About once a month I like to post up a submission from a Punch Debt In The Face reader so you can get a feel for how other people are doing. Last month’s story focused on a woman who was $63,000 in debt and trying to figure out how to get out. Today’s story, is much more upbeat…
I’m a married mom of two kids, who works full-time in Human Resources, and I’ve been following Ninja’s blog for at least a couple of years. When he asked for some of his readers to contribute their stories of how they’re doing, financially speaking, I thought it would be a good chance to submit mine, in the hopes that it might help any readers who find themselves in a mess, and are not sure if there is life AD (After Debt).
When I first discovered Ninja’s blog, it was some time in 2008. As a New Year’s resolution that January, I had decided to start budgeting and keeping track of expenses. Prior to that, for six years, we lived in ignorant bliss with respect to our financial situation. We each had a credit card that carried a revolving balance of approximately $10-$15K, as well as two car payments, and a mortgage. I had somehow convinced myself that everyone lives in debt – it’s no big deal. Now I look back at that person and want to give her a Ninja-Chop. That’s just crazy talk!
The budgeting process was difficult at first to get expenses on track, and see where we were spending our money. We cut where we could, and buckled down, and at the end of each month, I took whatever was left and paid it down towards the debt. After 6 months, I made the final payment to the credit card company, and kissed our credit card debt goodbye. It felt so good! In that time, my husband got a new job, where his car was paid for completely, and our other car payment had been fulfilled. In less than a year, we had been able to reduce our debt to just our mortgage, and as a bonus, began making extra payments to reduce the principal amount.
Fast forward to the nearing the end of 2011. I am happy and proud to say, that the only debt we continue to carry is our mortgage. We are able to contribute to vacation funds, and savings accounts for expenses that pop up above and beyond the monthly budget (Hockey fees for my kids, brakes for the car, etc). Additionally, we were able to take some equity from our existing property, and purchase an investment property in Arizona this past year. And as someone who lives in Toronto, and spends frigid winters in the North, I’m very excited to have a getaway where it’s warm!
Not only have we remained out of debt, but we have fulfilled other areas of financial responsibility:
- We are both contributing to our retirement
- We have an education fund that we contribute to for our children each month
- We have a healthy emergency fund that currently covers three months expenses that I’m hoping to grow to six months
- My husband and I both have life insurance policies, and even more importantly, critical illness insurance.
My friends tease me for loving me some spreadsheet action, but it feels so good to be in charge of your finances, and being able to do what you want with your money, rather than being held tight to the banks and the credit card companies.
Ninja’s Comments: Mel freakin’ killed it, and I’m glad that I may have been a small source of inspiration for her. What inspired you to punch your finances in the face? What part of personal finance turns you on (spreadsheets, investing, paying down debt)?