Tomorrow is Independence Day in the United States, a time for friends and family to gather and enjoy the early summer. I’m taking a l-o-n-g weekend, and won’t return until Monday. If I’m lucky, I’ll get a chance to play in the sprinkler.
In the meantime, I thought it would be fun to devote a thread to financial success stories. People send me e-mail all the time to say how they’ve taken control of their personal finances. I love to read these tales, and I know that other people do, too. (We even have a section of the forums devoted to them.)
For example, here’s what one long-time reader wrote a few weeks ago:
I paid off a credit card today! At times its balance had been as high as $12K, but with the severance pay from my old job, signing bonus from new job, and various other resources, I paid it off completely today.
The next step is to move the existing balance on my other credit card (about $8K) onto the now-zeroed card at a low balance transfer rate, and then pay down that last balance. It feels really good to have this thing off my back after so long.
Do you have a financial success story to share? Big or small, it doesn’t matter. Tell us about it! You have all weekend to do so. Have a safe and happy fourth, everybody…
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@LC: Nope. No problems there — I’ve gotten the entire match.
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I spent 2 years clearing every debt I had by working 3 jobs and over 100 hours a week. I then saved my money and escaped the rat race, and Im enjoying the most happy times of my life as I’m living in the Caribbean running my own businesses.
It feels so good to have escaped being a wage slave!
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We are out of debt because of the sale of our rent house and house due to a job change. We have a nice emergency savings now and wouldn’t have it if we had not sold our homes!
We also cut our expenses to the basics since we are on a student salary while my hubs gets his phd. I am a stay at home mom but get to work at home now via my bargain blog!
I think you sent me a website or something that you wanted me to link and I can’t find it. Do you mind sending it again?
~The Bargain Shopper Lady
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To Dan:
1. Am I willing to forego savings in order to satisfy my principles?
You list several things, including buying and eating organic food versus eating crap food, and buying good clothes rather than cheap clothes at Target.
I think that you might be new to the PF blogosphere, because I’ve noticed A LOT of PF bloggers (including myself) are very much conscious of the difference between “cheap” and “frugal.” Is it a good idea to buy crap food? No. Why? You’ll pay for it with obesity and the medical bills it incurs later. Is it a good idea to buy cheap clothes at Target? No. First off, many of them are not only made in countries with poor human rights practices, they are made poorly. This makes them a bad investment. It is better to buy clothes at a discount retailer (like Ross) – I get made in the USA clothes there cheaper than foreign-made clothing! – or to find quality used clothing. The fact is, owing money makes you less free to make the decisions you want. Check out http://www.bostongals.com — she has a net worth of almost $500,000 after coming out of debt several years ago, and she spent her money this spring buying solar panels for her home in Boston. These are the kinds of solutions that happen when you’re free to use your money as you want, rather than pay interest to the bank/corporation.
2. As for your second comment, “In the face of all the economic “canaries in the coal mines”, how do you stay focused on the long term? I have a hard time envisioning the world as anything but fundamentally different (market collapse, resource wars, etc.) in the years to come,” here’s what I think:
When it comes to those canaries in the coal mine — global market collapse, resource wars, etc. — you have to make your own choices. Do you want to survive a market collapse? Take your savings and buy gold, invest in a solar company, fund a company that makes an electric car (http://www.zapworld.com/), or stockpile food in a bomb shelter.
I grew up in evangelical Christianity, and we always expected “the end of the world.” My parents have a huge stockpile of food and water, and would seriously consider buying a bomb shelter if they could. Because of my background, I understand people’s fears, but I also know it is no way to live a life.
The fact is, you might not live to be 65, and yes, living for today is good. On the other hand, you could be living and totally dependent on a government you don’t like at 65, too, depending on your financial choices NOW. I would rather have choices and be independent, because it also gives me the room to make a difference. Also, people tend to listen to you when you have something to give — including the government. As a friend of mine put it, “You have to decide if you’re going to come to the table. Are you going to hide your head and blame the government, or make the sacrifices you need in order to be part of the decision?” I thought about that for a long time before I decided that it was better to be a part of the decision.
As a PF blogger who cares deeply about our world, our country and the failing environment, I want to be free of corporate control. I don’t want to pay interest to people I don’t know or like, and I want to be free to invest my money as I choose (my first investments were in two solar companies). I could die tomorrow, but living frugally can and is good for the environment, because living frugally means living less, consuming less, and reducing my footprint on the planet.
I don’t think there is any bolder political statement than that.
I don’t think you need to forego your principles in order to save money and reduce debt. You might have to forego lattes, or consuming — even when its free trade organic — but the idea is less, not “equal amounts but cheap.” I recommend reading more of GRS as well as BostonGal — heck, you can even read my blog, http://www.tiredintucson.com — but I think you’ll find you’re not alone in your convictions, and there are solutions out there.
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This week – on Friday to be exact – my family will become debt free. Tomorrow is the anniversary of my blog, which I started thanks to inspiration from JD and Tricia from Blogging Away Debt (now heaps of others inspire me too!).
In this past year, my husband and I have paid off $27,000 worth of debt – $7000 in CC debt, $5000 in family debt and $15,000 that was left on a car loan. We did this on 1.5 incomes while I finished the sixth and final year of my degree (I have 6 months left!).
It feels absolutely amazing, but it took hard work. I have completed a full-time study load, cared for our toddler and worked two nights a week to make it happen. My husband has made similar sacrifices.
We feel so much relief, but one thing I’ve learnt while doing this is that this is just the start for us. We need to focus now on our emergency fund (it got depleted along the way) and our 20% house deposit.
The change in the way we look at money and financial responsibility is almost 180 degrees. Thanks to JD and everyone else who shares their story in these forums or via their blogs.
I am 100% sure it is thanks to the constant motivation and support that we have been so successful this past year.
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@ Missy:
Thank you for your comments (and I will be checking out your blog shortly).
I am fairly new to reading PF blogs, but not new to thinking about these things myself. I read Your Money or Your Life my first year out of college and it has shaped many decisions and the course of my life since then…in fact, I somewhat attribute my coming marriage to the fact that I got out of a bad relationship years ago over money arguments…but I digress.
My questions were a little off the cuff, but the principles part is something I’ve thought about when reading some “frugality” advice out there…
I can also see how it is a cop-out. We can feel better about still being consumers as long as we are buying “green” products…Pata-gucci, etc. You are right, we must first Reduce, then Re-use, and finally Re-cycle. We must think to first limit our needs and THEN meet them the way that fits our pocketbooks and consciences.
In regards to the state of the world…I’m coming to agree with that as well. No guarantees in life, just have to do what you do and see what happens. If doing what you do involves living lightly on the earth and socking money away for the future, I think you’re right, its hard to go wrong, even if you die young and/or lose all the money to unforseen circumstances. The lifestyle itself has merits…so that is what I’m going to try to focus on…living simply and frugally, not just for the money down the road, but for the peace of mind it gives right now.
Thanks for the dialogue.
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I started keeping track of my networth and just watched the number go up up up since I started:
https://www.networthiq.com/people/wbmsic
I’m on track to be FREE of all debt on Christmas. What a great gift…
My school payment at $1500 I killed about a year ago.
I just finished paying off my credit card that had been kicking around for about 3 years now at $1900.
What took me about 8 months do with the school loan took me about 3 with the credit card. That’s the difference between paying $160/month and $160/week.
GAZELLE INTENSE BABY!
Now I’m piecing together a fund for essentials for my next apt. And rebuilding up the Emergency fund, which I spent on the first month’s rent for the new place.
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A local credit union has a great billboard ad:
“No One Ever Feels Saver’s Remorse”
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I got a new job through networking! I went from a student job of $5,000-7,000 per year to $26,000 with insurance and 401(k). Of course I signed up for those the day they were available and I’ll be funding my IRA on top of that.
Now I can pay off my credit card and student loans–and start saving for cool things, like a Wii so I can play Wii Fit.
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Hands down the most inspirational comment is Garry’s.
I only work 40 hours a week (just graduated college) and am already scheming how to get more time to myself.
You are truly the American dream in my mind. You worked your tail off and now you are enjoying the fruits of your labor somewhere sunny and warm. Enjoy.
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These stories are great. Thanks to everyone who participated.
I hope everyone had a great holiday weekend. Mine was spent doing yardwork, running 16 miles, doing yardwork, having dinner with friends, and doing yardwork. Very nice.
But I didn’t get any writing done.
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We just got back from a two week vacation to the west coast and canada, which we funded after saving over 8 months in ING. We did go a little (okay, about 20% ) over budget, but this was mostly due to exchange rate underestimation of costs in Canada.
We also just passed a $1000 emergency fund (also set up at ING) for the first time.
During the same period we have invested $1600 in peer-to-peer lending at Prosper.com, and invested $2200 in brokerage. Meanwhile, we have not maxed out 401k contributions yet.
We know this is suboptimal but we are building up non-retirement assets to have some money invested that we can reach if need be without getting penalized.
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Our story is more of an “in progress” story as well. My husband and I graduated in May 2006.
He couldn’t find a job so he had to incur another student loan to go to a three-month grad school program. He didn’t find a job until Oct 2006 and I didn’t find one until November.
Despite using up all our savings during that long period of no work before we found jobs, a period of unemployment for him in the beginning of ’07, and a car accident that required us to get a car and loan to go with it, I feel we have made great progress.
This Friday we will be making the last payment on the loan for his graduate program. 20k paid off in 18 months.
Status?
Car loan 10k (6.2%)
Undergrad student loan debt 20k (2.75%)
Emergency fund $2500
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