Financial Independence – My Current Status

I shouldn’t lecture you about personal finance without practicing what I preach. In the interest of honesty and transparency, here’s a little bit of information about my own financial situation.

Financial Independence? What’s that?

For those of you unfamiliar with the financial independence movement, it is a radical new way of thinking about early retirement that involves living below your means, saving the extra, and exiting the rat race at a young age. The basic, driving principle is: if you can save 25x your annual expenditures, you can live off the investment returns from that money indefinitely and never have to work another day in your life. When I started my job, I began reading blogs about financial independence and became fascinated with the concept. Looking over my accounts, I realized that financial independence could easily be a reality for me! As a natural saver, I have always put away anything I don’t spend into my savings account, and get a warm fuzzy feeling when I see the numbers in it rising. Having a more concrete goal in mind for all those savings would only motivate me further!

While some followers of this movement tend toward extreme frugality in order to retire at the age of 30, I found that I didn’t really buy in to that lifestyle completely. While I definitely believe in living below your means, I’m fortunate enough that my means are a lot higher than rice and beans for every meal, and I want to be able to enjoy some creature comforts in life. I also feel really passionate about my career, like many others who work in technology. My goals are more moderate–I’d like to commit to a solid couple of decades of rewarding work, and retire around age 40.

My Spending

Part of having healthy finances is keeping an eye on your expenditures. This is especially important for someone interested in early retirement, like me, because increased spending extends the time I will have to keep working! I consider myself a pretty reasonable spender, though I do have my vices. The chart below illustrates some data I’ve collected on my spending and saving habits:

Where every dollar from my paycheck goes
Where every dollar from my paycheck goes

This shows where every dollar I take in as monthly income goes. You can see from the chart that I invest heavily in my 401k, and also put money into a Roth IRA. The “Other Savings” category includes my savings for my shorter term goals, which go into a regular savings account. I haven’t quite figured out what those are yet, but this is something like a “House Downpayment Fund.”

Taxes are what they are. Uncle Sam must have his share! My major expenses that I control more directly are food and rent. Which makes sense! I gotta eat, and gotta have a roof over my head. I have tried to keep my housing expenses low by picking a reasonably-priced apartment and sharing my living space. Lucky for me, Texas rental prices are nowhere near as sky-high as the Bay Area! I’ll be honest, I’m not nearly as frugal with my food spending as some other finance bloggers, but I’m not totally crazy with it either. I get a lot of value out of sitting down with a good friend over a hot meal, and though I often try to host parties at my apartment, sometimes it’s fun to go out!

The remaining categories are things like “Shopping,” which includes clothes, electronics, and other semi-necessary purchases, and “Miscellaneous” which could honestly be retitled as “Travel”. Utilities aren’t huge, I keep my bills as low as I can without freezing my butt off or boiling in the Texas sun. Car expenses can get annoying, but I keep them pretty low.

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My Personal Finance Journey

Everyone’s journey to responsible personal finance starts somewhere. I started mine by being born into a frugal Midwestern family. My dad was an engineer, my mom a saleswoman and later a homemaker. They taught me many of my first lessons in saving money. My younger years are filled with memories of carefully depositing my $0.25 weekly allowance into the recycled cool-whip container in my sock drawer.

So much better than those fancy piggy banks, don’t you think?

As I got a little older, I continued to “sock” away the $20 from Grandma for my birthday, or $1 my dad gave me for trimming the grass (minimum wage was quite the upgrade for me). Eventually the cool whip container evolved into a real savings account, and started saving for bigger goals. Instead of the latest Pokemon Gameboy game, things like cars and college came onto my radar. By the time I was 14, I was itching for my first job. That summer, I worked at the pool concessions stand and volunteered at my dad’s lab. The next summer, I was able to leave the wet hot dog buns behind and work at the lab for pay, which I did every summer through my freshman year of college.

Personal finance started becoming a big topic in my family during the summer before I started college. I think my parents were hit by sticker shock when we got back the financial aid letters from colleges. They sat down with me one evening and said, “Hey, this is how much we’ve saved for you, and we now realize it won’t nearly cover everything.”

The applications sure seemed daunting at the time, but graduating without debt was worth it!

So began my stint as Scholarship Essay Writer Extraordinaire. I applied to so many scholarships that I literally lost count. That whole summer, when I wasn’t working my 8-5 job at the lab, I was up writing essays and filling in applications. I managed to win a few, too! However, they didn’t cover anything, so I used $10,000 of my own savings toward my public university tuition.

Throughout my freshman and sophomore years, I worked about 15 hours a week in my college town to cover my living expenses. I also kept applying for scholarships every chance I got, spending every break searching and applying for more. I kept getting lucky throughout my college career, and by the time junior and senior year rolled around I had covered my entire tuition piecemeal in scholarships. With my parents’ help and my own hard work, I graduated with no debt and a great degree after four years.

I interviewed like crazy my senior year, trying to put myself in the best possible position after graduation. I was fortunate enough to find my current job, located in Texas, in the Fall of my senior year. Come the next summer, I was ready to move on down south and start out in the “real world.”

The other fantastic thing to come out of my college years was my wonderful boyfriend-now-husband, who thankfully shares many of my inclinations for saving money and passionately discussing the finer points of personal finance. I firmly believe that the partner you choose can make or break your financial future, so having him by my side has made all the difference.

Everything I owned packed into one little car, ready to be driven across the US!
Everything I owned packed into my little car, ready to be driven across the US!

Moving out on my own after college was a fun but overwhelming experience. You don’t realize how much stuff you have until you try to pack it all into your tiny little car. I started my job, and it was then that I realized just how complicated finances can get for a young engineer. 401-what? RSUs, ESPPs, and FSAs? …oh my.

In my quest for knowledge, I stumbled across the likes of Mr. Money Mustache and other radical personal finance bloggers who inspired me to live frugally and think carefully about where every dollar was going. Through several lively discussions with my fellow new graduate coworkers, I soon discovered that they were all just as confused as I was, which inspired me to write the blog that you are now reading.

Welcome to TechPF

Hello and welcome to TechPF – Tech Personal Finance! In this blog, I plan to share my personal finance knowledge and tricks for young people in technology, my goals for financial independence (a.k.a. “early retirement”), and tips on how to live a good life while still saving money.

Why Start a Blog?

As a young person in tech, I’m surrounded by people who obtain high salaries from the minute that they start working. When my peers and I graduated last year, many of my friends were offered six-figure salaries straight out of undergrad! While I don’t quite make six figures myself, my current job is a huge upgrade from my previous minimum-wage teaching assistant pay grade. Handling this avalanche of income is a fortunate problem to have, but a challenging one nonetheless. I have seen my friends and coworkers spend thousands on unnecessarily expensive cars, fancy kitchen appliances, and nights out at the bar. While these things can make you happy in the short-term, they often don’t contribute to long-term happiness, and living beyond your means can lead to a lot of stress.

Personal finance is hardly ever taught in schools. Even when it is, your average home economics class often doesn’t cover the topics that are relevant to someone suddenly making an upper-middle-class income. Seeing those big paychecks appearing in your account every other Friday would tempt even the most disciplined of individuals to spend more than they normally would. For this reason, wealth management is a skill that all young tech workers would benefit from having. I have spent many a slow day at the office digging into finance topics, scouring blog and IRS documentation alike in search of the best possible strategies. I hope this blog will make your information-seeking journey much faster than my own!

I also like numbers, and regularly make charts and spreadsheets to help guide my financial decisions. This blog will be a good outlet to share these tools so that they’re not just rotting away on my hard drive!

Who are you, anyway?

I am a 23-year-old computer engineer living in Texas. Originally from the Midwest, I graduated with an electrical engineering degree in 2014 and moved down south to start my career. I now work in computer hardware, doing my part to create the next generation of awesome tech. Outside of work, I love learning about personal finance, exploring the outdoors with my wonderful boyfriend, keeping up with my favorite TV shows, pursuing my master’s degree, playing volleyball, and practicing my Mandarin Chinese.

I realize that aside from the above speed-dating style, “I-like-long-walks-on-the-beach-and-excel-macros” introduction above, you probably want to know how I handle my money, too. Check out this post to learn more.

I hope you enjoy reading and learning from my experiences. Be sure to join in the comments so that I can learn from you, too!