Thursday, October 18, 2007

The Wii Success Story

J.D. at Get Rich Slowly is giving away a Wii. This would make an excellent Christmas gift for my kid brother. So here's my Personal Finance Success Story.

I came from a very modest background, and started working my first job the week I turned sixteen. I paid for my own stuff, even things like my prom dress. I worked my way through college, with the help of scholarships and loans.

One day I was at a baseball game, and I filled out the credit card application to get a free t-shirt. Yep, I'm that idiot.

One card soon became two, then three, then four, then five, then six (for the balance transfer rate!). I graduated from college with five of those cards just about maxed out. I would have maxed out the sixth, but it was a card for a store I didn't live near! Hey, I thought, I'll just pay them off when I get a real job!

I took me seven months to find a "real" job, then I settled into a new apartment, bought some furniture, new clothes for work, and started planning a vacation or two. Six months into my new job, I realized that my general expenses had just ballooned to match my new salary. My student loan payments began and I didn't really know how much debt I had.

I could have just kept spending and making minimum payments, but I knew that in the back of my head, I would always have a nagging feeling that it could all come crashing down. I knew that eventually, I'd like to be able to buy a house, have kids, and not be worried about money all the time. So I decided to grow up.

I listed all my debts, including student loans, and they totalled $39K, $14,500 in credit cards at interest rates of up to 29.99%. Yikes.

Back in June, I started this blog. I made a budget. I stuck to it. Since then, I have paid off over $5,000 in credit card debt, bringing three of my six cards to a zero balance. I have a fully funded emergency fund, and I'm working a second job to max out my Roth IRA by the end of the year (keep your fingers crossed).

I'm not out of the woods yet. I hope to pay off the credit card debt by August 2008, and move on to the student loans after that. But I feel like a success everytime I see those zeroes on my credit card statements, everytime I walk by (or even through) a store without buying something I don't need, and each week when I put that tiny second-job paycheck towards my retirement.

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