I have always had a lot of debt. It’s a common symptom of people who grow up poor. We struggled as it was for most of my childhood, but when my stepfather left, quite abruptly, we had nothing. My mother had always stayed home but suddenly had to find work, having no skills, no car, and the looming fear of the unknown. My brother had quit school and had a job as a night watchman. I was sliding into my freshman year of high school then. I got work babysitting five hours a day after school and we somehow managed to make ends meet.
We picked up a car, a yellow Pinto, for $300. It was pretty beat up on the outside and the driver’s door didn’t shut. The driver would have to hold the handle when he turned a corner and the floor boards were so rusted and worn through that you could see the road. We were always “This” close to not making the rent. We never actually did get evicted but the fear was there. We didn’t get our utilities shut off or starve to death and we didn’t receive public assistance. I remember buying a quarter pound of ground beef and adding bread and spices so I could make four burgers. We made do.
I used babysitting money for anything I needed but was very careful. Once I was sixteen I got a real part-time job at the local ice cream place, then a department store. Eventually I got out of school, got a full-time low-paying job and went to night school. Then life got in the way and I needed things I couldn’t afford. I got married and had a baby then got a divorce. I never finished my English degree.
Fast forward to now. I’m forty-three years old. I have the car I always wanted, an overpriced townhouse which has lost $70k in value in the last five years. I have a bunch of expensive impulse pets who I love but did not need. I’ve had some great vacations I couldn’t afford, traveled extensively for writers’ conferences not in my budget, and ate out way too many times when I should have gone back to my roots and eaten ramen noodles.
A few months ago, I upped my 401k to the max they match at work which gave me less cash flow but seemed smart for long-term savings. Shortly after doing that I was hit with unexpected medical expenses. Until then I was fine with high debt and no way out, but my new financial situation woke me up. I had a ton of credit card debt, the car payment, the mortgage and now less money coming in and medical bills that weren’t in my very tight budget. My bills were all paid on time and I had excellent credit but there was no money left to get ahead. My credit card balances were increasing every month.
At Book Expo a few weeks ago I got a free copy of Rich Dad, Poor Dad. Reading his book inspired me so I went to the library and took out four more books about financial freedom. The only good one in the lot was Suze Orman’s Nine Steps to Financial Freedom. That was a life changer. In Rich Dad, Poor Dad and this one what I learned was that sitting here fearing my financial situation wasn’t going to help. I needed to just fix it all. Now.
First I dug out a credit card I haven’t used since 2007. I called to cancel the card but seeing how long I’ve had it (2006) and hearing the giant credit limit I was able to call and in seconds the woman on the phone took me from 13.99% to 9.99%. A start. I said, “I’ve got two cards at 11.99%. Do you have any 0% transfer options?” Within five minutes I’d moved most of the debt on those two to this one at 0% until October 2013, saving almost $300 a month in interest. Wow, that was easy. $300 a month appeared out of thin air.
I dug out the Sears charge from the drawer which has no balance and huge limit. I’d opened it to get a dress for $.01 back in 2008 and never used it again. I’m going to put this on my Outlook calendar to buy a pair of socks every six months and pay them off immediately. Okay so this isn’t saving me money but it’s upping my available credit to increase my credit score.
I returned those books and got four more. This got me thinking about my college degree. I’ve always worked in the financial industry so why was I still hung up on the English degree? I decided to finish the darn thing now that Abby is old enough to stay home alone. Plus, having a long distance boyfriend means most of my weekends are spent home alone watching movies or writing. Schoolwork would be a better use of time. The company will pay a big chunk of it. I re-enrolled and next week will find out how long it will take and the cost. My goal is to finish in two years.
And finally, due to Suze Orman’s insistence that the first step in Financial Freedom is responsibility to others, I wrote up a Living Trust and a Pour Over will. Next week, I will work on actually transferring assets to the trust.
I’m breathing easier and am looking forward to the future now and watching things get better.