I’ve been a financial blogger for 7 years now. It’s been a blast and it’s been fun not only watching the blog grow, but also watching my own personal finances grow. Whether it was finally hitting 15% retirement savings, buying a house, becoming a landlord, opening a HSA/FSA or having a kid. Throughout my own personal finance journey I’ve learned a few thing along the way, whether by researching them or by learning the hard way (ie making mistakes). I thought it’d be cool for me to reflect on a few things that I’ve learned and share them with you! 

Not all debt is bad

I grew up listening to Dave Ramsey. In the summers I worked with my Dad and we had an hour long commute each way to work. In the afternoons we’d catch the Dave Ramsey show and I learned a ton from him. One of the things he was big on is NO DEBT. Like none at all. He espoused a method of never taking on debt – and working super hard to get out of any debt you may be in. For a while I thought that was a good plan, and tried my best to follow it. However, I realized I couldn’t buy a house without taking on a loan and that most of my peers had student loan debt. Were we in the wrong or not doing it right somehow by taking debt? 

I’ve come to learn that not all debt is bad, and that debt can actually be used as a tool. It’s been incredible to watch our house increase in value, and all that equity is ours. It couldn’t have been possible without a loan from the bank to buy the house. Similar with education, a good degree from a good university that prepares you for a good job is definitely worthwhile, and if reasonable student loans are what’s needed to achieve it, then by all means borrow!

I do still think that there is ‘bad’ debt which should be avoided. I’m not a fan of personal loans or credit card debt. Car debt is a grey area for me and I’m not sure how I feel about it. Car loans are so cheap these days and it isn’t the end of the world to borrow for it. I do think there are better investments and maybe paying cash for a slightly older car is smarter but it’s up to you. 

Don’t need to pay extra on the mortgage

Starting out with my first home, I would often pay a few hundred each month for extra principal payment, to pay off the loan faster. I figured that money now will save me a ton in interest over a 30 year loan. I actually got called out by a few readers of the blog for doing so and have changed my views on the practice. 

I always say that you should put your money to work where it’ll work the hardest. So, by me paying extra principal payments, I was essentially earning a 3.6% (my mortgage rate) return. However, with some of my other investments (index funds), I could be earning a lot more with my money. Of course I need to pay the required amount each month, but paying more than that wasn’t the best use of my money. 

It felt weird making this switch but I feel good about it. It’s smart to put my money into play where it’ll earn me the most. If the economy takes a downturn and the return on my investments is lower than my interest rate, I could easily change my strategy with my investment money and pay more with the mortgage. 

Index funds are the way to go

I’m a little nerdy in the personal finance and investing world (probably why I have a blog) and really enjoy following stocks. I listen to podcasts (Jim Cramer is a fave), read articles and check the stock market daily. As such, I consider myself a fairly informed investor and for a while felt like I could pick individual stocks and make money. I would buy a few stocks here and there, probably putting about 10% of my entire investment portfolio in individual stocks (generally considered riskier BTW) as “mad money”. I put the other 90% in mutual/index funds. It was fun seeing some of my stocks go up and others go down. A few years ago, near the end of the year, I was taking stock and reviewing some of my investments and compared one of my big index funds ($SWTSX, a Schwab Total Stock Market fund with low expenses) vs the return on my individual stocks (Apple, Ford, SiriusXM Radio…) and to my dismay, actually found that my index fund, the investment I thought 0 about and that’s pretty ‘boring’ (invests in most of the stocks in the market) BEAT my individual stock return. It was at that point I decided that I wasn’t as hot of an investor as I thought I was and that I should probably be putting most, if not all my money in index funds.

Index funds are great because they buy most of the stocks on the market. Picking individual winners and losers is tough, nearly impossible over a long period of time, and an index fund, although boring beats individual stocks more often than not. It’s also low cost, which means you’re not paying too much that directly eats into your profits. 

I still buy a few individual stocks here and there (I can’t resist) but that experience was humbling to me and I’ve learned my lesson – put most of my money in index funds. $SWTSX or $VTI are solid options if you’re interested, it’s where I personally invest. 

Don’t keep every receipt

This last one is a bit silly, but I for a while meticulously kept every single receipt. I’d always ask for one, and carry it around in my wallet until I got home and then put it in the budget. I’d keep the receipt there and then line by line at the end of the month go through my credit card statement to make sure it posted correctly. As you can imagine, it was a ton of work and not scalable! After doing this for about 2 years, I think I found maybe only one mistake – a slightly higher than what I had charge at a restaurant, probably my bad handwriting on the tip line or something. It wasn’t worth calling to dispute the charge from weeks ago and I let it go. Today, I’ve got 5 different credit cards and lots more expenses with a wife and kid. So, keeping every receipt is not sustainable and not worth it!

What I do nowadays is still keep my receipts for a week or two, but then trash them. If it’s a receipt I might need for a return, I’ll keep it longer. I do monitor my credit card accounts online every few days, and keep an eye on charges to make sure they’re what they’re supposed to be. It’s much easier! 

Achieving financial independence is a journey, and a long one! I’ve learned a lot during my time out of college in the working world and will continue doing so! What about you? What have you learned financially over the years? 

Curious to learn more? Check out my guide on Personal Finance 101.