I am writing this blog to document my fall into debt and my long and painful journey to get debt free.
I started off in my late teens and early 20's with a credit card. This little card was used for minor purchases and paid off every month. If I was ordering concert tickets, they went on the card. If I put gas in my car, it went on the card. If I bought anything online, it went on the card. When the bill came, the amount was paid in full. It worked great. I was spending within my means and doing great right. Wrong. I wasn't saving much of anything. Anything I did save went towards the first car I purchased. At least that was paid in full too. My checkbook was always balanced every month and my statements were reconciled to match my checkbook. Discrepancies were found and corrected. No worries.
Fast forward to my mid-twenties. I was making $40,000.00 a year. I was living in a large city and life was good. I had plenty of money to spend. I was saving money for a rainy day. Boom. It happened. I got laid off. What am I gonna do now. Well I bit the bullet and moved back in with Mom & Dad (I moved back in with them after college and worked until I got the $40k/yr job) . I took part time jobs to pay what bills I had and to build some savings. Fast forward about 7 months. I've moved out of Mom & Dad's again and went to another big city. This time I was living off my savings, was searching for a job (I suicided for this move), and was sharing an apartment with a friend from college.
After finding some part-time work, I found a full-time job at a local establishment. The job was pretty dead-end, but it was money to keep me afloat. I was still using the credit cards, but I was still paying them off each month. I was still working the part-time jobs. After about two and a half years of the dead-end job, I saw the future. I predicited the place would close within a year and I knew it was time to get out. I started watching the classifieds for good jobs and with the blessing of my supervisors, I began the hunt to better my job situation. One day, I see it. A job near my hometown, in something I'm familar with. I go for it. I get it. They relocate me back home. I'm making twice what I was making at the job I just left and paying half the expenses. WIN/WIN right? Not quite. I end up hating the job. I'm busting my rear end and hearing nothing but negative feedback. I'm also not tracking my spending. I stop following a budget. I'm starting to spend above my means, but I don't see it. Bad move. Since I hate my job, I give them the required notice and for about a month, I have no money coming in. That's right. I quit without having something to fall back on. Finally, my uncle gives me a job. He needs some help. I need a job. We both win.
I'm working my rear end and working a lot of hours. We sometimes worked around the clock, taking power naps every few hours, and napping when the power naps aren't working anymore. By now, I'm spending more on the credit cards and making just the minumum payments. I'm digging a hole and have no idea how bad things are getting. I've let things start getting out of control.
I finally get hired on in a field I absolutely love. The pay isn't great, but you don't do it for the pay. Raises are few and far between and I swear it takes an act of God to get one approved. I start dating this girl. She lives a few hours away and we drive back and forth to see each other. Yep that's right, more money on the credit card. Finally she moves in with me. More money on the credit card. We break-up. I still have a bunch of money on the credit card and I'm only paying the minimum payment.
Fast forward about 15 months. I'm in Kwik Shop to get something to eat and drink and one of my cards is declined. I use the other one, get my purchases, and head home. I log into to my online account and I see I'm in deep poop. I've maxxed the card out and the other one is getting close. I immediately fire off a payment to take maxxed card to under the maximum. Now I'm worried. I don't want to file bankruptcy. I don't know what to do. I won't ask my family for a loan. Call it pride/stubborness/whatever. I start reading everything I can find about debt relief and getting out of debt.
One day, I'm reading Reader's Digest and I find an article about free websites of various topics. One site is for debt help. The site is http://www.debtgoal.com/. The site was in test phase at the time, but I liked it. They have you list your debt and some information about your debt. Payee, Debt Type (Credit Card, Loan, Car Loan, Mortgage, etc), Interest Rate, Amount Owed, Monthly Payment, Statement Date(s), Due Dates(s), Minimum Payments, and other information. After you enter everything, you set a few other things (you can visit the site if you want to check it out) and the site helps you set up a payment plan. You still have to send the payments, but the site helps you work on getting out of debt. There are even ideas for cutting other costs and making some extra money to apply towards debt payments. You have to pay a monthly fee now, but I use this site about every day. One of the actions, was to tell trusted family and/or friends about your situation and request their emotional support and understanding of your situation. Let me tell you. That was the hardest thing I've ever had to tell my parents or my brother. At the same time, a huge weight was lifted off of my shoulders. I felt some relief and I had some backing. I also had some help. My father and I sat down and ran numbers and pay down options. I continued to do this for hours. I still do it today. That was 18 months ago.
A friend and former roommate pointed me towards Dave Ramsey, http://www.daveramsey.com/, and I use information off of his site as well. I don't use the stuff payment is required for, but I follow some general principals and combine them with stuff from Debt Goal and my other research. I am that much closer to being debt free. For over 18 months, I have spent nothing on my credit cards, dilligently tracked my debt payments and bonus payments, balanced my checkbook, and made sure I'm living within my means. I work extra jobs, take as much overtime at my full-time job as I can, sell stuff I don't use anymore or could live without, and have minimized the non-essential bills. I negotiated with my cable company for a lower rate for my cable and internet for six months. At the end of the six months, I dropped my cable service and downgraded my internet service one level. I still have fast internet, but I saved 40 a month by making the changes.
I sent my last car payment in a week or so ago. I'm applying some of the car payment to the next debt, some to savings, and the rest to an account for insurance, tags, & taxes. By saving this, I can save some money on my insurance (by paying 6 months at a time instead of monthly) and have enough for my tags and taxes each year. I also can apply the amount of my monthly insurance payment to my credit card and almost double my montly payment on the card and continually lower the minimum payment. Now the credit card is my focus and any extra money goes towards the payment. If I get a raise, the difference in my take home pay after the raise compared to before the raise, will be made towards the credit card. Any tax returns I get will be 15% to savings, 10% for spending (you have to live a little), and the remaining 75% applied to the card. I've requested extra-duty for work and could make enough for a full monthly payment (made as a bonus payment) and enjoy the work I do earning the money. The minumim target date for paying off this card is January 2014. My ultimate goal is to have the card paid off before 2013 ends. It's going to take a lot of work, sacrifice, and creative problem solving, but it will all be worth it in the end.
I have also found I am willing to openly talk about my situation and pass what I've learned on to those who need some direction on getting out of debt. I might have found a new career, assuming I can find a way to make money doing it. LOL
I will try to post when I can and update you on my progress. Thank you for stopping in.
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