February 7, 2023

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We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free – so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
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When the last recession began in December of 2007, I was in a very different place in my life. Although I was married by then, I was only 27 years old and child-free. This meant I had a lot more freedom and considerably less responsibility. But I was definitely not as financially savvy as I am today.
While I didn’t make as much financial progress as I wish I had in my late 20s, the two years that made up the last recession weren’t a total loss, either. I certainly learned a ton, including lessons that still benefit me today.

Like many people in their late 20’s, my husband Greg and I spent more money than we should have on things we didn’t really need. We traded in our cars for newer ones every few years, and we went out to dinner all the time. We also overspent on home remodeling projects that didn’t necessarily pay off. And we didn’t save nearly enough of our incomes.
At one point, we owed more than $50,000, between credit card debt and car loans. Even with good jobs and steady incomes, we managed to dig a hole that took years to get out of.
By the time 2008 rolled around, I was pregnant with our first child and we were ready to make a change with our finances. Something about having a daughter on the way made us take our lives more seriously, and we knew we had to change in order to have the life we really wanted.
While it took some time to figure out how to turn our situation around, we ultimately started using a method known as zero-sum budgeting, and reduced our regular expenses dramatically. For example, we stopped dining out and cut our food and discretionary spending in half overnight.
From there, we put all our “extra” money toward paying off our debts. Progress was slow at first, but we eventually paid off all our credit cards and car loans. After paying off $50,000 in debt, we vowed to remain debt-free — and have been ever since.

While we racked up credit card debt and auto loan debt in our late 20s, we did do a few things right. For example, we put $10,000 down to purchase our first rental property in late 2007, and turned our first home into a second rental in early 2008.
Unfortunately, the housing crisis that began in 2008 led to an instant drop in the value of both of our rentals. This was really stressful for us at the time, especially since we bought these properties with the goal of building long-term wealth.
While there is no clear sign that record-high real estate prices will sink if the U.S. enters a recession, buying high can hurt — especially if you experience a layoff or tighter budget due to inflation.
Fortunately, the rental prices we could charge for our properties did not drop, only the value of the real estate. With that in mind, we simply put the homes up for rent, and proceeded as landlords.
We still own these properties, although we’re planning to sell both this year. Even though we experienced a drop in net worth when real estate prices plummeted, both houses are worth more than twice what we originally paid for them. We also never experienced a vacancy of more than one month during the entire time we were landlords.

While we bought investment real estate earlier in our lives than most people, we dropped the ball when it came to retirement in our mid to late 20s. We both had a 401(k) plan through our jobs, but we contributed a small amount of our pay, compared to how much we save and invest today.
While I wish I had understood the power of compound interest in my 20s, we more than made up for our lack of retirement savings in our 30s and early 40s. Saving and investing became a lot easier to handle once we were debt-free, and we learned a ton about investing along the way.
We’re self-employed today, and we max out our solo 401(k) contributions each year, while investing all other funds in a traditional brokerage account. We’re 42 and 43 now, and most people would say we’re financially independent. Since we have kids at home, however, we are putting off full retirement for seven more years until our youngest reaches college age.
One lesson I learned since the last recession is that life can change a lot more than you would predict over the span of a decade or more. I also learned it’s okay to make mistakes, and that you can find your way back on track if you figure out what you need to do, make a plan and stick with it.
In 2007 and 2008, we were both working for someone else and not really getting ahead. Today, we’re debt-free, self-employed and living life entirely on our own terms.
Periods of financial turmoil can make you question everything, and it’s easy to feel like you’ll never get ahead. But if you figure out where you want to be and what it will take to get there, you can start building the life you want.
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