I'm climbing out of debt. Care to join me?
The abundance of consumer debt in this country scares me. I often wonder how long our country can survive with such outrageous amounts of debt. I will admit that I have often been guilty of overspending, and I do carry some consumer debt. But I'm ready to buck the trend. I'm ready to "just say no" to consumer debt and get on my way to a life of living within my means. That's what my lens is all about.
My Story Part 1
Getting Into Debt
My story isn't unique. I grew up in a lower-middle class family....sometimes lower class, depending on the year. I graduated from high school with the high hopes of doing better for myself. I went away to college, and the first day I walked through the courtyard, I was hit with a credit card offer. A week later I had my first credit card.I was pretty responsible at first, but by the end of the year my money was running out, and I needed the card to charge necessary (or so I thought) expenses. Still, I kept the balance under $1000, and I paid the minimum payments on time.
Two years into college I had to take out my first student loan. I was one of the lucky ones. Most students need student loans all four years. I only needed them for two. I graduated in 1993 with a B.A. in Sociology, $4000 in student loans, and $1000 in credit card debt.
In 1993 I met my future husband. In 1994 we started dating, and around Christmas of that year he proposed. We set the wedding date for June 1995. Since none of our parents had any extra money to help with the wedding, we financed it ourselves. I charged my $800 wedding dress to my credit card, along with other wedding expenses. On our wedding day, we had $6000 in student loans (my loans plus his) and $2000 in credit card debt.
The week after we got married, I started graduate school. Graduate school is expensive, and there isn't that much financial aid available. Enter more student loans. A week after we were married, our student loan debt increased to $16,000.
In October 1995 my husband got a new job in a town 100 miles away. I dropped out of grad school, and we moved. The next year we made $30,000 total, between the two of us.
In 1998 my daughter was born. I quit my job to be a stay at home mom, a decision I don't regret despite the financial ramifications. That year we made less than $20,000. We put the student loans into forbearance, not understanding that the interest would continue to accrue. We charged car repairs on our credit card. By the time our son was born in 2002, our student loan balance was slowly creeping up, and our credit card debt had increased to over $4000.
Being Frugal
The goal: To become debt-free in one year. Think we can do it?
If you want to read more about my journey to becoming debt free, this is my blog, beingfrugal.net.
Fetching RSS feed... please stand byMy Favorite Financial Blogs
Otherwise known as the M-Network
- Financial Dominance
- Dedicated to helping others take control of their personal finances.
- Gather Little by Little
- Finances from a Christian perspective.
- Moolanomy
- The science of money.
- Plonkee Money
- Finances from an Englisher's perspective.
- I've Paid for This Twice Already
- The trials and tribulations of getting out of debt...and someday beyond.
- Christian Personal Finance
- More about finances from a Christian perspective.
- DebtFREE-Revolution
- Getting out of debt the Dave Ramsey way.
- Single Guy Money
- Finances from a single guy's perspective.
M-Network Feed
Fetching RSS feed... please stand byMy Story Part 2
Climbing Out of Debt
In the years since my son was born, our income increased and so did our expenses. At the beginning of 2007 we had $17,000 in student loans (remember that interest that was accruing?) and 3 credit cards with around $5000 total owed on them.Every time my husband's income increased, we had the intention to pay down our debts, but we always found new ways to spend our money. We would try to save, but we'd pull money out of savings for vacations and other frivolous things.
My husband's father died in late 2006 and left us a small inheritance. Before he died, he told my husband to use the money to get out of debt and stay out of debt. We received most of the inheritance in early 2007. We used the money to pay cash for a new-to-us van, because my husband's car was on it's last legs. We also paid off our credit cards and put a big chunk toward the student loan.
It's hard to break old habits, though. Our computer died in March, and we knew the rest of the inheritance money would be available in May. So we charged a new computer on a 0% interest rate card, thinking we'd pay it off in May. We charged a few medical bills, too, thinking we'd also pay them off in May.
We learned a hard lesson when my husband lost his job in the middle of May. Suddenly we needed the rest of the inheritance money to live on. So we're still carrying a $2000 credit card debt plus $7500 in student loans.
Fortunately my husband quickly found another job. Unfortunately it's a commissioned sales position. I don't worry about my husband's ability to earn the commission, because he's done this sort of sales for years. There's always a ramping up period, though, where your income isn't enough to live on. That's where we are now. Slowly going through our inheritance for daily expenses.
The good news is for the first time in our married lives, we're in the black. My husband's 401K had just been vested before he was let go, so between that and the inheritance money, we're a couple thousand dollars in the black.
We are now firmly committed to getting and staying out of debt. We rent our house, and our cars are paid for, so when we get the student loan and credit card paid off, we'll be out of debt...forever.
I'll be providing updates on how we're doing, as well as things that have and have not worked in our quest to save money and get out of debt.
To be continued.....
News on Consumer Debt
My Favorite Personal Finance Books
Debt-Proof Living: The Complete Guide to Living Financially Free (Debt-Proof Living (Paperback))
Amazon Price: $11.55 (as of 07/06/2008)
The Total Money Makeover: A Proven Plan for Financial Fitness
Amazon Price: $16.49 (as of 07/06/2008)
Other Money Management/Frugal Living Books I Like
I don't refer to these as often as "Debt Proof Living" or "The Total Money Makeover", but I either own them, or I've checked them out from the library more than once. I can definitely recommend them.
Live Your Life for Half the Price: Without Sacrificing the Life You Love (Debt-Proof Living) by Mary M. Hunt
Mary Hunt gives practical advice on how to cut you more...0 points
Debt-Proof Your Kids by Mary Hunt
I'm going to implement this plan when my daughter more...0 points
The Complete Tightwad Gazette by Amy Dacyczyn
Some of the advice Amy offers is a little too extr more...0 points
How to Manage Your Money by Larry Burkett
I really like anything by Larry Burkett. He offer more...0 points
Miserly Moms,: Living on One Income in a Two-Income Economy by Jonni McCoy
Jonni McCoy went from being a working mom to a sta more...0 points
The Money Answer Book: Quick Answers to Everyday Financial Questions by Dave Ramsey
What can I say? I love everything by Dave Ramsey!0 points
Getting Out of Debt
Increasing Income
I'm pretty committed to being a stay at home mom, at least until both of my children are in school full time. Thus, it's necessary to be creative in finding ways to increase my income. These are the things I've done so far:1. Sold unused items on Ebay.
2. Sold books on half.com.
3. Childcare. I prefer taking one child at a time. It's easier to maintain your regular schedule that way.
4. Yard sale. This is a good one to do either early in the summer (to pay for summer activities) or late in the summer (to help with back-to-school expenses).
Frugal Living Blog Posts From Google
What other people are writing on my favorite subject.
Getting Out of Debt
Cutting Expenses
It's often easier to cut expenses than it is to increase your income. I try to focus my efforts here. These are ways I cut expenses:1. Shop at the least expensive grocery store.
2. Buy clothes on clearance. My favorite place to shop for the kids is the Children's Place. They usually have great clearance sales right after major holidays, where you can buy clothes for a few dollars a piece. I already have my kids' Easter clothes for this year.
3. Scour the web for online coupons. Combining coupons plus sales is a great way to save!
4. Live simply. Ask myself twice if I really need something. Our house is small, and we don't have a lot of storage space. By keeping less stuff, we stay organized, things don't get ruined, and I can always find what I need. In the long term, this saves money.
5. Live in the house you can afford. Here in the Pacific Northwest, housing prices are outrageous. There's no way we can afford to buy, so we live in a little duplex. It's dated, and not ideal, but the price is right.
6. Line dry your clothes. I just started doing this last week, so I'm not sure how much I'm saving yet, but every little bit counts.
7. Use compact florescent bulbs. I really like these. They save energy, they're good for the environment, and I don't have to change my light bulbs that often.
8. Recycle. It's good for the environment, and the less trash you have, the less you have to pay for garbage service.
9. Pay bills online. It's more secure in the days of identity theft, and you save the cost of the stamp.
10. Plan your meals and shop once a week at the most. Less trips to the grocery store means less money spent.
11. If you're going to rent movies, check out Blockbuster's Total Access program. I'm a firm believer that you have to allow yourself some fun money while climbing out of debt, or you'll never stick with the program. Blockbuster has pretty good rates for their online rentals, and you get to exchange those rentals for rentals at the store.
12. Check out the free entertainment in your area. Our newspaper puts out a Summer Guide at the beginning of the summer. It lists all the activities in the area. There are free movies in the park, free ballet lessons, free art showings, and many other activities. Take advantage of them.
13. Give. I'm a Christian, so I tithe on our income. If you're not a Christian, give anyway. It makes you appreciate what you have when you help those who have less.
Money Saving Sites
My favorite money-saving resources.
Dave Ramsey
If you've never listened Dave Ramsey or read one o more...1 point
Say NO to Debt!
This community is a group of people who are in nee more...1 point
Freedom Debt Relief
Find all suitable debt relief solutions.1 point
Fat Wallet
When you shop through this site, you earn cash bac more...0 points
Amazon Filler Item Finder
I love to shop Amazon, and I love their free shipp more...0 points
Fishing for Deals Forums
The ladies here know how to find a bargain! There more...0 points
Debt-Proof Living
Mary Hunt is my other favorite financial guru. I more...0 points
Crown Ministries
The Crown Ministries tools page has some great cal more...0 points
Lack Attack | Can God Supernaturally Eliminate Debt?
Yes, He can! And more and more followers of Christ more...0 points
Reader Feedback
Do you like this lens? Have a comment? I'd love to hear from you!
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LittleStar
A series of debt can lead to a very difficult cycle of unmanageable finances. Great lens with very sound advice! Posted June 11, 2008 |
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LittleStar
A series of debt can lead to a very difficult cycle of unmanageable finances. Great lens with very sound advice! Posted June 11, 2008 |
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LittleStar
A series of debt can lead to a very difficult cycle of unmanageable finances. Great lens with very sound advice! Posted June 11, 2008 |
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Rokusan
Thanks for sharing your story. It sounds a lot like my own... and I sure like many of us! Hey, another great book you might consider adding is Your Money or Your Life. It sure did change how I look at money! Posted March 19, 2008 |
Excellent work! I am updating my financial web page for Rest Ministries, an org for those with illness- will be linking you! Loved your practical ideas. Found you by searching for "Crown ministries" and Widget.
www.restministries.org
Posted February 09, 2008
