After Lisa from Mad Money Monster graduated college, she entered a romantic relationship. She met him one night out with her sister — he made her laugh, and he was fun and smart.
Up until that point she was “making all the right moves.” She graduated college after sleeping in her car between working full-time and attending school. “Not only did I snag that scientific degree and that high-paying job, I also started investing (heavily) for my financial future,” she says.
But she noticed her new boyfriend was a spender. Lisa didn’t mind because they were only dating — but fast-forward five years and she found herself spending, too. They moved into a big house together and went crazy.
Lisa knew it was wrong, but it was fun. “We were eating out almost every night and throwing extravagant parties to boot,” she says. “Not only were we eating out and throwing parties, we were also bankrolling our friends. It wasn’t uncommon for us to go out with two other couples and pick up the tab for everyone.”
She thought she found success. After all, Lisa grew up poor in an 8-foot by 50-foot trailer. She says, “I didn’t want to uproot my life and start over with nothing. No big house. No in-ground pool. Nothing to validate what I had accomplished. That was the image of success I had been chasing since a child.”
But Lisa soon realized she was living a lie. By the time she broke off the eight-year relationship, Lisa was also renting a house for her parents. She told me:
The “bad” relationship ended at the end of 2007. At the time, I moved out of our big, beautiful house and into the rental property I had purchased for my parents. Two weeks later, I moved out into an empty apartment with four lawn chairs and my two cats.
She could barely afford the mortgage for her parents’ home and pay for her own electric bill. So that winter, Lisa sat alone in her cold apartment with her coat on. She lived in that apartment from 2007 to 2010.
During that time, Lisa says, “I stopped contributing to my retirement accounts and was focusing on my reinvention, not my financial future.” After a few hefty raises at work, Lisa started contributing money to her accounts again.
Lisa makes a comeback
Lisa purchased her current home in 2010. It wasn’t the smartest move financially. She says, “When I purchased my current home in 2010, I left the settlement table with the keys and $200 left in my bank account — not something I suggest other people do.”
She then started dating again. Lisa told me she went on “literally over 100 first dates.” She met her husband in 2013. They started making the same financial mistakes Lisa made earlier in her life. “We had the expensive cable package, we were going out to eat all of the time, and we nearly bought a big house we couldn’t comfortably afford.”
But she and her husband held off on the purchase. She says: “We quickly pulled our heads out of our butts and adopted a selectively frugal lifestyle. We opted to stay in the home I bought in 2010 and save like crazy towards financial independence.”
Although Lisa made some mistakes, she also did many smart things — like earning an academic scholarship and graduating from a private four-year college. Her degree gave her the opportunity to start working in a highly paid field immediately upon college graduation at age 25. And Lisa never left. On top of that, she also took advantage of her employer’s benefits and snagged a master’s degree for free.
After speaking with Lisa, she offered these three financial tips:
- Track your net worth. Whether you’re paying off debt or investing, the number is going to go up. It’s sometimes hard to realize that your net worth is increasing if you’re just paying off debt — but it is.
- Choose the right partner. It might seem like the two aren’t related but, oh, they are. Choosing the “wrong” partner could eat up years and even decades of your life. It’s important to know what you want out of your life, both emotionally and financially, before diving into a relationship.
- Resist lifestyle inflation. By tweaking just a few “normal” habits that most people take for granted, you can build significant wealth over a short period of time. Look for financial efficiencies in everything. For example, buy a cheaper/smaller house and consider roommates.
It’s clear that Lisa has finally found success.