I received this email success story, and I thought I’d share it with you. Yesterday I wrote about taking action to alleviate stress. This success letter is EXACTLY what I’m talking about. I’ve seen thousands of people faced with this very same situation, but most people just ignore the problem. This couple faced it head on. Names are changed to protect the awesome. Enjoy.
INTRODUCTION AND THE EXPENSIVE PITFALLS
Hi, my name is Jill. My spouse, Jack, and I have been married since July 2009. Jack graduated from a great state college in May 2009, and I finished in December 2009. We were very, very broke college kids who fell in love. We also graduated right after the economy fell out so underemployment became our best friend. From 2009-2011, Jack worked at a church near our college campus as a graphic designer making $23,000 a year (from donations…gotta love that), and I fell through a series of jobs in Lafayette. My income ranged from tips and server’s minimum wage to $35,000 a year doing event planning. Jack and I had never lived on our own before marriage. Although I tried to keep a budget for us, we went a little…scratch that…BIG spending crazy. By February 2011, we had accumulated the following debt:
Student Loans: Approximately $60,000 (we are both first generation college students and had little to no support/wisdom from our parents)
Jack’s parents for my engagement ring: $800
Jill’s parents for living assistance: $400
HOW MOVING INTO MY PARENTS’ BASEMENT MADE ALL OF THE DIFFERENCE
We felt overwhelmed. All we could do was minimum payments or interest on everything. Changes had to be made. I asked my parents if we could live with them, and they graciously agreed. We moved to Pheasantville and lived with them from May – November 2011. In that time, we lived in their basement with our dachshund, Mr. Stumbles Ferguson, and saved every dollar we could. We ended up paying off the Discover, Visa, MacBook, mattress, Jack’s parents loan, my parents loan, and guitar ($8,000 in six months). We also saved up money for a new apartment down payment and moved into our own place again in November 2011. There is no way we could have gotten out of that nasty consumer debt without eliminating rent and other living expenses. This was our saving grace.
SEEING FINANCES AND CAREERS LIKE A CHESS GAME – ALWAYS SEVERAL MOVES AHEAD
I took a job as a secretary at a local community college in May 2011 making $32,000 a year. I was certainly over qualified for this position, but they have great educational benefits like paying for my master’s degree. Turns out, they liked me so much, they just gave me a promotion to be an academic advisor making $40,000. So basically, they are paying me to get raises and better jobs. Jack is working at another church doing graphic/web design for $28,000. He’s not happy with this amount so he’s been interviewing at a ton of design companies in Pheasantville (he has a great connection at good tech company and hoping that will open up for him this month). In the mean time, he has been taking on freelance projects to supplement his income.
Since moving out of my parents’ basement, we have been in a steady budget and savings plan. I have our Christmas gifts fully funded, and we’re ready to shop (always a major pitfall each year so far for us). Although we don’t have a full month’s expenses in savings, we keep a consistent $1,000 in there, and that has been very satisfactory for us at this point. Since we have so much student loan debt, we’d rather re-direct the money towards that.
We’re 26. Jack and I want to be completely student loan and auto loan free before we start a family. That means almost $100,000. I’ve used Pete the Planner’s ideal budget
to build our plan. By shaving off the rest of our expenses areas, we devote the rest to paying off the debt. When/if Jack finds a higher paying job, we will devote his extra income to fully funding our savings account with one month and then three month’s expenses saved. With the plan, I think we can get everything paid off by the time we’re 30. Four years. So…we’re going to do it, and we’re going to set up our future family in a way that our parents never could…or should I say, never did. After the debt is done, then we will redirect all of that money towards buying a house. People seem to view us as “lesser than” for renting as opposing to buying, but what can I say…I can’t justify the down payment at this point.
I truly couldn’t have done this without your insight. You made finances easy to understand and directed it in a way that really connected with my twenty-something, first college generation college student mind. I promise to keep you posted. We are going to do this, and we have you to thank. Have a great night.
All the best,
Jack, Jill, and Mr. Stumbles Ferguson
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.