Sometimes, one decision can change everything.
On Quora, more than 100 people responded to the question, “What is the single best financial move you have ever made in your life?”
From becoming a minimalist, to never borrowing money, to buying a condo at exactly the right place and time, here are 13 of the best money decisions people ever made that changed their lives for the better.
1. He never borrowed any money.
“To forgo the society of the ‘wealthy,’ forgo a comfortable income slavery and live simply… I have never borrowed money to buy anything. I only bought what I could pay for…
By earning very little and living simply, I stayed below the poverty level and paid very little taxes… My home is small, located in an area with low economy so bills are low for energy and taxes also. Ate simply for much of my life, opting for water over unnecessary beverages, saving money and avoiding ensuing health consequences. Cooked for myself. Avoid most packaged crap, buy in bulk…
Now I’m still a consumer, I still appreciate some comforts, especially as I get older, but its dialed waaay down and I have lived many times more life, I judge, than most who had all that money to pay for all those services in life.
That’s what I feel has been my best financial move: a complete lifestyle reframe to live simply and self responsibly!” –Quora user Steve Lewis
2. She never spent a dime on education.
Growing up, many of my friends went to expensive private high schools, but I went to a specialised arts public high school called LaGuardia High School of Music & Art and Performing Arts which had less than 10% acceptance rate… Getting accepted to the prestigious LaGuardia Arts High School was my first great financial decision…
I decided I wanted a career in marketing; it was the perfect blend of art and business. While my friends partied, I would stay up all night with my SAT books and write college application essays. Soon, the acceptance letters came in the mail – $US50,000 a year tuition on average for the creative schools. Finally, I got an interesting offer: a full-ride scholarship to a public business school in New York City, along with $US7,500 to study abroad and a free MacBook Pro. Can you guess which offer I went with?
I used the $US7,500 to study in Barcelona and Paris with zero out of pocket… Some of my friends are drowning in debt because they chose to go to schools with fancy gyms and football fields. I hustled my way through college with four internships and freelance design work. I lived at home, had a four-hour daily commute, and the ‘campus life’ was non-existent. I graduated with zero debt and an honours degree, without any financial help.
I got a job offer from Google straight out of college and I am absolutely loving it.
And yes, I still get free food.” – Alessandra Rao
3. He bought a house at 22 and rented it out.
“In the past two years, I’ve brought in $US35,425 in rental income, had my house appreciate $US69,300 in value, and paid down my mortgage by $US24,810. All I’ve been doing is living for cheap and I’ve increased my net worth by $US94,110. I’ve had a few house repairs that have totaled around $US7,000, and I’ve been frustrated with my roommates, but overall I’ve been pleased with my experience. In addition, I was able to pay off my auto loan and student loan, and now am building solid wealth for the future!” –Erik Tozier
4. He started saving and investing at a young age.
“The best advice I have received, followed, and now give is this: start young. Time is your friend. I know that most people in their 20s and 30s can’t even conceive of being old and getting to a time when they can’t work or just don’t have the desire. Plus you ‘need’ a lot of ‘stuff’ when you’re young, so savings takes a backseat to new phones and TVs and a car and going out.
Trust me, save. Set up a Roth IRA and a 401(k) within 60 days of getting your first full-time job and then contribute. It may seem hard, but you will quickly get used to the money being gone. Set your 401(k) to withdraw 4% from your paycheck and set up an auto-increase every year on your birthday. It is the gift you’re giving to yourself. Continue with this until you are setting aside 10 to 12% of your gross income (six to eight years)…
The time horizon of doing something like this at 22 or 23 until you’re in your 60s is incredible.” – Kent Miller
5. He bought a jet ski.
“I convinced my brother to chip in some money… I had cash in the bank but decided to use three different credit cards to get the points…
Picking it up felt like a lie. Buying an unnecessary item on credit feels like sleeping with the wrong girl. On the surface, it’s sunshine and rainbows but underneath, emptiness. The more bills tied to something, the less you want it…
I started finding ways to pay off my accounts quicker. 21% interest was a great incentive. I turned to finance books [such as] ‘I Will Teach You To Be Rich’ by Ramit Sethi… I dumped all of my savings onto my credit cards. Earning 3% interested in a savings account was no match for 21% interest on my cards.
Still $US4,000 in debt. I diverted all of my pay to go straight to the cards… A Google Sheets document with amounts owing and when the monthly bill was due helped me know how much and when to pay off each card… The biggest card went first. Then the two smaller ones. My balances were at zero after three months of consistent repayments. Paying it off fast meant minimal interest.
Buying Bumblebee (yeah, we named it) is what kick started my journey into personal finance. I bought a jet ski to realise I don’t need a jet ski. I don’t need any kind of material possession.” – Daniel Bourke
6. He became a minimalist.
“In 2017, I found out that my business surpassed seven figures of revenue in a 12-month period. This translates to multiple six figures in profit personally; however, I still live like someone earning only $US50,000 a year.
I own one car (a stick shift sedan), live in the same apartment I’ve lived in for the past three years, wear inexpensive clothes, fly coach, and generally keep my purchases and possessions minimal. I focus almost all of my time, money, and resources on creating new experiences and improving relationships… Not things. And this has TRANSFORMED my financial life forever.
I no longer have to worry about money. I don’t stress about my income or bills because I don’t spend money on material items that don’t bring me real happiness, freedom, and peace of mind.
And you know what? I’m the happiest that I’ve ever been in my life.
When you spend your money on things that bring joy into your life like good foods, fun experiences, travel, personal growth and time with people that you love, I can guarantee that you will be happier (and richer) than you were when you were when you spent money on the latest phones, TVs, clothes, and cars.” – Andrew Ferebee
7. He moved out of New York.
“Two years ago, I was living in an apartment in New York City working as an investment banker. Between paying $US1,700 a month for my apartment and my everyday food, nightlife, and other life expenses, I was burning through $US3,000+ a month.
I was also sitting in a cubicle for 15 hours a day doing work that didn’t excite me. Something didn’t add up. So I mapped out a plan to escape the cubicle and my expensive, unfulfilling life.
I found a gig at a reputable startup that allowed me to work remotely, and shortly after, I quit my job, moved out of my apartment in New York, and bought a one-way ticket to Cartagena, Colombia, to travel with my best friend.
Not only did this decision set me on an immensely fulfilling path that accelerated my career, but it was also the best financial move I ever made.
I now travel full-time and have been doing so for two years. I’ve travelled to 25 countries across North and South America, Europe, and Asia. I’ve eaten at top 50 restaurants, gone to big events like Rio’s Carnival, and consistently lived in beachfront apartments… And in doing so, I’ve improved my financial situation.
Last year, my monthly rent was $US786. My average monthly life expenses were consistently under $US2,000 and often much lower. With lower expenses, my net worth and freedom sky rocketed.
By moving out of New York and travelling the world, I inadvertently created a life that was 30% to 40% cheaper and filled with much more adventure and fulfillment.
It’s the best financial move I’ve ever made.” – Calvin Rosser
8. She never bought a car.
“I am 53. I chose not to purchase a car way back a number of decades. I looked at the physical history of my extended family. They were large people… I decided in college I needed to keep moving. Even when I gained weight, I biked.
By not buying into the car culture, (I do enjoy riding in cars by the way) I saved money that today I could not comprehend on calculating… I found housing in the central location of the largest geographic city in the US. I am able to bike relatively easy to most of my destinations in town… Cheap rent and not paying for gas, car insurance, tags, up keep I was able to save way more money than most people who made more money than me…
I am not saying I lived frugally, because I do like to go out and eat. But, that early decision has allowed me later to save up even more money to allow me work for myself. While working for other people I made sure to max out on any matching contributions to a 401K. I did this because I did not have that expense of a car. Once money is placed into a saving or other investment I never touch it…
Is this for everyone? No. But this decision worked for me. I am healthier than most and live well below my means and I am a character in the neighbourhood who most know.” – Roxanne Henkle
9. He purchased Brooklyn real estate during the financial crisis.
“Warren Buffet has a great quote about investing: ‘Be fearful when others are greedy, and greedy when others are fearful.’
In 2010, the real estate market was in the toilet worldwide, even in NYC where I had recently moved back to. I was fortunate in having saved a lot of the money I made while I was living abroad and didn’t own any real estate at the time. I knew that the neighbourhood where I was living, Park Slope, in Brooklyn, was going to only get more valuable – it’s a beautiful neighbourhood with lots of amenities that’s easily commutable to Manhattan. So against the advice of my family, I bought a newly constructed condo in a building that had just become available.
It was a little out of my price range but I was optimistic about my future earning potential (I also didn’t realise that I was soon going to meet my future wife and move in together, which would make that a lot less of an issue). I had only scraped together enough money for 10% down, so I experienced the joy of paying mortgage insurance (pro tip: avoid this whenever possible) on top my mortgage.
Nevertheless, three years later I sold it for 45% more than I paid. Took the money I made and was easily able to put a downpayment on the house where I live now (outside the city) and still have plenty of money left over to fix it up and buy furniture.
Wouldn’t have been able to do it otherwise.” – Mike Lieberman
10. She kicked her shopaholic lifestyle by tracking her spending.
“Before four years ago, I was shopaholic and had a trouble with my unplanned shopping lifestyle. I’m making good money, but can not save money
I talk [about] this problem to my neighbours in Jakarta… he brought me a paper. He told to me to write down my expenses every day. I don’t understand why he asked me do that, but soon after all these I understand – managing money and finance is about habits…
For six years, I collected the bills and try to write it I try to write down my expense. It was hard in the beginning. Sometimes I wrote, sometimes I don’t…
I became more discipline[d] to write down my expense and income. I challenged my life to live [frugally]… financial management is about habits.
Now I understand why people said if you cannot control your habits, you cannot control your money.
And if you cannot control your money, you cannot control your life.” – Fi Aifi
11. She started staying in with friends instead of going out.
“I think a part of it came from growing up. When I was younger, I was spending money on hanging out with friends, a lot! Going out everywhere and anywhere with them. As if I was going to miss something. Then as I got older, I started to enjoy nights in with them. Having conversations that lasted for hours over good laughs, simple foods and reasonably priced bottles of wine. Not having to yell over to them in crowds or spending lots on drinks. You can have just as good of an experience with them, maybe even more when you hang out at someone’s place. It’s comfortable, friends share in costs of food/drink by bringing something.
The next thing you know you’re up until 5 a.m. and have had a great time. And then when you do go out for a special occasion, you really enjoy a night out because it is a special event.
You learn to say no more. You discover that you’re not missing out on things and that enjoying some alone time relaxing or doing things you love for yourself is rewarding too.” – Sonia Varkey
12. He calculates his total net worth every single day.
“I always keep a diary in my pocket which has updated details of my every financial asset… I calculate my net worth every single day.
It takes almost half an hour for the exact calculation but it helps me know what exactly have I gained over the last day or last month.
How it helps?
If I have gained something considerable over the previous day, things are going right. If I have lost money, I take it as a big red flag and immediately analyse what happened and how I will go forward.
I plan my all essential and luxury expenses on the basis of my net worth and the increment in it. I take all big and small financial decisions on the basis of daily findings. It motivates me to continue business and sometimes forces me to take certain harsh decisions.
I change the diary every month. It works for me very well!” –Anubhav Jain
13. They paid themselves first.
“Put 10% of every paycheck in savings. Beginning with your lawn-mowing and baby-sitting money. As a routine. Forget about EVER spending it. Not on beer, or a cool bike, or a puppy, or a nicer car or even your kids’ schools. It can be for life-and-death situations only; otherwise, HANDS OFF. Every single time you get paid, just put that 10% in savings. Eventually, you’ll have enough to invest. Find a good financial planner/coach – who is fee-based, not percentage based – and let it grow in safe places.” – TL Wagener
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