There’s nothing like the start of a new year to inspire reflection on what you’ve done during the past 12 months—and what you’d still like to accomplish.
For many of us, having some kind of aha! moment helps us chart this new course.
Get started with a free financial assessment.
Get started with a free financial assessment.
Perhaps you step on the scale post-holidays, and the number that registers convinces you to finally swear off sugar.
Maybe your year-end credit card statement, with its breakdown of just how much you spent on restaurants, gives you a much-needed nudge to corral that eating out habit.
Or—like these four people—a big realization precipitates drastic changes.
From asking for a $20,000 raise to finally launching a second business, let these success stories motivate you to set your own resolutions for 2015—and take control of your finances once and for all.
“I Realized … I Wasn’t Making What I Was Worth”
Anne Kelly*, 34, education consultant, Washington, D.C.
Her Aha! Moment "I’m one of those lucky people who loves their job. I develop programming that enables school children to travel to foreign countries and learn about new cultures. It’s satisfying work—yet necessitates long hours and a busy travel schedule.
On a trip this year, I met a colleague who works in a similar position at a different company—and learned her salary is about $50,000 more than mine. I brushed it off at first, reminding myself how much I enjoy my gig, but I couldn’t stop harping on that pay difference.
It prompted an epiphany: It had been two years since I’d received a big raise, and if my boss wanted to keep me, he was going to have to pay me more.
"While a $10,000 raise would’ve satisfied me, I asked for $20,000. It may sound crazy, but I really wanted to get my boss’s attention."
Her Aha! Action As my annual review approached, I knew it was the moment to make my request.
I thought long and hard about the right tactic, and decided to send my boss an e-mail. He doesn’t like to be put on the spot, and I had a hunch that giving him time to think would offer the best shot at a positive response.
While a $10,000 raise would’ve satisfied me, I asked for $20,000. It may sound crazy, but I really wanted to get his attention. I also made sure to include very detailed examples of what I do for the company, and how my workload has evolved.
Some of my friends warned that I should be prepared to leave if my boss said no, but I didn’t want to do that. Instead, I made it clear to him that I loved my job but needed to be fairly compensated.
Happily, I got an e-mail response from him just a couple days later—and learned I’d receive a $15,000 raise. I was ecstatic!
My husband and I just got married last summer, and we are saving for a house. This pay bump has made me feel much more financially secure, since we’re able to save more toward that big goal.
It has further boosted my job satisfaction too. While the quality of my work never suffered, the fact that I’m paid more has made me even happier to do my best."
“I Realized … I’d Be Paying Student Loans at Age 50”
Chenell Tull, 27, e-business coordinator, Philadelphia
Her Aha! Moment "In January I started using my commute to work as an opportunity to increase my money knowledge by listening to financial podcasts.
Many of the shows featured people seeking advice on how to deal with debt balances in the hundreds of thousands. I thought the stories were interesting—even though they didn't apply to me directly.
I had my own debt at the time—about $50,000 in student loans—but I was making the minimum payments. So I didn’t worry about it much—until I listened to a podcast one night about variable vs. fixed interest rates.
I was unfamiliar with the difference, but got worried when I learned that variable rates can cause payments to increase ... a lot. As soon as I got home, I logged into my account to find out if any of my loans fell into this category—and most did.
I freaked out. I was comfortable with my $400 monthly payment, but didn’t think I could swing much more.
I used a debt calculator to estimate how many years it would take me to pay off my loans at my current rate. The answer: 25 years. I'd be 51 before I was done paying.
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I knew I had to find ways to scale back in order to get debt-free faster.
"Since March I’ve paid off $9,942—or $6,742 more than I would have if I didn't change my attitude about debt repayment."
Her Aha! Action I already tracked my money through an online app, so I had a pretty good idea of where my cash was going.
But when I reviewed my recent spending with the new goal in mind, I realized the $400 I shelled out each month on eating out and socializing was excessive.
Right away, I cut 75% from this budget, and gradually worked toward my current output of $40 a month on 'fun.' I remind myself often that sacrificing now will allow me to live the life I want in the future.
I've also found other saving opportunities, like downgrading my cable subscription and being mindful of not leaving the lights on.
To stay accountabIe I created a monthly debt report, where I document how much I've put toward my loans—which averages about $800 to $900—and how much I have left to pay. Then I describe any big wins or setbacks, like the time I diverted some cash to cover hospital bills.
Since March I’ve paid off $9,942—or $6,742 more than I would have if I didn't change my attitude about debt repayment.
And I don’t have any plans to slow down in 2015: I'd like to put another $15,000 dent in my balance, which will officially mark the halfway point to kicking my debt—and the stress that comes with it—for good."
“I Realized ... I Was Overspending on My Car”
Brian Milburn, 30, college lecturer, Rochester, N.Y.
His Aha! Moment "I’ve been an avid cyclist for the past five years, and I find it liberating in so many ways. I love feeling connected to my surroundings.
But because I live in a town where the winter temperatures are brutal, I've driven a car to work every day in the winter—and hated it. I'd consistently arrive at work each morning—and at home in the evenings—stressed and irritated after battling traffic to get there.
This was made worse by the fact that owning a car requires a constant stream of cash for upkeep—I spent about $150 a month on gas and $400 on maintenance.
Finally, a few months ago, I decided enough was enough.
I was frustrated by the thought of shelling out $700 to reregister and reinsure my car for another year, as well as replace two tires, so I started brainstorming ways I could stop driving altogether.
"I immediately began arriving at work and home happier, knowing I wasn't throwing such a big portion of my income into the money pit that is my car."
His Aha! Action Through some research, I learned that electronic bicycles cost about $1,500. Riding an e-bike in the winter is much better than a motorcycle because you can quickly clean off the salt, and utilize the bike lanes instead of negotiating traffic.
Buying the bike would cost me more than what my car required at the time, but it’d be money well spent—and translate to less stress and financial output in the future.
After I started commuting with the e-bike in November, I immediately began arriving at work and home happier, knowing I wasn't throwing such a big portion of my income into the money pit and energy vampire that is my car.
One of the best parts about the e-bike is that it's like a big smartphone. When I'm not using it, I detach the battery and charge it in my office. When I'm done with my workday, the battery's full and I zip back home.
What I thought would be the biggest downside of the switch—not being able to make significant side trips after work, such as to the grocery store—has turned out to be a big money saver. I've learned to be more prudent and conscious of my spending, making sure I can fit all my purchases into my backpack.
Of course, if I ever do need to use a car, I can borrow my partner’s Honda Fit, carpool with her, or snag a ride with friends.
In 2015, after I’ve proven to myself that I can make it a full winter without my car, my goal is to sell it. That'll net about $8,000—and a whole lot of happiness."
“I Realized … I Was Missing Out on a Big Business Opportunity”
Caitlin Pyle, 27, professional proofreader, Orlando, Fla.
Her “Aha!” Moment "Three years ago I left my full-time marketing job to launch a professional proofreading business, making $3,000 to $5,000 a month.
As my career began to take off, friends and acquaintances began asking me how I was making it work. After all, the kind of freedom I experience now—setting my own schedule, and being able to work from anywhere in the world—is something many people want.
To be nice, I shared my secrets, filling everyone in on what skills are needed to become a proofreader, and how to get a business off the ground. My husband suggested that I monetize my expertise—but I didn't take the idea too seriously.
At least, not until one of my “students” e-mailed me in October to tell me about the success she'd found as a result of my advice.
While I was happy for her, it was a light-bulb moment—and gave me the push I needed to stop giving away my tips for free.
"In addition to boosting my income by about $700 in just a month's time, this exposure has also expanded my network—garnering even more clients for myself.
Her Aha! Action Soon after that, I sat down at my computer for 12 hours straight and wrote my e-book about how to make money as a proofreader for court reporters.
The next week, I developed practice materials and launched a website. I even took out a few ads online.
Almost immediately, I received e-mails from people who were interested in what I had to offer, and I've since signed on five paying students, who are currently completing my five- to ten-day course.
I’ve received great feedback so far, and students have reported that they’re finding clients and earning extra cash right away. So I have no doubt I'll steadily add more students to the roster through more advertising and referrals.
In addition to boosting my income by about $700 in just a month's time, this exposure has also expanded my network—garnering even more clients for myself.
It's perfect timing. In 2015 my husband and I plan to fulfill our dreams of moving to Ecuador to experience a new culture. To fund this adventure, my husband is planning to quit his corporate job and start his own software business.
I know it will take a while before he starts earning a profit from his new venture—and I am already feeling the pressure of providing enough income for both of us.
But the beauty of my new business is that it has given us more wiggle room to financially prepare for our big move. And I believe my potential is endless."
*Name has been changed.