Hi Yakezie!

I’m Monica Iannacone from Monica On Money and I am thankful to have completed the Yakezie Challenge!  It was a lot of work and a lot of fun, but I am grateful to become a Yakezie member today.

I would not be here today without the help and support of the amazing members of the Yakezie community. Monica On Money was my first personal finance blog and actually, my first website ever so I consider myself lucky to have met such amazing bloggers in the Yakezie Network ;-)

Now, a little more about myself.

My First Real Job

I was lucky enough to get a full scholarship to college with all tuition, books, and room/board paid for. Since it was a Navy ROTC scholarship, it came with a 4 year requirement to serve in the Navy. The awesome part was that after graduating from college, I was commissioned as an officer in the Navy and guaranteed a job for the next 4 years.  As a 22 year old, I was thankful to graduate with no school debt and have a job making approximately $55,000 a year.

I was also lucky enough to have parents who taught me about saving money early. When I was in middle school, my dad bought me personal finance books by Suze Orman and Dave Ramsey. I knew saving money was important and I knew not to sign up for lots of credit cards even if I was a broke college student. And even then, I talked about money often.

You would think that set me up pretty well for life, financially speaking.

And it did. But I also made some pretty stupid financial decisions for those 4 years.

Living Paycheck to Paycheck

The day after graduating from college debt free, I bought a condo in the nice, expensive part of town for $204,000. Wow! At the time, I honestly had NO concept of how much money that is! And of course, I bought this condo at the height of the housing market in 2006. I still love my condo but it was the worst financial mistake of my life.

At the time, I just knew that I finally graduated from college with a real job and felt like I had made it in life. All my friends were buying houses and I wanted to buy one too. So I did. Making only $55,000 a year, I was paying 6.9% for a mortgage and at $1650/month, I was paying 50% of my take home pay towards my condo.

To make matters worse, instead of saving the rest of the money or having a plan for retirement, I spend my money on “stuff” every month. I was living paycheck to paycheck. But I had every new iPhone, iPad, shoes, clothes…I didn’t want for anything but I barely had any savings either.

Fortunately, I did take my dad’s advice and I put 15% in a Thrift Savings Plan, the military’s equivalent of a 401k. But I didn’t have money saved in a checking or savings account. I loved knowing that I’d get a paycheck every 2 weeks, that I was guaranteed a job and a paycheck. And because of that, I spent all of the money I made each month. And if I still had money left over, I’d buy something else that I “really wanted”.

Finally Getting Debt Free!

After 4 years on active duty, I loved my job but decided that didn’t want to stay in the Navy for 20 years and retire. My dad did this and I have a lot of respect for the Navy but I wanted to use my business degree in the civilian world. So I left active duty and went into the Navy Reserves instead.  I loved the idea of working for a large corporation and looking for business opportunities. This meant getting a civilian job but the idea of not having job stability completely scared me. I also wanted to go back for my Master’s in Business Administration so I’d be more competitive.

But with no savings, how could I leave the Navy, find a job making at least the same amount of money, and start a master’s degree during a recession?

I decided to just start saving money and cutting expenses. I knew the master’s degree would be $30k so I figured that was a good goal to start with. I immediately stopped eating out, buying new technology, shopping just for fun, and going out with friends all the time. I made an actual budget for the first time and cut back on literally everything. I didn’t have cable anyway, but I cancelled my gym membership, cut back on my phone plan, started buying groceries and cooking at home for every meal. The Navy made it easier to save money because right before I left active duty, I went on a 6 month deployment where I wasn’t really able to spend money anyway.

It was amazing how quickly I started racking up the savings. I saved the $30k in 9 months and started feeling excited about being able to pay for graduate school with cash. I literally felt sick to my stomach every time I transferred $6,000 each semester to my college. But at the same time, I was thrilled to pay in cash for my entire graduate degree! And, I was inspired to stay on my budget!

I kept up the budget and saved a year’s worth of expenses in cash. I left the Navy during a recession so I was still pretty worried about job stability, even though I got a great job in the financial field immediately. So wanted to have a year’s worth of expenses available, just in case I lost my job or had an emergency.

After that, I knew I wanted to be debt free forever.

I hated worrying about money. I hated how money is the largest cause of family arguments. I didn’t want to spend my life worrying about money. I’m now debt free and working on paying off the $138,000 of my mortgage in the next 5 years. I’ll have to pay $3,500 a month towards the mortgage but then I’ll finally have financial independence! I also teach undergraduate business classes at a local college and everything I make doing that goes directly to my mortgage.

I’d love to share my journey to being completely debt free with you. Follow me at Monica On Money.

Of course, once I’m completely debt free, I’ll need a new financial goal!

Any ideas on the next financial goal? What’s your next financial goal?