I am not quite sure where to start, so I will start with my first brand new car purchase. I was 18 and had a 1988 Dodge K car. It was an old (but nice) granny car. I wanted a "cool" car, so without my father's permission, I went to the Jeep dealership. The salespeople acted like fresh meat had just arrived at their doorstep. I felt like a King! I had never been treated with so much "respect". Needless to say, I left 3 hours later with a brand new 1994 Jeep Wrangler 4x4 for the STICKER price of $11,300 and a $340 car payment. At the time I worked at Pizza Hut as a driver for measly pay. I remember to this day the disappointment in my Dad's voice. He was crushed that I didn't consult him before this purchase.
Fast forward 6 months (yes just 6 months). I was "tired" of manually taking the top off of my Jeep, and wanted something different. I pulled up to a stoplight and saw a brand new convertible where the driver was simply pushing a button and the top was coming down. I wanted one, now! I consulted my Dad, and he said absolutely not. But I was rebellious and knew everything. I went to a Chevy dealer and spotted a red 1993 Pontiac Sunbird with a white convertible top, for the bargain basement price of $10,300. I left 2 hours later with a $14,700 loan, because the dealership "did me a favor" and financed my negative equity.
You might be getting the picture here. I FINALLY learned my lesson when I bought my first house. My credit was shot and I had zero cash. But, by a miracle, I found financing for my house at the god awful rate of 13% on a $82,500 loan. My payments were $936/mo!! It hit me when I would be talking to friends and they would tell me what their payments were. If I had just listened to my Dad and practiced some patience, where would I be now?
I sold my house 2 years later for exactly the same price I paid for it. Luckily, I was a Realtor, so my broker didn't charge me her fees with the exception of the legal paperwork.
I am now married with 2 kids and one more on the way. We have shaped our finances now so that we live strictly on cash. The only loans I have are a 6% real estate loan and my student loans. I budget every paycheck down to the penny, and because of this AWESOME blog, I stumbled onto hsbcdirect.com and am earning 5.05% interest on my life savings (a little over $10k, now).
I abbreviated quite a bit of my story, because simply I didn't want you to fall asleep. Probably the best financial book that I have read is Dave Ramsey's Total Money Makeover. I followed his plan starting a few years ago, and it is now a way of life. While I still have some debt, it's not the worst kind of debt, and my house will pay me back eventually. I don't believe the hype that the housing market is crashing. I believe it is correcting the problems that have occured over the past decade and bringing some of the unjustifiable prices back down to earth. Plus, there hasn't been a better time to buy a house than now and for the next couple of years. It's a buyers market. Buy right and SAVE BIG!
Have you paid off your debt? Managed to save for your dream home? Had an awesome investment pan out? Share your personal finance success stories here.
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