2015 Financially Real CarnivalToday I was asked to be a part of a little financial roundup with other awesome personal finance bloggers. It’s hosted by my good friend Shannon, from The Heavy Purse. Since April is Financial Literacy Awareness month, why not end it by delving into what it means to get “financially real?”  April is an important month for personal finance bloggers. This is a month to focus on helping people understand their finances and all aspects of money. We can only be good at money once we learn as much as we can. We are only as good as the best knowledge we keep.  Lucky for all of you, there are a plethora of personal finance bloggers out there and general financial information.  Heck, I learned how to get out of debt and change my life around because of the information I found on the web. It’s what inspired me to create this blog nearly three years ago. So, today I want to share with you what happens when you get financially real with yourself and your money situation.  I want to show you where I came from and where I am today. Watching it unfold over the past 9 years has been astonishing.

You Can’t Know Where to Go If You Don’t Know Where You’ve Been

That is a paraphrase of another quote, but it’s very true. You can never know where to go if you don’t know where you’ve been. When it’s time to get financially real with yourself, the first step is understanding where you are right now. I would have never made a change back in 2009 if I hadn’t fully understood where I was prior to that.  While in college, I started a small e-commerce business. I grew it from nothing to over $1 million in sales. It was one of the best achievements of my business life. While I shut it down in 2009 for a number of reasons, it was actually the start of my entire journey to fix my finances. It was the start of getting “real” with myself and my money.

When I decided to shut down my business, I realized I was spiraling out of control with my money. I was funding my business on credit cards in order to continue growing sales, but I wasn’t even using my profits to pay off my credit cards. I was putting money in my business by any means necessary.  There was a method to my madness, but it ended up being a big mistake. Instead of using the profits to pay down the debts, I wanted to fund my business on the notion of future earnings. While that may be good for some companies, it was terrible for mine. I wouldn’t do that again!

Just recently I was being interviewed about one of my worst money blunders, which was buying a Jetski on credit. Terrible, terrible purchase, but I’ve since moved on. I bought that stupid thing two months after graduating college and starting my job. At the same time, I was funding my business and living on credit. Why? I only cared about the minimum payment. I never thought about how long it would take to pay it off. Too bad it was inching up to 60+ years! Yes, I would have been over 80 by the time I paid it all off and that’s only if I didn’t keep adding debt. I was in a bad place, but the only person I could blame was myself. I take full responsibility for it.

We Can Only Change What We Control

As I noted, shutting down my business was my turning point. It allowed me to put a temporary pause on my life and look at things in a very real light. What was I doing? Where was I going? How was I going to get there? There were so many questions, but I had little to know answers. It was time to get control of my life and my money, but I needed help. Never be afraid to ask for help. For me, I turned to the personal finance bloggers online and they gave me the information I needed. They showed me what it’s like to be real with yourself and your money. Remember, no one is perfect with money. If they say they are, go somewhere else for information. Failure and mistakes are what teach us the most valuable of lessons. I would never be where I am today without some bumps in the road. It’s what you do when hitting those bumps that defines you.

One of my biggest mistakes in my journey was trying to focus on things which I had no control over, especially my past. When trying to figure out where I went wrong, I would get upset about what I did in the past. Well, that time has come and gone. I had no control over that anymore. Since I don’t have control over a time machine, I can only focus on today, tomorrow, and the next days. External factors affect our money in different ways, but we have to only focus on what we have control over.

If you need to make more money, but can’t get a raise, then do something about it. You can control what job you have and what you do on the side to make money. I hear it time and time again about how people want to earn more, but they are expecting to get it through the traditional means. That’s all fine and dandy, but if you want to make a financial change in your life, then you’re doing to have to do it. No one else can do it for you. It’s you and only you! You control your future, your choices, and your money. It’s time to take control of it and do something positive.  Want to make more money, then get out there and hustle your a** off.

From There to Here

I wanted to share a little bit about where I’ve been and where I am now. It’s been six years since I decided to make a change and get out of credit card debt. It’s been three years since I paid off my credit cards. Seven years ago, I had no idea what I was doing wrong. I was barely making ends meet, but never knew it. I had no idea how bad my financial situation was. Luckily I found Mint.com (now I use Personal Capital) to give me a picture of my mess. It wasn’t pretty, but it was a start! I could make a change now since I knew where I was financially.

Last year, I shared that our net worth was -$75,000 back when I started paying off the debt. It was a sea of red and I hated it. I hated it so much. I clawed my way back to zero. You will never know how good it feels to see zero until you’ve been deep in debt. As someone who has a positive net worth now, I would hate to see zero, but it was one of the best days back then.  When I paid off the last credit card in 2012, it was time to get going and push for creating wealth.

Two months into my new wealth journey, I made my first step toward investing. I opened a Roth IRA with Betterment. I still have it to this day and love their service. It’s not the only investment account I have though. Before my debt payoff, I contributed very little to my 401(k). After paying off my credit cards, I have increased my contributions to get the full company match. Any left over money I invest in Betterment and Motif Investing. I also have a SEP IRA which I just setup this year with Vanguard. I will be contributing my money there as well.

Investing in so many things would have never been on my mind if it wasn’t for the personal finance bloggers showing me the ropes and giving me knowledge. It’s amazing how much you can learn when you take some time and make connections. I can laugh now, but I actually thought I was doing well when I paid off my credit cards and was only contributing 1% to my 401(k). Well, I say laugh, but more like shake my head in shame!

Today, I’m glad to report that we’ve increased our net worth to over $165,000. This has been since we hit zero in July 2012. So in a little less than three years, we have done much better with our money. We are growing it (slowly) and making better financial decisions.  I no longer try to rely on things I can’t control. I focus on the ones I can and do the best I can to make those things better. I save more money now, I invest more, and I make more. These are the aspects of personal finance where you want to succeed. Remember, basic money management boils down to just one thing: spend less than you earn. Simple concept, but with so many things around us, it gets harder and harder to follow. I get it. I was there. Now, I’m here and I don’t plan on going back. For those who are in debt, I hope you join me on the other side soon. I can never explain how good it feels not seeing that red. That color is not good on me!

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  1. “…focus on things which I had no control over…” Thanks for pointing this out Grayson…it’s a really big deal! We can’t control what other people are doing…we can’t control what the stock market is doing…we can’t control/change what has happened in our past. We can only put our head down in the present and evaluate what it is we can do to change. There is no value in worrying about all the external stuff.

  2. Grayson, I think I really need to be more financially real because I am not yet fully embracing my situation, which I think hinders me from knowing what I really need to do to reach my financial goals. Nice post, Gray!

  3. My real moment came when I opened up my foreclosure notice on my home. I paid off almost 80K in under three years and never looked back. Every time I write an article I write with this in mind – how best to communicate how real you’ll need to get if you’re serious about getting out of debt. We can only change what we can control but we can control more than we think. Thanks for the great insights.

  4. I love your turnaround story Grayson!! And it’s so true, we can only change what we can control, but what most of us don’t realize is that there’s actually a lot within our control and if we just focus on that, then we will see results.

  5. I think a huge mistake people make is focusing on where they want to go without reflecting on how they got where they currently are. You have to understand what your “money blueprint” is in order to change it. Pausing, reflecting, and understanding your past is vital to changing your future. I would have never gone from $206k in stun dent loan debt to $135k in a few short years. While this is my story, I cannot stress enough how important it is to learn what works best for you so that you can succeed. Great story, Grayson!

  6. You have one of my favorite blogger origin stories. The fact that you started a successful business, but didn’t see the financial fruits of your labor, shut it all down and then started from scratch. That’s a book my friend.

  7. That’s pretty impressive turnaround, indeed. From reading this series of articles from the carnival, I realize how different everybody’s situation and reason to get financially real has been. But I’m so glad that we all have gotten real and we can show others that they can do it too.

  8. Thank you so much for sharing your story as part of the Carnival, Grayson. You are such an inspiration and proof that getting financially real can turn a life around. “I was in a bad place, but the only person I could blame was myself. I take full responsibility for it.” I particularly love how you own your mistakes because a lot of people are resistant to doing so. They want to blame everyone else but until they accept responsibility, they can’t truly get ahead and are far more likely to repeat the cycle. You certainly don’t need to beat yourself up over past money mistakes (because as you said – we all make them) but accept, learn and move on – just like you did. And now you and your wife are building an amazing life together for your family. Thank again for your support; I truly appreciate it!

  9. I love the idea of focusing on what you can control. So many people focus on what they can’t have or can’t do and totally forget the things they can do. I guess it’s easier to complain than take action.

  10. Great job on increasing your net worth! It’s funny that you bought a jet ski on credit – that probably seemed like a GREAT idea at the time. I made a few awful purchases back in the day. I’m very glad I know better now!

  11. That’s a pretty huge change just looking at the numbers! Nice work! Like a lot of others have said, I think there is a lot we can control, but for the things we can’t you’re spot on: we’ve got to focus our attention and not get all negative about the things we can’t. Because more often than not, life happens.