newlyweds

What do you do with your money?

This is actually a serious question. Are you a spender? A saver? A debt-repayer? Are you an investor? An entrepreneur? A philanthropist? Better question – what do you want to do with your money?

Does money decide what you do with your life, where you travel, what you eat? Or do you decide all the things you want to do and make the money work accordingly?

Until the last couple of years, I never really had any money to speak of. Growing up we didn’t get allowances or any money from our parents. What we needed was purchased for us, usually from a thrift store or some other ultra-economic option. If we couldn’t afford it we didn’t have it. My dad never had financial debt, but my mother still sits on defaulted loans from back in her undergrad days. I remember when I was young and she was in her mid 30s and she would talk about owing money on loans for a degree she hadn’t finished. She seemed to want to go back to school, but she never really did – not for the same thing at any rate. And those loans just sat there. The way she talked about them indicated some level of regret, but not really much in the way of concern for paying them back. We didn’t have the money to do so, no matter how you rearranged our “budget,” so she just didn’t sweat it.

When I started college I didn’t understand how debt worked. Neither of my parents ever had credit cards (thankfully) so other than the occasional mention of my mother’s loans, debt wasn’t really discussed. Unfortunately, this meant I didn’t have a firm grasp on the situation when 18 year old me signed on for 4 years of college and seemingly endless student loans. About 60+% of my schooling was paid for with scholarships, grants, and need based financial aid. The last 30+% was student loan. I signed on the dotted line and for all intents and purposes, didn’t look at the numbers again until I graduated and suddenly had a new bill to pay each month.

Upon graduating from an expensive private college with a bachelor of art in Philosophy, I went on to make six digits right off the bat.

I’m being facetious, obviously. I barely scraped together a job for my first year out of college. Just enough to pay for my car, my phone, my rent, and minimum payments on an income-based repayment plan for my student loans. It wasn’t pretty. It was once again paycheck to paycheck.

Then things changed dramatically, which involved me no longer being employed (due to rapidly changed plans when I was set to move to China – you can read about that in the archives), living with family, and working two terribly low paying part time jobs. I was making so little that my loans were once again deferred until I made enough income to even pay my bills. What was already bad was growing continually worse.

In the spring of 2016 I “had to” open two credit lines in order to pay monthly bills and relocate for a better, higher paying job.

So it wasn’t until fall of 2016 that I started paying more than before (but still extremely low payments) on my loans, and started paying off those two new lines of credit. It took me well over a year to pay off the two credit cards, and in that time I ended up getting engaged and started planning finances a little better. Within a year after that, we had saved enough to fully fund our own wedding, putting nothing on credit and maintaining $0 card balances, began renting our own new apartment, got rid of my car lease and bought a used 13 year old car, and took another look at my stupendously growing debt.

By this time, even with over 2 years of continuous (income based) payment, my debt had grown by almost $10,000 in interest. I worked a second job to be able to afford the wedding and the car and all that, and I had felt comfortable that we had “savings” left after getting married.

That was when we took a Dave Ramsey course, and for the first time in our lives understood what the HELL debt really was and how it worked.

We began by making sure the only financial debt we had left was the student loan payments. And we started by doubling what I had been paying. Because somehow it takes forever to update information, my income based payment hasn’t increased as I’ve begun to make more money. But that’s okay because even with low minimum payments, we have every single month paid above and beyond.

With a minimum of $180, we thought it was a huge deal when we paid $500 in September of 2018. That wasn’t that long ago, and we thought that was a lot. But The lesson had to sink in slowly. Our “savings” meant nothing if we still have debt. We have a negative net worth. The only way to remedy that is to keep a small emergency fund, because we all know how life likes to throw curveballs, and to put the rest into debt, not just once but every month.

So we bit the bullet and did it. The very next month, October of 2018, we put $10,000 – almost all of our savings – into my debt. It was terrifying and exhilarating and all of the good and scary things at the same time.

Since then, we have limited our monthly spending to much lower than ever before. Since October, we have had $35 “fun money” as pocket money per month, each. We have limited our grocery bill. We have had a small fund for the very occasional times we go out on dates, but other than that have completely refused to eat or drink out. And that’s it. All the rest is actual bills, which we have also diminished by being conscious of how much water and electricity we use daily. We have driven fewer places to decrease our gas money each month. It sounds crazy, but you wouldn’t believe how much this made us be able to put into debt each month, even after putting essentially all our savings into the debt.

It has been life changing.

It’s now March 1st of 2019. We have done so well it’s ridiculous. We got married in June and if we kept earning and paying how we have been, we could be finished paying off the entire $40,000 in less than a year of marriage. We could be done by June.

If we continue how we have been.

But sometimes life happens. Like you wake up and you realize that Jefferson constantly riding his motorcycle to work and trade school and all that 24/7 is taking a huge toll on him, and that he really, genuinely, needs a car.

So we’re going to buy a car.

Starting trade school was a huge step for Jefferson too. It will greatly increase his earning potential once he’s done next December. For now it has cut his paid working hours down to less than half time, so our income isn’t currently what it was the past 6 months. That is making a difference in how we pay debt as well. And that’s a-okay!

So we’re going to roll with that too.

Long story short – is that debt is manageable, even when it’s not. And even though we could be paid off by June – we won’t be, because we do have to keep some priorities, like health and safety.

I don’t know when we’ll be done. But it won’t take forever, and we won’t always have my misguided teenage financial indiscretion hanging over us. One day, all of our income will be savings, investment, and lifestyle. It’s just great in the mean time to know what we’re capable of.

It isn’t necessarily easy, but it was much needed. We needed help and advice to get going, but now we know what we’re doing. My advice to anyone trying to do the same thing is just this – talk to someone who is doing it, or has done it. The perspective they can offer is invaluable. And also, ask yourself a couple questions: where is your money going? why is it going there? where would you rather see it spent? Be deliberate.

It’s never too late to get started. Our own adventure continues…

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