Today’s guest post comes from my friend Angela at Tread Lightly, Retire Early. Her story is inspiring, and I think you’ll enjoy it. Take it away, Angela!
My money story started pretty normally — I graduated college with $24,000 in debt. After school, I packed up my old car and drove across the country to South Carolina, where my then-boyfriend (now husband) was stationed in the Marines.
I had a job lined up as a naturalist intern, which was amazing. I led kayak tours, taught people about wildlife, and spent my days on a vacation island. The catch was that it was an internship and paid less than $5 an hour.
There was no way I could cover half the rent, groceries, utilities, car costs, and still pay the $308.44 monthly student loan minimum on that income. I just wasn’t making enough to live.
I don’t know why I didn’t think to defer my loans — I clearly should have — but instead I looked at my bank balance: $212. I realized I couldn’t sit back and watch it disappear. I’d never had so little money since leaving for college, and it terrified me. The idea of not having money for groceries or gas was awful. I didn’t even have a credit card, so if the account hit zero, that was it.
So I started applying for second jobs. I got an interview right away at a PetSmart about thirty miles away. I was relieved to be hired and didn’t try to negotiate more than the $8.50 an hour they offered. It was above minimum wage and a big step up from the internship.
Soon I was working my internship Monday through Friday and then driving out to PetSmart for evenings and weekends. I joked I worked eight days a week, but it paid the bills.
PetSmart wasn’t a bad job, but getting asked where I went to high school stung. It’s one thing to take an entry-level retail job with a degree; it’s another to feel like I wasn’t even old enough for other jobs. Work was slow in the area, so I accepted having a job, even if it wasn’t what I wanted.
During that time I got engaged and then married. We were young and broke, so we had a simple wedding and honeymoon — wonderful, but not expensive. When you’re barely getting by, a big wedding is not an option.
Six months after we married, my husband finished his Marine service and we moved back to the Pacific Northwest. I packed up and drove again and started a summer job as a park ranger. It paid better. We were lucky to move into a family-owned home for a while so we could save for our own place. With the VA loan option, we didn’t need to save a huge down payment, and we bought a house a year later.
Our mortgage was large compared to our incomes, so we took on roommates to help. We settled in, and I focused on paying off my student loans that were still hanging over me.
During the year we saved for the house, I kept chipping away at the loans, and I finally landed my “real” career job. With the new job and the new house, expenses rose, but so did my income.
Shortly after starting that job I calculated the daily interest on my loans and nearly fainted. My $375 monthly payment felt like a lot (I’d been paying just over the $308 minimum), but most of each payment still went to interest because of the 8.5% rate. Seeing how much interest I was racking up every day pushed me to act. I searched the web and found Retire Early Ninja at punchdebtintheface.com.
I devoured his posts and got inspired to throw everything at paying the loans off fast. A year after starting my career job — and less than 3.5 years after graduating college — my student loans were gone. I didn’t have a high income, and my husband was in school on the GI Bill, but I put every extra dollar toward the debt. I knew that every payment would reduce the interest accruing each day. When the balance hit zero, it was one of the best days of my life.
After that, my to-do list focused on things I wanted done before having a baby: pay off loans, have my husband finish college and find work, finish my grad school, and fix up the house. I had a clear goal, and once we’d checked everything off, we had a baby. And that’s when things started to shift.
I’ve always been a great student and a doer — once I committed to something, I could get it done. Becoming a mom was the hardest, most overwhelming thing I’ve ever done. I lost a lot of control and spent my days just getting by. I went back to work part-time three weeks after our son was born because I needed to get out of the house. Four months later I went full-time, and life got crazier. There wasn’t enough time for work, chores, dinner, or myself.
I’d work mornings, try to clean in the afternoon, play with our son, work during naps or when family watched him, and open my laptop again after he went to bed. I was exhausted, the house was a mess, and I barely saw my husband, who was also putting in long hours.
Something had to give, so I cut my hours to 80% time and enrolled our son in part-time daycare. We made 20% less and paid about $700 a month for childcare, but life improved almost immediately. I had mornings and afternoons with our son, focused office time, and time to handle chores and appointments during the week. Weekends were ours again. We earned less and had higher fixed costs, but because we lived below our means, we could make it work.
Still, the lifestyle creep that came during that first year of parenthood didn’t disappear with the reduced salary and childcare costs. To survive week to week, we started paying for convenience: coffee and oatmeal at a shop before work, lunch out every day, takeout several nights a week, eating out on weekends, and buying partially-prepped meals to save time.
We told ourselves we were still frugal because we didn’t have a car payment, financed electronics, or credit card debt. But we weren’t saving much, and an expensive month would push us into the red. I started reading personal finance blogs again and got interested in financial independence. I even launched my own blog to get involved in the community.
I stopped buying new clothes, cut lunches, and quit buying coffee. Yet our month-to-month savings didn’t change much. Our 2016 savings rate was 22% — great compared to most people, but disappointing given how much I’d paid toward loans on a smaller income.
Then three crazy expensive months hit back to back — over $8,000 in unexpected costs — and we had to tap our emergency fund for the first time. It felt awful. We were earning decent money, but suddenly it wasn’t enough to cover living expenses. We could have recovered without going into debt, but it still felt terrible. Even worse, I’d just started a financial independence blog, and there I was admitting we’d overspent for three months straight. My conservative FI target of 15 years felt out of reach.
I spent a few weeks feeling powerless. We weren’t in tech with six-figure salaries, and I wasn’t even full-time. I started to think a 22–25% savings rate might be the best we could do.
Then I tried a “no-spend” month. I’d read about them before but always found excuses not to try. This time I set a $1,500 target for the month (excluding mortgage and childcare), wrote down every penny we spent, and marked no-spend days. I emptied the pantry and freezer and cooked everything from scratch.
We even went to Hawai’i and tracked spending while there. The good news: there’s a lot of great free stuff to do, and we spent very little beyond food and gas. We returned, celebrated Thanksgiving, started Christmas prep, and finished “No-spend” November with a 51% savings rate.
That hooked me. Hitting a 50% savings rate had felt impossible unless you had two six-figure incomes and no kids, but we did it. I set an ambitious goal to reach a 50% savings rate in 2018 — more than double what we’d done before. Now we tell our dollars where to go instead of adding them up at the end of the month and wondering where they went.
What’s next? I’m not sure. Neither of us is ready to say we’ll retire early, but chasing financial independence is never a bad move. Whatever we choose in five, ten, or twenty years, I want it to be on our terms. A high savings rate will let us make choices based on happiness, not on which bill is due next.