I thought about starting a personal finance blog about a year ago but never got around to making it happen. I didn’t know anything about blogging or how to start a blog so I just put it aside. I did however write my story just in case I decided to start blogging one day. Well I finally decided to start this website because I needed to document the progress I have made with my finances and to keep myself motivated to achieve early retirement.
Here is my story.
How I am changing my financial future.
April 2013 – I am 32 years old and I FINALLY understand what I’m supposed to do with my money. I’m not saying that I’m doing the right moves with money yet, all I’m saying is that I understand what I’m supposed to be doing with money…kinda. All you have to do is pay attention. That’s it. No tricks, no gimmicks; just know what your money is doing at all times. Pay attention.
Before you stop reading because you think this is stupid, just give me a few minutes to explain myself.
My name is Aldo and I’m an idiot when it comes to managing money. That was the very first step I had to take to get responsible about my finances.
I can’t tell you that I was in so much debt that I was going crazy or that my car was being repossessed or that I was so broke that I couldn’t afford anything because that’s just not the case. I’m an Analytical Chemist at one of the top pharmaceutical companies in the country. At 32 I’m making a decent but below average salary for an Analytical Chemist. I am single, live with my mom (don’t judge, there’s a reason), have a car, two cats, five turtles and a girlfriend who is excellent with money. The part that gets me is that she doesn’t even try to save money and she has a fully funded emergency fund. I, on the other hand, have very little savings.
For the last, I don’t know, forever years, I found myself always saying Where’s my money? I make about $X a month; rent, car payments, student loan, cellphone and going out money should be $Y, therefore I must have $700 left-over every month, right? WRONG!!! I was living paycheck-to-paycheck every single month. Where was my money going?
I didn’t have too much debt, about $2,300 in credit cards, a car loan which I pay $250 a month, and my student loan which I pay $150 a month. I could afford the payments so everything was alright. I only had about $2,300 in credit card debt because my credit limit was only $2,500! Almost maxed out, but as long as I pay enough to have a $100-$200 available in my credit cards for emergencies , then that’s not that bad. Or so I kept telling myself. I went on vacations, went out, went to the movies, dinner, dates, etc. I enjoyed myself but at the end of the month I always panicked because I wasn’t getting paid for another week and I have $50 to my name. But when pay-day came, yoohoo I made it! Have I always been that way? The answer is: Yes!
When I was 15 years old, I migrated to New Jersey from the Dominican Republic with my mother, my brother (2-years older) and my sister (3-years younger). My mother started working at a factory making fake Christmas trees and Christmas decorations. She started making minimum or around minimum wage and worked 40 hours a week. With her “salary” she had to pay rent, feed us, and buy us clothes. She didn’t have enough money to give us to go out with our friends to the movies or for ice cream every week. This wasn’t a problem during the school year but then the summer came.
I needed money to go out so I got a job at the municipal pool picking up garbage. I walked around the pool grounds with a small broom and a basket picking up french fries, empty cups, napkins, etc. I got paid less than minimum wage but all I needed was money for the movies and to hang out. I got paid every other week and the first week after I got paid all my money was gone. Now I’m waiting until I get paid again. Another pay check came, another pay check went. And that was my first summer in the U.S. Next summer I became a lifeguard and was getting paid double the money than I did the previous summer but again paycheck came and paycheck went and nothing saved.
I then graduated High School and while living at home commuted to college, where for two years I only took electives because I had no idea what I wanted to study. I finally decided on Chemistry and it took me five and a half years to graduate. Since my mom didn’t make enough money I got financial aid for the first four years but then had to take student loans for the remaining time. I got a job at the local YMCA as a lifeguard in their indoor pool while I was going to school but I only worked about 20 hours a week, which was enough money for books and to enjoy my college days. But again, paycheck came and paycheck went and still no savings.
Oh College. College was good to me. Met lots of friends, had a lot of fun, got an education and got my first credit card. I remember walking around campus when I spotted some people gathered around a table with Bob Marley t-shirts. I love Bob Marley! I must investigate. They were plain white tees with a picture of Bob Marley printed on the front. Most pictures of Bob Marley are headshots, but this was a full-body Bob Marley. It was a black and white picture of him wearing what I can only assume is a white button down shirt, jeans, and dark shoes. He is leaning on his guitar, which stands on his right side with the bottom of the guitar on the ground and the neck by his hip. He is laughing, maybe because he was high or because somebody told him a joke, or both. I approached the table and asked “How do I get this t-shirt?” One of the guys working behind the table said, “Just fill out this credit card application, which is designed just for students. You get the t-shirt whether you get accepted or not.” What?! I get a free t-shirt just for filling out an application? Where do I sign?!
I really didn’t think I was going to get accepted to have a credit card because I didn’t have any credit and I didn’t have a real job, but at least I can rock this cool Bob Marley t-shirt. A few weeks later a credit card with my name on it arrived in the mail with a credit limit of $250. You might say that $250 is not much but I thought I was the MAN!!! I now have credit card; I have arrived; I am now an adult. I truly was one of the happiest kids around. I just got extra money, yoohoo!
I reached the credit card limit in a few days. I don’t know what I bought but I knew that I couldn’t buy anything else unless I cleared some space. But wait, I don’t have any money to pay for this credit card. I have $20 until the next paycheck and the minimum due on the credit card is $15. I guess I’ll survive on $5 for a few days. That went on month after month until there came that one month that I didn’t even have enough money for the minimum, oh well. Instead of building my credit, I ruined my credit within the first six months of “being an adult.” I missed a payment here and a payment there but I didn’t care because I was still enjoying my life and having fun.
Even though I had been working for at least 6 years part-time, I had nothing saved when I graduated. I had a Chemistry degree, about $18,000 in student loans, and bad credit.
I was lucky to get hired on a big pharmaceutical company making double the money my mother was making. This is it! This is when I get the things that I want. I needed a car for work so I leased a brand new car, which I had to put under my mother’s name because my credit was terrible…I told people it was because her insurance was cheaper. I must say that I have never defaulted on any payments since I got the “big” job, be it credit cards, student loans or the car payments because I didn’t want to ruin my mother’s credit, so I had that going for me, which is nice, but I was still living paycheck to paycheck and I couldn’t understand why.
Anyway, fast forward until just a few months ago. I was tired of living paycheck to paycheck when I came across an article online about personal finance. I have never been interested in finance, obviously, but I was bored at work so I decided to read it. In it the author mentioned that the first thing you need is a written budget where you can track your expenses. A budget? I don’t need that. I keep track of things in my head. But I kept reading. The author continued, “If you ask yourself month after month, “Where is my money going?” then you need a budget.” Oh my god! He’s talking about me!!! Maybe that’s what I should do. Maybe I should start a budget.
Since I was already online, I decided to search how to create a budget and came across a free spreadsheet of a Zero-Based Budget based on Dave Ramsey’s baby steps. I didn’t know who Dave Ramsey was so I did some more research and discovered that he wrote a book called The Total Money Makeover in which he guides you through financial independence with seven baby steps. Uhmm, this book sounds interesting. I’ll grab a copy at the library but first let me start this budget. (I’ll talk about the book later but let me say now that even though I don’t agree with everything Dave Ramsey says, he does have a simple system which will at least put you in the right path. But more on this on a different post.)
I started a written budget, downloaded an app to help me keep track of expenses and the rest is history.
If you are struggling with money and are always wondering where your money went then I highly recommend writing down your expenses and keeping a written budget. You will be amazed at how clear your finances will become. You will know exactly where your money is going and how much money is going where. This is a must if you want to start saving, having fun, and paying off debt. I’m telling you, having a budget is the first thing I did and I will never, ever, ever again go without a written budget.
I still don’t have a lot of money saved up, I haven’t paid off all my debts yet, and there are more steps that I have to take but I know I’m on the right path. All I had to do was pay attention to my money. So my advice on my very first post is pay attention to your money.
So if you are willing to take a journey with me, I will keep posting about what I am doing to change my financial future and how I am doing it. Maybe I can help someone along the way and also learn a thing or two from you.