In April of 2006, I financially wrecked. Two credit cards were maxed out and then some and two outstanding loans were no longer current. I didn’t want to admit that I had a problem to my parents, though I knew I did. I’d find a way out, though I knew not where to start. Answering the phone was a thing of the past, as I couldn’t bear the thought of having to talk to a collector. Only problem was I started out with these while living with my parents, so when “I couldn’t be reached” at my home, they called my previous number. Then Mom came to my place wondering why a creditor was this close to suing me.
That’ll make you feel sick to your stomach. Being a failure is one thing, but being a failure and your Mom knowing about it is a whole different can of worms.
That weekend, Mom, Dad, and I had a chat about money, debt, and how I needed to shape up. The first step was to face the fear of talking to my lenders and getting things worked out so I could get to where I was standing again. By the way, if you have an education loan, they are about the easiest to work with. If you can’t pay for a season, they’ll deffer for a time. That’s a lot better than defaulting, plus they’re more than willing to work with you since they get rewarded for every loan that doesn’t default.
Anyway, part of the solution was a loan in Mom’s name to get the Credit Cards settled. At the time, it was a great idea, but now I don’t endorse familial debt. As Dave Ramsey says, Thanksgiving dinner just tastes different when it’s with your lender instead of your family. This loan had a four year life and I had to pay at least $25 above the minimum. Talk about not fun.I had a total of $8,000 with Mom’s name on the line. $500 was in a convenience check to make up part of the remaining balance on a card. Knocked that out in a couple payments. Then the big task started.
Oh, yea, I had to get a second job too. I landed that the day before my move back in with Mom and Dad deadline. I started doing my minimum payments and after almost a year, I realized, I could tack on another $50 to what I was paying. Then I got a huge bonus from my primary job, and did something that I never thought I’d be able to do. I spent my bonus on debt reduction. Not the latest gadget or anything else. I also came up with another $100 a month to put on the familial debt. The lender that Mom talked to even offered me a month off, penalty free, which I flatly rejected in my new mindset.
When you’re going through Baby Step 2 (paying off all debt, smallest to largest), it is easy to get weary, no matter how good you’re doing. I do a little jig when I reach a $1000 threshold or my finance charge drops $10. Why? Because it’s a progress marker. Finance charge drops because the principle drops. Principle drops because I’m paying above and beyond what the lender wants.
But it’s still easy to get discouraged that the debt is hanging around too long (and it is).
So, last night, I took all my debts paid up-to-date this month. Mom’s loan, with another $50 per month has just five months to live. That means, just in time for Mom’s and mine birthday’s, I’ll have my parents back!!!!!!!!!! I told my Mom the good news today and her jaw nearly hit the floor when I told here that I’d have her paid off in half the time the lender stipulated. I think it was her recent neck surgery that prevented it from falling all the way down.
My next debt is a car (yuck!). Don’t get me wrong, the car is nice and all, but it’s dragging a little having a bank as the primary owner. I calculated out five months of payments and ran what I’m paying on Mom’s loan into the minimum for the car. Seven months after I reclaim my parents, the car will have a bumper sticker that says “PAID FOR.”
After that, I have this lady I’m living with named Sallie; Sallie Mae, every college grads live-in girlfriend. I calculated out a year’s worth of payments on my college education and then rolled my new minimum on the car into the monthly plan for the education loan. In a little over a year, Sallie will be evicted. I set a personal goal for the end of 2009.
That’s just two years away. I did some figuring on time saved. Mom’s loan will be two years early; the car will be just over a year and a half early; Sallie Mae will be just under 10 years early. Added all up, I’ll be saving 13 years and 3 months of loan time!!!! I’m looking forward to being debt-free, especially now that I know it’s so close, I can see it on approach.
Thanks be to God for His grace that has gotten me through this self-inflicted tough time, for loving parents to say “We’ve been there and we still love you,” and for friends to share the good news with.