First Person: Financial Planning in My 20s, Debt-Free in My 30s

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My twenties were a time of instability. I graduated college at 21 and worked odd jobs before going back to school to become a teacher. I completed the necessary coursework at 27 and landed my first teaching job at 28. During this period, there were several financial planning decisions I made that may allow for early retirement.

These smart money moves weren't flashy: no clever investment strategies, flipping houses, nor brilliant ideas to launch a new business. Instead, the financial decisions in my twenties that I look back upon proudly fall under the umbrella of "living within your means." They include:

- Driving old, paid for cars

- Planning for large expenses

- Avoiding and minimizing debt


I drove an old sedan well beyond its shelf life, from 24 until 34, replacing parts as they broke (or literally fell off) while doing my best to ignore the snickers around me. Why? A new, or even newer car would have required me to finance the balance, which required paying interest on money I didn't have. It would have also required higher insurance premiums - insurance on my sedan ran about $30/month.

Large Purchases

Planning for large purchases was a strategy I used for much of my twenties. To pay for annual summer fishing trips to Wisconsin, I would set aside $50 a month beginning in December. I used the same principle for other large purchases, including routine car repairs.

Avoiding Debt

Most importantly, I did my best to avoid debt. I didn't have a credit card until I was 30, which, in retrospect, may have been the best decision of all. Instead, I paid for everything with cash. The only exception to this rule were the student loans I took out in graduate school. Since I hate the idea of paying interest on another person's money, I paid as much towards them as I could afford, often sending the majority of my paycheck to pay down principal.

Living within my means wasn't glamorous, but it was effective. By 32, I was able to save enough for a down payment on a house and pay off my student loans. After getting married, we were able to pay off my wife's auto and student loans. Using the debt snowball method, we're now focused on paying off the mortgage. We're also in good enough financial standing to be able to get by on one income if need be. With the hopeful addition of a part time income, we can fully fund our retirement accounts and plan for retirement sooner rather than later.

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