When I made the decision to make this blog more finance-focused and less consumer-driven, I realized it would be important to share when and how my interest in personal finance developed. When you decide that you need to change the course of your life, it almost helps that you have hit rock bottom and have no other option, but to go up. And that’s where I was over six years…
August 2009 – $28,200 in Debt
The summer B semester had just ended, and I had learned that my enrollment at the University of Florida was in limbo. I had been on probation for allowing my GPA to fall below a 2.0, and because I had not successful raised my GPA, and I was not allowed to enroll for fall classes. And because I was not currently enrolled as a student, the $26,500 in student loans I had amassed over the past 4 years were now due. I also had maxed out a credit card with a limit of $1,700, and had just applied for another card to cover my expenses while my cash went towards a housing deposit. I had been working part-time in a student housing community for over a year, making around $7 an hour. My hours varied, so I made between $400-550/month, basically the equivalent of my rent. I had no other source of income so I put in a request for my loan repayment to be deferred (it was granted through December 2009). I also decided that my financial priority needed to my rent and utility costs. Every cent of my paycheck was saved for those monthly expenses, while everything else went onto my credit cards.
February 2010 – $32,000 in Debt
Months of job searching prevailed, and I was finally offered a full-time job working for my current employer at a property in Tallahassee. To say that I was relieved was an understatement. I was currently on food stamps, had used my credit card for a cash advance to help pay for utilities, and I had just spent the day before (my 23rd birthday) being lectured by my father for not trying hard enough to find a better job. I remember holding my coworkers hand and crying tears of joy while sitting at the front desk when I got the call for the job offer. Two weeks later, I packed up and moved to a city where I knew no one.
April 2010 – $30,400 in Debt
I was two months in to my new job and working steadily to hack away at my debt. I was earning $2,100 a month after taxes, $600 of which was still going towards rent & utilities for my house in Gainesville (I was on the lease through July). My hiring package included my rent & utilities (thank you, student housing perks!) so I was able to put about $1,200 towards my debt repayment. Keeping my monthly expenses below $300 was a challenge to say the least. I had food stamps for about one more month, which helped immensely. I was also not purchasing any premade foods, buying the bare minimum toiletry items, and spending zero on entertainment items.
April 2011 – $22,600 in Debt
My year of austerity had payed off. I had paid down all of my consumer debt as well as a couple thousand towards my student loans. Instead of filling my extra hours with purchases, I was working. I was ALWAYS working. It can be pretty difficult to spend money when you’re not even taking the time for a lunch break. And the extra time I put in at the office, paid off with 2 promotions in 14 months. My 2nd promotion brought me back to Gainesville, but provided me with some new expenses – rent and utilities. With these new expenses, I was actually going to have $300 less per month. Not to mention, I was newly-engaged and faced with the reality of wedding costs. But I had spent the last year learning how to be strict with my spending, and I was not about to become overly frivaleous for a party, albeit an important, once-in-a-lifetime party.
February 2012 – $19,700 in Debt
Thanks to family and friends who gifted their time, money, and services, my husband and I managed to only spend $9,000 on our total wedding costs. I had only been putting $315/month towards my loan repayment so now that the wedding expenses were over, it was time to get back on track. I allocated a little over $1000 to go towards loan repayment (about 25% of our household income) while 15% went towards savings and the remaining 60% towards living expenses.
September 2013 – $0 in Debt
February 2012 was our final budget revamp. Even with raises and promotions, we kept the same dollar amount towards living expenses and savings, and the rest went towards paying off the loans. We lived in a college town, so why not continue to spend money like college students. We lived in the cheapest (without sacrificing safety) apartment we could find, we didn’t go out drinking, and we rarely went out for dinner. While my coworkers were going out for Chipotle, I ate ramen or soup I brought from home every day (if it was actually slow enough for a lunch break). The only traveling we did was to see family for the holidays. In September 2013, four years from when I was a broke college drop out with $28,200 in debt, I was debt-free with a big buffer in savings.
Today – $34,000 in Savings
A lot has happened in the past two years in regards to our finances; we bought a car, we have two beautiful babies, I stopped working, we moved to another state, and my husband got his Ph.D. If you had asked me in September 2013, where we would be now, I would have said “in a home with a mortgage and both of us working full-time”. Having children affects your finances – that is an understatement. But paying off debt versus just saving money is more of a challenge than you would think. Two years ago, 40% of our income was going into savings. Now only 30% makes it into our savings vehicles. So I’m working on lots of little changes we can make to get that percentage higher. I once thought paying off $32,000 was daunting. Now we’re trying to save for a 20% downpayment on a mortgage in 2 years – that is REALLY daunting. But I know that if we keep our eye on the prize, two years from now, I’ll be blogging about how we bought our dream home.