Archive for May, 2011

How I Got Here

I don’t know how I ended up being such a crazy saver, but I’m assuming I can thank my parents. In high school, I saved 80% of my net income and 20% was for spending. This was possible since I had very low expenses (partially due to being a school-aholic), but still. How many high schoolers out there saved 80% of their net income?

I may have only worked 16 hours per week at $6.50/hour, but I saved 80% of that. I also tutored other students at my high school in French, Math, Science, and English, which was quite lucrative at $10/hour, though infrequent. Even though that was paid in cash, I saved 80% of that income as well.

I had a pretty decent sized savings account when I went off to university, despite the minimal amount of time that I had spent working and the fact that I was working at minimum wage.

My parents paid for my tuition, rent, utilities, books, flights home, and long distance to call them throughout university. For my first three semesters, they paid for my food as well.

I took several internships throughout my degree, most of which paid quite well. I continued to save a good portion of my income since my expenses were minimal during school semesters (I never spent more than $1,000 – $2,000) and I lived within my means during my internships.

I chose a degree that would land me a job in the well-paying high-tech industry with only a Bachelor’s degree. I graduated from both high school and university with honours.

I graduated from my four-year university degree with a positive net worth in the low $30,000 range and approximately $7,000 in retirement savings. I managed to increase that by 69% in my first year out of university, despite spending $21,000 on a new car and I am hoping to increase my net worth by 90% in 2011.

So it was one part luck in my parents covering the cost of my university education, but it was many parts hard work – I graduated with an honours degree from a reputable university with a handful of internships under my belt – and many parts diligent saving.

I don’t see my story as the story of a spoiled brat. I didn’t spend my university days partying nor did I waste the money I earned during my internships. I see my story as what parents hope will happen if they provide their children with a university education – I took that and flourished, starting my adult life with no debt.

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Goals for 2011

Save as much as possible:

1. Max out my Roth IRA – done in early April.

2. Max out my Roth 401(k).

3. Bump my emergency fund up by $4,000.

4. Save $3,000 towards a car replacement in 10 years.

5. Save $20,000 towards a down payment on a house.

Have excellent credit:

6. Have a credit limit of $1,000 on my Amazon.com Rewards Visa card.

7. Raise the limit on my primary card.

Reduce financial anxiety:

8. Have only one checking account that I actually use – done in early April.

9. Don’t check my bank accounts daily. (I’ve never overdrawn, so this is a safe goal.)

10. In May, only enter my receipts into my spreadsheet twice – once on the 15th and once on the 1st of June.

11. Only check my Vanguard account on the 2nd business day of the month (when the previous month’s dividends post in my 401(k) account).

12. Make no more trades until January (except to convert the traditional IRA back to a Roth IRA).

And one final, golden goal:

Achieve a net worth of $100,000.

I would say that all of these goals are attainable, but the ones to reduce financial anxiety will likely be the most difficult.

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