I often get raised eyebrows as well as lots of questions and comments when I tell people about my personal finance journey.

“You actually sold your car and lived car-free?”

“You were living by yourself and chose to move in with roommates?”

“You ditched cable? Stopped buying designer clothes?”

“Why waste time by searching for deals online?”

“I could never do all of that.”

“That lifestyle wouldn’t work for me.”

“Why would you do that?”

Well, I did it all because of this:

I started my financial journey on September 1st, 2015, and in exactly three years, on September 1st, 2018, I hit just over $100,000 in positive Net Worth growth. On average, my net worth increased by approximately $2,800 dollars per month, while living off of an average of 25% of my income – which included my salary as well as a couple small side hustles.

As you can read about here, here, and here, I paid down my original debt burden and have also been contributing  some funds to saving and investing as well. Some of my positive growth can be attributed to the unprecedented run that we are experiencing with the stock market right now, which has been incredible. However, most of the growth has come from working to destroy my debt load.

I still have a little bit of debt, but I’m excitedly anticipating paying it all off within the first couple months of the new year.

The great thing is, as my debt continues to evaporate, I’ll be able to save and invest more money. Instead of spending my current money on based debt and the interest that accompanies that debt, I’ll be putting my money to work by investing it in passive income producing assets. Thanks to the magical benefit of compound interest, reaching my next $100,000 in Net Worth Growth will be much easier and quicker. In fact, if all goes well, these last 3 years will actually be the longest amount of time, for the duration of my life, that it will take to grow my net worth by $100,000. How awesome is that?

So why do I tell you all of this?

Please know that I’m not trying to flaunt my success or brag in any way. It’s actually quite scary and vulnerable to be posting this information online. Also, there are many people out there that have done far better than me on their financial journey.

Alas, comparison is the thief of joy right?

Ultimately, I’m very proud of my efforts and I share it with you to encourage you that it is possible to take control of your finances! You don’t have to win the lottery to get where you want to be financially. You don’t have to live in a cycle of debt and stress. All you need is a little sacrifice, planning, and hard work!

I didn’t have a super high paying job. I don’t have a trust fund. If I can do it, I promise that you can do it!

So how did I do it? Here are the three biggest tips that helped me reach this milestone.

1. Make Conscious Purchase Decisions

There are tons of blogs out there that will tell you what you should and shouldn’t spend money on. Ultimately, the most important thing that I’ve realized is that instead of focusing on not buying a coffee from Starbucks or not having cable, focus on making conscious purchase decisions.

Often times, before I started this journey, I would spend lots of money on food or clothes and not even think about what I was doing. It was almost habitual.

By taking a step back and truly thinking about each purchase, I was able to assess if it added value to my life. The more I started thinking about trying to limit purchases to only things that truly added value, then my spending decreased on its own. Not that there aren’t sacrifices to be made, but when you really think about if that $10 fast food meal is going to truly add value to your life, then it gets easier to decline.

I also don’t want you to get the wrong idea. I definitely spent money in frivolous ways at times. Many FIRE (Financial Independence, Retire Early) bloggers might shake their head at some of my spending as I regularly went to concerts, ate out with friends, and even went on some international travels during the last three years.

The cool thing is that by consciously making purchase decisions, I was able to increase my net worth while also not being forced to live like a hermit. I was frugal without being cheap.

Things that people think would be huge sacrifices, like living without a car or moving in with roommates, actually enabled me to be able to do other things that actually added value to my life while also getting out of debt.

I’m not in a position to prescribe to you exactly what you should and shouldn’t spend money on, but I will tell you that you definitely won’t improve your personal finances if you fail to make conscious purchase decisions.

2. Track your spending and Net Worth

For me, tracking my spending, debt, and Net Worth were game changers. It took a little bit of effort to get started on the front end, but once I got started I was able to do this pretty easily. It typically only takes me about 20 minutes once a week to track everything and get an up to date picture of where I am financially.

I’m a fan of using a budget, so I’d suggest that you look at your last 3-6 months of purchases and use that as a rough guideline to get you started. Once you have that budget, you obviously want to pore over it to see where you can cut out some excess.

Typically, the three biggest expenditures for an individual are housing, food, and transportation. Take a close look at these areas to see if you can create savings. Another area to consider is your frivolous or consumer spending. Eating out, purchasing clothes, getting manicures or hair cuts, etc are all categories where you can likely trim a lot of fat in your budget.

One important tip – try not to unrealistically constrict your budget. If you don’t give yourself a realistic shot at staying under your budget, you’ll likely lose motivation and give up entirely.

Aside from budgeting, it’s important to track your spending, debt, and net worth. I use an Excel spreadsheet and I physically enter all of my expenses. It seems tedious, but it’s honestly not that hard. It also provides a physical reminder of what I spent. Sometimes, just having to type what I spent into the spreadsheet is a great reminder of what a silly purchase it was, which motivates me to make fewer such purchases moving forward.

If you don’t like to use Excel, you can also use online tools such as Mint or Personal Capital. I prefer Personal Capital, which I use in addition to my spreadsheet system, but use whatever you need to in order to keep you motivated.

Understanding where you are financially is truly vital in making progress. If you don’t track it, you’ll spend more that you want, and end up in the same (or worse) place as you started.

3. Create a plan for your specific personal financial journey

There’s lots of advice out there about how you should get out of debt or save/make/invest your money. I think that the best way for you to make progress is to develop your own plan.

For example, I did a combination of the debt avalanche and debt snowball payment methods, where most people advise sticking with one or the other.

I also did a hybrid of paying off debt as well as investing in my employer’s 401(k).* Initially, I was doing almost straight debt payoff in order to eliminate my most costly debts. Then, once I eliminated those debts, I was left with only low interest debt.

*(Side Note- If you do get an employer match of any kind, it is usually always best to at least invest enough to claim the full match, otherwise you are giving away free money.)

At that point, based on my calculations, it was important to me to ramp up my investing and slow down my debt payment because the money that I was making via my investments was actually more profitable than eliminating the debt payments. I was (am) still paying my debt off at what most would consider a high rate, but instead of a 90/10 percent split of debt to investing, it shifted to more of a 50/50 split in order to capitalize on investment earnings.

Ultimately, you need to take time to develop a plan. Without a plan, you’re very likely to fail. Take the time to research different personal finance strategies and develop steps that you can take to motivate you on your financial journey.

If you are interested in getting help on your journey, I offer session based consulting to help you create and develop your personal financial plan. Visit the Personal Finance Consulting page for more details.

Alright folks! That’s all for today. Thanks for following along with my journey.

What about you? How are you progressing on your personal finance journey? What are some things that you’ve found to help you stay motivated? Let me know in the comments!