Anywho...I wanted to get this down on virtual paper before any of it starts to fade away. I am so fired up, excited and motivated right now because getting out of debt and on the right financial track is getting really close for us, and damn if I'm not totally psyched about it!!
Just a little over a year ago, I looked at Brian and said "we've gotta do something about this. The credit cards have to go away, and we need to get out of consumer debt." This desire prompted me to take action and was the first step towards achieving a huge goal.
What did I do? I drafted up a plan and put us on a very aggressive debt pay down schedule. I put together some excel charts and created the visual representations of the milestones we'd be hitting along the way and posted this information on the fridge so that we could see the progress we were making every day. The goal was to have the credit card debt erased by November of 2007. That was 18 months from when we put the plan in place.
I am very excited to report that we are 4 months away from this monumental achievement and will be 1 month ahead of schedule!!
In the midst of all the aggressive pay down, Brian's company was sold, and he was offered an attractive package at the new gig. As a result, we realized we had to start getting serious about getting some tax strategy in place. I started doing some research which has lead me to numerous resources around building wealth (and keeping it!), managing your money smartly and how to stay out of debt.
If you are interested, the 3 books I've most recently been consumed with (and HIGHLY recommend) are:
1) The Millionaire Next Door
2) The 9 Steps to Financial Freedom
3) Debt-Proof Living
In one of the books, The 9 Steps to Financial Freedom, the author talks about respecting your money. The basic concept is that if you don't respect your money and start making smarter, wiser choices about what you do and how you think about money, you will effectively block yourself from earning/finding/making more money. Now when I first read this, I wrote it off as being a little too "other worldly" or spiritual for my taste. But somehow this concept stuck in my head. Funny thing is, once I had the chance to sleep on it and ponder it at the back of my mind, the realization hit me like a bolt of lightning.
When we were fully entrenched in our pattern of reckless spending, we were constantly stuck in a paycheck to paycheck cycle. Extra $$ rarely came our way, and it was hard for us to hang on to bonus $$ that did wind up in our checking account. In 2006 we got hammered on taxes. Nailed with a huge lease penalty. Our savings started to seriously dwindle down. But then in the spring of '06, we started taking control of our debt and getting smart about making it a priority to pay it down. This meant we had to be smarter with the money we had at our disposal. We had to start making better choices and lay off the gut impulse to just buy buy buy!
When I look back and think about our financial situation since making that change, I realized a number of other things started to change. We are both working for successful companies that reward employees (unlike United and their "negative raises"). I get a couple of referral bonuses come in. We didn't get hammered so hard on our taxes this year. There was some stock that got paid out. My team at work is one of the fortunate few that will be getting a special bonus this summer.
That's when I made the connection. We took control of our financial disarray and started giving our money more respect. Suddenly (or so it seems), we are seeing better things come into our lives. Coincidence? Maybe. Luck? Possibly. You can take from it what you want, but I am going to choose to think of this as we are finally learning how to respect our money. And now we are being rewarded for doing so.
So what's next? Lot's of stuff!
1) We are paying ourselves first by doing things like substantially bumping up our 401Ks.
2) We've figured out where our money is going, established a budget and changed how we manage expenses.
3) We're creating a method to manage intermittent/surprise/annual/quarterly expenses and fund dream/fun/vacation plans.
4) We've separated our savings into it's own unique account and established what our savings goal will be.
5) We've chosen a financial adviser to help us with our investment decisions.
6) We've decided to establish a trust and will be planning our "estate".
I cannot believe how far we've come and how close we are to getting on track.
We are so close. I can't wait to be there!
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