Can people save money today? I understand that times are tough and there are not enough resources. However, times are always tough.
In 2019, I earned $100,000+ a year, and my wife earned $35,000; we lived in Florida. For all intents and purposes, we should have been doing very well.
However, we were in $77,000 in debt. Even worse, as soon as we received our paychecks, the money went directly to mortgages, credit cards, and personal loans.
Determine Your Bare Bones Budget
These were not fun times. We were never big spenders, so we couldn’t understand how we accumulated so much debt. Sadly, we couldn’t figure out how to get out of debt.
But things change. Today, I want to talk about our journey and why it’s vital we all learn how to get out of debt, save money, and start investing. The most important reason is that we can pass this information on to our kids early in life. Let’s begin.
All change starts with a catalyst—mine was an embarrassing situation. In January 2019, one of my credit cards only had $2,000 available of $25,000. That’s right; I had $23,000 stacked on one card.
My car had been damaged, and it was in the shop. My friend took me to the auto shop, and the cost was exactly $2,000.
He watched as I swiped my card. I seriously didn’t know if the transaction was going to go through. It went through (thank God), but I had never been so embarrassed in my life.
Your Wealth Your Choice
My friend was ten years older than me and had his financial life in order. I promised then and there that I would never put myself in this situation again.
Looking back. Before continuing my debt payoff journey, let’s determine how I got into so much debt in the first place. I figured it out after a few years of reflection.
The main reason is our first house was way too expensive. We were paying $1,800/month when we should have bought something around $1,000/month.
We built the first house without guidance or input from our family or friends. I didn’t even know that taxes and insurance increased until I got my tax bill a year later.
The power of compounding is the eighth wonder of the world. From 2008 until 2019, our mortgage payments compounded against our resources.
Writing: I Retired to Start My Dream Job
Doing the rough math, we paid $237,600 in mortgage payments to our house in Arizona when it should have been closer to $132,000—a $100,000 difference.
As you evolve financially, it’s good to figure out your past and see how you got yourself into debt. You can pass along everything you learn to your kids and grandkids.
Back into the future. That embarrassing event in January 2019 sparked my determination to get out of debt and start repairing my finances.
My mom always had roommates where she lived, so I pitched the idea of getting a roommate to my wife. My wife (my love) is always on my side. She agreed to get a roommate to start changing our financial situation.
We got our first roommate in January 2019, and things started to change immediately. We charged $500/month. In February 2019, we paid all of our expenses and debt, and we still had $500 left. It was the first time since we got married (2006) and had kids (2006) that I felt we had a chance to get ahead.
The Gig Economy vs. Entrepreneurship
That feeling I felt was called passive income. However, I wouldn’t learn that exact word for a few months. In February 2019, we consolidated our debt into three loans. We decided to use the debt snowball technique to start paying down debt.
Traveling to Turkey. My wife and I began to do well. We decided to visit Istanbul and Didem, Turkey, in the summer of 2019. We saved the cash to go.
I loved our time in Turkey, especially Didem on the Mediterranean Sea. I thought about living here and not having to work.
I was 20 years into my Marine Corps career, so I knew I had a nice pension coming when I retired. However, I knew my pension wouldn’t be enough to travel back and forth while helping our children.
I started researching how to live somewhere while continuing to earn money. After reading for a couple of days, the words “passive income” entered my world and never left.
To Change Your Life: You Must Change Your Life
June 2019 was the month of my full conversion from “normal dude” to “super passive income guy.” I promised then and there that I would never be in a financial rut again.
In June 2019, I opened my Wells Fargo brokerage and Discover high-yield savings accounts. I was hellbent on changing the trajectory of my family’s future. And I did!
Learning how to save. Over these five years, I have learned that saving is a mindset, not an account. You should count every single penny that enters your house.
People tell you that counting every penny is mundane and sucks the passion out of your life. Do not believe these lies.
Once I started counting every penny from my job, I could see every penny I earned in interest. Once you start tracking your interest, you can see that your standard savings accounts are ripping you off.
In June 2019, you can see that we had $1,200 in savings and investments and $0.06 in passive income. I have tracked every cent since that first month.
How to Make $100 a Month in Passive Income
In September 2024, we had $344,00 in savings and investments and $3,400 in passive income. So, tell me which position you prefer.
Savings come down to a few questions: Do you want to save? How badly do you want to save? Are you willing to change your lifestyle so that you can save?
Savings and investments. Once you become a saver and start paying down debt, you will recognize that you will need to invest as well.
Remember the power of compounding. Debt is the power of compounding working against you. Saving is preventing yourself from going back into debt. Investing is the power of compounding working in your favor.
Therefore, saving and investing go hand in hand. You want to save an emergency fund that you never touch, and then you should save an incidental fund for emergencies.
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Once you have a clear grasp on your debt, emergency, and incidental funds, you can start dabbling in investing. Don’t wait for years to start investing, as you will forfeit a lot of compounding knowledge of financial markets.
Going back to the beginning. I got into debt because I had no plan for my finances. In turn, my family suffered because I took a sluggish, lackadaisical approach to running my financial house.
Once I prioritized our financial future, things “magically” changed. You will see massive improvements as soon as you start documenting your journey.
Is it tough to work with your spouse? Sure. Is seeing your friends buying new things and going on trips tough? Sure. However, there is one thing you can’t purchase—financial freedom.
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Conclusion. You must earn financial freedom. My wife and I retired at ages 39 and 42, respectively. We make over $15,000/month while not working.
We learned how to budget our food and entertainment expenses (the two most important categories). We own multiple properties.
The most exciting part is that my 17-year-old son has a $2,000 emergency fund he built working at a restaurant. He is starting with the information that took me 38 years to learn.
How do you save money? You decide to start saving money. You decide that nothing is more important than saving money and getting out of debt. Magically, you will get out of debt and start saving money. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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