If you’ve read many personal finance blogs, you’ve undoubtedly read some remarkable success stories. Our Beginner to Blogger interview series gives personal finance bloggers a chance to share how they started their personal finance journey, what early obstacles or mistakes they needed to overcome, and how they’re still improving – even as an “expert” or thought leader! Today’s interview features Nick of Your Money Blueprint.
Hi, my name is Nick and I blog twice a week at Your Money Blueprint.
I am 38 years old and married with a 6-month-old daughter. The focus of my website is financial independence and personal finance education. I am planning to escape the rat race before I reach the age of 45 with a plan to focus on my financial coaching business.
What prompted you to start focusing on your personal finances?
I didn’t learn about personal finance from my school or my family. All through my 20’s, I spent everything I earned.
My first experience of personal finance hitting me in the face was in my early 30’s. I bought a house of the McMansion variety. Far too big for a single (at the time) person. I was told the best thing I can do was buy as much house as the bank would allow me to. Terrible advice, by the way.
Within a year, mortgage interest rates went up and I was struggling to keep up with mortgage payments. Aside from student loans, I had never been in debt before. So to have a $600,000 debt hanging over my head was pretty scary.
This feeling of not being able to keep up was the prompt I needed to do something about the situation. I sold my McMansion and moved into a much smaller house that was only one-third of the price. It was only 20 minutes away, too, so not even a massive sacrifice to make. I could breathe again.
By now, I was approaching mid 30’s and engaged. We had a much lower mortgage now but still weren’t saving the difference. Then I had an accident while out running and had a bad back injury that resulted in several years of sciatic leg pain. This included periods where I couldn’t work.
With no work income, we were in trouble again. It was here I decided I can’t keep living this way… Where I was so reliant on an employer. I made a vow to save more money and take responsibility for my own life.
Just three years later and our mortgage is now paid off, and we are saving 50% of our income. You can read more of my transformation here.
What was the greatest financial obstacle you faced or mistake you made during the “early days” of your personal finances? How did you improve the situation?
I would have to say it was buying far too much house for my needs. Not realizing how much a house really costs but instead following blindly the common advice. Owning a house is not always “the dream.”
Now I know better, I have come to realize all the not so hidden costs of home ownership.
What is one area of personal finance that you still struggle with?
I would have to say balance.
It’s a hard balancing act to take care of your future while also making sure you are happy today.
In the last few years, I’ve had periods where I have been too future-focused. This has meant missing out on fun things such as going to sports events or having a nice dinner out with the wife.
I think I’m much better now. There is no disputing how important saving for our future is, but it isn’t so important that we make ourselves miserable doing it.
What does financial independence mean to you?
It means time freedom.
With that I mean, I can make my own decisions on how to spend my time.
The standard path is to work a full-time job until your 60’s. In that scenario, you have no say over how you want to spend your time. You are relying on your employer to pay you money. In exchange, your employer gets to dictate what you do with your time, with who, and when.
With financial independence, I can do all the things I want to do because I am not relying on an employer for money. I can spend time with the family. Exercise more. Travel our country and abroad. Volunteer in the community. Work on my business.
Since making your personal finances a priority, how has your quality of life changed (happiness, relationships, career, hobbies)? What’s improved that you may not have expected, or what unexpected challenges may have surprised you?
My quality of life has improved significantly, and I did not expect it would. I thought the less fancy things I bought, the more miserable I would be. In my mind, I had equated material things with happiness.
There is a lot of pressure to keep up with your friends’ houses, cars, and hobbies if you are stuck in that competitive “keeping up with the Joneses” mentality. Once I freed my mind to not care about the big house and fancy cars and competing, it was such a huge weight off my shoulders.
This has resulted in me being much more relaxed and has freed up a lot of head space.
Headspace where I don’t have to worry about getting one up on my mates. By downsizing, I have really simplified my life in so many ways. This simple life has allowed me to focus more on the things that matter most. Health and meaningful relationships.
Another surprise has been at my full-time job. As I get closer to financial independence, I don’t have as strong a desire to do things I think are unreasonable. I am a very hard worker, but sometimes I will be expected to do something like work during my holiday.
Previously, I would have interrupted our holiday to do work. Now that I have a large financial safety net, I’m not afraid to tell my employer “no, I’m not working on my holiday.” Since this attitude, I’ve actually been promoted, funnily enough.
The one challenge I must say has been staying focused on my job. I am still probably 4-7 years away from quitting, but I sometimes focus on the finish line too much. It makes time go very slowly! I need to keep my focus and remain in the here and now. I need to keep reminding myself of this.
What advice (money or career-related) would you give to a recent college graduate just starting their first full-time job?
- Contribute as much as your employer will match to your retirement scheme.
- I got carried away with my first-ever paycheck and that lasted for seven years. Try as best as you can to not inflate your lifestyle too much after getting a pay raise. Invest the difference.
- Don’t try and invest in the next hot thing. Look at how Bitcoin has turned out. Invest in broad-based index funds. Simple and effective.
- At your job, do more work than you are paid to do. Everyone else is only doing what they are paid to do (if that). If you can do more, you will be noticed and you will be compensated fairly. It may not happen immediately, but it will happen eventually. Accidental Fire did a nice job of explaining this concept.
- If your boss doesn’t notice all the work you are doing, don’t be afraid to let them know. No one else will do this for you. Promote your work.
- Be a sponge. Don’t think you know it all already. You don’t. You have so much more to learn. Acknowledge your mistakes. Don’t ignore them. Find a mentor that will teach you.
- Save at least 15% off your after-tax income.
- If you haven’t figured this out already from my stories, don’t buy too much house if you are in the market.
- Learn about and understand compound interest. You will regret not starting earlier.
- Try to find a partner/spouse that is aligned with your personal finance ethics.
- When you are young, live with roommates. It’s a great way to halve your housing costs and not too big an inconvenience. This becomes harder as you get older.
- Don’t feel like you have to keep up with your coworkers’ spending. If they are going to lunch every day, pack your own lunch. If they are going for coffee every morning, make your own. Sure, there are some opportunities for socializing, but just be mindful you are not doing this too often. Pick your times.
- Enjoy your life. You are young. Don’t think you need a 50% savings rate from the get-go. Enjoy being young. Experience things. You can always increase your savings rate as you age.
What is a common misconception or belief about money you’d like to warn beginners about?
That money doesn’t buy happiness. Money actually does buy happiness. Just not directly.
Money buys time and freedom, which, if used productively, will buy happiness. Money is important, so don’t underestimate this. Our time on earth is finite. So look to buy experiences and time, not material goods.
In the last three years, what is one new behavior or decision that has most improved your financial situation?
Tracking my net worth. This process has allowed me to keep on track of my progress, and not deviate too far from the plan.
What is one item you like to splurge on?
This is the one budget item that I could probably reduce quite significantly. My wife and I love good food and often buy the nicest, free range meats.
If you could give a personal finance book to everyone just starting their financial journey, what book would you give them?
The Richest Man in Babylon. A very old book but a good story with timeless advice that works.
What led to your decision to start a blog, and what has your experience been like so far?
After the mistakes I have made, I realized I was very normal. I wasn’t the only one, and a lot of people don’t even realize they are making bad financial decisions. I wanted to start my blog to educate the masses.
It has been a good experience so far. I find a twice a week schedule challenging with a full-time job and young daughter, but I am keen to get my content out there.
If you had to delete all of your blog posts except for one, which post would you keep and why?
A very short article but emphasizes perfectly the impact of investing and compound interest over long periods of time.
Anything else you’d like to add?
Don’t feel like you have to know everything now. You don’t need to be the best. You don’t need to be perfect. Whatever you want to do, just get started and learn along the way. Never stop learning. Time on the sidelines can be costly.
Thanks, Aaron, for having me over!