The Hustle of Sistah Ant

Ten thousand dollars.  Well, roughly ten thousand dollars, and if my old landlord gets me my security deposit by the end of this month, definitely ten thousand dollars.

This month marks the anniversary of the beginning of my hard core journey.  I’d been trying to pay down debt before, but not with the same drive and intensity that I acquired in October 2006.  I’d just started my current job, making more money a year than I ever made before, and I knew, from calculating how much I needed to get by, that I would be making much more than I needed to survive.  I vowed to not spend everything I made, and I decided to go for financial counseling to get a road map of what do to.  Before meeting with the counselor, I thought it would be a good idea to calculate my net worth.  Following the example in Black Enterprise, I calculated my assets and liabilities and then got my net worth.

I knew I had debt, but I didn’t know I had $87,271 worth of debt.  It blew my mind and scared me to death, considering how much money I was making.  The bulk of my assets was the value of my car, which I’d just purchased six months earlier, and I owed more than I could sell it for.  Seeing these numbers was a defining moment.

The financial counselor told me to bulk up my savings, consolidate and kill my high interest debt, and postpone investing (I wanted to start a retirement fund at the time) until after I got these first two tasks accomplished.  I walked and drove from bank to bank that Saturday, trying to find a loan to consolidate my old credit card debt on a fixed rate installment loan to no avail.  No one wanted to give me that much money.  So I turned to Lending Tree, where I found a line of credit that would cover both my credit card balances, give me a lower interest rate, and provided I paid the minimum on time every month (a habit I’d already perfected), a guaranteed payoff in six years.  I had no intention of waiting six years or paying the minimums, but I signed on and got to work.  My first few payments, starting in January 2007, were erratic, because I was still getting my finances straight - I’d just moved, I’d just gotten the job, and I was unemployed before then, so my savings were low and times were tough.   But once I got into a rhythm, things picked up.  I think I may have this thing paid to zero by January 2008.

Where does the ten thousand dollars come in?  Well, before I really pushed hard on paying that line of credit, I had to get my savings up to at least $1,000 for my own peace of mind so that if I had an emergency, I would hopefully not have to use plastic.  I also streamlined my expenses.  I trimmed all the fat.  I took Single Ma’s advice and adjusted my tax withholding so that I’d get more take home income.  I quit eating lunch out.  I chose not to pick up cable, internet, or a landline phone.  I killed my cell phone text messaging package and changed my car insurance.  I took public transportation.  I didn’t go shopping much at all.  I passed on (most) must-have CDs, and vowed not to buy another book until reading all the ones I already have.  I kept current on all my other bills.  And I used windfalls and "extra paychecks" wisely.  Studying for the bar exam (if you were almost $90K in debt, wouldn’t you try to increase your income?) kept me from going out so I saved money that way, too.  All extra money went directly to paying debt.

Blogging has helped a lot.  My behavior is actually influenced by how much I want my NetworthIQ graph to shoot up, and how far I get to push my progress bars to the right - looking at the numbers is a great motivator for me.  I’m also influenced by the lessons I learn and the lessons that are reinforced by other bloggers.  Thank you guys for your help and encouragement. 

So far this October, I’m $77,561 in debt.  That’s a $9,710 difference from this time last year, and I’m owed $645 by my old landlord, which will go towards paying my debt, for a grand total of $10,355 in progress thus far.  My net worth has gone from -$71,211 to -$61,706 (also a $10K positive difference once I’m refunded my security deposit).  I realize that over the past year, I’ve lived on less than $20K of my salary, which makes sense, because I lived on even less than that when I was in college making much less than $20K annually. 

It feels good.  Especially when I think about the times people told me my penny pinching would get old - fast, and that I would get tired and quit.  Today, I’m more energized than ever.  2008 is going to be a very good year.  This is just the first ten thousand dollars.

(By the way, this is a special double-post day, so be sure to see my other post about retirement, below.)