Knowing your net worth is a key part of living a financially healthy life. But being in the negative does not mean you’re bad with money — it’s just a reflection of where your money stands now. Here’s how one woman paid off debt and grew her total net worth over a 5-year period.
Making it work is brought to you by wealth simple which gives everyone access to simple affordable investing on cruise control just five years ago i was living life paycheck to paycheck i was constantly scrambling to scrounge up enough money to cover the minimum payments on my credit cards saving all of my tips from serving so that i could cover rent and using cash
Advance so that no one would know i didn’t have my own money calculating your net worth is probably the most frustrating thing you can do when you’re a twenty-something afterall you’ve likely just graduated with five to six figures of student loans and are working at an entry-level job in 2014 i had over 15,000 canadian dollars equivalent to eleven thousand four
Hundred and sixty one american of debt then my then-boyfriend now has been proposed and i knew that if i ever wanted to see our wedding day it was time to grow up i needed to pay off my debt i was 25 years old and in the red the venn value of my financial life was negative fifteen thousand two hundred and twenty two canadian or negative eleven thousand six hundred
Thirty one american but what did i have to show for it i didn’t own a home or a flashy new vehicle and i certainly didn’t look like i’ve blown fifteen thousand dollars on a designer wardrobe all i had to show for my many many spending sprees were cheap out of style clothes and photos from nights out that i couldn’t remember i had to take a long look at what went
Wrong after applying for hundreds of entry-level gigs i finally bagged an interview at a financial counseling organization the irony was incredibly real however my marketing background was perfect for the position and i signed the job offer stating i would earn forty eight thousand canadian or thirty-six thousand six hundred and seventy six american after a week
Of training and sitting in one-on-one sessions where financial counselors would help people set up a debt repayment budget i quickly realized that there was a light at the end of the tunnel and that i wasn’t the only one in this position i then turned to google i typed in how to pay off debt fast and found a list of personal finance blogs that had every single
Answer i was looking for i downloaded a few spreadsheets broke down all of my debts owed and started to take stock of my life step 1 i got a handle on my lifestyle inflation and paid off my debt a significant factor that got me into debt in the first place was living above my means each month i spent more money than i earned by living in unaffordable rental units
Splurging on clothing and never keeping track of my spending to realistically reach that freedom in ten months i would need to put over $1,000 toward my credit cards each month therefore i made some drastic lifestyle changes i went from renting a three-bedroom townhouse to moving into a house with five other people sharing a bedroom with my significant other we
Split the $400 rent which reduced my living expenses by 86% i put myself on a shopping ban that would prevent me from any unnecessary spending and i started avoiding nightclubs and focusing on cheaper nights in with friends to top it all off throughout 2015 i chronicled my debt repayment on a vlog so that i could hold myself accountable to paying off my credit
Cards and student loans by the end of the year it worked i was able to enter 2016 debt-free step 2 i prioritized investing and saving the moment you reached at freedom the world suddenly seems so vast however there is also a lot of fear for the first time you can start planning your financial future this quite frankly can be overwhelming and it took me a while
Before i was finally unafraid to look ahead one thing i learned early on is that just like you prioritize paying off your debt you have to prioritize saving otherwise there is always a chance that you may slip back into old habits and i wasn’t willing to take that risk at 26 years old my net worth was around $8,000 canadian close to $6,000 american thanks to my
Employer provided retirement plan otherwise the only savings i had was $20.00 that i had just transferred into my very own emergency fund i continued working at the same company earning a small raise each year while saving and paying in full for my wedding and honeymoon i was also receiving a great side income from blogging and freelancing in 2017 with around
18,000 canadian thirteen thousand seven hundred and fifty three american in investments retirement funds and emergency savings things were going well my now husband and i were in a comfortable position able to focus on bigger goals step three we got serious about our income after doing some research and applying for new jobs my husband was offered a three year
Contract position in a city seven hours from her home but with a significant pay increase we knew we had to jump at the opportunity i also started to explore other job opportunities just a few months later i started a new career and began to pick up more side work in total as a couple we increased our income by 48 percent with a monthly income totaling over $10,000
Canadian we were able to save approximately seven thousand dollars canadian towards various financial goals every month increasing our income was what seriously changed our lives however something else that changed our lives was finding out that i was pregnant suddenly we had to reduce our long term savings to start planning for our baby and create a fund that
Would allow me to take a stress-free maternity leave for 10 months we funneled away all that we could and didn’t get to hyper focused on the numbers after checking our net worth today just four years after paying off my debt we found that our financial life was now worth 52,000 canadian dollars just shy of 40 thousand dollars american of course there were a lot
More steps in my story than these including some curveballs that life threw my way when i least expected it but the important thing is that i gave myself a chance i went from being a party girl who never worried about the future to a new mom who plans to and can buy a home in a costly city it’s a personal celebration to look back and see how far i’ve come after all
Money can be fun that way sharing your money fails makes it easier to see where you went wrong and what you can do differently in the future if you’ve been putting off opening an investment account remember that it’s never too late to get started and well simple makes it easier than you think well simple is online investing that’s as simple and human as it gets in
Just five minutes they’ll build you a custom portfolio to fit your personal goals and timeline just answer a few easy questions and they’ll manage your money for you on autopilot set it forget it and let your money grow in the background you can turn on automatic deposits as well as set up a smart savings account with higher rates than big banks for your shorter
Term goals you’re writing your next great adventure or that handbag you need they also have a socially responsible portfolio that invests in green stocks and companies that support gender diversity the fees are much lower than big banks and tfd viewers will get their first $10,000 managed for free with no minimum deposit check them out at wealth simple comm slash
Tfd or use the link in our description there are no account minimums and it only takes a few minutes to start no excuses
Transcribed from video
How I Went From A Negative Net Worth To $40K In 5 Years By The Financial Diet
