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 Post subject: Getting started; our debt free journey
PostPosted: Thu Oct 18, 2007 9:03 am 

Joined: Thu Oct 18, 2007 8:50 am
Posts: 1
This is a story about how we're ready for success. We're not THERE yet, but we have no debt holding us back.

We started this financial journey together when we married, before that our finances were completely separate. Even during the first year after marriage we kept his and hers accounts, just coordinated our bills.

His family is super thrifty, immigrating from Mexico and working their way up to financial stability. They're still not quite there, but they own a house in the Bay Area and are nearly debt free besides their mortgage.

My parents had massive debt, caused by my dad's impulse spending and gambling. I grew up with a shortage of food and hand-me-down clothes, but my dad had lots of toys. It resulted in a bankruptcy and my dad moved to Thailand with his small retirement pension and my mom lives with her parents about 30 minutes away from me.

We started out nearly broke after our cheap wedding. Rings cost about 1.5k, the backyard wedding cost us about another 1.5k and family and friends helped with the rest of the preparations. We used credit for everything, but as always, paid everything off each month.

We rented a studio apartment for $790 a month, and we both had retail jobs. Mine's at Trader Joe's and his was at Home Depot. We worked between 16 and 32 hours each week and went to school full time as well. We bought furniture at Ikea, food at TJ's and the Farmer's market, clothes at Goodwill and bought very few other items. My biggest expenditure was my digital camera which was half of our tax return, the rest went into savings. We both drove beaters that our parents had sold or given us.

We found ourselves having to move when our studio was being torn down to make way for townhouses, so we moved into another studio, also at $790. At that point we found out that we were pregnant, and that's when our finances became a lot less simple. When I was around 6 months pregnant we moved in with Raa's parents, because they offered the master suit to us so we could continue our schooling. They refused all rent, so that saved us $800 a month. I started buying a huge portion of the food though, so we did increase out non-rent expenses by a few hundred. At the same time my car broke down and hubby's car was not suitable for a car seat, so we purchased an $8000 2001 Chevy Prizm with 49K miles on it. We paid cash, though we took out a 2k loan from my mom to cover our expenses till we recovered from the purchase. We paid her back within 3 months with interest (I forget the percent). We've been very happy with that car.

Evren's birth was also a financial strain, though I wouldn't have had it any other way (except maybe insurance coverage). We had a home birth with a midwife and her fees came to about 4k. Our insurance covered 100% for hospital births and nothing for home births, but I'm completely happy with how things went.

The biggest financial loss with having a child is lack of income. We've been unwilling to go the daycare route with him and worked opposite shifts from the time he was 7 weeks old till he was around 18 months old. Then we hired a neighbor to watch him part time. In the meantime my husband had been forced to quit Home Depot because they refused to work with our opposite shifts. Since I was making 4 dollars more an hour than my husband, with awesome benefits, it was a no brainer. He worked for the holidays at The Container Store (his favorite job ever), then moved into medical collecting. He's making more there than he ever has though his base pay is still less than Trader Joe's is paying me per hour. It's dependable hours though, with frequent bonuses and he's working his way into management. We're both still going to school very part time, though at this rate it'll take years to get our Bachelors.

Living with Hubby's parents only lasted 9 months before I couldn't stand it anymore. We're now living in a tiny 1 bedroom with a great park nearby and lots of other kids to play with. I really long for a bigger apartment, with windows on both sides, or the ability to quit my job because of the stress of trying to make all the child care issues work out (there's at least one mini crisis per week.) However I'm proud that we made it this far debt free, with a net worth of about 28k. Half's in our retirement accounts, the other half is in a liquid CD. We live in the Bay Area, and my hubby refuses to move, so we need to make much more than we're earning in order to thrive.

Getting married when we were 20 and 22 and having a child when we were 22 and 24 doesn't feel like the brightest idea we ever had, but we value each other and time together more than things.

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