Single Mom Whose Net Worth Reached $750K in 4 Years Shares Her Budgeting and Investing Advice
Lakisha Simmons didn't wait long to make some major changes when she went through a divorce in 2017.
One of the first things the mom of two did was put the family's five-bedroom home in Nashville, Tennessee, on the market. She then found a two-bedroom apartment for her and her sons, who are both under the age of 10.
The move saved Simmons $1,000 a month compared to the $2,400 mortgage she and her ex paid every month on the home. But she wouldn't stop there. Simmons tells PEOPLE that in four years she saw her total net worth reach $750,000 through budgeting and investments, which she credits to her determination to become financially independent.
"I know what it feels like to be financially insecure and to just not have even emotional security," says Simmons, 41. "When I got divorced, all those feelings of insecurity and being alone and not knowing if I was going to have what I needed came back to me. And I knew I had to do something because I put myself in a position where I could potentially not take care of myself and the children."
By switching to an apartment, Simmons — a Belmont University associate professor of analytics — saved on expenses like garbage and lawn care. But she says her budgeting didn't kick into high gear until she stumbled upon websites touting the concept of FIRE.
The movement, which stands for "Financial Independence Retire Early," involves adapting conscious saving and budgeting habits with the goal of working less in the future, according to Nerd Wallet. The idea has been popularized by blogs like Mr. Money Mustache and Financial Samurai.
"I was reading every day, all weekend, in nights after work, all through my lunch break," she says of learning about FIRE tips. "It felt good to know that I was taking control of my finances and was doing something that was going to help me, in the long run, be financially secure, which is something I didn't really ever have."
The FIRE philosophy inspired Simmons to cancel her cable bill, opting for streaming services Netflix and Amazon Prime instead. That saved her $100 a month. She also began shopping at discount grocery stores like Aldi and switched from a name-brand wireless carrier to one that offered a cheaper price (in her case, Mint Mobile). Unexpectedly, Simmons also learned to cut her sons' hair to save on barber costs.
She then looked at the companies providing her renter's and auto insurance and asked them if they could provide a lower rate. If they didn't, she found somewhere that did.
"I found ways to substitute what I already have or need, for a cheaper or less expensive, but still high-quality option," explains Simmons.
Instead of simply keeping her extra cash in a bank account, Simmons invested the majority of it in an S&P 500 index fund. The S&P 500 is made up of the 500 largest companies in America, and investing in an index fund means you can own a piece of all of them.
Simmons says she had about $125,000 in total investments when she started budgeting four years ago. Once her FIRE journey began, she saved enough to start maxing out her 403(b) and 457 investment accounts, which both allow up to $19,500 in yearly contributions as of 2021. Simmons also invests the maximum $6,000 allowed for her Roth IRA, with the rest of her spare income going into a general brokerage account. Overall, Simmons says she only needs about $35,000 a year for her living expenses.
"I just make somewhat [of an] above-average salary, [but] I'm by no means rich in terms of my salary," Simmons says, adding she was able to hit the $750,000 thanks to the stock market's growth since 2017. "That right there is just a testament to saving and investing in something that gives returns."
To keep track of her expenses, Simmons uses a Google Sheets document that allows her to see all of her adjustments over the course of a year. Other popular budgeting tools available on smartphones are Mint and Personal Capital, but Simmons recommends Google Sheets if possible.
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"I really think [it's been] my key to success," Simmons — who founded BRAVE Consulting and volunteers in the Nashville Period Project — says. "There are apps you can use on your phone, but I find that many of those are kind of difficult when you're really trying to budget your money for the whole month and for the year to really see where the money's going."
Simmons hopes her story can inspire others to take a look at their expenses to save (and invest) if they can.
"Your number may not be my number and that's okay. Everybody has a different number, but you can do it," she says. "There are some things that we can change in our lifestyle."
"I want people to know that you can do it. You can do it too. It doesn't matter what your income is today. It doesn't matter where you come from," adds Simmons, who says she had a difficult childhood while growing up with teenage parents in Indianapolis, Indiana. "Look at where I come from and it's not easy. I had to work so hard and I'm thankful for my family and friends who have supported me over the years. They helped me get to where I am today. I just want to let other people know that they can do it too."