It’s Wednesday, which means it’s time to decide which financial question we’ll ask this week.
This week, my question borrows from the John Thornton Jr. essay about the formative nature of debt: what financial decision (whether it was a decision you made or a decision someone else made on your behalf, like the decision to give you an inheritance) do you think had the greatest effect on your life?
In my case, I can identify three big financial decisions that changed my life:
- Immediately after graduating from college, reading Your Money or Your Life and making the decision to track every penny I spent and earned. (Which I’ve kept up, consistently, for fifteen years.)
- Deciding to share my finances with the internet, which I initially did on Tumblr before I started writing for The Billfold. This choice kept me financially accountable and kickstarted my current career.
- Deciding to live off 50 percent of my gross freelance income so I could put the rest towards taxes, savings, and debt repayment. I just checked YNAB and I am still living off roughly 50 percent of my gross income, only I’m putting more towards savings now because I’m debt-free.
I should also note that there are two other big financial factors that shaped my life:
- Getting full-ride scholarships for both college and grad school.
- My parents telling me they were going to pay off the $14K credit card debt I had incurred during a period of underemployment, so that I could pay them back interest-free.
In the second case, I had already started the “live off 50 percent of my income” plan, which is one of the reasons why I initially resisted this offer — I was on target to pay down my debt in two years, so it wasn’t like I was financially flailing or in over my head. But in the end I accepted their gift and saved probably $2K on interest (I did the math at the time but I don’t remember what it was).
So… yeah. As with most things, my current financial situation derives from a combination of luck, work, active decision-making, and privilege.
What about you?
Discuss — or ask your own questions — in the comments.