NerdWallet recently talked to a handful of folks who experienced massive wealth—and debt!—growth, including myself. In the early days, I was thrilled when my salary jumped from $45,000 to $60,000. So thrilled that I went out and bought a BMW. Any time I got more money, I immediately found a way to spend it, and this dangerous cycle went on for three years. It’s very common to have your debt increase as your wealth does, which makes it feel like your wealth isn’t increasing at all.
The more you make the more you spend, which is what I was doing eight years ago when I was working a solid 9-5. However, I was living paycheck to paycheck and swimming in debt. It wasn’t until I made a budget and actually abided by it, sold my BMW for a cheap but reliable car, and prioritized paying off debts that I became free. In total, I saved hundreds of dollars per month in interest and maintenance for a foreign car, but it was moving in with roommates that really sealed the deal.
I found myself with about $2,500 in surplus each month, which I reinvested into myself. Even though I make a much better income now, I’ve changed little about my frugality.
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