I was born in a small, rural town in east Tennessee to blue collar parents, one with a high school diploma and the other who earned his GED while I was very young. Both were factory/mill workers for the majority of my childhood and slowly worked their way “up the ladder” to more desirable positions.
My introduction to money was in the form of savings bonds that my parents started purchasing for me around the age of eight. Obviously, this did not do much for my future in the form of capital, but the idea of money growth was intriguing.
My introduction to debt was about ten years later when my dad co-signed a $1500 loan to repair the beautiful high school graduation present I had recently wrecked.
Three department store credit cards and a car loan later (I cashed out my savings bonds for the down payment), I was introduced to Dave Ramsey and Suze Orman in a Personal Finance class at the community college in my county. Their teachings were all I left with from an otherwise uneventful and unfinished college career. I immediately looked at money differently. I paid off my credit cards, closed the accounts and promised myself I would never get another one.
I signed the stack of paperwork for my $100,000 (an amount I just assumed I could afford) home on November 15, 2013 at the age of 25 and walked away with the keys and a little more monthly payment than I had anticipated. I used the $10,000 I had contributed to my Roth IRA as a down payment. Since these are the easiest numbers to do math with, it should be apparent that PMI was a part of my mortgage. I had not done my homework.
Since I was freshly $90,000 in debt, it makes perfect sense (sarcasm font) that I got the itch to look for my dream car. I found it and convinced myself I deserved it, ignoring that little nagging voice at the back of my head. Staying true to my habit of using invested money as down payments, I used my $5000 emergency fund in this way (stupid), financed the rest (stupid) and shortly thereafter, cut my retirement contributions from 15% to 4% to be able to cover the car payment (stupid). Keep in mind that I had kept my original, paid-off car, so this second car was a toy in every sense of the word. When I started feeling the regret and talked about selling the car, everyone told me I was too obsessed with Dave Ramsey and that I needed to live a little. I listened.
My wonderful, amazing (I could go on forever) at-the-time boyfriend proposed to me on August 8, 2015. Desiring a spring wedding, the planning began quickly, as did lots of money-talk. My new fiancé and I decided that we were going to do this right. No more debt. Period. My husband paid off his car and closed his credit card account. I cried the whole way behind the wheel of my beautiful, Grabber Blue Mustang GT convertible when I drove to Knoxville to sell it.
We got married on April 16, 2016. A week after, we combined finances by setting up a joint checking and savings account, as well as another savings account for our starter emergency fund. A few days prior to May, we sat down and created our first budget together, with intentions of flowing through the baby steps during the first few months of our marriage.
And flow, we did. As soon as we completed our goal of having $10,000 in an emergency fund, we decided that in September 2016, we would start taking steps to dump our last and final debt – the mortgage. Since we had not increased our standard of living, we decided to use my husband’s income, as well as any extra money we come across, straight to paying down principal. Our monthly budget now consists only of my income, and the regular monthly mortgage payment continues to come from that.
That’s it for now. In two years, or less, I will have more to add to my financial story. The tone will be different, though. I’ll be writing about goals of saving for my future instead of goals of paying for my past.