The Past Year

When I first got out of college I was in a ton of debt or so I thought. I had a few delinquent debts that I avoided in college and I remember the day I decided I was going to turn it around. I owed probably less than $1000, not including the student loans I still have, but I thought that the few hundreds I owed was crazy. I paid the debts and a a few more I incurred from moving and then I began to spend.

At first I bought a TV, an XBOX and gifts for my girlfriend. Then I realized that I needed to save some money and slowed my pace down a little bit. I stopped spending and starting thinking about the future. Then my girlfriend became my wife.

I didn't know it at the time, but my wife was in close to $30,000 worth of bad debts. She had previously been married and she was making minimum payments on just about everything and was paying more than half of her income on a Countrywide mortgage. Before I saw her bills I thought that my wife and her daughter had it made.

I soon realized that they were in debt up to their ears. For example her daughter had a computer that cost them $40 a month and was about a year old. They owed over $1000 on it and you could buy a new one at the time for $400. All of a sudden I was taking over the finances and I became the financial guru.

Finances weren't new to me, because my father is a Credit Union CEO, but I certainly don't claim to be an expert. We started slowly and began to make some sacrifices and make double payments on the credit cards. We also created a budget that outlined our spending each month and stopped using credit cards. At first it was hard and we longed for things like ice cream, TV and shopping. A year later we have nearly $1500 a month to spend on gas, food and whatever else we need. We were able to increase our monthly spending from $500-$1500 without adding to our debt.

Now some of you may be thinking that $1500 is not enough for a family of three. Well consider this, we have life insurance policies of over half a million dollars, we are putting hundreds away in savings each month and we have a new house and a new car. All of this on teacher salaries.

The first step to financial success is to stop borrowing. Second begin to make double payments. Third create a budget.