We’ve posted before about the 10 financial tips we wish we’d learned earlier in our FIRE journey and I’ve covered the biggest financial mistake I regret in detail. While we haven’t been perfect with our finances as these articles suggest, we didn’t get everything wrong. So I also wanted to share the best financial decisions we’ve ever made, in the hopes that it will inspire you to do the same. Granted, some of these we stumbled into and some others we realized the importance of in retrospect, but it doesn’t change the fact that these 10 decisions have helped us on our path to financial independence as we build the life we want to live and the legacy we want to leave behind.
Alright Letterman, count us down!
10. We bought our first car together with cash money, honey
Now granted, it was a new car, and that’s ironically the biggest financial regret my husband has. Spoiler alert: having a new car? Not worth the extra cost. But he’d been driving hand-me-down cars his entire life. He had air conditioner systems that didn’t work, seat belts that tried to choke you, and engine oil that constantly leaked. He was tired of “problem children” and gave into the lure of a new car. But we didn’t walk onto a car lot, make goo-goo eyes at a Tesla, and walk out with a huge car loan as newlyweds still trying to get our financial foundation under us.
Instead, we saved up and budgeted for the car. This helped limit how much we spent on a car that birds were going to poop all over and that would collect pollen during allergy season, which is always in Florida. We went for a previous year’s version and bought the most basic model. We went for a cheaper manufacturer and bought one of their economy models. (And yet, it still wasn’t worth the cost.)
Buying a car in cash hurt (even with bartering and a trade-in, $11,000 is a LOT of money when you have to hand it over all at once. I can’t even imagine $40,000!), which was actually a good thing. It kept us out of debt (minus our pesky mortgage) and there was something so empowering about that.
9. We’ve kept that car for nine years
Cars, like credit card debt, are leeches on your money. In our culture, not only do we pay a ridiculous amount of money for something that goes down in value, but we take the huge upfront depreciation of value when we buy it new and then turn around and typically trade it in for an upgraded, newer model a few years later, compounding the loss.
Not in my house!
I bought my first car in college (that one was used) and I owned my beloved Fofo for almost fifteen years until we moved cross country. Honestly, I still wanted to keep it, but the car wasn’t worth the cost of what it would take to get it to Colorado.
I’ll admit, I cried in the dealership when we sold it. It felt like I was sending the family pet to the “farm.”
The car we bought above we still own. In fact, it’s the only car we currently own. It has close to 130,000 miles and is still going strong. We gave it a tune up before we drove it across the country because the air compressor blew up on the previous road trip (to be fair, we abused that poor A/C system in Florida. I don’t blame it for finally quitting). And when we took it for its first oil change out here, the maintenance shop even commented what great condition our “little car” was in.
Strawberry might not seem like much on the road, but he’s reliable. He never complains about the music we jam out to or the podcasts we binge on weekend drives in the mountains. Yes, I would LOVE a Subaru Outback. It feels un-Coloradan to not own one. But our car is paid off, has low maintenance costs, and gets us safely from A to B. We’re going to drive that bad boy until he quiet quits on us.
Explore our related topic: should I repair or replace my car?
8. We avoided credit card debt and paid off other debt as fast as we could
You don’t have to be the daughter of two accountants to understand how much credit cards can cost. You just have to look at the monthly statement and see how much the interest charge is on the balance. Credit card debt can be one of the biggest burdens on your money, especially since often the minimum payment doesn’t even cover the interest accruing. This means even if you stop putting more charges on your credit card and continue to pay the minimum payment every month, you’ll go further into debt instead of ever climbing out. Honest Ads covered this well, so I’m going to hand you over to Horton for a hot minute:
I’ve seen the stress credit card debt can cause, so I avoided it at all cost in college. And the loans I took out for school, housing costs, and my car were always front and present in my mind, even if they weren’t at 25% interest. Every shift of part-time work I picked up in college and over the summer break, I put toward my debt or to reducing the amount of debt I took out.
My husband was in a similar boat, going from school to work to sleep, rinse and repeat. While he was completing his master’s, our definition of a date was hanging out in the engineering computer lab—he didn’t have time for anything else. But his job helped him cash flow his master’s, and as soon as he graduated, he turned his income to his undergrad student loans and tackled them and his car loan as well.
Granted, our loans at that time were at lower interest rates than what the money may have made in the stock market, but we knocked the debt out so fast, it didn’t matter. And the amount of peace and the number of opportunities it’s opened up for us? Priceless!
7. We lived with roommates for the majority of the time until we got married
College taught us the difference between a good roommate versus a bad one, but it didn’t scare us away from having roommates. Instead, it made us more careful about who we chose to live with. We both lived with three roommates throughout college to cut down on living expenses as much as possible. My husband took it a step further and moved off campus, which saved him a ton more than I spent on room and board.
After graduation, he rented an apartment with one of his college roommates and best friends. I moved back home with my parents for a short stint while I paid off debt. When I moved to the Midwest (twice), I lived with my grandparents and with a lady I connected with through my grandparents.
My husband has never lived alone. I rented a small, one-bedroom apartment for a year by myself until I moved in with him and his roommate, where we stayed until we were ready to get hitched.
Moving in with him and his roommate after living by myself and paying bills all on my lonesome for twelve months reiterated just how much I could save by splitting rent, electric, water, and internet.
6. We chased our talents, not just our passions, at cost effective schools
I’ve been a storyteller as long as I can remember. If you don’t believe me, ask my brother about Chinese checkers sometime. He’ll vouch that I’ve been telling tales since we were kids.
Growing up, I wanted to be a writer. In full honesty, I still want to become an author one day. It’s a dream I’m actively pursuing. But I’m so thankful I didn’t go to college for a degree in creative writing. I’m especially grateful I didn’t go to graduate school for a master’s in fine arts.
Now that I’m in the writing space, I see what a struggle it is to make a living as an author. The vast majority of the income in this entire industry are made by the top percentage of earners. And while I’d love to be the next Michael Crichton or Brandon Sanderson, the odds likely weren’t in my favor. I was much more likely to end of like the majority of writers, who write in their spare time around their full-time day jobs and raising their kids because publishing pays peanuts.
That’s not to say I didn’t still follow my passion. After my dad took me to my first Indy 500, I decided I wanted to working in motorsports. So my dad helped me meet someone in the industry, and I spoke to others around the paddock. I learned quickly that everyone and their brother had marketing degrees. A wise team manager told me if you want to get into racing, become an engineer.
I had no idea what an engineer did, but Google told me they were good at math and science and problem solving and that they made decent money. Sign me up!
My husband didn’t want to work with race cars, but he followed a similar path—he found a degree path that would likely provide steady employment that took advantage of his skills: math and sciences.
We ended up in college together because we both also didn’t want a butt ton of student loans, so we picked the public in-state college that offered us the most scholarships.
What you do for your career isn’t all about money, but coming out of school with a lot of debt and a degree that makes it difficult to land is going to dig a deep financial hole that’s hard to climb out of. And it’s something no one warns you about in high school. So often, we hear “follow your passion!” and while it isn’t wrong, it isn’t the entire puzzle either. It’s simply one piece.
Passions change and so do careers. Your first career doesn’t have to be your only one. I’m on my third career, and my husband is on his second. But we continue to chase our talents, and work to expand them. And we truly enjoy what we do.
Getting a useful, reliable and affordable educational foundation under us set us up for all the pivots we’ve been able to make and for the successes that have come our way.
5. We bought a small first home in a less desirable neighborhood
After we said “I do,” we started to consider purchasing our first home. At the time, many of my husband’s coworkers had already purchased houses. In fact, many of them did so right out of college with their first engineering paycheck. They bought in the more affluent areas of town, close to downtown and near work.
We, however, got sticker shock when we saw what homes in their neighborhoods were going for. We set a much lower budget, which meant we couldn’t afford to purchase in the area we’d rented in with our roommates. And I’ll admit, I loved that neighborhood full of sidewalks meandering along the edges of the golf course, shielded from the insufferable Florida summer sun by a canopy of trees. But we loved not being broke more.
When we rented by ourselves, we lived “ghetto adjacent” as I called it, or as others would say, on the other side of the tracks. (There were, indeed, railroad tracks running through our neighborhood.) We valued our safety, so we didn’t want to purchase there either.
It took a lot of searching and negotiating, and we ended up in a much smaller house than many of our friends and colleagues on the other side of town, but it was the perfect choice for us. Our small mortgage allowed us to pay it off quickly and then supercharge our investing. And the appreciation for a more affordable, smaller “starter” home helped up move to our dream town decades ahead of schedule.
While we focused on purchase price versus size, the fact that a tighter budget put us in a smaller home compounded in savings across other expenses such as property taxes (which were a LOT in Florida), homeowners insurance (also B-A-N-A-N-A-S in Florida by the time we left), utilities, and maintenance. And all that money we saved in those areas? We saved that toward financial freedom as well.
We’ve covered this topic in detail with the benefits of living in a smaller home.
4. We paid off our mortgage early
This wasn’t a good financial decision just looking at the interest rate math, so I can see if you’re a little confused to not only see it on the list, but so high up. Our financial advisor recommended against our approach, warning us that at our 4% interest rate, we’d be better off investing the extra payments we made toward the principal balance.
But hear me out.
Paying our mortgage off in our early 30s gave us the rest of our lives to live exactly how we wanted. Without owing anyone any money, we had complete control and autonomy over our decisions and actions. That power is not only an incredible feeling, but it opens up so many more opportunities to win with money earlier in life.
My husband was able to make the leap to an entirely new career, because he didn’t have to worry about losing his job and us not being able to pay our lender. He now makes more in his new job and has a higher growth potential.
We were able to take the entire payment we’d been making toward the mortgage and invest all of that, which allows us to invest almost 50% of our income, putting us on track to be completely financially independent in a few short years.
I was also able to shift careers again, this time into not only a new industry, but into an entirely new role. I’m now getting paid in part to follow my passion I referenced in number 6 above. The past year and a half of experience has opened up an entirely new realm of possibilities for me that, like with my husband’s job change, has much greater growth potential in the future.
In those short few years where we channeled our inner Roy Orbinson and tackled our mortgage like Bobby Boucher sacked players on the football field, we might have made a little more money investing. But it’s hard to argue against the financial gains we’ve made since then. Even our financial advisor had to admit, in hindsight, it wasn’t such a bad idea after all!
Take a deeper dive into should I pay off my mortgage early?
3. We focused on investing early
I opened my Roth IRA around the age of thirteen and have been investing in it ever since. As I earned more, I invested more. I didn’t know about the Dave Ramseys or the Money Guys of the world at that age and wasn’t focused on investing 15%-20% of my income for retirement, but I at least knew the importance of investing. That social security thing that took a chunk out of every paycheck I earned? The financial people in my life mentioned it would still be around by the time I reached my 60s or whatever the retirement age would be by the time I hit it (because it kept going up), but my payout was likely to get less and less at the program struggled to stay solvent. Which was kind of BS, given how much of my money they were taking (maybe this was part of the reason I struggled to understand the true power of compound interest early in my investing career).
Still, I invested. And when my husband and I got married, and I realized he didn’t have a Roth IRA, we fixed that problem quickly and got him investing too. Ironically, even though I’d been the little retirement saver in my teens and early 20s with what I could manage, he became an even bigger saver, up to the point where I had to pump the brakes a little because I like my vacations, thank you very much.
While I’m not as hellbent on trying to save and invest 50% of our household income like my husband is, I’m grateful I saw the importance of investing early. It’s definitely made a difference in our journey to financial independence.
2. We focused our spending on our values and ignored the noise
If I had a nickel for every time someone replied “YOLO” or a similar sentiment to a comment I made, we’d be at the top of the FIRE ladder already.
It would have been easy to fall into that reasoning, but that mindset is a trap. While it might be enjoyable in the present, it often leaves a financial hangover that ibuprofen doesn’t fix in the morning.
And here’s a dirty little secret I love to shout from the top of mountains: just because we saved and invested a significant portion of our income didn’t mean we weren’t living our best lives. It just meant that we were intentional with our spending. We spent a lot of time talking (and yes, sometimes dreaming) about what our goals were, what we valued, and what we wanted from life. And then that’s what we spent our money on.
Going out to eat and grabbing drinks or dessert? No thanks, I prefer to cook at home, where I don’t feel like such a Karen asking the chef (myself) to make a million substitutions so I can eat exactly what I want.
Going on a road trip and visiting the Mighty Five national parks in Utah in five days? Where do I sign up? I’ll sleep when I’m dead, YOLO!
We’re frugal, but we know what matters to us, and we chase that with controlled abandoned (AKA within our monthly budget).
We’ve been to some of the most beautiful, humbling, mind blowing places in the world, and we wouldn’t trade a single one in for a fancy new Tesla or a bigger house.
Your values might be different, and that’s okay. But cutting out all the noise and the urge to keep up with the Joneses has been critical to our financial success.
So has staying off Instagram when it’s been three months since our last vacation and I’m going through withdrawal.
1. We married each other
Yes, cue the sap sap sap, but it’s true, and not just because we go together like peanut butter and jelly. Arguably the most important financial decision you’ll ever make is who you hitch your wagon to, because that wagon is either going to get you from Independence, Missouri to Oregon City, Oregon or you’re going to die of dysentery along the way. Winning financially when you and your spouse aren’t aligned is damn near impossible. Money fights are one of the leading causes of divorce in America, and divorces themselves can be expensive and difficult to swing back from.
While we never sat down and compared balance sheets of our situations before my husband popped the question, and we probably should have had more direct money talks before getting married, we’ve reflected on this happenstance together. We’ve realized we both paid attention to key indicators that clued us into our similar money mindsets, such as:
- My husband took me out on dates in a car with a window held up by a spatula
- I was happy to go Dutch and preferred cheap dates, which were often eating in at my apartment and watching movies on Netflix
- We both worked during college and tried to minimize our student loan debt
- We both tried to pay off our debt as fast as possible after graduating
- I asked for a fake diamond in my engagement ring
The final word
There you have it: the 10 best financial decisions we’ve made. We hope these can help guide you on your journey to financial independence as well!