When I filed for divorce over 2 years ago, all the family debts were paid off, including the mortgage. What I was unable to anticipate ahead of time was being tossed out of my home by the drug-addict that once was my beloved husband. I was terrified to ask for the property and live in the house that he had once built. Basically, I feared for my life if I lived there. I also had 5 horses to care for, and their lives were in jeopardy if I kept them there. My only recourse at that time was to move out --- lock, stock, and horses. This meant boarding where once I used to have them in my back yard. I also paid rent for an apartment and tried to "buy" some security for my 2 teenage sons. All this turmoil, fear, and chaos led me into over $15,000 debt, not counting the attorney fees. I "flipped out", having never, ever been in debt like that in my entire life!
Last year, I took on a part-time job, realizing it would effectively kill any social life I wanted, but how could I sleep at night if I could not financially care for the ones I loved? Eventually both sons moved back in with their father, for their own reasons. I accelerated my 2nd job schedule. I found a better paying 2nd job at a Home Improvement store, and increased to the maximum of hours my primary job would allow. At first I was swept away with emotion over spending, as I had in the prior year, but spending it on items for the house my second son had talked me into buying. Oh yes, no financial settlement yet, and I will probably have to return to court and fight that battle yet again. The Court stuck me big-time!
So, now, here I am, with a house in town that I really don't want (no horses in the back yard, you see) and that needs upgrading, no social life, no time to drive to see the horses, no kids, plenty of bills. I decided to concentrate on Financial Fitness for the next year.
I started by putting my credit cards under lock and key and paying for only those projects that I planned on completing within a week with cash. I forced myself to go through a comprehensive financial review of my debts, place everything on an Excel spreadsheet, and force myself to plan on how much I could pay off each month, and how long it would take me to clear these debts. It was painful and ugly. But very educational. I decided to become frugal!
I paid bills with each paycheck, early if necessary. I paid extra on credit cards until the one with the highest rate was paid off. Then I placed it in a locked filing cabinet, and concentrated on the others. Just last month, one card offered to me a 4.9% rate for 12 months for credit transfer, and they actually transferred almost $7000 from my only other open-debt card! My last payment to that other card allowed me to also place it in that locked filing cabinet. I now have only 2 cards, and have actually saved some money that I am seriously considering investing in a mutual fund account that I hear has high interest payment. I will bear my soul to my father, a retired banker who planned very well for his future, and follow his advice. If I decide to not invest, but to pay the bills, already I have a large chunk to pay off, nearly $5000.
I still have to plan for paying for one-third of my older son's college, plan for replacing my home's furnace/airconditioner, plan on replacing my vehicle that has over 215,000 miles on it, and so forth. My horses are with some friends at a price I can afford, at least for the summer, and I was able to lease out one mare for breeding purposes so that I don't have to pay for her right now. The situation is not ideal, but livable at this point in time. As for the house, it stills needs updating, but I am proceeding it one step at a time. I paid for the roof job, and now need new gutters and a paint job. But I already know that I can do these things myself with a little help from friends.
My recipe for getting out of debt:
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