Thursday, August 23, 2007
Using the momentum of others
Prior to joining the WIRR, I had already created a spreadsheet to track my debts and predict how long it would take me to pay them back. Being a bit of a data nerd, it was full of formulas and linked cells so that I could see how paying a little extra here and there would affect everything else. I thought I was doing pretty good on my own and had figured out my own 'snowball' that would have my CC free by Dec 2009, and debt free by 2017...now keep in mind if I were to take as long as the banks want for me to repay the student loans, I'd be in debted until 2025. So I figured cutting it down by 8 years was pretty good. Once I joined the WIRR, my mentality towards debt repayment totally changed. I realized that I could and should commit more of my income to paying my bills. I was seeing plenty of other people doing it and hearing stories of people in worse financial situations than myself pay 2x what I was each month! So I became addicted to working and re-working my spreadsheet. All kidding aside, I play with the numbers at least 1x a week! I'm now currently on track to be CC free by March 2008 (20 months ahead of "schedule" and debt free by January 2011 (14 years ahead of schedule)!!! It's amazing what happens when the momentum of others inspires you to dig a little deeper and squeeze a little tighter!
Monday, August 20, 2007
And she's off...
Well, this is my first attempt at true blogging...so bear with me for a while until I get the hang of things! Let me give you a little background information about how I got into the financial predicament I'm in now...
I moved out on my own at the age of 18 after making the decision to pursue a college degree. My parents were not in a place financially to help me with school, so I took on the entire burden myself. I really was flying blind, and was pretty naive about how student loans, etc. worked. All I knew was that I applied for and was awarded loans from the gov't...it paid for school and then some! I didn't really pay attention to how much was accummulating over the years, and I definitely didn't research anything about what it would take to pay them back. During college, I also fell into the credit card trap...seriously, what poor college student is going to turn down free t-shirts, etc just for filling out an application? But then the cards arrived, and I made the fateful decision to activate and use them. I did alright for the first 2 years of school...didn't charge up more than I could handle and was able to pay them in full almost every month with the money I made waiting tables. But then I moved out of the dorms and into my first apartment...I had furniture and TVs to buy. And the balances got higher fast. On top of that, I had monthly bills - I was used to paying 1x for all room and board! I did not do well balancing my checkbook...and a budget! Are you kidding?!? What fun was that? Luckily I got scared into cutting up the cards before the collective balance hit 5 figures, but the damage to my credit was done. I wasn't able to make the minimium payments - and if I was, I'd often forget. I was overdrawing my checking account regularly too. I was 20 years old and had trashed credit...I had a stretch for almost 2 years where things got better - I was living with my BF at the time and my committed expenses were VERY reasonable...until that relationship went kaput. Again, I had trouble adjusting to living on my own and being responsible for 100% of the bills. My CCs were late again - my phone bill went to collections...and I'll I wanted to do was act like everything was ok. I'd get notices in the mail and throw them away without opening them. I'd never pick up the telephone for fears of the creditor that might be on the other line. The result of this was of course that my credit score took another nose dive. Anyways...4 months before my 24th birthday I had a BS and MS, almost $35,000 in student loan debt and a credit score that wouldn't qualify me for jack squat! :)
In May 2007 I found a group called the Women In Red...and they have been a godsend. Although I'd stabilized my finances prior to joining the WIR, I wasn't really making any major progress, nor did I have a desire too! (i.e., carried <$200 balance on a CC for 2+ years - just made the minimum payments so I could spend more on other things). Now just passing my 90 day mark with the group, I've made a lot of headways. Above mentioned CC is now paid off! :) This blog is not only to help me track my progress of climbing to a positive net worth and eventual debt freedom, but to help others in the same situation learn from my mistakes!
I moved out on my own at the age of 18 after making the decision to pursue a college degree. My parents were not in a place financially to help me with school, so I took on the entire burden myself. I really was flying blind, and was pretty naive about how student loans, etc. worked. All I knew was that I applied for and was awarded loans from the gov't...it paid for school and then some! I didn't really pay attention to how much was accummulating over the years, and I definitely didn't research anything about what it would take to pay them back. During college, I also fell into the credit card trap...seriously, what poor college student is going to turn down free t-shirts, etc just for filling out an application? But then the cards arrived, and I made the fateful decision to activate and use them. I did alright for the first 2 years of school...didn't charge up more than I could handle and was able to pay them in full almost every month with the money I made waiting tables. But then I moved out of the dorms and into my first apartment...I had furniture and TVs to buy. And the balances got higher fast. On top of that, I had monthly bills - I was used to paying 1x for all room and board! I did not do well balancing my checkbook...and a budget! Are you kidding?!? What fun was that? Luckily I got scared into cutting up the cards before the collective balance hit 5 figures, but the damage to my credit was done. I wasn't able to make the minimium payments - and if I was, I'd often forget. I was overdrawing my checking account regularly too. I was 20 years old and had trashed credit...I had a stretch for almost 2 years where things got better - I was living with my BF at the time and my committed expenses were VERY reasonable...until that relationship went kaput. Again, I had trouble adjusting to living on my own and being responsible for 100% of the bills. My CCs were late again - my phone bill went to collections...and I'll I wanted to do was act like everything was ok. I'd get notices in the mail and throw them away without opening them. I'd never pick up the telephone for fears of the creditor that might be on the other line. The result of this was of course that my credit score took another nose dive. Anyways...4 months before my 24th birthday I had a BS and MS, almost $35,000 in student loan debt and a credit score that wouldn't qualify me for jack squat! :)
In May 2007 I found a group called the Women In Red...and they have been a godsend. Although I'd stabilized my finances prior to joining the WIR, I wasn't really making any major progress, nor did I have a desire too! (i.e., carried <$200 balance on a CC for 2+ years - just made the minimum payments so I could spend more on other things). Now just passing my 90 day mark with the group, I've made a lot of headways. Above mentioned CC is now paid off! :) This blog is not only to help me track my progress of climbing to a positive net worth and eventual debt freedom, but to help others in the same situation learn from my mistakes!
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