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 […]
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