Four years ago, I graduated from college a semester early with nearly $25,000 in debt. Although I was able enough to start my first job two months later, I had no clue what to do with my money.
I remember going through my benefits package with my mother and her telling me, “Imani, you should allocate some of your paycheck each month into your 401(k).” My first thought was, “I’m 21. Why on earth should I be thinking about retirement now?”
I felt so fortunate that my parents were able to pay a portion of my tuition, but I also needed to take out student loans. Because of that, I felt like I was falling behind my peers financially.
Now I know that wasn’t true at all, but at the time, I felt desperate to pay off my loans. I lived with my parents, was incredibly frugal, and put nearly every penny I had into my debt.
I started my money journey feeling like I was falling short. There are things I might do differently if I could go back. But I was able to start a number of positive habits like tracking my expenses regularly, following a realistic budget, reading a ton of personal finance books, and investing with early retirement in mind, that have helped me get to where I am today.
Now, at age 25, I have a net worth of nearly $200,000 and I invest 60% of my income. Here is how I got started.
I created a plan to pay off my student loan debt
Based on my salary and monthly expenses at the time, I created a plan to pay off my student loans within two years. I worked backwards from that goal to see how much I would need to contribute each month to achieve that target.
I ended up paying my loans off in 18 months by making extra payments, but I wish I had approached it a little differently.
Right before turning 23, I paid off my student loans and suddenly had to decide how best to allocate the money I had been putting towards payments.
At that time, I was anti-investing because I thought it was something only rich or super smart people could do. However, I started researching how to manage my finances online and came across many blogs, articles, and social media accounts that focused on investing and financial independence.
Through what I learned, I realized I could’ve made more money in the long run if I had invested some of the funds I used to pay off my loans into the S&P 500 earlier on. If I could go back, I would’ve balanced investing and paying off debt at the same time.
I figured out what my work was worth
Although I appreciated that I even had a job out of college, I knew my skill set was worth more than I was getting paid at the time.
I researched on websites like Glassdoor and Indeed what employers were paying in my industry and it was significantly more than what I was making. I also went through a breakup at that time, which led me to a sense of “Hey, I deserve better in life than what I’m getting, and I need to prove that to myself.”
Video by Mariam Abdallah
This empowered me to start job searching. I signed an offer with a fintech company on the one year anniversary of starting my job at my first employer, which was a 30% increase from my salary at the time.
When I went to put in my two-week notice, my employer offered to match the salary. I politely declined because it showed me that they knew they were underpaying me that whole time and didn’t care to do anything about it until I was about to leave.
I took full advantage of my employee benefits
When I joined my new company, I decided it was time to really get an understanding of my employee benefits.
Previously, I only invested in my 401(k) because my mother literally told me too. But once I did more research, I was more than eager to take advantage of what was being offered.
Video by Mariam Abdallah
I started contributing up to my employer match and never looked back. I also leveraged my employer’s ESPP (employee stock purchase program) where I’m able to purchase my company’s stock at a discounted price and they’ll match it up to a certain amount.
More recently, I began investing into my employer’s HSA program as well. I love HSAs because they are triple tax advantaged and my employer matches this as well.
I negotiated at every opportunity
After graduating from college, I was fortunate to be able to live with my parents for a year and save what would have gone to rent and other home expenses. I eventually moved out in January 2019, and then I moved back in when my lease ended during the pandemic since I was fully remote.
Seven months later, I decided to move back out to live with my current partner. When we went apartment hunting, we negotiated everything. In DC at the time, it was a renter’s market. With many people moving out of high cost of living areas, many apartment buildings and management companies started lowering their rent prices.
Video by Courtney Stith
We were able to negotiate a lower rent, a lower monthly parking fee, and lower pet rent for our dog. Many apartments had special offers at the time due to the pandemic, and we were able to compare offers across buildings and use those as leverage during negotiations.
Going into my first salary negotiation, I didn’t feel very confident, but I wanted to try. Ahead of my meeting with the recruiter, I looked up a couple of YouTube videos on the subject and tried to repeat some of those key phrases back to the recruiter.
I showed my appreciation for the initial offer but also explained that my level of experience was more in line with a higher market value. As a result, I was able to walk away with an extra $5,000 added to my initial offer.
I spend and invest with intention
Once I paid off my student loans, I ran the numbers and decided that, as long as I had three months worth of expenses saved in an emergency fund, I felt comfortable allocating the rest of that money into my Roth IRA and brokerage account.
I started investing seriously right before March 2020, which admittedly was pretty terrifying for a new investor like myself. But having read books like Ramit Sethi’s “I Will Teach You to be Rich” and Robert Kiyosaki’s “Rich Dad, Poor Dad,” I understood why long-term investing and diversification is key.
Video by Courtney Stith
I currently invest 60% of my income and spend the rest on discretionary and fixed expenses. I do this by paying myself first before spending what is left over.
In 2021, I was very grateful for my emergency fund, which was put into service to cover medical expenses for my dog and new parts for my car.
I have also been able to create a sinking fund for things like birthday gifts and travel. And when it comes to spending, my mindset has shifted from wanting to buy the trendiest new styles to prioritizing experiences and high-quality items that will last.
I started my website and Instagram MoneyWithMani in the summer of 2021 as a side hustle to further explore my passion for personal finance and help others reach financial independence. I believe that money shouldn’t be a taboo topic, and that talking openly about money will help set you, and your loved ones, up for financial success.
Hi there, I’m Imani! I’m 25 and work in fintech in the Washington DC area. I’m a huge advocate of investing to achieve financial independence while also allocating money to pursue my passion of traveling. My goal is to educate Gen Z and Millennials how to become financially savvy so that they can have financial security, retire early, and make smart money decisions.
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