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I spent most of my life knowing what I should be doing with my money. My parents were smart with their money and set a great example. I went through a Dave Ramsey course in my Bible class in high school. I mean, I majored in Finance in college for goodness sake. I had all the knowledge and resources to crush it at personal finance during my 20’s. But the reality is that I spent my entire 20’s should-ing all over myself only to get married at 28 with not much over $10,000 to my name.

When I got married, the game changed. My life was no longer just “my life”. My life died and became our life. I could no longer tell myself, “Retirement? Nah, that’s a problem for tomorrow.” Or maybe, “Oh, by then, I’ll have started, grown, and sold many businesses and have a massive chunk of money in the bank.” Better yet, “I don’t need to worry about retirement, I have plenty of time for that!”

I spent my entire 20’s excusing away the execution of small, consistent, seemingly benign habits that would have likely resulted in me being 15-30x my net worth back in 2020. But ruminating on the past is worthless. We can’t turn back the clock. But we can use it as motivation to get serious and play the game with a chip on our shoulder.

2020

2020 was… an interesting year to say the least. But financially, 2020 was the first year I got serious about my personal finances.. Our personal finances. 2020 is the year I went pro at personal finance. It’s the year I stopped looking for the quick hit, the overnight financial success, the business exit that would make me a multi-millionaire. 2020 is the first year I accepted the mundane, weekly, small wins. It’s the first year that saving $200 a month was a win. It was the first year I stopped giving myself excuses to avoid small wins. 2020 was the first time I accepted my failures of the past and decided that enough was enough – I would take the habitual path to wealth and stop jacking around day-dreaming of the cover-of-Forbes path to wealth.

2020 didn’t necessarily have any banner successes. It didn’t have any “post-worthy” financial wins. It was the first year I started tracking all our income and expenses. It’s also the first year I realized we spent every dime we made. And it’s the first year I really realized how difficult lifestyle inflation is to avoid. And how many friends and family were completely unaware of their dire financial behavior. 2020 was the year I realized our propensity to spend everything we make even when we track all spending, income, and have an intention to save.

In 2020, we took our $10,000 of savings and bought 3 stocks in April, 2020. This was terrifying. But we were doing our best to embody the investing principle, “Be fearful when others are greedy, and greedy when others are fearful.” The market was tanking. People were panicking. It was time to go shopping. We purchased Norwegian Cruise Lines (NCLH), ONEOK (OKE), and Alaska Airlines (ALK). We invested a total of $10,736 in those 3 stocks and trusted that they would rebound. At this time, the world was surely ending. But I continue to find that when the news is saying our very lives are coming to an end, it’s a sign to get your check books out and start buying (assets, of course).

2021

2021 was the year that our decision to go pro with our personal finances started to pay off (Punny, I know). In 2021, I set up Roth IRA’s for my wife and I and maxed them out for 2020. I started contributing to my 401k enough to get the match.. for two months… (Later that year when I tried to roll over my 401k for my new job, I received a check and a tax obligation because my 401k balance wasn’t over the minimum to qualify for a direct transfer – $1,000. That was a little bit of an embarrassing phone call to have with support.)

In 2021, we doubled our household income while cutting our housing expense by 67% freeing up $1,200 in extra cash flow each month from housing alone. It was the year where good habits and seemingly failures of 2020 set us up for massive financial wins. We established the right habits in 2020, even though the results were.. meh. In 2020, we gained awareness of our financial situation. In 2021, we both got new, higher paying jobs and because we were aware and defending against lifestyle inflation, we avoided the lifestyle inflation that typically comes with a higher income and banked all that extra dough. Cash money, baby.

In 2021, we started to freaking crush it. The idea of financial independence started to become a serious day dream.

We also realized the successes of our investments from 2020. In March, we sold our stake in Alaska Airlines. Then, in July we sold both our stakes in Norwegian Cruise Lines and ONEOK. We took our initial $10,736 investment and walked away with $22,494 over about a 15 month holding period. That’s a 109.5% return. That was huge. I wish the dollar figures were bigger, but I was happy with the return. Every little win compounds.

Sucking in 2020 while establishing the right financial habits allowed us to slay 2021 when the opportunity for geographic change savings met the financial windfall of a new job. We didn’t go pro in our finances in 2021, but that was the year when we felt pro. When we felt like we were kicking butt. 2021 was the year that opportunity met our preparedness.

2021 was the first year of maxed out retirement accounts. It was in April, 2021 that we scraped together enough extra income to max out both our Roth IRA’s from 2020. And it was December 2021 that we completely maxed out my 401K and both my wife and I’s Roth IRA’s. 2021 was the first year that we finally felt successful. It was the same habits of 2020. But the results were much different now. It didn’t just feel good. It was good.

2022

It’s 2022 now. And this year will be the first full year of our new, higher household income coupled with our new, cheaper cost of living home and city. I am aware of my obsessive tendencies with our personal finances. Because I don’t use social media (no Facebook, Instagram, Twitter), I often sit on my phone with little to distract myself. So I open up my Mint app and check our net worth! And I do that 4x a day. 2022 I intend to trust that our habits will lead to success and stop obsessing over it every day.

We know there is still opportunity to reduce our annual spending… considering that we routinely spend over $1,000 a month on food for 2 people. Ugh, just saying that makes me want to go bury my head in our garden soil. We also know there is opportunity for increasing our earnings. Mrs. Frugal Feline will keep her current job this entire year, after bouncing around 3 different jobs last year. And I will have a full calendar year of my new, higher income.

2022 we will easily max out my 401k and our Roth IRA’s. We also plan to max out our HSA. We hope to pay down our mortgage a lot as it’s currently sitting at a measly $105,000 making it low enough to feel worthy of killing. We are kicking around the idea of trying to put $30,000 of extra principle on our mortgage this year. But I still struggle with the tradeoffs of not putting every extra dollar into the market.

My mindset going into 2022 is to stay the course. We could reduce our spending, but we’ve already made huge progress there. (We typically sit at anywhere between $3,500 to $4,200 a month. That’s down from $6,000+ in 2020.) We could and hopefully will increase our income a little bit too, but I’m trying to find balance here and make sure I’m not squandering young healthy years by spending all my time behind a computer screen.

This year I want the pendulum to swing back a little bit to a normal life with less obsessing over every dollar spent. Will the market tank this year? Maybe, but I don’t care. Sounds like a good buying opportunity. Will we lose one of our incomes? Maybe, but that won’t kill us because we have a few irons in the fire and have eliminated all of our payments except our measly mortgage payment of $586.50.

My mindset this year is to let go and trust the process. We established the right habits, now it’s time to go back to our lives and be present and enjoy the moments. Because we locked down our spending these past 2 years, now any kind of loosening up will feel like we are the Kardashians chartering a private flight to Morocco.

A Call to Comment

What is your mindset going into 2022? How are you feeling about your personal financial progress? What are your thoughts on eliminating payments even on small interest debts? The cash flow vs interest rate optimization tradeoff?