While I am now in a financial position to live a life that I can be proud of and content with, I have many money skeletons in my closet.

It took me several years to recover from the stupid financial moves that I made in my teens and twenties.

Even though time eroded some of the damage from my poor choices (7 years for items to fall off of a credit report), there were some direct actions that I took to get back on track.

The following are the main financial fixes I applied to my life that really made a difference.

They are My Top 5 Money Moves:

1) Started Tracking My Income And Expenses

This is huge. For a long time, I did not really know my income vs. my expenses.

I made what I made at my job and I spent what I spent when I wasn’t working.

This was not a productive or responsible way to live. It led to the accumulation of massive debt and was a strain on both my wellbeing and my relationship with my fiance.

The Debt Equation

When I finally decided to grow up about money, I realized that I needed to get a handle on my cash outlay vs. my income.

It was a mathematically simple exercise– but it was painful initially. I found it uncomfortable to look at my finances while they were in a less than desirable state.

But I realized the knowledge that I was giving myself was powerful.

My list of assets vs. liabilities spelled everything out so that there was no question of “could I afford this?”

I use a spreadsheet for tracking this. It contains all sources of income, all cash accumulation account balances, all regular bills and any unusual expenses that I can account for (like a wedding present or planned repair to my property).

Admittedly, the spreadsheet is not as well maintained as I would like– but I do review/modify the file at least once per month.

I know that the more information I include and keep up to date, the better decision making capabilities I will have.

2) Took Responsibility For My Bills And Creditworthiness

As you can imagine, during the years of my cash flow ignorance, I was pretty bad at paying my bills. This led to the predictable credit blemishes and collection calls.

But– when I finally took the reins of my money, I got acquainted with who and what I owed. I could then make a plan for how I was going to address each bill.

As my financial tracking evolved, I started adding additional details about my bills to my spreadsheet.

Not only does it have the entity owed and the amount of the payment (sometimes fixed, sometimes budgeted if a variable expense) due, it has when the bill is due and how I pay it.

Some of my bills are on auto pay. I got a discount on my car insurance for setting up auto debits from my checking account.

I also have my cell phone bill charged to my credit card. I rarely charge anything so this is a good way to keep the account open.

As much as I believe in a cash/debit lifestyle, that account being open keeps my credit score up and gives me available funds as a worst case scenario. I am in the habit of paying the card off as soon as the cell phone bill posts.

My other bills are not automated. I’m not against it, per se. But I actually enjoy taking ownership of logging on to the website and manually setting up the payment. It feels like active responsibility.

Many would advise against this as automation ensures that you will not forget to cover the expense. I’m proud to say that I have not missed a payment due in a very long time.

After a few years of on time payments, my credit score climbed. I have also kept my credit line usage really low– a great score booster.

Eventually, my mishaps (collection entries and even a judgment) fell off of my credit report. I plan to keep it clean forevermore!

While there is some fluctuation, my credit score is consistently well over 700.

This is a far cry from where it was a few years ago. I don’t even know what the score was when I was getting collection calls coming in everyday. (I didn’t check back then. Irresponsibility? Fear? Probably a bit of both.)

I remember seeing a score in the 500’s at one point. It was pretty disheartening.

I am proud of the progress. Maybe one day, I will see a score that starts with 8!

3) Became A SAVER

The Yay Equation. Me and my bank account are squealing with joy!

This one was hard for me. Money used to burn a hole in my pocket. I wanted to spend.

I still sometimes have to fight the urge to splurge. But, for the most part, I get a definite high from seeing my bank accounts inflate.

I started to view it this way– the money in the savings account was to buy future me what I needed and wanted. I was still spending! It was just deferred.

Up until a few years ago, I never had more than a couple of week’s worth of expenses in the bank. I was living paycheck to paycheck and it was very stressful. One unaccounted for expense, and I had to take the credit card out.

Now, with a cushion in the account, I can deal with both the unpleasant unexpected (roof damage from a hurricane) and the joyful surprises (invited to a wedding across the country) that arise without going into debt.

For a period, I was socking away over $1,000 per month (into a savings account)– on top of a 401k contribution. I felt that wasn’t too shabby since my after tax monthly income was $3,900.

I ultimately saved up enough of a cushion to quit my full time job and be secure for more than a year.

4) Paid Off My Car Early

Most personal finance experts will caution that buying a new car is a terrible investment due to depreciation and interest on the loan (which can be high if you have marginal or poor credit).

I agree.

However, in the summer of 2013, I bought a new car anyway.

My 1994 Chevy Caprice (rest its rusty soul) needed to be retired. It was no longer safe to drive.

Here is my big red boat. I drove her to the scrap yard.

But I had no money. (I hadn’t really taken off with saving yet.) I couldn’t go and pay for a car in cash.

I could get a new car with no money down and a warranty. For the foreseeable future, I would be free of buying car parts and my fiance would be free of having to install them.

The monthly payments were affordable since I was making a decent salary and the interest rate was acceptable since my credit was still marginal.

At the time, this was the way to go.

I took out a 6 year loan.

On this:

Big difference. Half the size. Half the cylinders. But hey– it had all of it’s gears. Upgrade!

I find long term car loans to be absurd, really. Chances are, if someone drives a lot, the warranty will expire long before the car is paid off. The car may even be in junk status by the time the last payment is made.

That’s why I paid my note off in just over 3 years! (Coincidentally, the warranty expired a few months later. I drive a lot.)

Getting the car payment expense off of the books was really helpful. I instantly had an extra $334 per month. This gave me more breathing room and the ability to save a lot more cash.

While this scenario worked out pretty well for me, I still advocate paying cash for a car whenever possible.

I plan to buy my next car outright– but I hope to get a couple more years out of my 2013 first.

5) Optimized My Housing Expense

Housing is generally the largest line item on anyone’s budget. If you want to make a big dent in expenses, it’s a great place to look.

Before moving to FL in 2014, I lived in MA. MA is in an incredibly expensive place to live. (Compared to FL. It’s cheap compared to HI or CA).

When I left MA, I was paying $1,125 per month for a small, run down one bedroom apartment, complete with ornery landlord.

When I first moved to FL, I rented a 4 bed, 2.5 bath, 2 car garage home for $1,125 per month. I quadrupled my square footage for the same price that I was paying in MA!

Now, I own a 3 bed, 2 bath, 1 car garage home on a lake (with a 1/2 acre of land) and I’m paying $917 per month (all in– principal, interest, taxes and insurance).

My property taxes are also low because FL offers a homestead exemption. Since I use the home as a primary residence, I get a huge tax break. In 2017, I paid $1,645. The previous year, before I was eligible for the exemption, it was nearly $2,500 (which is still cheap compared to some parts of the country).

I could put a photo of my house here. But it’s a pretty ordinary house. I bought the view. The dwelling came with it.

The Recap

When I got serious about managing my money, I took the power from it.

I had knowledge of my own situation. (I mean, I should, right? It is my situation after all.) With that knowledge, I was able to make good decisions that led to an increased quality of life.

I now settle my debts in a timely manner and can reap the benefits of a vastly improved credit score (and peace of mind!).

I now stockpile cash (some in savings accounts and some in low risk investments) which makes me feel secure.

My cushion in the bank gave me the confidence to quit my full time office job and live life more meaningfully.

As of this writing, I am able to cover my expenses for the next 12 months while only working part time. (This is conservative. If there are no major financial emergencies, I am good for closer to 18 months.)

During this time, I will spend more time with loved ones, enjoy my home and achieve big goals (one of which is to figure out how NOT to have to return to the 9-5 life).

I have learned that responsible use of money can lead to incredible opportunity. I used to blow my cash on jewelry. Now, I invest it in my freedom.

What’s the best money move you’ve made? Drop me a comment.

Related Reading:

My Top 5 Money Mess Ups

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