From time to time, we’ll be interviewing folks who are “owning” their money. In other words, they have told their money where to go, instead of their money telling them.
Meet Dave. A 40-something accountant who resides in south-east Minneapolis. A numbers-lover, he runs an accounting firm which caters to non-profits. He also works as a personal life coach.
Are you currently debt-free? How long did it take for you to get there?
I have never been comfortable with debt. When I graduated from college I bought a used car for $5500 and paid off the loan in seven months. The next loan that I took was when I bought a house at age 31. I had saved enough to put down a 20% down payment to avoid mortgage insurance. I paid off the mortgage in less than four years. It really has been freeing to know that my home is completely paid for and not owned by the bank.
What steps did you take to become debt-free?
Paying off the mortgage was a priority for me. It was probably easier because houses cost much less then; my mortgage was only $60,000. I rented out rooms in the house and much of the rental income went toward the mortgage. I kept an amortization schedule to track the mortgage balance, and it was fun to see the principal portion of my payments increase and the interest portion decrease.
Where do you think your handling of money came from? Parents? Other?
I have one sister and she handles money completely differently even though we were raised the same. My parents were a good example and didn't buy things that they hadn't saved for in advance. Even as a kid, I saved money and opened a bank account. Being careful with money is probably my “bent” but I had a lot of good influences through my parents and extended family members.
As an accountant by trade, what things do you think folks could do a better job of with regards to handling money?
The first piece of advice involves delaying gratification. Put off the nice car and the new furniture and the expensive vacations until you've paid off your debts. The second is to make sure that you don't misuse credit cards. If there is a month that you can't pay off the balance, address it as soon as possible.
Any “thrifty” tips to share with our readers?
Never seek to maximize your finances through dishonest means. I've come across people who are untruthful on a tax return or falsely claim to deserve some sort of financial benefit. They never seem to get ahead. As the Old Testament proverb says, “getting treasures by a lying tongue is a fleeting vapor”. The best way to accumulate wealth is little by little through hard work and careful investment.
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