The past few years in my financial life have not been ideal. I was plagued by college student debt–all of the money I earned went directly back to the school to pay for tuition (that’s the point of work study, right?) and I opened several credit cards/accounts to pay for the basics (food, laundry, books, car payment and insurance). I put an entire semester of grad school (my student teaching) on a credit card because I had used up my Aid in the summer and was unable to work and have my placement (school rules). After moving to South Carolina, I worked hard at two jobs (putting in about 70 hours a week +) and still couldn’t cut it. My finger surgery was put on a credit card and that’s when I realized I was in major trouble.
Many tears were shed wondering what in the world was I going to do to get out of debt. An aunt had talked about this book about being young and having money issues, so I purchased it (on a credit card, of course!) and got to reading. I learned a few things and realized I was going to be ok, but that I needed to start taking steps in the right direction.
Taking my financial future into my own hands, I decided to give my creditors a phone call starting with the “big ones”–one bank had 2 credit cards AND a personal line of credit in my name. When we couldn’t work out any deals to lower my minimum payments (which on those three alone plus my rent and car payment left me broke), they referred me to a “Credit Counselor”. This company convinced me that I would need to stop using all of my cards (aka close the accounts) and they would work a deal with the creditors to put me on a four-year plan with a low monthly payment and lowered, stable interest rates. Hook, line, and sinker–I bought. My monthly payment was more than affordable, and I was happy. I was told over and over again that this was not going to impact my credit score, so an even bigger win.
For two and a half years, I racked up more medical bills and started paying off student loans, but because of my “counselor”, I was able to stay within budget. When I took off on 6 weeks of unpaid maternity leave, however, my world crashed. I was trying to raise a newborn (who needed a specific formula), pay rent, and stay afloat. One night, my roommate and I split an MRE (Meal Ready to Eat, a US Military staple) and the next we ate Ramen. We were out of food and out of money. Thankfully, I never stopped paying rent, utilities, and on my loans (credit, car, and student), but it was still scary. That’s when I decided it was time to move home to Pennsylvania and get my life back on track.
Enter Mr. Burgher. Free of debt…which also meant free of credit. We wanted to have the best we could give for our family, so we opted on a (what we thought was a cheap) rental down the street from my parents and used them as ‘lil Miss A’s caregivers when his work schedule overlapped mine. We still weren’t floating, but weren’t exactly drowning either, so we exercised the idea of buying a house.
The journey to buy a house was not easy. We had to have a lot of money on hand (which we didn’t) and a good credit report. Here’s where I found out my credit score had been torn, soiled, and drug through the mud by deciding to go into counseling. Remember, they closed my accounts? Yup, that never looks good. But, it was what it was, and somehow, because I never stopped paying my debt, there was light at the end of the tunnel and we got our house. Our house payment decreased over $300 a month (including utilities and the travel time/gas I was spending daily) and we felt like we could breathe!
Today, as have now paid off 6 of the 7 accounts in the consolidation and are staring down 3 more payments, we can see the light at the end of the tunnel. Sure, there’s still debt (cars, student loans, and a pesky emergency card I somehow was able to keep), but there is the opportunity to start saving for our future so the present can be enjoyed. I looked at an article about saving for retirement and how to get there from “here” over at WIFE.org and I see we are taking the right steps. I’ll be able to start putting money into my 401K this year or next, which is a late start, but better than nothing.
Oh, and what about the extra money we’ll have around once we’re free of the monthly credit payment? Well, first, we are paying down some of the other outstanding items, but I’ve entered the sum into this handy savings account calculator that’s showed me we are going to be able to put a good bit away for the kids’ future (or whatever other things come our way). It’s good to know that when you are thinking about personal finance and your future, there are resources out there to help you dream and pull up. We’re getting closer, and it feels so good!
What things have you found helpful in staying afloat in this economy? Do you coupon, pinch pennies, or look under the couch for spare change? Do you have a go to guide? A dream wall of what you’ll do once you reach your savings goal(s)? Do share!