In August of 2019, I decided to start documenting my personal finance journey. It was something born out of the time I’ve been thinking about what life would be after college (aka the real world).
I started looking at my finances because I’ve understood that to be financially wealthy, I needed to start with the money that I had. So, I doubled down on learning about personal finance. I tracked my spending, did my best to earn as much money as I can, and invest any extra money I get into something that generates me more income… passively.
I’ve had two main focus on my personal finance journey: paying off my student loans and any other debts, and build my investment portfolio. On the other hand, I’ve been building my savings as well.
Here’s a video version for your convenience.
Student Loans
When I got serious paying off my student loans, I started with a huge amount to deal with. Right after college, I was close to $28,000 in debt. With an unreliable income from my small Social Media agency, I felt frustrated and anxious as to whether I could actually pay off my loans.
But the prospect of getting out of debt and enjoying financial freedom just as others had before me has pushed me to shake off that fear. I put all my focus on cutting out expenses like my Netflix, Crunchyroll subscriptions, electronics, video game purchases and fast food.
With my expenses taken care of, I started watching videos on YouTube about paying off debt. I came across Dave Ramsey and learned about two different ways to pay off debt: the Debt Snowball and the Debt Avalanche Method. I chose the Debt Snowball method because it made sense to me at that time. I needed the motivation to stay consistent in paying off my loans.
For my student loans, I had 4 private and 4 federal loans. 3 of the private loans are with Sallie Mae. The remaining with College Avenue. All federal loans are serviced by EdFinancial Services.
The 1st Student Loan – Sallie Mae #6207
I put all those saved money to paying off my first student loan with Sallie Mae. At that time, the amount left on that loan was around $1,700. Although I wasn’t consistent in it, I made extra payments to it ranging from $250 to $350 on top of the $50 monthly minimum I paid.
And on January 2020, I paid it off early by making an extra payment of $300+. This was the very first time I’ve ever paid off a debt and it made me very happy. It took me 5 months of laser-focused paying and that small win got me motivated to keep going.
The 2nd Student Loan – Sallie Mae #4245
With the first loan done, I shifted the extra payments I made to the next one on my list, another Sallie Mae loan. Before shifting my focus here, the amount was at $3,300+ in February 2020. That’s around 2.5 times bigger than the first loan when I started.
I wanted to make $400 in payments to this loan. So, on top of the $60+ monthly minimum payments, I added the $300 from my first loan and added some extra. I really wanted to see my principal balance go down.
What really got me fired up during this time was during March. After I made my first $300+ extra payment in February, I saw the monthly minimum go down to $54!
By now, the pandemic has started hitting globally and has started beating down the economy. Starting from here, my business had seen clients downgrade their contracts with me, thus decreasing my monthly income.
But while that was the case, I kept going at it until in May 2020 where I saw the monthly minimum go down again to $50. That just made my extra payments more impactful because it chipped away a huge chunk of my principal balance.
It was during this time as well where I decided to revise my strategy as well. I switched to making weekly repayments. Student loan interest is calculated on a daily basis, so by doing a weekly repayment strategy, I would save more on interest. And it truly did.
Every week I saw my principal balance dwindle down. By June, it went down to $1,600. By August, to $700. And finally on September 6th, I made a final payment of $156.20 to seal the deal. It took me 8 months of laser-focused payments to get rid of 1 more private student loan.
Now, I’m left with 6 student loans.
The 3rd Student Loan – Sallie Mae #6489
Before completing my 2nd Sallie Mae loan, I’ve decided to switch my strategy again. Instead of following a Debt Snowball method, it was time for me to do an Avalanche method. So instead of tackling my College Avenue loan, which was around $3,300, I’ll be attacking my 3rd Sallie Mae loan, #6489, costing around $5,700 at the time of this writing.
College Avenue & EdFinancial Services
I didn’t really focus much on these two loans yet. I’ve been making minimum payments to College Avenue. And as for my federal loans, lucky that all my minimum payments are going directly to the principal balance. All thanks to the CARES Act, which paused all accrual of interests on all federal loans.
I made paying off my student loans a priority. I’ve racked up $29,238 a total of student loans when I was at school. At the start of my journey, my student loans totaled around $27,400. As September 17th 2020, that amount has declined to $20,830. I’ve paid $6,570 towards my student loans.
Investment Portfolio
To be honest, I haven’t given enough time to keep track of my portfolio’s growth. The only thing I really tracked is how much dividends I have earned throughout my journey, and I didn’t measure the growth of my portfolio. But nonetheless, my investment portfolio consists of dividend payers. I am an dividend investor and that has been my focus with this portfolio.
I uses to use 4 different platforms for my stock portfolio. I’ve been using TDAmeritrade for as long as I can remember. I’ve used WeBull since September 2019. And I’ve let go of Stash and Acorns.
Anyway, when I started documenting, my entire portfolio was around $5,200. Since the stock market always moves, I am not certain anymore of the exact amount when I started. But let’s just use $5,200 as the benchmark.
From August 2019 to August 2020, I made $382.57 in dividend payouts. At the end of August 2020, my portfolio was at $5,434. That’s basically a 4.5% portfolio growth. This are not the exact numbers though, just an estimate of how my portfolio grew.
My portfolio positions haven’t changed much throughout the year. These are my usual positions: $PCI, $APLE, $STAG, $O, $GNL and $GOOD. I’ve sold $CLM, $SCHD, $VPU, $VOO by December 2019. And since then, I added $T, $AGNC, $NRZ, $LAND and $SCHH.
I’ve been really looking into different dividend stocks that pay me in a consistent basis. Most of my stocks are paying out monthly while a little of them pay quarterly. When I started, all I really wanted was to get as much dividends as I can from my stocks. Yield mattered to me so much back then. But now I’ve learned that having a stable and consistent dividend stock is very important. So there’s that.
So I’ve started looking at quarterly payers now and that’s why I kept $GNL in my portfolio and added $T and $SCHH in my portfolio. The other monthly payers are still there because, well, it’s a stock that pays monthly.
My next plans for my portfolio is to keep adding more quarterly dividend payers. That way I can hedge any risks I get from my other riskier dividend stocks, and also increase my quarterly earnings for the year.
Savings
I didn’t think too much about my savings when I started. It was something that only came up when I saw Dave Ramsey talk about it in his Baby Steps. He says to build your savings/emergency fund first before doing all the other personal finance stuff.
I’m a rebel. I didn’t do that. Hahaha!
I went on with my other finance goals first, and I did that for a reason. My expenses aren’t that big. I live with my parents, so the biggest expense, housing, is free for me. Food is taken care of as well. So my only expenses are those that I spend on myself.
So building up my savings wasn’t a priority. It was only back in May when I truly started saving. I made automatic deposits of $50 to my high-yield savings account in Wealthfront, and only recently, I bumped it up to $100. As of this writing, I have $1,100 in emergency savings.
Experts say to save up 6 months of expenses as your emergency fund. My expenses mostly just involve my student loans and some agency business expense that total roughly $750. That means my goal for savings should be $4,500. But I’ve decided to do $6,000 instead and I’m 1/6 of the way already.
Lessons Throughout the Year
- Keep track of your expenses all the time. Do a monthly tracker. This will keep you disciplined throughout your journey.
- Focus on one financial goal at a time. The more money and time you spend on one goal drastically impacts the next financial goal you target. The faster you pay debt, the faster you can save or invest.
- Read articles about personal finance and investing. It’s very important to constantly learn about this niche. Times keep changing and your behavior will. The more you know about options, the better off you will be.
- Time is of the essence, so make sure to start early. Money is correlated to time. The longer you have no assets that produce more assets, the less you make overtime. And the inverse is true as well. So start now!