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Friday inspiration: Financial management is about more than just getting out of debt

Friday inspiration: Financial management is about more than just getting out of debt

This is part of a series of interviews with people who are either working to improve their financial situation or who have already reached their goals. This week’s interview is with Making My Way, who writes Journey Towards Financial Freedom. She is working on paying down debts and learning more about financial management.

Could you tell us something about yourself?
I am 37 years old and a full-time working professional working at a university in the Midwest. I have over 12 years experience in my field and make a salary of $41,000, which is good for my age, experience, and the fact that I am working at a public university. I live with my husband of 8 years and 2 cats. My husband is a disabled vet who is not working. We do not have children.

In what way have you turned your financial life around? (Or what are you working on changing?)
I have begun to view financial management about much more than just getting out of debt. For me, it is about becoming free of the strings that make me have to go to work everyday at a job that sometimes drives me a little crazy. I also don’t want to be depending on welfare and a soup kitchen when I retire. I want to do some traveling and other fun stuff. So, when I make financial decisions now, I do so while asking myself, “Do I really need this thing? What’s more important? Will I use this thing in 5 years?” It makes me really think about what I buy and whether I really need it or just want it. If I really and can’t afford to but it new, I check the thrift stores or freecycle.

Can you give a little bit of background on your story? What were things like for you pre-change?

Fast forward to our charge off in July 2004. We were ecstatic, but we did religiously save every month almost as much as we had been making in debt payments. In January 2005, I began to seek employment elsewhere and found I needed a credit card to do a car reservation to make the trip. I found a job around 500 miles away. After getting the job and making the move, I did faithfully pay off the credit card and keep it paid off.

I think the first major mistake came in July 2005 when my husband found an old Ford Mustang that he wanted to buy and trade in our Honda. I realized that we had traded a nearly perfectly running car for one that did not run so well and there wasn’t one thing I could do about it. Then, my husband, who is an army vet, began to have some health problems. We ran up the credit card to about $2000, plus we also had a $7000 hospital debt from when I had to take him to the ER. I also had a couple of smaller hospital and doctor bills amounting to about $1500. I got out my computer and figured out a way to get it all paid off. Since then, I have not missed a single payment, though it has been very difficult. I have also resolved to never allow my husband to push me into a financial decision that seems weird or that I am not comfortable with.

How much progress have you made?
I have made significant progress towards paying off my second set of debts. I believe we started with around $10,000 and it is down to about $5200. I also began contributing to my employer’s 403b plan. In a little over 2 years of contributing the minimum (which I think is 5% of my salary), I have accumulated over $12,500. I also have $250 in my short term savings account. That does not sound like much, but it is growing every payday. I resolve to continue contributing to it without fail and to leave it there unless I don’t have a choice. After the debts are paid off, I will continue putting in the same amount I have been paying on debt, because I have been living on my pay without much difficulty.

How do you feel about your financial situation right now? (Or how did you feel after reaching your goal?)
I sometimes feel very depressed when I look at how far we have to go, then I look at how far we have come and feel proud.

What was the catalyst that caused you to take action?
I realized that I was 35 years old (37 now) and that I did not want to have these debts when we retired. I want to be able to enjoy life to its fullest and I want to buy a home. In order to be able to afford to make significant home payments, though, I want to have all debts paid off.

Did you have any setbacks? If so, how did you deal with them?
I have had many, many setbacks, and dealt with them by trying not to beat myself up. We also put money into a short term savings account, because life, like flat tires, happens.

What has been the hardest part of the process?
The hardest part of the process has been that my husband does not support me putting money into a retirement fund. I don’t know what he thinks we will live on, because I really don’t want to work when I am 70.

The easiest?
The easiest has been the joy at seeing each debt fall as we got them paid off.

How long has it taken?
The second round of debt-payoff has taken since July 2005.

What will be your next step?
After paying off the debts, I will increase the amount I put into savings each payday and also increase what I put into my retirement. I will also accumulate money to use to buy furniture, etc. for when I buy a house. I will also open an IRA.

What’s the best financial advice you’ve received?
The best financial advice I have received was to not use credit cards, because you are giving over control of your financial future to a bank.

What inspiration could you give to someone in a similar situation?
I would say, “The future is what you make it. What do you want your future to be?”

Would you like to share your story? If you would like to be interviewed via email for a future article, please email me at c o m m e n t s @bluntmoney.com (without the spaces) to let me know you’re interested.

View Comment (1)
  • It’s hard when your family is not on the same page as you financially. I’m sure you’ve tried a couple different ways to get him to see your point of view. What are his reactions? What is his response when you ask about retirement funding?

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