How I went from owing $29,000 and making under $36,000 to debt-free with over $100,000 saved

Invested Wallet founder Todd Kunsman was making $36,000 a year and paying off $29,000 in loans before he shifted his mindset about money.

Todd Kunsman
Todd Kunsman is the founder of Invested Wallet.
Courtesy Todd Kunsman

In 2014, I was four years out of college, and I was feeling stuck.

I didn't have any savings. I had made some bad financial decisions in the past, like moving to an apartment I could barely afford and buying a new car that cost close to my salary at the time. I had a weak 401(k) that I barely understood and a job in the publishing industry that I wasn't passionate about that paid me less than $36,000 a year. I was also working to pay off $29,000 worth of debt.

I knew I needed to make changes. I wanted to set some goals: Learn how to invest, get rid of my debt (student loans and a car loan), and start to build a solid financial foundation for myself. I also understood that improving my income and transforming my financial literacy would be up to me. I had to be accountable. 

Today, I have saved and invested six figures, paid off 100% of my debt, and started saving more than 75% of my annual income. I also manage all my own investments. Here is how I did it and what I learned along the way. 

I shifted my mindset about money

For a long time, I looked at money as a tool I worked for in order to provide the living essentials. I also thought that money and investing were incredibly complicated concepts. That mindset was holding me back. Over the last few years, I've learned that I need to make my money work for me. 

In early 2013, I knew my finances were not in the best shape. But it took me a full year before I got serious about it because the prospect of getting a plan in place was overwhelming. 

During the summer of 2014, I vented to a friend about my situation. He told me creating a financial plan was easier than I realized and that I would regret putting these changes off any longer. It was that simple conversation, without judgment, that gave me that extra confidence to get started, even if I was nervous about the unknown. 

It made me realize that it was this voice in my head that was making me think I couldn't do it. More of a fear of "What if I fail?" But I realized that if I did fail, it was better than never trying and wondering what could have been.

Once I understood those things, it was easier to start taking action. 

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I prioritized my spending 

Budgeting doesn't feel like a hardship when you prioritize spending on things that matter most to you and cutting aggressively elsewhere. By understanding what you can't live without and what you can cut back on, you start to learn how to prioritize your money better. 

Understanding what I wanted to use money for helped guide my perspective. It changed the way I used money and forced me to look at what my priorities should be when it came to consuming. My initial budget was simple and broken down in a Google Sheet. It listed out all my current expenses and where I was spending money. 

Budgeting doesn't feel like a hardship when you prioritize spending on things that matter most to you.
Todd Kunsman
Founder of Invested Wallet

I focused on three areas when it came to spending: my cost of living, groceries, and extraneous spending. Seeing it all visually written down, I was able to catch where my expense problems were, like paying for a gym membership I didn't use.

Seeing that my cost of living was too high for my current income, I changed my living situation. A friend and I moved into a new place where we split the costs, which automatically cut my expenses in half. 

I didn't deprive myself from spending money on things I enjoy, like occasionally going out to dinner, but found moderation and cut expenses on things I could live without and areas with the highest costs. I still use that same budget sheet today but check in less frequently, because I am more secure about what is coming in and where my money is going. 

I developed a financial curriculum 

Once I had gotten my budget plan in place, I decided to dedicate an hour or two each week to learning about personal finance.

Books like "I Will Teach You to Be Rich" by Ramit Sethi, "The Simple Path to Wealth" by JL Collins, "The Millionaire Next Door: The Surprising Secrets of America's Wealthy" by Thomas J. Stanley, "Your Money or Your Life" by Joseph R. Dominguez, Monique Tilford, and Vicki Robin, and "Money Master the Game: 7 Simple Steps to Financial Freedom" by Tony Robbins were all a big part of my financial education. I would highlight key sections and take notes on my phone to remember points that stood out to me.

Even if you don't have an hour to spare, five minutes spent on a blog post about the difference between a 401(k) and an IRA, or 20 minutes spent listening to a money podcast while you cook dinner can help you feel more confident. 

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I wrote down my financial goals

In 2014, I had a lot of goals that I wanted to accomplish. This included paying down my debt faster, increasing my income, boosting my savings rate, learning how to invest on my own, and generally having more control over my money. In order to reach these goals, I needed to plan, analyze the state of my finances, and give myself time to accomplish them.

In order to pay down my debt faster, I looked at the loan amounts, interest rates, and current monthly payments. From there, I took care of the smallest loans first. Since all my interest rates were basically the same, I could knock some debt out. Seeing that incremental progress did a lot for my confidence. 

Over the next few years, some wins would be quick while others were longer-term objectives that were more challenging. But having this mix of goals and writing them down, especially as they changed over time, kept me focused and motivated.

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I embraced my setbacks 

Inevitably these things take time. Your first year might not go as planned. Setbacks happen: an unexpected emergency, maybe a job loss, or other life events that cause you to lose focus or the ability to work on your finances further. 

The biggest initial setback I had was being laid off a few days before Christmas in 2014. While I was fortunately doing some freelance work on the side, I was only three months into my financial journey. I was naturally nervous about money, paying debt, and reaching my goals. But I was also hopeful. The job loss motivated me to further tighten up my budget and work on what I truly wanted out of my career.

Instead of getting bogged down, I used that as fuel to work even more on my financial goals. 

While that was my personal situation, there is no doubt that this process might be easier or more challenging for you given various circumstances. But no matter what, someone will always be better or worse off than you, too. You work with the cards you were dealt and formulate a plan accordingly. 

By using these five strategies, I improved my money knowledge and was able to completely overhaul my financial health. I'm not a millionaire and I don't have full financial freedom yet, but I don't wake up every day with financial stress the way I used to. And that is one of the best feelings in the world. 

Todd Kunsman is the founder of Invested Wallet and has been featured in publications like Time, Business Insider, and HuffPost. He's passionate about financial freedom, investing, side hustles, and helping others realize they too can transform their finances. You can find him on Twitter at @InvestedWallet.

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