Allan Nascimento

Hey everyone, this is Allan. I am doing a little bit of building in public, and I want to share where I am financially right now.

How I got here

I began my adult life without behaving in a good way with money. I used my credit cards as an extension of my own money, and that put me in debt. I also made wrong decisions about college and ended up with a student loan, which became the biggest debt I had. And when I started making more money than usual, I began spending more instead of saving or investing.

Where the number is today

I started this year almost $10,000 in debt. I am based in Brazil and all of that debt is in Brazilian reais, so it may not sound like much in dollars, but here it is a huge amount, because the real is roughly five times weaker than the dollar.

In May I was able to renegotiate my university loan, and the balance dropped a lot. That is the honest version: my debt decreased mainly because of the renegotiation, not because I paid it. About $3,600 was written off in that deal. What I have actually been paying is close to $106 a month, for nine months. I owe $5,700 right now, and I am setting the challenge of reaching zero by December.

Why the gap keeps opening

The Brazilian minimum wage is around $315 a month, so that is the scale we are talking about. Since the beginning of the year I had problems with the amount I could pay myself. I had a team working with me, and my biggest client ended the contract in March, so there was little to no money left after paying the people who worked with me. April is when I started to recover.

I live at my parents house, so I do not have many bills, but my cost of living is still higher almost every month than the take home pay I get from my business as a freelancer. I try to keep the business money and my own money separate, and sometimes the business has to be paid first. That is how I ended up borrowing from family.

What is working now

From July to September I have been working in a different way with my business partner, and things are starting to get better. September is the best month of the year so far: my cost of living went down compared to August, and what I made went up, because I found a way to actually use my skills correctly and be paid better for that. It is still a low amount, but I came a long way.

What the mistakes actually were

Almost none of my debt came from buying things. It was a university loan I abandoned when I could not keep studying, a project that failed and became debt, family loans for the months my own work did not cover my costs, and a sales course I bought and never really studied. Instead of trying to get better at sales, I should have gotten better at my technical skills as a freelancer and found a business partner, which is what I did from the beginning of this year. I also had to stop my software engineering degree last year because I could not pay it, and part of that is still open.

The biggest one, though, is simple: I was using my credit card as an extension of my money. It is so dumb to do that, but I did not think that way before.

What I am doing about it

I still need to keep investing, so today I bought a course for almost $500, and I know that money will come back multiplied more than tenfold. It sounds like a bad situation, but I have nothing else to do besides working a lot, studying a lot, and being honest about my own situation.

I think that when you are actually honest with yourself about the situation you are in, you are able to find ways to solve it.