Dancing with Finances

October 11, 2010 · 16 comments

stick figure dance

Guest post:

I want to thank Ninja for the opportunity for this guest post. It’s nice to be on this big stage of the kind, friendly, $2100 a year blog earning Ninja. <---- (edit: He forgot to add extremely good looking)

My story I’m sure is very common to many others out there. In a span of less then a year I got married, purchased a home and had a child. Two children to be exact, my wife and I had twins. That was over 11 years ago now. We had our 3rd child back in 2002. In those years we did a lot of living beyond our means. Things like vacations, cars, child items, home improvements, etc. We have racked up a pretty penny in consumer debt.

I manage the money. I consider myself educated. I have a college degree and a good paying job. I have danced around our budget for years. Ask my wife and she will tell you I’m not a very good dancer. I have kept an excel spreadsheet of our budget for at least 5 years. I’ve used it to watch our money go right out the window to creditors.

Roughly about a year ago I took a continuing education class titled “How to get out of Debt.” The instructor, a retiree, lead a 1-hour class and discussed the basic principals of the debt snowball. At the end of the class I found out that the instructor worked for Primerica (a financial service) and was ultimately running this class to see if he could drum up some business, but the information he provided started my personal finance journey.

I went home that night and built a number of debt snowballs sheets. Modeling how many years it would take to pay it all off if I could add an additional $10, $50, $100, $500, etc to my minimum payments. I reviewed this with my wife and we both agreed this was a great idea and it would be awesome if we could do this. I was excited about the new information I had learned, but failed to really act on it.

Fast-forward to May of this year. My wife and I were discussing vacation plans for the summer. We had just received an invite from her family for a mini family reunion and friendly day of Olympic style family competition. My wife’s family lives in CA and we love visiting them. We began planning the trip. After reviewing travel costs for the 5 of us (airfare, rental car,etc) I realized we couldn’t afford it. Not only because I didn’t have cash in a savings account, but because I didn’t even have enough credit left on my credit cards.

The reaction of my family was one of disappointment. I was disappointed too. Not in the fact that we wouldn’t be traveling to California for a nice vacation, but disappointed in myself for letting my family down. I started thinking about the debt snowball again.

About a week later, my brother called me and asked to borrow some stuff for his two kids’ upcoming graduation party. He talked about how he feared having two children in college at the same time. As I hung up the phone I again thought of the debt snowball and the fact that in less then 7 years, I could have 2 children is college as well. After the kids went to bed my wife and I sat down and made a plan. We went back over all the things that we’d talked about over the last year. We decided to close all of our credit cards, stick to a cash budget, and my wife would go back to work. (booya, for getting serious!)

That plan was put in motion back in June. It hasn’t been easy, but we have made due so far. We stayed at home for our summer vacation this year (for the first time in over 10 years). We’ve began discussing finances with our children. It has definitely been an adjustment, and there have been a number of “no’s” along the way, but we keep the big picture in mind: a budget without monthly payments to creditors, and a nice emergency fund in the bank.

In these last 3 months I found out that most of PF is just commons sense, there are no big secrets. I’ve had the ability and tools all along, I just lacked the discipline needed to make it happen. PDITF was the first blog I found when searching for information on the web. I’m in such a better place now, then I was 3 months ago. I have already chipped away at over 3% of my total debt!

I tried to keep my post in the spirit of PDITF, but also wanted to tell my debt story as is. I’d like to know what motivated you to get your finances together? If you had a do over, what would it be?

‘Tech’ blogs over at Until Debt Do Us Part which he started as a good way to stay focused on his own budget and finances. Go check him out.

1 momninja

Nice guest post!!!

As you have heard from DN we did not discuss finances much with our kids, sure they could “earn” money and such but that did not really help them understand the true value of
Debt and how it could rock your world, and not in a good way. So if I had it do over again I would forgo the whole Financial Infidelity thing as well as educate our little Ninja’s.

2 Techbud

Thanks! It’s never too late to share valuable info.

3 TwinsMama

Great post! Thanks for being honest and sharing your story with us!

The only thing I’d do over is to find cheaper places to rent. We also have twins and could not afford to buy so we spent a lot of money thinking we had to live in really expensive places to be “safe”. Well our cheapest place (after years of renting at top dollar) also proved to be our safest. Go figure!

4 Techbud

Thanks! What I could do if I didn’t have the monthly mortgage payment. :)

5 Skrizel

If i could do it all over again i would not have purchased two expensive diesel trucks that i didnt need. those vehicles, purchased one at a time, have really set me back in terms of my financial progress. no one needs a 28K truck to drive 3 miles to work… also having a budget and sticking to it straight out of college would have been smart

6 Sophie

“no one needs a 28K truck to drive 3 miles to work”

Sophie *stands up and applauds Skrizel’s statement*

Can I also add that if your truck has those big airplane tires on it…you look like a dumbass.

7 Skrizel

i sold it for a 6K loss but still came out ahead in the long run, sold it for a little hatch back, and it did have the big tires and it was AWESOME, just stupid too

8 Makky's Mom

For us, we realized we needed to change things when we had $12,000 on our LOC AND we were facing having to replace one of our vehicles in the near future. We had no money in the bank for a down-payment, so that meant we’d be putting an additional $8000-10,000 on our LOC to get a new set of wheels. The possibility of facing an over $20,000 LOC balance scared us into action. We immediately made a plan and started chipping away at that $12,000 debt – it took 19 months to pay it off. In the meantime, WHILE we were paying off the LOC, we saved up $11,000 to replace the dying vehicle (which thankfully, survived till we were out of debt and had money saved up to replace it). Now, 6 months after getting out of debt and paying cash for a new car, we have about $17,000 in savings for an emergency. We are FINALLY doing well financially and it feels so great!!!

9 CanadianDebtGirl

Thanks for posting! It is so refreshing to hear from someone starting their debt free adventure later in life. Thank you thank you thank you for sharing your story!

A do-over? I wish I had paid for my schooling completely on my own without student loans. If I had no student loan payments I would’ve had a lot more free money to save once I graduated.

10 Techbud

Thanks! It’s never too late, I do plan on being here awhile. :)

11 Frugal Midwest

Great post, thanks for sharing! The one thing I would change about my financial past is how many benjamins were spent on vehicles. My habit of changing vehicles every two years, after adding aftermarket wheels (read: Waste of Money) and other accessories dented my potential net worth significantly.

I read two books by Thomas Stanley titled “The Millionaire Next Door” and “Stop acting Rich.” His writing changed my perspective so I began thinking about WHY I was so focused on maintaining status symbols. I traded in my $20k sedan, bought a used vehicle with good gas mileage for $7,500, and used the extra cash to pay off debt. Thankfully, the only debt the wife and I have left is our mortgage. An investment of $10-$20 or so in fiscally responsible literature saved me thousands in interest, insurance, gas, and so on.

-FMW

12 Amy

If I had a do-over, I would not have opened up those store credit cards after I left home… or I would have kept up with the $10 monthly payments at least! And cut back spending. And told my leech of a boyfriend that we didn’t need to eat In and Out every night and pay for movies in theaters and the garage parking and to basically go to hell.

Ahem. Yes, I’m still a bit peeved.

13 Trina

Great guest post! I can completely relate since we have 2 year old twins and a baby due this month!
Do over would be not saving my salary before we had kids. We thought about it, but never followed through. Would have made the transition from Dinks to a family of 4 on 1 income a lot smoother. Thankfully all is good now…but the adjustment was tricky.
Trina

14 Techbud

Thanks. Best of luck with the new baby. Other parents of twins ask me if it gets easier as they get older, I always tell them it gets different. Kids are never easy, but certainly worth it.

15 Journey To Our Home

What has motivated my husband and I to get on target is wanting to build a house from scratch and purchasing land.
If I had anything to do over again, I would have probably talked about finances a lot more before we got married. He is a spender and I didn’t realize how much debt he had when I said ‘I do’. Unfortunately, I also would change a LOT of the ‘yes’ answers to ‘no’ ones starting from day 3 of our marriage. :) I am a big saver and he’s a big spender and his habits have overwhelmed mine so we are sitting in a lot of debt and trying to reach the surface!!

Good luck on your journey!

16 Techbud

Thanks! Same to you!

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