In my previous post, I began examining the prior decade and the lessons it brought on finances and happiness.  Through rose-colored glasses, I tried to summarize the things that had gone well, with the hope that sharing my story brought value to you, the readers.

Today, however, we take off those glasses and put on… well… whatever the opposite color of rose is, once again with the hope that there is value in a lookback on the mistakes of the 2010’s to avoid these missteps in the future.

No oversight seems so prevalent that those that I made surrounding my health and the many ways in which I could have taken better care of my body.  I’m blessed not to be overweight or have any significant chronic health problem, and my “numbers” always come back as pretty good at the doctor’s office.  As a result, I let a few aspects of my health slip.  Let’s look at three examples.

(1) At my first job, there was a free soda fountain, so I spent over 6 years drinking at least one soda per day.  Sure, sometimes it was diet, but there’s no question that I was probably getting 5-10% of my daily calories from it on work days, justifying it to myself as a “free” reward to myself because I was working hard and not gaining weight.  I’ve begun to reverse this in the last 3-4 years, now drinking exclusively water at work and not buying/drinking any sugary drinks at home.  Now the challenge is making sure I actually stick to it and drink enough water.

(2) I’d often spend weeks without going to the gym or getting any significant physical exercise in the early 2010’s.  With an hour-long commute and increasing work responsibilities, I convinced myself that I was “too tired” and that I’d get to fitness “soon” (which, of course, kept being postponed.  I coached a teen basketball team one summer, and when they needed another body to fill in for a scrimmage, I was completely gassed after 10 minutes and felt sore for days.  It was embarrassing to be a 24-year old coach who was outpaced by 14-year-old girls and boys!  We also had a challenge at work in 2014 during which we had to count our steps for 8 weeks and calculate the average, with a company goal of 10,000 per day.  Much to my dismay, I discovered that I was only getting about 3,500 per day on a normal day in the office (and I was still the highest among my coworkers… which doesn’t speak well about the average person!).  I even had a gym at work for two years but didn’t develop a regular schedule and lost the habit when I changed jobs.  Not good.  I’m happy to say that I’ve made real progress on this one in the last few years as well.  I got a fitness tracker, and although I was skeptical at first, it has honestly motivated me to move more.  I’ll take a brisk walk at lunch, move around every hour at work, and jog in place when I watch TV.  I’ve averaged about 8,500 steps – more than double – and these walks are now something I look forward to every afternoon.  I’ve also been joining Lady Centsei at the gym once a week and am working towards twice per week.  Getting up and getting ready together keeps my motivation high.  Small incremental changes are making a world of difference.  That little bit of accountability goes a long way. 

(3) I love salt.  My goodness, just the thought of potato chips, French fries, and crackers is enough to make my mouth water.  I’d go to the grocery store, see the snack food isle, and light up like a kid in a candy store.  My roommates and I would keep almost a dozen bags of chips in the kitchen at any given time; I’d go out with my coworkers once a week for pizza; I’d add salt to more foods than really need it.  This one, however, did show up in the numbers, as my blood pressure went from excellent to just average.  I knew I had to make a change here before it became a problem.  We now only buy snack foods when we host parties, and I’ve stopped adding salt to foods that really don’t need it.  Hopefully the 2020’s show more improvement here.

There is no question that far too often, I used good numbers at the doctor’s office as a mental excuse to not improve my health further and to not correct some easily reversible bad habits.  A passing grade, however, is not the same as a good grade, and I knew all along that I could have done so much better.  Let’s call this “Centsless Decision #1.”

I also wish I’d been more aggressive towards retirement investing at the very beginning of my career.  The stock market was in complete shambles in 2009/2010 when I first started, and I knew that it was an excellent time to invest (“buy low”).  My company had a 5% match on the 401k, so I put 5% of my paycheck away towards the 401k, patting myself on the back for being so “forward-thinking” and “maxing out” the benefit.  And there was a nugget of truth to this.  After all, almost half of people have absolutely nothing saved for retirement, and a staggering number of people who are offered a match (free money) don’t take it.  At the time, it never dawned on me that I could have saved a much much larger percentage.  If I’d saved 50% of my income and made the maximum contribution to retirement for just one year in 2009/2010 ($16,000 to my 401k and $5,000 to my IRA), that $21,000 would be worth over $60,000 today and over $450,000 when I retire. 

Chart 1 ($21,000 invested in 2009 for 10 years would have a rate of return of 11%)

Chart 2 ($60,000 invested in 2019  invested for 30 years [when I’m in my early 60’s], assuming a 7% rate of return)

That’s all without contributing anything else.  Let’s not even get into the idea of if I’d saved even 20%+ of my income towards retirement – like I do now – every year since 2009.  I thought the 5% plus match was good enough, so I should focus on paying off my student loans, buying a car, and moving out of my mom’s house.  None of those are bad things, but I’d just never heard of anyone stashing away 40% of their paycheck or more for retirement.  The concept of financial independence and saving large percentages of one’s income was foreign to me at the time, so I missed out on a very lucrative time to invest for my future.  Centsless Decision #2.

Next on the list is a story that goes to show the potential downfalls of not following my own advice.  It was late 2014, and we’d just closed on our house.  We knew we were going to need to fix the shower, since the prior owner had the shower head only five and a half feet about the tub, and I am over six feet.  The original need for the project was a very practical one.  We weren’t experienced with home improvement and contractors, and did not do enough research on the expected cost.  We did not get three quotes on the work (Part 3 #1) and instead went with the first contractor that offered to do the job start to finish.  We didn’t give enough time to think about each incremental expense, each of which were expensive (Part 3 #3).  We got a bit too wrapped up in the aesthetic of the project and lost sight of the original priority (Part 1 #3), which was just a higher showerhead.  What started as a simple tub/shower replacement turned into an entire bathroom remodel at twice the total cost.  To top it all off, the contractors went over budget and over on time (shocker…), and we didn’t make “that” phone call (Part 3 #5) to hold them accountable to their agreement.  In fairness the new bathroom does look nice, brings us utility, and did add some value to the house (some value; you should never expect a 100% return on investment from a home remodel project, however).  Nonetheless, the house project ended up costing us thousands more than we would have paid if we’d been more patient, gotten more quotes, and researched more thoroughly, especially for something this big.  Centsless Decision #3.

Another habit I wish I could have fixed was one that many working people fall victim to: buying lunch.  I fell into the trap early in my working career of buying lunch about three or four days per week rather than bringing it.  I tried not to spend much, only spending about $7-8 on days I went out, but this was about three times the cost of preparing lunch at home, which I estimate to be about $2.50.  $5 per day really adds up, even three times per week.  How much, you ask?

Chart 3 ($5 per day, three times per week, invested for a 40-year working career, assuming a 7% rate of return)

$183,737, or almost 4 years of expenses for the average American.  You could also read this number as “4 years onto the number of years until financial independence and retirement.”  Those $5 daily habits can be detrimental to your finances, whether its lunch, coffee, alcohol, or something else.  A restaurant is not the same thing as a kitchen.  Some people spend $10-15+ per day on lunch, and they do so 5 days per week.  That would be worth $500,000 in retirement!  And that’s only the financial impact, not even considering that most restaurant meals are less healthful than those from home.  I let a $5 daily habit become routine, and if it goes unchecked, it could add years onto my working life.  Centsless Decision #4.

Finally, I also look back on the 2010’s knowing that I could have done more to help my community and make the world a slightly better place.  Far too often, I found myself focused on myself and my immediate social circle, without taking as much time as I could have to help those have been less fortunate.  This isn’t to say that I’ve done nothing or have been completely selfish: I played in a community band for a few years, volunteered for professional and/or career events at a local high school, helped several family members and friends in need, and donated a percentage of my income to charities.  However, none of these things have had the kind of consistent, impactful change that I could have made with a more in depth commitment.  Though none are profound, I do have some skills (teaching, finances, music, or maybe even blogging nowadays!), and there could be some very real social benefit to sharing those with others more often than I have so far.  There was always some excuse, like being too busy or not being totally passionate about the work, but I certainly always found time and money for other things.  It’s not that regret investing this time and money in my education, experiences, or family/friends, but I do wish I’d made the effort to more significantly benefit other people or groups outside my immediate circle to help make the world a slightly better place.  Centsless Decision #5.

It’s with this last “Centless Decision” in mind in particular that I’m starting to shape some of my goals for the 2020’s and beyond.  I’m hardly full of grandeur, but perhaps *I* can actually leave the world a little better place than I found it.  I’d love to do so through some of the themes of this blog.  I hope this is a starting point.  Over the last decade (coincidentally), I’ve spent thousands of hours learning about personal finance and tens of thousands of hours at work learning about the financial system.  After all, this is something I have time for and is completely passionate about.  It’s (metaphorically) a crime that we don’t teach people about money when they’re young, and it’s (literally) a crime that so many fall victim to predatory institutions.  This effect is particularly true for lower income folks and immigrants.  It’s easy to say “they should have known better,” but quite another thing to get out there and help people.  My dream is to start a non-profit devoted to free financial literacy for teenagers and adults, with a focus on helping English Language Learners as well as lobbying for financial education reform in schools. 

While this non-profit is my long-term goal, it doesn’t mean I can’t start now, so I have.  If it’s not too much to ask, I could use your help, too.  Please consider sharing this blog with anyone you know that could benefit from its contents, and feel free to write to me if you have a question or need advice.

Wow, that digressed a bit!  Let’s get back on track and wrap things up with a summary of ways in which the last ten years could have gone even better.

The 2010’s were a great decade, so here’s to the another (mostly) Centsable one!

If you have your own Centsless Decision from the 2010’s, I’ll again hope you’ll consider sharing them in the comments!

As we begin the new decade, it seemed worthwhile (albeit cliché) to revisit highlights of the 2010’s.  I find looking back on the past can be a valuable tool so long as I do so while I’m still looking forward, not dwelling on “what if.”  While the decade has not been without its challenges, there’s no question that the good memories will far outweigh the bad.

Ten years ago, I was at what mathematicians might call an “inflection point” in my life, where the potential for change was large.  I had just graduated college and felt that I’d done everything “right” (worked hard in school, gained experience during the summers, earning money at a part-time job).  However, I was facing the reality that 2009 economy was at a generational low-point, and I was utterly unprepared for what lie ahead.  After receiving 125 job application rejections in the prior 12 months, I had just $100 in my bank account, a 5-figure negative net worth due to student loan debt, no girlfriend, and just one unglamorous job interview lined up with a temp agency.  “Being an adult, sticks!”

Nevertheless, I did have one thing– the mindset that I could change my life for the better.  That single interview I mentioned landed me a temporary job offer with a bank involved in the payments industry.  Although I knew absolutely nothing about payments, I knew that if I had a chance to prove myself as a temp, learn as much as I could, and become an asset to the department, I might be able to land something full-time later.  Earning something is way better than earning nothing, especially with the first student loan payments due by the end of the year… so wanting to make the most of my situation, I accepted the offer.  Let’s call this a (good) ‘Centsable’ Decision #1.”

I also moved back home rather than renting an apartment.  I paid my mother rent, helped with housework (though with her new beagle mix to entertain me, very little of the housework felt like chores), and paid for my own expenses.  This move certainly came with some “costs” – a 50-minute commute, and what little pride I could swallow when my coworkers asked me where I lived – but the benefits were significant.  My student load debt suddenly felt surmountable with this arrangement.  In addition to spending more time with my mom and the dog, I saved nearly 70% of my after-tax income because my rent/living costs were less than a third of what I would have paid living on my own.  Within 20 months, I managed to completely pay off my student loans and pay for my new car (a bare-bones Mazda 3 with excellent gas mileage) in cash.  I then moved into a 3-bedroom apartment with two of my closest friends who had graduated in 2010, landing the best unit in the complex and securing an extra parking spot by dressing professionally and making a good impression when we interviewed with the landlord.  The commute was also vastly improved.  All in all, by the end of 2011, I was student-debt free, living with two of my closest friends at a reasonable rent, and owned my car outright – all thanks to the decision to live modestly at home for a year or two.  There is no shame in living at home if you help around the house, find a job, save everything you can, and construct a plan to move out.  Centsable Decision #2. At the risk of straying from the point of the story… yes, here’s a picture of the dog.

Although I felt like I was doing well at the temp job, I needed to keep my options open and pursue full-time work elsewhere if I things with the bank didn’t work out.  I interviewed for a job in Florida with the insurance company where I’d interned, as well as a nearby financial services company where they’d begun hiring new staff.  The financial services company ended up making me an offer with benefits that sounded pretty darn good, so I called my boss at the bank, thanked him for being supportive of my work as a temp, and said I’d been offered another position so was planning to wind down the temp work.  My boss looked concerned, almost panicked.  “You haven’t formally accepted yet, have you?” he said, without my even prompting.  “What would it take to keep you here?”  You can imagine my astonishment.  It’s still late 2009, and in the matter of an hour, I’d gone from no full-time job offers to two.  Though I wasn’t prepared for a counter, I named a salary a bit higher than my first offer, since I was indeed very happy working for the bank and he truly had been a great boss.  “Give me 24 hours,” he said, and indeed he came back with a written offer the next day.  None of this would have happened if I had worked hard, nor if I’d dismissed the bank as a just “temp job.”  Lesson learned.  The best negotiating position you can be in is one where you have options and are willing to seek alternatives.  Centsable Decision #3.

At work, I took on as many projects as I could manage in a reasonable workweek, wanting to strike that delicate balance of excelling without subjecting myself to burnout.  One of those projects caught the eye of an executive at the bank helping to get promoted, and another project caught the eye of a former manager who would later offer me a more senior level job at a new company.  About two years after that, I was approached about another more senior role at a new company, where I’ve worked and have been very happy for the last three years.  The more unique your skills, the more robust your professional connections/network, and the more irreplaceable you are, the higher your earning potential will be.  Experts back up this idea (source, source, source, source), so I’ve been mindful of this throughout my career.  Centsable Decision #4.

Consider this in your own career.  Taking on projects that build one-of-a-kind skills within your industry and capturing the attention of the right people can be a very good way to become more valuable to your company and increase your income.  Is there an important task no one is solving?  Is there new technology that you can master to improve things in your function?  Is your industry going in a direction that you can help with?  Can you take a class outside of work to gain the knowledge you need to get to the next level?  If so, take that task head-on, do an outstanding job, and keep exceeding everyone expectations.  You’ll earn that promotion. 

Of course, this philosophy works best when the work environment is equitable and positive, which is not always the case.  If you feel inequity at work, reflect honestly to see if there’s anything you can do to improve.  In some cases, it’s an issue with the person’s attitude – i.e. they think their work life is a Dilbert comic strip and that everyone else is incompetent but them.  In other cases, however, it’s a genuine issue with the person’s superiors – in which case, that’s a telling sign that you need to find a new job asap.  Other outside factors can come into play too, like layoffs, acquisitions, or changes in the demand for your products or services altogether.  It can be extremely challenging to keep your professional skills “sharp” and transferable if the need arises, especially if you’re happy with your job.  Still, the best thing you can to maximize your income is to keep learning new things. 

As the 2010’s progressed, I was faced with the reality that although things were going reasonably well financially and professionally, none of that had transferred over to my life romantically.  Up to that point, I had been pretty close-minded.  I was opposed to dating anyone who worked remotely closely to me at work… and opposed to meeting people at bars… and opposed to online dating (for some reason)… and I was only meeting a small number of new people through friends.  After seeing lots of success stories from online dating and no life-altering failures, I decided to give it a whirl.  I created my profile with help from my brother (he had met his wonderful now-wife online), asked my female friends to go through my pictures and pick out the winners (I was completely hopeless in choosing), and spent over 50 hours crafting my profile, questions, and interests.  If I was going to do this dating thing, I wanted to, you know… try!  As luck (or fate) would have it, the second person I met up with in person seemed like the real deal.  Seriously.  She was charismatic, compassionate, brilliant, mature, open, honest, funny, interesting, and stunningly beautiful… on top of being financially prudent as much as one could tell early on!  However, every time I had the slightest thought of “there’s no way I could have met the right person this soon” or the fleeting notion “you don’t deserve this,” the more I’d see that our goals, values, and trajectory were aligned.  She was the most wonderful person I’d ever met, and this was the most important relationship I’d ever formed.  I poured everything into keeping the relationship healthy.  We’d later get married, and I’m not ashamed to say these years have been the happiest of my life.  Have there been obstacles and challenges?  Of course, but our respect, honesty, and empathy for one another has kept the relationship as strong as ever entering its eighth year.  It still amazes me that just the second person I went out with after I started dating ended up being my life partner.  When life hands you the “goose that lays the golden egg,” recognize it, be grateful for it, and devote everything to preserve it.  Centsable Decision #5 (and no doubt the most important).

Lady Centsei and I sacrificed a lot in our first few years together, focusing on earning two incomes, paying off both of our debts completely, and beginning to save for a house.  We opted for lower-cost-but-still-nice apartments over expensive-luxury-in-the-city apartments; we planned our meals to minimize food waste; we took just one vacation to see family and stayed with them the entire time to save money and enjoy more quality time; we paid a penny of credit card interest; we shopped around diligently for the best products and the best price; we went without cable TV, new phones, fancy appliances, and expensive subscription services.  The net result was that we’d paid off our debts and saved up for down payment on a house in 2014, just two years after the market had completely bottomed out in our area in late 2011, meaning that we were buying near the bottom of the market in terms of pricing.  Our bank told us that “we could afford” a home twice as expensive as the one we bought (according to the bank’s formulas – which expect you to throw virtually everything into a mortgage payment).  After visiting 50 houses to compare the cost benefit, we instead opted for a modest two bedroom condo in an up-and-coming area that had fallen significantly in price due to the seller leaving the country (interestingly, it was the second property we looked at after it had come down significantly in price – I guess second time is the charm in my life!).  Despite this savings goal, we made sure not to ignore our retirement/401K and nearly maxed them out every year.  If we’d spending all our income and taken on more debt – without saving – as some people do in their 20’s, we never would have been able to afford our home.  Centsable Decision #6.

As important as all this has been, we have not felt like we’ve wasted our 20’s being “too frugal” or going to some of the extremes that you read or hear about.  We’ve stayed in touch with our friends from high school and college, as well as developed new ones in adulthood.  What were once “my” or “her” friends are now “our” friends.  We’ve visited my family (my father lives 1,000 miles away) and her family (who primarily lives 3,000 miles away abroad) every year.  We’ve prioritized time with our family, including our parents and siblings.  We host parties every month or two at home, which is many many times more enjoyable and less expensive than crawling bars for a high.  We’ll occasionally splurge on things that offer us true longer-term value, like a nice computer or quality work clothes.  I treated Lady Centsei to a cruise for her 30^th, and she treated me to a vacation to the U.K. for my 30^th and Greece for my 32^nd (she found an amazing deal that still blows my mind).  There’s very little that I would have wanted to do in the 2010’s that I didn’t get to do (I truly can’t think of anything at the moment) and it only took being frugal in the right places. Very rarely have we ever bought an expensive “thing” that will lose value over time.  No expensive cars, no expensive clothing, no expensive jewelry, no expensive gambling, no “posh” lifestyles, no expensive habits like smoking or drinking.  Every time I think about a purchase, I try to think of it in terms of “would I rather spend $X on this now, or would I rather have 7 times that amount when I retire? (Assuming 7% return and 30 years).”  When it comes to experiences and friendship, try to prioritize the present since these two are invaluable.  When it comes to things and status, I’ll prioritize the future – as the right choice today can become many more choices in my future.  As I’ve said before, there is no greater status than financial independence.  You may notice a theme with how we spend our money.  We value experiences and friendships, not “things” and status, and our spending habits reflect this.  Centsable Decision #7.

Centsable Decisions for the 2010’s:

1) Believing that you can improve your circumstances in life is the first step towards doing it.

2) Doing expectations-exceeding work and constantly learning new things will make you a desirable employee; being desirable will give you options; having options will put you in the best negotiating position for your career.

3) There is no shame in making financial sacrifices early (like living at home) if you have a plan and work towards realizing it.

4) Developing unique marketable skills, strong professional connections, and becoming irreplaceable at work are the keys to a higher earning potential.

5) When life hands you something truly invaluable (especially a life partner), be eternally grateful and devote your entire being to preserving it.

6) Minimizing both debt and unnecessary spending are critical to helping you. accomplish your larger financial goals.

7) Value experiences and friendships, not “things” and status.

“Well, isn’t this just the perfect story little story, Centsei!  What, you didn’t make any mistakes?!  Tell me about all your failures”

All in good time, my friends.  And by that, I mean “next post!”

On a final note, I started this blog in the decade of 2010 with the goal of sharing what I’ve learned and what I’ve experienced with others.  I don’t mind sharing aspects of my life, and I hope someone somewhere finds some value from it.  Longer term, I’d like to add my experiences to the many communities of people who are on the path to financial independence and lifelong happiness.

If you have your own Centsable Decision from the 2010’s, share them in the comments below!