One of the main objections I hear when discussing either financial independence or long-term travel is – “well I could never afford to do that”. There are many people around the world who will never have the privilege of even thinking about these two options in life, but the people that I generally have this conversation with are definitely not them.

I’ve touched on this in another post but wanted to give you the full, warts and all, history of my relationship with money to give you an idea of how things have changed for me over the years.

But more importantly, how the average person can make the same changes I did.

 

The Early Years

I wasn’t born with a silver spoon in my mouth, far from it, and if I can get myself to a point in life where financial independence is a very real possibility – any other average person could too.

 

I grew up in the North East of England in a working-class family where food was always on the table but money management was a foreign concept.

Salaries were treated almost like an allowance, you get a certain amount to spend on necessities and whatever you want for yourself before you receive the next instalment in the following month.

Actually saving a proportion of that income and having the security that comes with savings was never even thought about.

A huge bugbear of mine is that children aren’t given a financial education in school.

You are effectively dependant on having parents who know what they are doing to have any chance yourself when starting out in life. And a lot of people, through no fault of their own, don’t have that knowledge to pass on.

 

Blyth South Beach Nothumberland

Blyth South Beach, just a few miles from where I grew up.

 

Fully Fledged Grown-Up Without a Clue

By the time I’d graduated university I’d been working part-time jobs since I was 16.

I took out full student loans to pay for my education and worked 2 jobs whilst at university to pay for my living expenses.

You’d think that having the pressure of covering all expenses aged 18 would have jolted me into being great at money management, far from it.

 

Despite working throughout my education I still graduated with £15,000 of debt.

 

This is nothing compared to what kids today face (another bugbear of mine!) but it was enough to be a scary prospect at 21.

I was terrible with money but was adamant that I was keeping my independence, no way was I going home after university.

I rented a flat with a friend and took my first job paying £10,000 per year.

Only 2 years after graduating I’d managed to amass a personal loan and a couple of credit cards. Phone calls from all of these institutions chasing late payments were a regular occurrence.

I cringe now when I think about it.

 

Maddie Deaton

Very young me, just getting started and hopeless with money.

 

The Problem

Looking back it’s clear to me that I’d fallen into the same trap that has caused countless people to get into debt.

Despite the fact that I was earning minimum wage, I still wanted to have nice clothes, go out with my friends, have the latest gadgets…

In today’s society you’re brainwashed from the minute you can think – don’t worry if you can’t pay cash for something, just put it on credit.

This year, 7 out of 10 adults in Britain have average debts of £6792 and 1 in 4 families in Britain have less than £100 in savings*.

In a couple of generations we’ve gone from saving to buy to buying on credit.

 

Maddie Deaton New York

My first trip to New York in my mid-20s. This was the furthest I’d ever travelled and a big deal to me.

 

Turning a Corner

Just before my 23rd birthday I met Paul, and no one has ever had a more positive influence on my life, before or since.

He helped me come up with a plan for paying down my loans and credit cards, saving as much as I possibly could every month.

At this point I was still only earning £14,000 per year.

His biggest piece of advice was to pay myself first. As soon as you receive your salary, stick a portion of it into savings and forget about it.

If you’re terrible at managing money, as I was then, this takes the temptation away completely.

I’ve always been proud about paying my own way – I think there’s no excuse in the 21st Century for women not to have the drive to support themselves financially.

Paul knew this from day one so his advice was all designed to help me manage my own finances more effectively while still contributing equally to our joint outgoings.

 

I had paid off all debt – aside from the student loan because the interest rate was far lower than what I was making in savings – within 2 years.

 

Since then I’ve become addicted to saving.

 

Maddie Deaton Paul Deaton Hiking

Hiking quite early on in our relationship. The most frugal and fun activity we enjoy.

 

The Shift in the Way I Think About Money

We still enjoy life, I think that’s fairly evident by all the adventures we have! But the freedom and choices that come from having savings are ironically invaluable.

 

People say that money can’t buy happiness, but it can definitely make you feel secure and that in turn makes me happy.

 

To behave with money the way I do now took a complete shift in the way I think, and this has been the key. Not how I manage money, but how I feel about it.

I now view money as a tool to help me realise my dreams rather than a quick hit on some consumer spending before the next payday.

 

Yosemite Valley Halfdome

The trip that started our love affair with travel. Yosemite Valley, mind-blowing.

 

It’s as Simple as This

I’ve had conversations with people where they can’t get their head around having money in your bank account when payday comes around – this is the mindset that needs to change.

I’ve gone from someone who constantly spent on myself – mainly a ridiculous clothes shopping habit – to someone who takes pleasure in the simpler things.

We do our best to save money on the things we genuinely need, negotiating on all utilities, watching what we spend on food etc.

 

But aside from shelter, clothing and food – you do not NEED anything else. The rest is stuff you want. Get your head around this and your mentality about money will start to change.

 

This leaves me with money to spend on what I really care about – exploring the world.

I buy clothes only when I need to, I drive an 8-year-old car, we don’t buy anything on credit.

My income has increased as I’ve progressed through my career but I’ve worked hard for every opportunity or promotion I’ve had and I’ve always negotiated every salary increase and freelance fee.

I’ll probably never earn the big bucks but I’ve gotten smarter with what I do have.

 

Campsite Two Jack Lake

Our home for a lot of the North America travels on our RTW.

 

What Not to Do

What I’ve not done is bought into lifestyle inflation. Lifestyle inflation is where every time you get a pay increase, you adjust your spending to include the increase.

Instead, if you continue to live on the same amount as before your pay rise you’ve immediately got a pot of money to save every month.

 

Once you’ve started saving it’s like a cartoon snowball rolling down a hill.

 

You pay money into an account and earn interest on it. The next year you earn interest on the initial deposit and you also earn interest on the interest. This snowball effect continues year after year.

It’s the magic of compounding and the key to building a decent savings buffer.

 

Rearview mirror California Desert

Why Am I Telling You All of This?

I’m keen to share my own journey with money because I’m about as average as it gets. I wasn’t born into extreme wealth or extreme poverty – just an average working class family.

I’ve been there and done that with most of the money mistakes you can think of and any success I’ve had has been off my own back and I’m proud of that.

 

I want people to realise that no matter what you’re earning now or how much debt you have – you can find your way out of it.

 

It may not be easy, but once you’ve got to the stage that a car breakdown, boiler packing in or even being made redundant doesn’t scare you – it’s completely worth it.

I’m far from perfect and am still constantly learning about this side of my life but I’ll be sharing anything I’ve learnt, and continue to learn, on this blog in the hope that other people can implement one or two tips that help them achieve their financial goals.

 

* Source: MoneySupermarket

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