Do you remember me telling you about my friend, Leif?* I knew him when I lived in Chicago. He carries one of the best souls I’ve ever encountered. Kind and loyal and good, we saw each other almost daily for years and I counted him among my favorite people.
He was also, unfortunately, a super dummy when it came to his finances. To a baffling degree. I remember him throwing away dishes instead of washing them. He would park illegally and accrue parking tickets monthly. The cable company would shut off the internet because he forgot to pay the bill. It made no sense and drove me up the wall. Gah!
Zeus ran around with this bag on his head until I mercifully removed it. Cats are freaking hilarious.
He had a great, recession-proof job that would always be in demand. Yes, he had six-figures of student loan debt, but he also had the potential to make six figures of income working far fewer hours than I at the time. But every year, without fail, he drained his savings to pay the tax man, never really getting ahead on anything.
When I first started this blog, I wanted to be Gail vaz Oxlade. Gail is a Canadian personal finance guru with various money management television shows under her belt. She would comb through people’s finances who were struggling and advise them on how they could do better. If you’ve never seen the show, trust me, there is something positively delightful about watching Gail tell people their spending habits were stupid.
I wanted to tell people their spending habits were stupid! I wanted to make spreadsheets and charts, showing them how quickly they could get to the better place. This blog would be the showcase of the worksheets and PowerPoint presentations I made for the people whose finances I helped overhaul. One by one, I’d turn the world into a place full of financial independent souls with spending habits that didn’t annoy me.
So when Leif eventually approached me for the help I offered him, I giddily set to work. He was my first guinea pig. Each week for a month, we would meet and I’d give him a homework assignment for the next week. I was hopeful that some of my rantings were getting through, but, honestly, it’s hard to tell when you’re in the middle of it.
He seemed a bit apprehensive, but also eager. We concluded our sessions and he told me he would at least try some of my suggestions. It was a good start.
And then I moved to Australia. Besides the occasional Facebook message professing our delight at the anniversary of our respective births, we drifted. I didn’t nag or even ask him about his finances at all, fearing there was little I could do to help from so far away.
I saw him recently and he gave me an update. A super fun update!
A sweet view of Chicago. Ever read The Distilled Dollar? It’s Matt’s rooftop.
In four years, he’s halved his student loan debt, going from approximately $160k to around $80k. He saves consistently and happily rattled off his various funds. He has an emergency fund. A vacation fund. And the fund he’s most excited about: a child fund. Leif is now married and eventually wants a tiny bundle of his own. Best of all, he is on track to retire in about a decade!
Back in the day, I made him a sample budget with outlines on what to cut and how to live. But of course the way he lives his financial life is different from my suggestions. I gave up on the Gail Vaz Oxlade dream because the devil is in the details and the details are so personal to everyone. Even knowing Leif as well as I did, I couldn’t tell him how to spend his money and monitor his habits.
It’s the mindset. The attitude toward living your life that matters. Once you get that, you got this. What are you working toward? Work towards it. That’s all. Really.
Leif indicated that therapy helped him a lot as well. Are you afraid to go for the life you deserve for some reason? Is there a deeper issue at play here? Poor money management is a symptom of poor life management.
And Leif confessed that he still struggles. As you can tell from my neurotic blog and occasional depressive posts, having a handle on your money situation certainly can’t solve everything. But I firmly believe, and Leif agreed, that being in control of your money is infinitely better than letting your money control you.
If I can do it, if Leif can do it, you most certainly can do it. Probably.
*Not his real name.
I don’t mean to sound critical. But it took him 4 years to halve his debt with a 3 figure salary? And he is on his way to retire in a decade? (not taking into account the family he needs to take care of). Please help me understand the math here.
Hi Arjun,
You wrote “3 figure salary” – do you mean 6-figure?
Anita wrote “he also had the potential to make six figures of income”
If you do, I can also clarify using my personal example.
I am also on track to retire in a decade while having only a 5-figure salary but w/o any debt. Given that, I would assume that Leif did take the 6-figure job and spends his 6th figure on tackling the debt.
I leave with someone but while we do share the expenses, our finances are separate. It means I do not count his income in while growing my retirement fund.
The secret is simple: Do not spend too much. Our family lives on about $2,000 a month and I am able to put aside about 70% of my salary.
Sorry that was a typo. I meant 6 figures. Thank you for the correction and sharing your story and advice. I hope you hit your retirement goal very soon:)
thanks, Arjun 🙂
🙂 I understand the skepticism. This is what I meant when I said that he’s doing his financial life not exactly as I would have done it. When I think debt, I break out into hives. I would have paid down the loans first, but some people prefer the stability of a bigger cushion. And he makes six figures. Not three figures.
Thank you for the clarification. I understand it now. And yes I meant six figures too. Sorry about that.
Awesome. Glad you’re helping others and it’s going well for you both!
This is such an awesome post! That is so cool that you influenced your friend in such a positive way. I think we all have these feelings. It’s why MMM talks about his following in a ‘cult’ like fashion. It’s us against the world. Everyone else are just suckers who haven’t figured out that there is a better way.
I have these thoughts all the time. I recently had a short term relationship. Prior to our first date we got to talking about vehicles and how excited she was about her purchase. When we met and got to talking about it I realized what an emotional purchase it was for her. It was simply I like x car and so I’m buying it. No thought about long term. Nope, none at all.
I was thinking in the back of my mind “Pardon?”. You are making a decision that’s going to cost you $125,000! And it’s just made after taking the car home for the weekend.
I’d sure like to right all the wrongs too. It’s just not possible. But good on you for helping a friend!
After reading the title/headline, I 100% expected this post to be about your first pet sitting gig for a Guinea pig.
That is hilarious and totally made my day. 🙂
How would you like another pet guinea pig to mentor? 🙂 mikegeers@gmail.com
I abandoned that project as it took a TON of time. You know what to do though.
Pick up a copy of Operation Enough!: How to Retire Remakably Early, Anita’s handy guide to financial freedom.
Helpful read for newbies and nice refresher for those on the journey already.
Excellent suggestion. Leif also recommended “When She Makes More” and “Couple Money” as books that helped.
Anita, I may need your help in a different aspect. I have crossed your savings but not able to retire…not really sure why…may be am scared what to do in my free time…
Yes, that might be the hardest part, honestly. The numbers are there, but the mindset isn’t. What are you working toward? Who do you want to be? You are what you do every day.
May be I feel it is my identity, I worked hard to reach here and don’t want to just throw away..I work for 10 hours and enjoy having people around me…
I understand that. People asked me all the time why I went to law school if I didn’t want to be a lawyer. I didn’t want “lawyer” to be my identity. Sunk cost fallacy. And, if you love your job, that’s the dream! Making money doing something you love.
I don’t think I love my job……Information technology jobs have crazy targets and sometimes we have to work round the clock to meet them…
But yes, I have a big team and love to have people around me…
If I quit my job, I don’t have many activities to do whole day and don’t want the image of doing nothing and free and may be am using my career as my identity….not really sure….
I find the potential of a “money badgering” profession interesting, because I read what you say about it being really difficult to coach individuals about money because everyone is different and has different values, but then i read about these money coaches who make a killer living doing money for people. And most of them are people who have their own overcoming massive debt story of their own.
A recent interaction I had from someone who charges $250/month to be their “personal money manager”, pay their bills, monitor credit reports, negotiate items, help set goals” and I was completely baffled that this was an actual thing.
“For years I never even had it on my website because I always said, “No one would just find a stranger’s website and pick them to pay their bills for them.” One day I decided to add it to my site and once again I was proven wrong… I’ve had people do one consultation with me then provide me with social security number, power of attorney, bank logins, etc. Luckily for them I really am trustworthy!!”
I don’t have enough $$$ to be forever retired, but I also don’t particularly want to go back to 9-5 work. Such a dilemma.
$250/month seems like a low number for how much work it would be honestly. I gave up on this idea because I don’t want to charge anyone, but I also value my time above all else. It takes a lot of time, especially if it’s for someone else. And, at the end of the day, they’re not going to take all your suggestions, so a lot of the time is “wasted.”
Amen, Sistah. Happy for Leif. Sometimes, things turn out well, despite the odds.