Dreaming Big: How 4 Real People Reached Their Ultimate Money Goals

Marisa Torrieri
Posted

get inspiredIf you had a financial fairy godmother, what would you wish for?

A new home? A robust retirement account? An emergency fund that could cover you no matter what?

Well, we don’t have a magic wand, but we do have the next best thing: four real-life cases of people who’ve achieved enormous financial goals.

On Day 11 of the 12 Days of LearnVest, it’s time to get motivated. What better way than seeing how others like you did it? From the woman who repaid nearly $100,000 in student loans in four years to the couple on track to pay off their house in five, let these true stories inspire you to make your money dreams come true.

Plus, we even got some insight from a LearnVest Planning Services CFP®.

Read on to hear from the people well on their way to achieving their ultimate financial goals—as well as David Blaylock, CFP®’s take on the lessons you may be able to apply to your own situation.

And go ahead, tell us in the comments: Which big money goals will you be pursuing this year?

Achieving Money Goals“I paid off $90,000 in student loans … in 4.5 years!”

—Erica Wong, 28, New York City

Where She Started: In 2009, about three months after Wong graduated with a degree in civil engineering—and about $3,000 tucked away in savings—she started working full-time as a structural engineer with a $59,000 salary.

How She Saved: “First I had to find out exactly how much I owed,” recalls Wong, who was fortunate enough to have parents who allowed her to live with them outside New York City for below-market rent. “Then I listed loan institutions, interest rates and amounts on a spreadsheet. I started with the highest interest loan and threw all the money I could at it.” Then, as each highest-interest loan dissolved, she’d tackle the next-highest one and so on. While most of her loans were public, she also had one private, consolidated loan.

RELATED: You Did WHAT to Pay Off Your Student Loans?

Wong paid her highest-interest loans manually (she submitted her payments each month instead of automating her payments and letting the bank take care of it), and for the ones with lower rates, she would set to automatic payment on the longest repayment plan she was allowed by the loan institution—the longer loan period meant a smaller minimum payment.

During a typical month, this meant putting about $1,600 toward the highest-interest loan and $500 toward the others, which was no easy feat: Wong wound up devoting about 66% of her post-tax income to her student loans, then another 20% to her parents for rent. “It left me with about $400 of disposable income a month,” she says. “That’s about $13 a day.”

RELATED: 7 Federal Student Loan Payback Plans: What You Need to Know

The Hardest Part: “I was miserable for the first year, constantly questioning why I went to work just to pay off student loans,” she recalls. Living on $13 per day meant making changes: buying clothing only when something needed replacing, scaling back lunches and dinners out, and discovering affordable new hobbies, like hiking, through Meetup.com.

Dialing down her lifestyle wasn’t easy. “It was soul crushing—it made me feel like a failure,” Wong says. “But I also knew if I wanted a life without the bondage of student loans, I needed to pay it off. Mathematically, my best option was to pay the loans off as quickly as possible and save on interest payments. So I continued on. I just took it month by month, and I got used to it.”

“If I can pay off $90,000 in a little over four years, what’s to stop me from saving up $100,000 in the next five?”

Where She Is Today: “I paid the final 10 cents on my last student loan in November, approximately 4.5 years since I started working,” says Wong. For now, she’s shifted her savings strategy to tackle other goals. “I would love to catch up on the retirement savings I’ve been largely neglecting for the past 4.5 years,” says Wong. “If I can pay off $90,000 in a little over four years, what’s to stop me from saving up $100,000 in the next five?”

While she is still living with her parents to help with their mortgage, she may move out in the coming year. “Coming off paying most of my income into student loans, it gives me tremendous satisfaction to begin building assets,” she says. “I appreciate the experience and the money discipline I gained from dealing with this amount of debt, and expect my life will continue in a money-conscious, alternative consumer style.”

The CFP® Says: ”Setting a goal and sacrificing to achieve it is a lesson that will serve Erica well for the rest of her life,” says Blaylock. “She used a debt-repayment method called ‘Rack and Stack,’ where you attack your highest rate debt first while continuing to pay the minimums on the other debts, clearly to great success! The one note of caution I have to add is that neglecting retirement savings to tackle student loans isn’t usually the wisest move. Time is the biggest ally we have when saving for retirement, and it can be difficult to make it up later.”

RELATED: How to Save for Retirement … When You Have Student Loans

  • mostlywentzel

    Wow – a couple making $140,000 a year managed to save $12,000? Amazing! A young woman living with her parents and making $60,000 paid off her student loans? Wow! Why are we supposed to be impressed? If my husband and I were making $140,000/year, we could save that kind of money too – and we have a house and 3 kids. I don’t want to condemn people for making good decisions, but let’s be honest – it’s a lot easier to save money when you make a lot of money to begin with or you have parents to help you. (And yes, i realize the young woman living with her parents paid rent, but she said she paid less than she would have living on her own and I would bet Mom and Dad paid the utilities and food bills)

    • snevets

      I was just thinking the same thing! I’m happy for the people who shared their stories, that they were able to set and meet these goals, but I’m not sure how this relates to my life. We’ve already shaved all superfluous expenses from our spending, and I even pick up freelance work where I can in addition to my full time job — but the salaries of my husband and I allow us only a few hundred extra dollars a month for savings, aside from our (relatively) meager retirement contributions. It takes so long to build up our emergency fund that by the time we’re feeling good about the amount, a car dies, or we need a new roof and we go back to feeling unsettled. I’ll continue to read these types of articles because I do find them interesting, but at the end of the day I don’t glean much new information or takeaways that I haven’t already done/tried in my own life. I need an article that explains how to double your income, or how to win $10,000. :)

    • skt

      I give the young woman credit because she is thinking about her future at a young age. Most people don’t think about saving money when they’re young and just go out and spend a have a good time, etc. Hindsight is 20/20 but when she reaches your age, she will not make your type of comment because she already took care of the debt.

      • mostlywentzel

        I’m not sure what you mean by my “type of comment.” My point is that it’s a lot easier to do the things these people have done if you make the kind of money they do and/or have that kind of support system. Not everyone does, and those are the people who face real challenges. When I was 22, my dad lived in a one bedroom apartment (my mother passed away when i was 16). He didn’t have any room for me to move in, so i had no choice but to pay rent and all my own bills. I’ve done fine and have managed well financially, but that doesn’t change the fact that when people have money, it’s easier. Yes, they have all made good decisions, but I’m not so sure they have faced real challenges (except for the couple who saved money so one could stay home with the kids). What does the couple making $140k do when one loses their job? Judging by the fact that they saved $12,000 in a year, and that that was a big accomplishement for them, tells me they need both salaries to live. My ex-husband and I paid about $10,000 for our wedding almost 30 years ago when we were each making about $25,000. The couple who manages to save about $5000 every 2 months – that’s great, but how much are they making? I can’t save that much money in that short of time. It simply isn’t possible. My point is that it’s great to make good choices, but with the median household income in this country at $50,000 and falling, these are not stories that help the majority of people.

    • Racheal

      I’m part of the couple in the article who saved up for our wedding – the point for us was that we found ways to do it without sacrificing or making any changes to the money we were already using to pay off our individual debts and for our personal savings. Last year, my fiance paid off his car two years ahead of schedule, while I made further progress in paying off mine (and am on track to pay it off almost three years ahead of schedule within the next few months). I also finished paying off $20,000 in student loans last year. At the same time, we were also both contributing hefty amounts to our emergency savings and retirement funds. Yes, we’re fortunate to both have decent-paying jobs, but we didn’t use that as an excuse to spend a crazy amount of money on our wedding, or let saving for a wedding derail us from any of our other financial goals.

      • Constance

        Congrats on your debt repayment goals! Let me ask….are you on any of the Learn vest plans or were you to accomplish this?

        • Racheal

          Thank you! We’re not currently using any of the Learnvest plans, but we have used tips we found here and on other financial advice blogs to help us come up with savings plans that work for us.

      • erica

        Hi Racheal, congrats on your financial accomplishments!! It takes discipline and foresight to be on the path you are now. Keep up the great work, do your own thing and no worries about defending yourself to ppl telling you otherwise :)

      • mostlywentzel

        That is all very commendable! I think it’s great that you are being fiscally responsible. I think it would have made your story much more inspiring to include that information. Honestly, saying that you make nearly 3Xs the US median household income and saved $12K is not impressive. If you couldn’t save that much with that income, assuming you were NOT doing all of the other things you mentioned, I would say you are squandering your money. But you are doing a lot more than that. You are paying off a lot of debt and plannng for your future.None of that was clear in your story, so I hope you understand my reaction (and it sounds like others had a similar reaction). Keep going – you’re doing the right things.

        • Racheal

          I totally agree with you, which is why I decided to reply. Learnvest wanted to focus on the wedding savings, probably because they already had someone to interview about student loans, but I do think knowing the other financial goals we achieved while saving for our wedding puts the rest of the story into better context.

          • Amber Finkelstein

            Absolutely – I’m glad you added in that information :) Some readers just get frustrated trying to draw lines between the articles and their own lives – it can be hard to see sometimes. Thank you for putting in the perspective

  • SingleinChicago

    These stories are great but I live in Chicago. I can’t find a teaching job so I am working in an office as an administrative assistant. I make $16.00 an hour which is better than most and i am paying off some debt. Being a single woman living in Chicago on $23,688.00 net income, I laugh at the thought of trying to save those kind of figures. I have a college degree in which I was supposed to have a rewarding job. I’m looking for a better job but the economy is still tough. Congrats to those people, I hope one day I can be fortunate to have a good paying job and save up that kind of money. Until then I’m just trying to figure out how to live on the money I make.

    • mostlywentzel

      Sounds like you might have a better story. Living on $16/hr in Chicago and paying off debt is truly a challenge. And the fact that you are paying it down is very commendable.

      • SingleinChicago

        Thank you mostlywentzel. I appreciate your kind words. It is quite the challenge but I manage to be very thrifty and resourceful. I’m still looking for a better paying job but I’m thankful I at least I have one with health benefits.

        • mostlywentzel

          Have you ever looked into Mystery Shopping to earn a few bucks? I found out about MSPA here on LearnVest. It is a legitimate site where you can start to find out about real companies that need mystery shoppers. Some of the best parts are that you can get reimbursements for things like meals out (so you can have a cheap or even free social life) and unless you earn more than $599 in a year from a single company, you will not receive a 1099, so essentially it’s tax free. I have probably earned/been reimbursed a good $3000 in the last 9 months and i don’t work that hard at it. I have kids, so it can be hard to do some of the shops. If you are single, you may have a little more flexibility. Look into it!

  • AMK27

    Erica, hats off to you for prioritizing your financial goals! Being around your age, I know how hard and frustrating it is to feel like you can’t do anything fun, especially when you see your own peers living a very different reality. I have no doubt that with your discipline and tenacity, you’ll reach your goal of saving $100k in five years!

  • Jacqueline Ferrell

    I agree with your statement mostlywentzel. They are rare in that the average individual is not in their position financially. I’m single in California and contribute to savings, retirement and paying off debt. I have scaled back as much as possible, but with the cost of living here, it is pretty tough to meet these numbers, but I give them props as well. Congratulations to all of you for your inspiring stories.

  • Amber Finkelstein

    I too give them props for making choices to do such great savings. However, like most people in the comments, I wish that LearnVest featured more of people who make lower incomes.

    I’m a single person living in the Midwest, and I make $40k, but with my debt load and bills, my monthly “free money” is around that $13 a day mark – and I was excited when I got there, I felt so decadent.