My husband and I are in our mid-twenties. We recently decided to put our education on hold because we were financing not just university, but all of our living costs, on various forms of credit (credit cards, student loans, and student lines of credit -- we each have one). We decided that was poo, and I finally got my husband on board after "just happening" to put on a Dave Ramsey CD while he was home.
We're not doing any particular program. I think a lot of them just repackage the same stuff. Big influences on my financial approach right now include Your Money or Your Life, Smart Couples Finish Rich, Total Money Makeover and the You Need A Budget software. In a nutshell, our goals are to: save up a buffer of one month's income and start living off of last month's paychecks (this will be done by December 1st), pay down our debt aggressively, save a full emergency fund and get our sinking funds up to speed, and have enough money to do the fun things we like. I also have a dream or a hope -- it's not concrete enough to be a goal yet -- of reaching what YMOYL calls "the crossover point": the point where interest from your investments can cover your living expenses and you get to retire. I'm not yet convinced this is possible, and I still have to convince good ole hubby, who is not much for a simple lifestyle... (I'm no frugal queen myself, but I am much better at delayed gratification and taking the time to make those big purchases worth every dollar I spend on them.)
I guess I'll start by listing our current debt. Here come some big, scary (to me, probably not to a lot of you!) numbers:
- my Visa: $1409.61. Not being used -- in fact, the bank sent me a new card I haven't activated yet. I maxed this card out at $1500 nearly two years ago...oh my god, that's a long time. 19.5% interest.
- Hubby's Visa: $945.01 He's realized he's not so good with credit cards, having more than a tinge of manic-depressive in him. This card is the "necessity" credit card for when we buy stuff online, rent cars/U-Hauls, book travel, etc. We don't do much of any of that anymore. It's also 19.5% interest.
- My LOC: $9901.74. At a different bank than our usual one, because their interest rate is only prime + .5%. Too bad they made me get a life insurance package that costs almost as much per month as the interest payments. It went to buying us a car (see Hubby's LOC, below.)
- Hubby's LOC: $9998.74. Rate is prime + 1%. Maxed out to buy a really nice used car (2003 Toyota Echo, bought in 2006 for $14k), a $1200 laptop, and various other crap I don't even remember now.
- My Student loan: $16,720.45. Ow. I didn't even want to phone the automated line to get my balance. This grows by $3.08 every day. Had anyone explained to me how student loans actually WORKED when I first decided to finance school through them, I would have changed my mind. These puppies are at prime + 2.5%.
- His student loan: $16,346.48. Also growing by $3.08/day. Makes my blood boil just to think of the fact that $180 gets added to our balances every month. We're not in repayment yet (will be come March), but the anger at this stupid $6/day charge is highly motivating.
Total debt as of today: $55,323.03
On the plus side, we do not have a car payment (just two line of credit payments?!) or a mortgage (we rent).
I have a multipronged plan to attack this big ugly number. Prong 1 involves cutting spending. (I'm really good at this, but my husband stinks at it.) Prong 2 involves raising our income. Our income has always been moderately above minimum wage. The problem is that minimum wage has gone up a good $2 in the past five years and our wages haven't. That's a situation we've created entirely for ourselves, and it's time to dig out of it. This is the area where I feel more like I'm in over my head. I'm not an assertive person by nature; I'd rather not "negotiate" wages -- I'd prefer to find jobs that just plain pay me enough and that give steady raises. Yes, that means I'm a union/office job junkie. And some of those jobs can be quite hard to get into full-time: they usually want you to go through a part-time temp cruddy entry-level position first. Assuming they haven't already picked their friends/relatives for the job.
I know that's whining. And it's going to stop. I'm actually finding it a real struggle to be comfortable thinking about raising my salary to the level I'd like. My husband and I, prior to school, were always able to meet our expenses (and then some) by one of us working full-time and the other working part time. The kinds of jobs I'm looking for now are a 30% raise over the ones I've had all my working life (admittedly less than a decade, but I've had nothing to buck the trend yet). It's almost like some sort of reverse classism, where I'm scared to make too much money. (Come to think of it, our friends don't make that much more than we do.)
Well, to combat all this I've been writing cover letters and sending out resumes to targetted companies and organizations who I know pay well, and in those temporary entry level positions that I know I'm qualified for. I sent out three last week, and the competitions are all closed now, so if they're going to call me back I should hear from them this week. I'm going to keep trying to find other places to apply, though. And I've set myself a deadline: if I don't have a better job than my current one by Dec 1, I'm going to pick up a second, part-time job doing evenings/nights at a strip mall 2 blocks away from us. I absolutely detest the idea of working 2 jobs (I did it once before), so this is a great negative motivator for me. And I'm hoping that telling all you people on the world wide interwebs will help keep me accountable to this goal!
My husband is also looking for a higher paying job, but there are a number of complications with his search which I won't go into right now. I think the biggest obstacle is that Murphy has been kicking his ass for the past two months and he really needs to get some counselling. (For an abbreviated list, in the past two months my husband has: been taken off his feet entirely for two weeks by acute gout, gotten robbed at work at knifepoint, had to deal with a whole bunch of work politics, had a strong case of bi-polar symptoms manifesting, and started smoking again.) He's not exactly at his most poised right now. I'm hoping that talking to a guy he's seen before will help even him out -- for both his sake and mine!
Anyway, I think I've rambled quite enough for an intro post. I hope this journal is the beginning of a very fruitful journey.