Money and I haven’t always gotten along. During high school we did fine, college things were ok but after college is when things started down the wrong path…
One thing my dad ingrained in me at an early age was not to carry a balance on a credit card. Not sure why this stuck with me but it did. He never really validated why either. He told me, “Eh, I’m a deadbeat as far as they are concerned. I pay off my balance every month and it pisses them off.” When I found out that if I didn’t pay off the whole balance I would get charged more I got annoyed. At that point I decided that I would pay off my balance completely each month and decided that that carrying a balance was something I would never do.
I wasn’t used to a full income. I was used to working for my parents and McDonald’s to earn some money. After college I got a real job and started working for corporate America and making more money.
The saving grace was the fact that I was living in the middle of nowhere. I really didn’t have anything to spend my money on. The biggest purchase was a higher end model TV that I used my tax return money to buy.
Money just began to build and build. I executed a plan to go to the 2012 Olympics with my then girlfriend Ms. Blue Ribbon and my parents. That drained a little bit of my saved income and then I proposed to Ms. Blue Ribbon (obviously I spent too much on the ring like you are supposed to right?). With wedding planning AND moving to another state in the near future the money seemed to dry up as quickly as it was earned until the stash was drained down.
Post wedding we thought it was a good idea to move out of our apartment we were in for 6 months and buy a house. Our monthly payments went way down and sanity went way up.
We were fine. Not great when it came to money but fine… Then we got new windows for half the house…loan. Overpaid the loan like crazy and we’re done. Sweet!
Then we did the other half of the house…loan. Overpaid the loan like crazy and got a small windfall from Ms. Blue Ribbon’s side and we were done. Awesome!
So I convinced Ms. Blue Ribbon to let me put up solar panels on the house….HELOC
Yes right as the housing market was coming back around I was taking out a loan that was the downfall of many during the bubble. I was sick with fear but it was the only type of loan anyone would give us to get solar panels. (they weren’t considered for construction type loans). So we started overpaying it, slowly upping how much we were putting towards the loan.
Then the idea of a family sprouted in our minds. We CAN’T have a baby in the car Ms. Blue Ribbon was driving!!! It is an ancient (‘99) safety hazard. We for sure can’t use my car! It is a manual two-door!
My dad whispers in my ear, “you should buy a new car”
THAT’S A GREAT IDEA!!!!
*wish I could slap my past self*
So recap: 0 debt and in 2 years we have a mortgage, heloc AND new car loan
Hero to zero :-/
Oh and less than 1 year later baby mini donut was born.
So as you can imagine father protection instincts started kicking in. We set up a 529 and throwing $80 a month into that. Directing anyone that wanted to buy us stuff to send money there instead.
But we were still a big pile of suck with our finances in general. We had a “budget” that we were kind of following. Generally big purchases were split and carried each month into the next to try to balance it out.
A few months went by and my friend and I started talking about finances. He heard about this CRAZY guy who was able to retire in 9 years! Thanks Mr. Money Mustache!!!!
After going to his site off and on for a few weeks reading many of the articles over again it started to sink in….WE ARE COMPLETELY DOING IT WRONG!
From there I contemplated the first course of action. Finally deciding to do the Dave Ramsey baby steps. I was able to get Ms. Blue Ribbon onboard very easily.
Quick win we didn’t have any credit card debt (thank god) and we already had $1000 for an emergency fund.
Pass Go and jump to step 2.
We threw any money we could dig up to go towards overpayment of the HELOC loan. Trimmed the budget. Moved to a cash system for groceries, gas, restaurants, and created a catch all entry called “else.”
Things were finally starting to turn around.
I got a new job that paid lots more…and all the extras went to paying down the debt. That’s when another windfall happened. Unfortunately, a very close friend of the family passed away. He was kind enough to leave us a little bit of money with which we ended up finishing off the car loan and jump starting our 3-6 month emergency fund.
Time went on and a little over a year after starting the baby steps we are consumer debt free, full 6 months expenses saved in the bank and happier than ever.
There is definitely a load of stress that comes off once you get to this stage. I am so excited to share with you how we got here and our journey to Early Retirement.