Scared? Don’t be. Here’s my story.

Posted on November 9, 2007 6 Comments

One of my best girl friends recently lamented that she sometimes gets intimated visiting my blog because she doesn’t have a personal savings plan in place. It was surprising to me, because I still don’t think I know much about personal finance. Stocks, options, bonds … blah, blah, blah… it all sounds like gobbelty-gook sometimes.

Still, I must admit, I’ve come a long way.

When I started the site in November 2004, I had just opened my first savings account and a 401K. I had about $3,000 to my name, all that remained from an initial $10,000 I saved by living with my parents for two years after graduation. I was spending more each month than I was making, and I couldn’t figure out why. 401K was a dirty … acronym?… and I spent a lot of my free time shopping. All which was fine by me.

That all changed when I started posting. I learned how to do a budget, which was painful, and started reading up on finance web sites. Easy ones that spoke my language, like Ms. Money. I began keeping better track of my money. I totaled my net worth as a benchmarking tool (to use a marketing term)… in February 2006, it was $2,300.**

The first two years on my own were hard. I wasn’t making a lot of money, rent was expensive, and I needed to furnish my apartment. I cut way back on my spending, we found a cheaper apartment a few blocks away and I discovered the beauty of direct transfers into my savings account. But by early 2006, I had only managed to save about $3,000 more into my savings account, according to my finance records, and I was probably only putting three or four percent into my 401K. It was still baby steps.

Luckily, with more time and dedication, things got better. Quickly.

In mid-2006, my hard work at the office paid off, and I began to earn more money. Sure, it required sacrifice, but finally, five years out of school, I started to earn a respectable income. This is a key point for me, because if I had chosen to either go back to school, switch jobs a bunch, be less dedicated to my career or try a new field, my income at this stage could be significantly less.

But I chose the path I did, and the past 18 months have been nothing short of amazing financially. I’ve been able to sock away a larger percentage of money into my retirement account. I opened a money market account that earns a higher interest than a typical savings account. I’m learning more about savings, and I’m considering new (and scary!) investment types.

Today, doing not much more than saving, saving, saving, my net worth is … drum roll please … more than $40,000.

I know I get frustrated. I know I complain. And the reality is, it’s not easy. But every day, it gets easier and less scary. The more you earn – the more you save – the easier it all becomes.

That said, I’m still a novice at this. I’m still a sucker for a pair of beautiful shoes. I’m still scared of losing my money. I’m still intimidated by people in the finance industry. I may be wrong about a lot, and my wealth accumulation may be slow. But I’m doing it.

So what are you waiting for?

** Footnote: I don’t have the record, but I think I probably left out a random retirement account that was set up for me through my company’s old holding company. Had I known about this account at the time, I believe my net worth would have been closer to $8,000 or $9,000.

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