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.