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How Hitting Rock Bottom Put Me On The Path To Financial Independence

Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. American Express is a ChooseFI advertiser. Disclosures.

So I have a pretty dramatic testimony, and I plan to be raw about it here in hopes of inspiring you. I’ve made a TON of financial mistakes and just recently discovered FI and before that Dave Ramsey. This has all occurred in my late 30’s/early 40’s. I’m a late bloomer.

Where I’m From

I grew up in middle-class America and somehow felt like everyone but me got the manual to life. I mostly figured things out but developed poor money habits, lived self-destructively and drank/drugged too much. Unfortunately, I was really good at making things look pretty on the outside, so I flew under the radar for far too long. In my mid 30’s I hit a hard bottom.

Smoke and Mirrors

I grew up with a lot of unwarranted insecurities. I fell into the lie that I was unworthy unless I could be perfect. I found an escape from this self-imposed pressure in, you guessed it, alcohol and drugs. When I drank/drugged, I became all that I thought I wasn’t, funny, pretty, and secure.

I was a high functioning alcoholic/addict. Very few people knew I had a problem, at least not until the end. In my 20’s & 30’s, I did some successful stuff–finished undergrad and grad school maintained my evolving career and participated in some healthy relationships.

However, I also did some unsuccessful stuff–married & divorced, filed bankruptcy took out loans, bought what I couldn’t afford on credit, hated myself, and participated in abusive relationships. I ultimately became reliant on substances to wake, get through the day, and sleep. In the end, it was a sad existence and I often looked in the mirror and said, “I hate you.”

Break Down of the Smoke and Mirrors

In my darkest hour, I had a vision that involved three paths. On the first path, I saw myself rocking back in forth in an insane asylum. I knew this is where I was headed if things didn’t change. The second path was death and I knew I could choose that instantly. Then on the third path, I could see a tiny glimmer of light. Like a match in an entirely dark room, I was drawn to it. I choose the third path and headed down a road to recovery and returned to faith.

Podcast Episode: From Addiction To FI–Ms. FIology

Inflection Point

Perfect love saved me and this was my pivotal moment where life became different, intentional, and purpose-filled.

I was ready to turn inside out and expose my inner wounds, insecurities, and secrets in pursuit of healing. I was ready to change. I came to that place Dominick Quartuccio talks about in his book, Design Your Future, when the pain to stay the same is greater than the pain to change. Pain can be a great motivator, but awakenings don’t require a deep bottom. It is available to everyone at any time.

The great thing about people is that we are fluid and can change. The tough thing about people is that so many of us are resistant to it. Since my great awakening, I refuse to get too comfortable.

The Early Years

The early years of recovery were all about uncovering and digging up the roots of my issues. It involved a lot of forgiveness, apologies, prayer, being raw, learning new ways of thinking and habituating, and eventually getting the focus off of me. I’m healed most when I serve other people.

Baby Steps

The last four years my focus has been on cleaning up my financial wreckage.

By my first calculation, I had ~$108k in debt. When I put out the call for recommendations, I was introduced to the Dave Ramsey method. Ultimately, Dave was the catalyst to me overcoming some limiting beliefs and gaining control of my finances. I’ve been dogmatic about some of his advice, like getting on a zero-based budget and being ultra-frugal while in the debt snowball step, but have chosen to ignore other things like giving up my employer’s match on my retirement account until I am debt free, or waiting to have a fully funded emergency fund.

I just couldn’t drink all of his Kool-Aid and was mostly okay with that. I chose what worked for me.

Great reason to be sober – being an aunt to these two.

I had been feeling guilty about not being able to swallow all of Dave’s advice when a colleague turned me onto ChooseFI. That’s when I realized I had found my financial tribe. The first episode I listened to was The True Cost of Car Ownership. When Jonathan calculated the opportunity cost of having a car payment instead of investing it, I about drove off the road!  #Mindblown

Related: Is It Too Late to Start My FI Journey?

Seriously, why had I never heard this stuff before?! Compound interest?! Whaaat? Truth be told I had taken finance courses where we calculated compound interest, but I guess it never seemed real or applicable to my life. I think I was so used to living in survival mode that I just couldn’t imagine having extra money to invest. Another lie I believed.

I have to wonder, why did I believe this wasn’t for me?? This stuff is not just for the privileged or wealthy, it’s for the disciplined. Once I figured that out, I realized I can do this thing. I’m going to achieve financial independence.

Surviving the Crash

When I got sober it was shortly after the crash of the housing market. At the time I owned a little house in a town that was just not bouncing back. Houses were foreclosing in my neighborhood and selling for like $10k! It was quickly becoming an unsafe place for a single woman, so when some major things in my house broke, I decided to pursue a short sale and moved out.

I moved into a ministry home (a form of house hacking by living in community with people of a common faith) and tried to do a short sale on my house. This didn’t work out so well, and in the 11th hour, I was declined for the short sale and the house went into immediate foreclosure. In the end, the bank bought it back and agreed to waive the deficiency. I pretty much walked away unscathed except for my credit, which has completely been restored in a few short years of using credit cards within my budget and paying them off monthly.

At this point, with the mortgage gone and my snowball working, I had about $36k left in debt. Which I was focused on finishing as intensely as possible. I went through my budget and started cutting more items. It’s amazing how many things we can think of as necessary that really are a luxury.

For instance, I stopped highlighting my hair. Although I had been having it done at a school for a fraction of the cost, I decided even that was not necessary. I love to ski and had a line item in my budget for that, but decided to put skiing on hold until this debt is gone. Delayed gratification can be a great motivator.

Then I realized I could do one more thing–move back home with my parents and quickly knock this debt out.

It has been humbling to move back in with my folks, and I had to get over myself to do it. I’ve had to tune out what people think, but the funny thing is many people actually consider what I am doing as heroic. So what I really had to tune out was my perception of what people think of me.

Besides being able to apply 70%+ of my monthly income to debt, I’ve found other blessings in it, like realizing the things that my aging parents need help with but would never ask. Overall it’s been really good and I’m now three months out from paying it all off!

Turning On The Financial Freedom Clock

After my debt is paid off, the goal is to apply the percentage that has been going towards debt, towards investments. I think this leg of my journey is going to be way more fun!

Obviously, I am going to move out of my parent’s house, and maybe not so obviously, add skiing back into my life. So the 70% might become 50-60%, but I have some creative things on the horizon in regards to house hacking so I’m still aiming high.

I do have a little head-start as I’ve been contributing a measly 2% to my employer-sponsored simple IRA with Vanguard and have a fully funded emergency fund.  I’m going to be maxing out my IRA among other vehicles and plan to chronicle it all here.

Plus for the first time ever, I’m excited about turning 50 (in five years) as my contribution limits go up on IRAs and Roth IRAs. Paige from episode 041 opened my eyes to this lovely benefit of getting older.

I’m still studying all the possible hacks and levers to pull in pursuit of financial independence and will share what works for me and what doesn’t. After listening to episode 023 with ESI, I realized career hacking might be my biggest FIRE power right now. ESI from ESI Money was kind enough to give me some advice specific to my situation, so stay tuned for an article on that.

I’m incredibly grateful to all of the people who have helped me on my journey, in particular, my colleague Carson who turned me onto ChooseFI. I’m so impressed with the people in this community and learn from you all every day. I would be remiss if I didn’t give a shout out to Jonathan and Brad, you guys are truly awesome at what you do and your generosity to this community is amazing. Thanks for giving me a place to tell my story.

If you want more from Ms. Fiology check out her site here.

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How Hitting Rock Bottom Put Me On The Path To Financial Independence

Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. American Express is a ChooseFI advertiser. Disclosures.
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