There are a lot of different websites out there that give you pointers on how to be more frugal and save more money – and we will definitely do that in the near future. However, a good place to start is at the beginning of our journey, and what steps we took here at Marco Polo Money to pay off $40,000 in 1 year and 8 months (20 months).
But first a bit of background. We had left Taiwan in 2010, after living a very lavish lifestyle there where we would think nothing of dropping a couple of hundred dollars (CAN$) on a night out and do twice yearly multi-week long trips to tropical resorts where I would scuba dive ( a very expensive sport)! After a family health crisis, we left Taiwan in May of 2010 with $20,000 in debt. Upon arriving back in Canada, I found an entry level city job in a couple of months. It had great potential for long term growth, but I wasn’t making much above minimum wage at the time ($12/hour to start). My wife went back to school and we were very quickly living beyond our means. This wasn’t due to going out to eat all the time or anything, it was using the credit card to buy groceries and clothing. This was made even worse by the birth of our son in 2011 – who we loved to bits, but babies are expensive! In a 3 and a half year period (where I continued to work at the entry level job, but was constantly applying for a better one), we managed to add another $20,000 in debt. Things were bad, very bad and we needed to do something!
In the world of personal finance, you’ve got to start somewhere. I think we all hit a point where we say to ourselves, “Enough is enough! I am exhausted with trying to keep my head above water with all these bills, credit cards, loans, etc. ….. How can I get out of this mess???”
It is simple really. But simple does not mean easy.
SAVINGS= INCOME- EXPENSES. That’s it. The end. Period. Pretty simple isn’t it? And once savings is achieved, that money can be used in ways that will allow it to compound and grow, which then leads to Financial Independence, Early Retirement (if that is what you want to do), travel, and Freedom!!! Then why is it SO difficult to do?