and Roth IRAs: We front-loaded our 401(k)s and maxed out our Roth IRAs for both 2015 and 2016. Minimizing taxes is crucial for wealth accumulation—the less we pay upfront, the longer our investments can grow.
- Crushed Our Dividend Goal: We surpassed our $17,000 dividend goal, reaching $18,130 by year-end. While most of these are in retirement accounts, a dividend is a dividend, no matter its source!
- Boosted Our Brokerage Accounts: With early retirement on the horizon, we invested heavily in our taxable accounts. This money will cover our first five years of early retirement expenses.
- Travel Hacked Like Pros: Thanks to Tatiana’s skills, we accumulated 315,000 points through credit card sign-up bonuses. We enjoyed six free hotel nights, saving an estimated $1,025.
- Increased Our Freedom Fund by 24%: We’re on the cusp of financial independence, well ahead of schedule. Our simple formula? Spend less, invest the surplus.
- Found Money in Unexpected Places: From $3 found in a cafeteria trash can to $1,200 in bank sign-up bonuses and $692.02 from class action lawsuits, we embraced every opportunity to boost our finances.
- Optimized Our Expenses: We saved $120 annually by switching to pay-per-pickup trash collection and earned $53 in cash back from Ebates.
Learning Experiences
- Overspent on Alcohol: We spent $1,726 on alcohol, more than intended. This year, we’re tackling a no-alcohol challenge to curb this expense.
- Almost Slipped Up: We nearly incurred credit card late fees and library fines but managed to get them waived. It’s a reminder to stay vigilant and not be afraid to ask for fee waivers when mistakes happen.
Your 3-Step Action Plan
- Track Your Spending: Use tools like Mint or Personal Capital to monitor every dollar entering and exiting your accounts.
- Define Your Happiness: Analyze what truly brings joy to your life. You might be surprised to find it doesn’t require much money.
- Take Action: Eliminate wasteful spending, improve your lifestyle, and wholeheartedly pursue what makes you happy.
Remember, as Jordan Belfort said, “The only thing standing between you and your goal is the bullshit story you keep telling yourself as to why you can’t achieve it.”
