I was out for lunch with a friend and co-small business owner (that is, he owns his own restautant). The first thing he said when we met up with him is “I can breath!!!” “Huh?” “I’ve finally got my head above water. I don’t owe anybody anything”
Ten minuets later he got a call from work that a freezer had broken down and we where telling him where he could go to get a good deal on one. (BTW for those of you that are wondering. A ‘small’ freezer for a restaurant or small grocery store. The kind that only have two glass doors and have the compressor underneath are about $3000.)
Congrats. We’re down to daycare, one car payment, and the mortgage.
It ended up being a 2200 after_tax raise when we got one car paid off and the Credit cards down to zero. We weren’t in as deep a hole (17k down to 6k, then back up to 10k, then 0.) but we’ve had three months now with a steadily climbing checkbook balance and it feels goood.
I’ll tell ya, that $350 is nice, but the next month you’ll have more. Blow it. Have fun. Then go back to a moderate lifestyle. You’ll find if you just put away the amount you used to pay in interest as mad money, with your savings reflexes, you’ll feel like you’re living like a king!
We’re about 28 years away from paying off the house, so I figure we’re just paying rent on something that’ll eventually pay us back.
It was a real eye-opener realizing that the credit cards, daycare, and a car payment added up to $45k a year…and the credit card balances weren’t dropping. :eek: !
In the 1950s and 1960s, once the worst of the McCarthy Red Scare had died down, quite a lot of politicians and government bureaucrats started going after homosexuals (or suspected homosexuals) for similar reasons. *
Because most gays were in the closet during those, ahem, less-than-tolerant times, the fear was that foreign powers could use extortion and blackmail to get them to hand over sensitive information.
Actually, it didn’t just start in the '50s and '60’s, but it picked up pace when the decline of the Red Scare left a void for the fearmongers to fill.
And groo, Congratulations!
I’m curious what helped you accomplish this? Any inspirations? Did you wake up one morning and say “screw this!”?
I have that dream, I’ve been listening to Dave Ramsey (although I think he can cost a hefty sum if buy into all the crap he pushes) and I find his ideas are pretty good. I’m just trying to get a. husband working regularly b.out of the crisis long enough to have a plan.
Please do what folks have suggested, pay yourself/your savings first. Put all that money you were sending out to support other folks into a smart account to support you. I can imagine how tough the road has been, but that kind of savings over 4 years to your retirement will go a long way in the future.
I love hearing what people have done to be debt free. One of my favorites is “eat beans and rice until you are sick of them, then eat rice and beans.” How did you attack your debt? How did you learn to control your spending?
When you don’t owe anyone and have saved up an emergency fund and have your retirement in order, who gives a crap what your credit score is? Dave Ramsey talks extensively of this, his suggestion is to find reasonable people/companies to deal with.
Well done, groo. I’ve never had that level of debt but I recall the feeling of being akin to drowning in debt. I also pay for a lot of things with cash and I’ve found it a lot easier to keep track and, indeed, minimise my spending.
Too true. I’ve gone from indebtedness to actually having money in the bank. I think that’s considered unpatriotic in some parts.
Now, that I don’t understand. Do lenders not look at the context of a loan application, like savings and net worth, as well as any history of actual borrowing? If I had a million dollars in the bank and no credit history, would I get turned down?
If you had a million dollars in the bank, you wouldn’t be getting an unsecured loan. You credit score is partially determined by long term use of revolving credit and timely payback of those debts.
Well, I kinda explained it in my second post, but here’s a recap:
How I got there:
Stupidity + depression + really-easy-to-obtain credit + a weird rule I’d made up: If my debt was still less than my annual salary, it wasn’t all that bad.
How I woke up:
I mentioned the DIS interview, but not the mood: the guy seemed like he felt guilty talking to me about it and that it was almost a foregone conclusion that I was on my way out. I’d never had a DIS interview like that before – they were usually just pro-forma “did you live here? for how long? any neighbors who we can talk to?” This interview was like I was at my own funeral.
My way out:
I got the strongest impression that if I declared bankruptcy that I could just kiss my career goodbye. So I made a monthly budget and figured out I could get out of it in SEVEN FREAKING YEARS. Then I just started doing everything the personal finance books said:
[ul][li]paying off the highest-interest debts first (my first rule and I’ve already violated it – I actually paid off the smallest debt first so I could get a taste for it)[/li][li]give myself a ‘cooling off’ period before all purchases[/li][li]left my credit cards at home (I have no family safety net, so I didn’t want to cancel any of my cards in case I hit some awful emergency)[/li][li]stopped doing anything social if it involved spending money. Actually, I overshot the mark (to my detriment) – I’ve basically fallen off the face of the earth to most of my friends. I just don’t go out anymore. This’ll have to change.[/li][li]started working overtime[/li][li]stopped reading computer magazines[/li][li]stopped going to Fry’s/CompUSA/Good Guys/etc.[/li][li]stopped traveling for any reason other than work[/li][/ul]
Things I didn’t do:
[ul][li]I still eat take-out food much of the time, but since I work overtime, I basically trade extra work hours for food preparation time[/li][li]I still take my clothes to a fluff-n-fold, again because of overtime. A half a day at work more than makes up for $20 for laundry.[/li][li]I still get premium channels on DirecTV – since I gave everything else up, I figured I needed something enjoyable.[/li][/ul]
Then I did this thing where I imagined rich bankers up in Palos Verdes (a hill-top community of rich people near me) looking down on me and cackling with glee every time I bought something.
No magic bullets or anything. It was mostly one week at a time, with little milestones every time I clicked below another thousand dollars. I’d only budgeted myself for earning my regular salary, but all the overtime started adding up. After zeroing out one VISA (out of four total), I started seeing some success, and slowly the seven years went down to six and a half, then down to six, etc. By the beginning of the year, I was looking at Dec. 31 as my liberation date, but we’ve had some emergencies at work, allowing me to work even more overtime than usual, and I got a (shhhh! don’t tell people) secret bonus at work as well as a (really don’t tell people) mid-year raise, so I came in three months earlier.
BTW: The last payment of my last debt was subtracted from my checking account this morning. It’s official – I have zero debt! I think I’ll celebrate by buying a HDTV (just joking – more like I’ll get a Haagen Dazs bar:)).
Holy shit. $800 a month. Fucking $800 a month. I’m stunned. I can’t get a room in a crackhouse for $800 a month. I pay more in property taxes a month. All my problems would disappear if my mortgage were $800 a month.
Well, the scoring is not identical to that in the United States, but in Canada (as in most other places) your credit history is still a key determinant of your ability to borrow money.
In the US, your credit score is generally given in the form of a three-digit number, with a top score of 850 (although there’s apparently a new Vantage score that will max out at 950). If you want to read about the US credit score, the Wikipedia entry will probably tell you more than you need to know.
In Canada, your credit rating is determined in ways not too dissimilar to the United States, although the whole procedure seems somewhat less confusing and less opaque in Canada. The US credit system sometimes seems like a mix of voodoo and deliberate obfuscation.
One of the two major credit reporting agencies in Canada is Equifax, which also happens to be one of the three major credit reporting agencies in the US. You can find out about the Canadian credit file system at their FAQ page.