Take the Financial Literacy Month Challenge—You Could Win $250!

Posted

financial hurdleHappy April! We all know what that means: longer days, the scent of spring in the air … and a new challenge from LearnVest.

April is National Financial Literacy Month, a time to boost your money savvy and understand the importance of taking charge of your finances.

 

This month, we want to know about a financial stumbling block you’ve encountered, and how you overcame it.

Maybe it was paying down student loans, getting rid of debt, paying for your kids’ college, or building up emergency savings. How did you figure out that you needed to make a change? A nudge from a close friend or family member? An “aha” moment? An inspirational story on LearnVest?

Whomever we select as the winner of this month’s challenge will receive $250 to put toward his or her financial goals.

To enter, post your tale of financial triumph in the comments below. Be sure to use your email address when you comment—it won’t be visible to other users—so we can notify you if you win. Good luck!

Posted in: , ,
  • Mart

    I had [regretfully] been an over-spender and was living above my means for the past 5 years, which caused me to go into about $20,000 in debt. Along with the debt, I was not saving for retirement like I should, nor adding to my emergency fund savings. Truthfully, my roadblock was not being honest with myself about what was causing me to over-spend, which [again, regretfully] had to do with pleasing others. Over the past year, thanks to both my boyfriend AND to Learnvest, I am only five months away from being debt-free for good. It was a combination of my boyfriend encouraging me to make cuts in my spending and bills, and helping me to find extra ways to bring in income. Also, I become pretty obsessed with reading Learnvest articles and budgeting! Even though I haven’t “made-it” quite yet, I am so pleased that I’m on the right path!

    • smashaheart2214

      Where do I start. Lets just say im really bad at managing my money. I got began getting my student refunds in jan. Its now april and i have lost about five grand and i believe all i have to show for it is a laptop now in the pawnshop until my final refund for the semester arives. Let me tell u i have no car no job and very little income comming in. With.all that said im also homeless 85% of the time. So where did my money go. I truely dont know. Why didnt i get apt. maybe a car,believe me tried both even had a guy drive me a car but as luck would have it, i couldnt get money out of my own account. Apt. lets see jm a felon, yes a felon, who hasnt been into trouble in ten years, but can i have the same oppurtunities as another american, no because i committed crimes when i was a child, and i look DifferanJit, im a product of the great state of texas, this is what they created, but do they Recongnize change, half the time i dont even know wats going on. Im hitting every bump imagined in life in my personal, mental, and financial areas of life. It brings me down to point i want to give up, but i Dont, i refuse, and i Guarantee w this Next refund I HAVE A CAR! If not to do anything else but to piss the people off who think im going to trik it off again. Give up, never heard of it. Im making changes weather the world believe me or not, i learn and accept mine, which most of people ive come to realize cant accept things for what they are, there is always that cloud of Doubt in a hatas mind. Its ok i really could use the 250 though cuz i be hungry, not to mention i blew the air bubbles out my brand new nikes, who does that. Try walkin from downtown dallas to tha grove after being up bout three days tryin make important meetings and classes and people ridin ur ass the entire time. Excuse my language please but its true, i am hungry and if u do let me get the 250 i give my word to invest in some stocks, lol somethin i just got interested in while cruisin ur site….
      My Life and Luck…… This is just not for me
      Jonathan Liau
      jliau2214@gmail.com
      P.S if u know me act like it n u see me walkin give me a ride damn I just bought those shoes….. :-)

  • MindyF

    Hi Learnvest! I graduated from college back in August… I am very lucky to have found a great full time job, however entering the world of bills with ZERO savings was scary!…. It took me a few months to realize that saving for the future and for fun short term goals was easy and worth taking the extra time to budget . My “aha” moment that kick started my new lifestyle of saving and saying NO to happy hours came when I was visiting family during the holidays… My little step sister who is 13 really wanted a new phone. She walked downstairs with a wad of cash and told my dad and step mom she was ready to buy her first iphone. I asked her where she got all that money!… her response was “I saved it…duh!” … If my 13 year old step sister can have the smarts and self control to save for her goals… than I could too!

  • Brandi R

    I used to pull out my credit card just to impress my friends and treat them to dinner or drinks. I learned quick that it’s a spectacular way to make student loan money go away quick without meaning to. 6 dollars here, 12 dollars there, doesnt seem like much. Then you get the bill and wonder what your stupid brain was thinking. I’m certain I left my lack of forethought back in 2008, where it shall remain! I’m still paying on my student loans but it’s manageable . To top it off, in the past week I’ve moved, paid two months rent, started another quarter of school (paid in cash), put my daughter in daycare and had the money to pay an outrageous cell bill and purchase new wheels and tires ( I destroyed the old ones on a city sidewalk). WITHOUT credit and WITH some money left in the bank. (don’t want to shamelessly plug my new budget method but it’s great software!) Im currently saving for a new mode of transportation, that isnt a car, so I can maximize what 28,000 a year can do for my family, and do a little of my part to make my city cleaner.

  • Megan

    My first job out of college paid very little, and i was saddled with $30k in student loans. I had worked and supported myself through college (rent and everything!), and once I graduated, I was hired full time but I was making only $28k. I continued waiting tables on the weekends to have ‘spending money’. I was determined to be able to support myself without asking for help. I barely scraped by each month, and put nothing into savings.

    Two years later, I got into a car accident on my way to work. My car was totaled and although my insurance covered the car, I was faced with huge medical bills, and my insurance only covered about half of them. I didn’t have any money in savings, even though I had been working 6 days/week for two years. I was hit with the reality that I was completely unequipped to handle an emergency. My father had just been laid off, and my mom was working, but barely made enough to support herself, and her income was supplemented by alimony from their divorce. I had this sunken feeling in my stomach for weeks, knowing I was injured, broke, and didn’t have any financial stability. I committed myself to patch my life back together and build a savings account. I bought a used car to replace the old one, using only the money from the insurance company. It wasn’t as pretty as my last car, but I knew it was the right decision.

    Over the next few months, I sought out a new job with about a 50% pay increase(!) to $45k. Even though I got a new job, I kept my spending the same, and kept my part time job. I paid off my medical bills in 6 months.

    I have set a goal for myself for this year; I want to put $15k into emergency savings. I set up two savings accounts; one for emergency, and one for vacation/big purchase spending. I put at least $500 a month into emergency, and maximum of $100 a month into vacation. I also put $200 a month into my 401k. I have picked up freelance jobs as well, and all of that extra money goes straight into savings.

    I am a third of the way to my goal so far this year, and I am proud of every dollar I have saved. I am 25 now, and while my friends are buying houses, new cars, getting married, having kids, etc., sometimes I feel a bit left behind because my financial problems have prevented me from some of my goals. But I value myself and all of my hard work, and nothing can replace that feeling of knowing that you have a safety net. I never want to be in debt again. My ultimate goal is to avoid that stress and anxiety of not having a safety net, and to be able to have peace of mind. I only wish I had started sooner!

  • http://www.facebook.com/Engchik Christine Tarlecki

    I am a freelance writer and contractor, so money isn’t
    always flowing in. Despite it though, I keep reinventing myself and taking odd jobs or looking for more work. I teach night classes on magazine writing, blogging, and event planning; teach swimming at the gym to get a free
    membership, work in retail for my health insurance and don’t go nuts spending each time I get a well-paying gig. I put money away for taxes; try to save while still going to dinner and the movies once in a while.
    Yet, even with my careful planning, stuff can happen! My
    biggest resource- myself- was what trapped me. Working 4 jobs, writing, working out, seeing family and friends, and entertaining caught up with me. Right before spring 2011 rolled in, I felt a bit off, thinking my allergies were
    beginning. 6 hours later found my mom hauling me to the ER where the doctors finally discovered what was wrong with me: a super high fever with double-lung lower lobe pneumonia. WHAT?! I have never felt so bad, but thanking my lucky stars I have health insurance, right? My bill was over 25K, and I was only admitted for two days! Panic on top of feeling lousy is not a good feeling, especially with the X-rays and (expensive) antibiotics I had to take. The
    hospital told me 95% of my bill was not covered, and I ended up putting the balance on my credit card. I was thankful that I had money in the bank to pay for the rest. My mistake was paying my bill before the insurance company reviewed the bill. (Wait to get the EoB!)
    Luckily, part of my hospital stay was covered. Next came the arduous task of getting the hospital to refund the balance on the credit card- which took months. I learned from this that it is vital to have health insurance, even just a little bit. I am healthy, I work out, I eat my veggies,
    yet out of nowhere I became gravely ill. A debit of twenty five thousand dollars would have wrecked all my careful savings, but because I work a couple days a week at the mall I avoided that horrendous headache. I’m fully recovered now, but I don’t work quite so hard, as I am very afraid of getting that sick ever again; and I want to be healthy enough to enjoy what I’ve worked for and be debt-free! (engchik@me.com)

  • http://www.jamesconnors.com/ James Connors

    My Secret Shame:
    I was addicted to credit cards – all of these companies think I’m worthy for giving me plenty of “free money” and I took it and I spent it. I said to myself, “I can pay for this tomorrow, next week, next year” – all sorts of justifying and rationalizing self-talk. It wasn’t until my girlfriend and I were considering moving in together that I was forced to take a real hard look at my finances.

    Mint.com had been hooked up to MOST of my accounts, but not all… without EVERYTHING being hooked up, I could always say that there was something else out there to pay for it. I didn’t have a handle on my net-worth, didn’t have a budget, and didn’t have a plan for discharging my debt. BUT I had a great job, a big lifestyle, and I was making all of my payments. Even with that, LearnVest’s debt quiz told me to consider Bankruptcy – no one had ever said anything about that before.

    So, what did I do? I called LearnVest – Ellen Derrick was compassionate, non-judgemental, and supportive of my financial goals. She helped me see how LearnVest could help get me on the right path to a better financial future. That same day, I signed up for the Budget Starter program in order get a structure for my spending and align that spending with what is most important to me. That week I filled in my profile and connected my accounts in MoneyCenter and I was SHOCKED with what I saw. I had a negative net-worth, ~40k in credit card debt, ~30k in Student, Auto, and Consumer loans. BUT, there was hope.

    Samantha Vient is my LearnVest CFP, helping me knock out my debt. In our first month together, we crafted a budget and posed some challenges for me. We’ve paid off 8K of my debt in that one month and I know how I’m going to spend my money this month. She was tough on me, challenging my personal goals and values, questioning what was most important to me, and made it OK for me to let go of some of my favorite hobbies and activities.

    Next month, after a total of three months on plan with LearnVest, I’ll be exploring the LearnVest 5-Year Planner so that I have targets for each of my future financial goals from zero-debt, engagement ring, wedding, home, college, and beyond. I have hope now – I didn’t have that back just a couple months ago.

    Thanks,
    James (Dude in Debt)

  • Caitlin Bates

    At the start of 2012 I broke off a 4 year relationship with a boyfriend and moved into the city in a one bedroom apartment. Everything felt liberating as a 24 year old single female, living in the city with friends and a full-time job. I thought I had it all. Shortly after signing my year long lease, I was laid off from my job. I had the typical first few days of panic mode, but jumped right back on the saddle of the hunt. I have a degree in the Arts and most of my jobs were your basic assistant type jobs, so I figured I’d be alright. I also had a bit of an emergency fund so I thought I could make it a few months.

    A few weeks went by and I started to panic again. So I decided to sign up for Unemployment and the Food Stamp program to try and help bring something in while I was looking, since I started to get that queasy feeling that this was going to take longer than I wanted it to. I immediately was denied food stamps because I had a decent amount in savings [never knew that was a negative thing!], and after collecting unemployment for about 2 months I received a letter in the mail from the unemployment office letting me know that my previous employer was taking me to the appeals court because they no longer wanted to pay for my unemployment. Turns out, even though I was told that I was being laid off due to lack of work, they claimed that it was in fact for job performance, yet there was never any discussion in my year of being there that I had any issues, let alone ones that caused for termination.

    Making a very long and grueling story short, I battled with this for a few weeks and ended up losing the appeals hearing. Mortified and confused and feeling like less than a person I then received a letter stating that I had to pay back the $2,000 that was payed out to me [including the taxes that I had asked to be taken out of each unemployment check], and I had 30 days to do it. I held off as long as I could to do this, but there went a huge chunk of my savings.

    I eventually picked up a few part-time jobs, but the hours were [and are] so sparse that it wasn’t enough to pay for anything. And when it rains, it pours because I also had to deal with several car issues [I had 3 flat tires in 2 weeks... talk about terrible karma], and a sick and elderly cat.

    I have since moved out and moved back in with my parents [almost a full year later] and am back to rebuilding my emergency savings account. I’ve also started to slowly build my own business [over Etsy, and thanks to the Build Your Business bootcamp!] so that hopefully this time next year I’ll be able to stand on my own again, making sure I have counted and recounted my budget multiple times. It’s been a really rough year but I’m thankful for friends and family for keeping me encouraged even when I’m discouraged. I’m also incredibly thankful for LearnVest because I would seriously be living in a ditch clueless about everything otherwise. I’ve learned better money management, I’m even more cautious about financial situations and employment endeavors than I was before [actually, probably more than I should be] and I’m finally able to have the time and slight resources to put towards finally working for myself and doing something that I’ve always wanted to do but never thought was possible. I know I have a long road ahead of me still, but it’s actually one I look forward to now, which is a nice change from refusing to get out of bed in the morning, feeling like you’re never going to amount to anything.

  • http://www.facebook.com/andrea.dorn.71 Andrea Baird

    Growing up, my parents relentlessly taught me to NEVER have credit card debt. So, during my four and a half years in a private college, I overloaded classes, worked a part time job and did whatever cleaning I could on the side to avoid any debt other than student loans.

    Then I graduated and life got tougher! With an engagement ring and Elementary Education degree in hand, I moved cross-country for love. Many tough financial challenges lay in wait for me. 1) I had just spent the rest of my savings, about $200, on gas to move with my car load of belongings. 2) I needed a job and mid-year appointments for a new educator are non-existent in this economy. 3) Due to religious beliefs and a bit of feminist pride, I needed an apartment.

    Luckily, a couple weeks before driving to my beloved, a preschool employer had Skype interviewed me and two schools had offered a working interview once I came into town. Immediately I called and set up appointments for both. I had to make a tough decision: take a part time job appointment that won’t cover the bills but ~might~ turn into something better, or take the full time position offered now, with benefits, even though it wasn’t my first pick of employment. My father pleasantly haunted me from the grave, reminding me: work hard, don’t go into debt. I took the job that paid the bills NOW. This included not becoming a substitute teacher. After a few months, an after school program for at-risk kids did open up, and my preschool employer was very gracious to work out a schedule that allowed me to do both.

    I put the loans on deferment for a year, and pinched pennies. Mac-N-Cheese and rice are both delightful meals. I stopped going shopping. Period. Whatever I could bum from my fiance’s apartment, I did. I found a hole in the wall studio in a not-so-pleasant neighborhood and said lots of prayers at night. And even though the credit card often threatened to approach red, it never did. (Maybe even with $20 to spare at the end of the month.) We scrimped and saved and threw the simplest wedding for over 100 people that you’ve ever seen; instant mashed potatoes to boot!

    It’s been over a year since I first moved out East and now I’m a Mrs. We, newlyweds, are opening up to each other in the endeavor of finances. I finally asked my Engineer how much he had in savings and I’m glad we’re both penny pinchers! It makes all the small sacrifices worth it in the end to know that if we have a baby, get into an emergency, or want to get a house, we can!

    I think back to when I first moved and had the choice: wait for the dream job or work and pay the bills till you can. My parents’ advice of “Pay the Bills” has made all the difference. I ~still~ have recent graduating girlfriends that are waiting for that perfect opportunity. With this economy, it just doesn’t exist. However, with patience and hard work, you can make your way. As my husband gears up to take his first engineering job, I will move with him yet again. The choice will come before me: take a job in the interim after we move or vie for that perfect salary. I think you already know my answer…

  • B

    When I decided to go to graduate school, I didn’t think twice about moving and taking on hefty living expenses. I had never paid for school before. I shared a glamorous apartment, ate out frequently, and didn’t think twice about all the loan money I was taking out because I was convinced I’d be able to pay it all back with the shiny new job I’d get once graduating.

    Fast forward 3 years and a crippling (and growing) $127,000 of student debt later. Granted my program was expensive, but there are things I wish I had known before I applied for loans. Don’t take out more than you need. Live as cheaply as you can. Sacrifice. Work a job through grad school. Don’t put things on your credit cards.

    My ah-ha moment came in 2012 a few months after graduation. I was stuck in a year-long lease and was in a panic because I couldn’t find a job in my field. I knew I had to get serious about my debt management and how I handled my finances, for the future I longed to create and to simply stay afloat at the moment.

    Since then I have been committed to working as many part-time jobs as it takes to pay my bills, paying off my debt, and gaining experience in my field. While I have had to sacrifice a lot of things and lead a less glamorous life than all the other 20-somethings I know, I feel better knowing that I am working towards financial freedom. Once paying off my consumer debt (an approaching goal!), I plan to tackle my student loans and start building my savings for an emergency. I never want to feel that sense of panic again.

  • Guest

    Income
    I’ll start by pointing out all of the points of my finances I am proud to call mine, then I’ll outline my struggles. I am 32. In the last year, I have had a number of ups and downs financially. I have a secure job with an income of around
    $80,000 a year. In that way, I am very comfortable.

    Home and Car
    In 2008, I purchased a 5-year old car for $10,800 and paid off the loan in under two years. When it was totaled by a hit-and-run driver, I chose to buy the same year, make, and model vehicle so the insurance I received would cover the whole cost. I still drive the same car and maintain it well so it will last. Thank goodness for a trustworthy, competent
    mechanic! In 2010, I purchased a foreclosed home for $54,900. It is a lovely 2-bedroom home near a park that is great for walking my dog. While there’s a learning curve, I’ve done as many repairs on my own that I can to save money. I recently made my final payment on the home, so I now own it free and clear. I have a $50,000 home equity line of credit that I can use for unexpected expenses, so I
    felt comfortable paying my loan more aggressively than I otherwise would have because I have nothing in the way of an emergency fund. I consider paying off my house a great accomplishment on the road to financial success.

    Budget
    I live well below my means. I live with a roommate to keep my expenses down. I got most of my furniture as hand-downs when my grandparents passed away or purchased them used off of Craig’s List. I make the maximum contribution to my 401K and a Roth IRA. I don’t feel like I am scrimping, though my friends sometimes tease me about my frugal lifestyle. They feel that I should live according to my means. I prefer to live a lifestyle similar to what I believe I will be able to maintain in retirement so I never feel like I cut back, even when my income is less.
    Anytime I want something, I may wait a little while, but typically buy it (used, if possible) because I don’t want a lot. I’m very happy with the things I have, so I don’t need to buy many new things. I like to window shop, but window-shopping is often enough to make me happy. I don’t have to bring home the things I like to enjoy seeing them. I often treat shopping trips like trips to a museum. If I am considering a purchase for something I didn’t plan to buy, I write a memo in my phone and if I want it enough to remember what it is without looking and to make a trip back to the store, it’s probably worth the money. Usually,
    I don’t even remember what it was until I look at the list in my phone.
    If I am purchasing items, I try to remember to follow my ultimate-frugality rule. First, I look for a discounted gift card (giftcardgranny.com compares the best discount on gift cards from multiple websites) and purchase the gift card with my credit card. One percent cash back on my credit card added to the gift card discount (my savings have ranged from 2% for Walmart to 28% for the Limited) gives me a little extra savings on top of whatever other great deals I can find. I also price-check other retailers online if possible. If I make the purchase online,
    I also use a rebate website to get extra cash back (ebates.com) and double-check for coupon codes before I actually check out. That sounds like a lot of work. Sometimes it is and many times I forget one or more of my steps, but when I remember, I feel accomplished because I didn’t waste any money.

    Life Insurance
    I am still single, so I considered life insurance a waste of money until I heard of life insurance with an accelerated
    death benefit, which will allow me to draw all but the last $10,000 of the policy for long-term care expenses. The
    company I chose has a $450,000 policy for an initial $35,000 premium (at age 32) with no further premiums, ever! I haven’t actually purchased the policy yet, but plan to purchase it before the end of the year. An annual premium would be a little over $1,000, so if I die before 67, my premium will cost more than if I paid annually, but I also have peace of mind knowing that I never have to make another payment and can never default, thereby losing coverage. I know that I have $440,000 for long-term care expenses (which sounds like a lot, but isn’t nearly as much after taking into account an estimated inflation of 3% for the next thirty or seventy years).

    Credit Card
    Here’s the bad part! Everyone has unexpected expenses and difficulties along life’s path. Mine was reporting a crime. I can count myself lucky that I’m not on the hit list of a drug cartel or a gang, but I’m still paying the consequences of telling the truth to the police for a crime that was never prosecuted. In my case, the perpetrator has stalked me, filed a false police report about me, and filed a
    civil suit because I reported the crime to the police. I learned the hard way that evil people can use our civil justice system to harass their victims. The government provides legal representation for criminal trials, as most Americans know from hearing the Miranda rights on
    television, but not for civil suits. While I hope that justice eventually prevails, I still have to pay a lawyer thousands
    of dollars to defend me against the civil suit. My credit card balance is currently $10,000 and climbing. I’m lucky enough to have an introductory APR of 0% for 11 more months because of good credit and unsolicited credit card
    offers (who knew junk mail could be such a savior?). I hope to be able to pay off the full balance before the rate goes up. If the bills get too high for me to pay before then, I plan to use my home equity line of credit, which I consider my emergency fund. If I had a real emergency fund, it would have helped to keep the bill from getting so high, but my essential monthly expenses (not including aggressively paying down my mortgage and saving toward the lump-sum life insurance policy) were around $1,200, so even six months of essential expenses wouldn’t cover something like this.

    Investments
    I have a 401K and have saved the maximum allowed by law for the past three years. I also have Roth IRAs and have saved the maximum allowed for the past six years. I once saved $30,000 in a mutual fund for a couple of years to use as a down payment for a house. That was a bad
    investment. When I needed it, it was only worth $19,000. I am considering whether to move my Roth IRAs into a peer-to-peer lending account (prosper.com or lendingclub.com, not available in all states) because the $29,000 I have saved has diminished rather than grown.
    Overall, having my money in mutual funds has cost me $15,000. As much as financial advisors recommend
    mutual funds, I am starting to believe that they are very good at taking money out of middle-class pockets and moving it into billionaire pockets. I think peer-to-peer lending, while not FDIC insured, may be a better option than banks or mutual funds. I may earn 6% annually, but that sounds a lot better than losing $15,000. It’s still a
    risk, but I am beginning to think it is a better option than playing roulette with the stock market.

    Helping Others
    While I can, I am trying to help my sister save for retirement. I have given her enough to max-out her Roth IRA for the past three years and I’m also trying to buy a life insurance policy with an accelerated death benefit for her. Though it is a much smaller policy than the one I plan to buy for myself, it will still help if she is ever in need of
    long-term care. I may not always have as much money as I have now, so I want to help while I can. I certainly don’t feel like I’m sacrificing by helping her financial security because I don’t use all of my income anyway.
    Lastly, I donate to charity. I donate to both non-profits and lobbying organizations because I believe both are beneficial. My heart lies with protecting the environment, so most of my charitable dollars go there. While donations to lobbying organizations, like the Sierra Club, are not tax-deductible, I believe they can sometimes do more good than non-profits that have no power over laws that benefit
    corporations at the expense of clean drinking water and habitat for endangered species. I believe that taking care of
    the environment will ultimately benefit us all. Keeping our drinking water and air clean is much less difficult than
    cleaning up after companies that put profit above people. No amount of money can bring back a child lost to cancer from chromium poisoning.

    Shirking (Some) Financial Advice
    In spite of my high credit card bill and an expectation of further legal bills, I think my finances are in pretty good shape. If I could go back in time, I don’t think I’d do much differently.
    I certainly wouldn’t have purchased life insurance without an accelerated death benefit, in spite of recommendations of financial advisors, because I don’t have any dependents who would need it if I die. If I heard of policies with the accelerated death benefit, I might have gotten the life
    insurance six years ago, when my premium would have been $4,000 less, but I don’t know if I would have been able to afford it then. If I bought it then, I’d have less in my
    retirement accounts and perhaps would have been unable to buy my house because I wouldn’t have a down payment.
    I wouldn’t change paying my mortgage aggressively instead of saving an emergency fund because I have the security of a home equity line of credit with a 10-year draw period. To keep a mortgage costs me money each year
    (and the tax benefit doesn’t come close to covering the expense). Keeping money in a savings account with practically no interest seems, to me, a poor decision.
    Using a home equity line of credit as an emergency fund costs me nothing (the bank I chose had no closing costs) and is available if I need it. I think that is a sound decision.
    I thought a great deal about which financial advice is beneficial for me. Saving in a 401K and Roth IRA are good for me. Getting the security of long-term care through life insurance with an accelerated death benefit (that also doesn’t lose its value if I die) is good for me. Living a lifestyle I expect to comfortably maintain in retirement is
    good for me. Paying down my debt, including secured debt, is good for me. Investing in mutual funds was probably a poor decision, but it was highly recommended by financial advisors. I wish I had known about peer-to-peer lending earlier.
    Overall, I am happy with my financial state. Yes, there are things I could have done better, but I have done the best I could with what I knew at the time and I’m constantly learning. Though I may save a million dollars, I’ll never be
    a rich person because my savings will go toward living a middle-class lifestyle in retirement. A million dollars sounds
    like a lot now, but who knows what a million dollars will buy in 2050.

  • Guest

    Income
    I’ll start by pointing out all of the points of my finances I am proud to call mine, then I’ll outline my struggles. I am 32. In the last year, I have had a number of ups and downs financially. I have a secure job with an income of around $80,000 a year. In that way, I am very comfortable.

    Home and Car
    In 2008, I purchased a 5-year old car for $10,800 and paid off the loan in under two years. When it was totaled by a hit-and-run driver, I chose to buy the same year, make, and model vehicle so the insurance I received would cover the whole cost. I still drive the same car and maintain it well so it will last. Thank goodness for a trustworthy, competent mechanic! In 2010, I purchased a foreclosed home for $54,900. It is a lovely 2-bedroom home near a park that is great for walking my dog. While there’s a learning curve, I’ve done as many repairs on my own that I can to save money. I recently made my final payment on the home, so I now own it free and clear. I have a $50,000 home equity line of credit that I can use for unexpected expenses, so I felt comfortable paying my loan more aggressively than I otherwise would have because I have nothing in the way of an emergency fund. I consider paying off my house a great accomplishment on the road to financial success.

    Budget
    I live well below my means. I live with a roommate to keep my expenses down. I got most of my furniture as hand-downs when my grandparents passed away or purchased them used off of Craig’s List. I make the maximum contribution to my 401K and a Roth IRA. I don’t feel like I am scrimping, though my friends sometimes tease me about my frugal lifestyle. They feel that I should live according to my means. I prefer to live a lifestyle similar to what I believe I will be able to maintain in retirement so I never feel like I cut back, even when my income is less.
    Anytime I want something, I may wait a little while, but typically buy it (used, if possible) because I don’t want a lot. I’m very happy with the things I have, so I don’t need to buy many new things. I like to window shop, but window-shopping is often enough to make me happy. I don’t have to bring home the things I like to enjoy seeing them. I often treat shopping trips like trips to a museum. If I am considering a purchase for something I didn’t plan to buy, I write a memo in my phone and if I want it enough to remember what it is without looking and to make a trip back to the store, it’s probably worth the money. Usually, I don’t even remember what it was until I look at the list in my phone.
    If I am purchasing items, I try to remember to follow my ultimate-frugality rule. First, I look for a discounted gift card (giftcardgranny.com compares the best discount on gift cards from multiple websites) and purchase the gift card with my credit card. One percent cash back on my credit card added to the gift card discount (my savings have ranged from 2% for Walmart to 28% for the Limited) gives me a little extra savings on top of whatever other great deals I can find. I also price-check other retailers online if possible. If I make the purchase online, I also use a rebate website to get extra cash back (ebates.com) and double-check for coupon codes before I actually check
    out. That sounds like a lot of work. Sometimes it is and many times I forget one or more of my steps, but when I remember, I feel accomplished because I didn’t waste any money.

    Life Insurance
    I am still single, so I considered life insurance a waste of money until I heard of life insurance with an accelerated
    death benefit, which will allow me to draw all but the last $10,000 of the policy for long-term care expenses. The
    company I chose has a $450,000 policy for an initial $35,000 premium (at age 32) with no further premiums, ever! I haven’t actually purchased the policy yet, but plan to purchase it before the end of the year. An annual premium would be a little over $1,000, so if I die before 67, my premium will cost more than if I paid annually, but I also have peace of mind knowing that I never have to make another payment and can never default, thereby losing coverage. I know that I have $440,000 for long-term care expenses (which sounds like a lot, but isn’t nearly as much after taking into account an estimated inflation of 3% for the next thirty or seventy years).

    Credit Card
    Here’s the bad part! Everyone has unexpected expenses and difficulties along life’s path. Mine was reporting a crime. I can count myself lucky that I’m not on the hit list of a drug cartel or a gang, but I’m still paying the consequences of telling the truth to the police for a crime that was never prosecuted. In my case, the perpetrator has stalked me, filed a false police report about me, and filed a civil suit because I reported the crime to the police. I learned the hard way that evil people can use our civil justice system to harass their victims. The government provides legal representation for criminal trials, as most Americans know from hearing the Miranda rights on television, but not for civil suits. While I hope that justice eventually prevails, I still have to pay a lawyer thousands of dollars to defend me against the civil suit. My credit card balance is currently $10,000 and climbing. I’m lucky enough to have an introductory APR of 0% for 11 more months because of good credit and unsolicited credit card offers (who knew junk mail could be such a savior?). I hope to be able to pay off the full balance before the rate goes up. If the bills get too high for me to pay before then, I plan to use my home equity line of credit, which I consider my emergency fund. If I had a real emergency fund, it would have helped to keep the bill from getting so high, but my essential monthly expenses (not including aggressively paying down my mortgage and saving toward the lump-sum life insurance policy) were around $1,200, so even six months of essential expenses wouldn’t cover something like this.

    Investments
    I have a 401K and have saved the maximum allowed by law for the past three years. I also have Roth IRAs and have saved the maximum allowed for the past six years. I once saved $30,000 in a mutual fund for a couple of years to use as a down payment for a house. That was a bad investment. When I needed it, it was only worth $19,000. I am considering whether to move my Roth IRAs into a peer-to-peer lending account (prosper.com or lendingclub.com, not available in all states) because the $29,000 I have saved has diminished rather than grown.
    Overall, having my money in mutual funds has cost me $15,000. As much as financial advisors recommend mutual funds, I am starting to believe that they are very good at taking money out of middle-class pockets and moving it into billionaire pockets. I think peer-to-peer lending, while not FDIC insured, may be a better option than banks or mutual funds. I may earn 6% annually, but that sounds a lot better than losing $15,000. It’s still a risk, but I am beginning to think it is a better option than playing roulette with the stock market.

    Helping Others
    While I can, I am trying to help my sister save for retirement. I have given her enough to max-out her Roth IRA for the past three years and I’m also trying to buy a life insurance policy with an accelerated death benefit for her. Though it is a much smaller policy than the one I plan to buy for myself, it will still help if she is ever in need of long-term care. I may not always have as much money as I have now, so I want to help while I can. I certainly don’t feel like I’m sacrificing by helping her financial security because I don’t use all of my income anyway.
    Lastly, I donate to charity. I donate to both non-profits and lobbying organizations because I believe both are beneficial. My heart lies with protecting the environment, so most of my charitable dollars go there. While donations to lobbying organizations, like the Sierra Club, are not tax-deductible, I believe they can sometimes do more good than non-profits that have no power over laws that benefit corporations at the expense of clean drinking water and habitat for endangered species. I believe that taking care of the environment will ultimately benefit us all. Keeping our drinking water and air clean is much less difficult than cleaning up after companies that put profit above people. No amount of money can bring back a child lost to cancer from chromium poisoning.

    Shirking (Some) Financial Advice
    In spite of my high credit card bill and an expectation of further legal bills, I think my finances are in pretty good shape. If I could go back in time, I don’t think I’d do much differently. I certainly wouldn’t have purchased life insurance without an accelerated death benefit, in spite of recommendations of financial advisors, because I don’t have any dependents who would need it if I die. If I heard of policies with the accelerated death benefit, I might have gotten the life insurance six years ago, when my premium would have been $4,000 less, but I don’t know if I would have been able to afford it then. If I bought it then, I’d have less in my retirement accounts and perhaps would have been unable to buy my house because I wouldn’t have a down payment.
    I wouldn’t change paying my mortgage aggressively instead of saving an emergency fund because I have the security of a home equity line of credit with a 10-year draw period. To keep a mortgage costs me money
    each year (and the tax benefit doesn’t come close to covering the expense). Keeping money in a savings account with practically no interest seems, to me, a poor decision. Using a home equity line of credit as an emergency fund costs me nothing (the bank I chose had no closing costs) and is available if I need it. I think that is a sound decision.
    I thought a great deal about which financial advice is beneficial for me. Saving in a 401K and Roth IRA are good for me. Getting the security of long-term care through life insurance with an accelerated death benefit (that also doesn’t lose its value if I die) is good for me. Living a lifestyle I expect to comfortably maintain in retirement is good for me. Paying down my debt, including secured debt, is good for me. Investing in mutual funds was probably a poor decision, but it was highly recommended by financial advisors. I wish I had known about peer-to-peer lending earlier.
    Overall, I am happy with my financial state. Yes, there are things I could have done better, but I have done the best I could with what I knew at the time and I’m constantly learning. Though I may save a million dollars, I’ll never be a rich person because my savings will go toward living a middle-class lifestyle in retirement. A million dollars sounds like a lot now, but who knows what a million dollars will buy in 2050.

  • Lily

    In 2008 I chose to go to graduate school full-time and worked several part-time jobs at my school to make money throughout my education. Even so, I went to a private university and racked up over $90k in loans. When I graduated in 2010 some of those loans had interest rates of 8.6%, rather daunting. We were incredibly overwhelmed by this debt and the interest being incurred each month. We wanted to be able to make sound financial decisions without feeling trapped and underwater by the loans. Because of that, since getting a full-time job post-graduation my husband and I have continued to live frugally (the graduate student lifestyle) and have lived off of his salary and used mine exclusively to pay down on my now consolidated loans, averaging about $2k a month in payments. Our goal is to pay these loans off completely by Feb. 2014 so that we can focus then on traveling, saving up for a down payment for a home and enjoying a few more luxuries. Throughout this process we’ve also focused on continuing to save for retirement and both have contributed at least 20% of our pre-tax incomes to our retirement savings. We are looking forward to sending in that final loan payment and being debt free.

  • BD

    I started dating my boyfriend 6 years ago. At the time I was working a temporary position that lasted one year and I wasn’t eligible for the 401K plan. He told me about Roth IRA and encouraged me to start setting something aside for retirement.He also was shocked and dismayed to find I had no real budget. I think his dismay encouraged me to get some personal finance education and start saving. I found I loved watching my net worth grow more than watching my wardrobe expand. My shopping cut down dramatically but my retirement and other accounts have grown just as dramatically.

  • http://www.facebook.com/profile.php?id=1607666875 Mc Miller

    I raised my credit rating over 200 points in 18 months!

    ———-

    Immediately after I legally separated from my (now ex) husband, I had $7.18 to my name. I also had my separation paperwork that showed what debts were mine and what debts were his. And I had a job that paid decent but was going nowhere fast.

    I contacted all of our creditors, informed them of the legal separation, and asked what proof they needed to take either my name or his name off of each debt. Most wanted a copy of the court’s decree detailing the assignment of the debt. I also contacted the credit bureaus to provide them the same information, but they weren’t interested in the proactive approach and suggested that I contact them on a case-by-case basis, if needed.

    I must have done a good job when I initially contacted my/ours/his creditors, because I never had to lodge a dispute with a credit bureau. I did, however, pay off some of “his” debts with companies that would accept my half as all I that I owed, but would not note that my account was satisfied in full without prejudice unless the full amount was paid. Since I knew that he would never pay his half, I paid these in full myself.

    Asking (and getting) my creditors to note that my account was satisfied “without prejudice” was very important. I am not sure of the exact wording to request now since my ordeal was a few years ago, but basically what I got was creditors to report to the credit agencies was that my account was satisfied fully and in accordance with their terms. In other words, even if a debt was several months past due or even into collections, when I paid it off they would report it using terminology that would not show it as ever having been a bad debt.

    Paying all of my creditors off over a period of several months raised my credit score and I used my slightly better credit score to acquire a few small loans with lenders that report to the credit bureaus. I paid these off quickly, usually by paying twice a month instead of once. I also got a couple of credit cards and used them to build my credit.

    Contrary to popular belief, maintaining a zero balance on your credit cards doesn’t make you all that attractive to credit card companies since it means that they are making no money off of interest they charge you. Instead, I used my credit cards to near their maximum every month and then I would pay them down to a $30 or $50 or occasionally a $100 balance. Since I always had a balance, the credit card companies saw me as a money maker for them. They both raised my credit limit from $500 to $1000 in six months. I then negotiated better terms and interest rates instead of switching to other credit cards. Within about 14 months, I had credit limits of $2000 and $2500 respectively.

    During this time, I also took a leap of faith and moved 200 miles to a place with no job waiting for me, but hopefully with better job prospects. I started substitute teaching the day after I interviewed with the assistant superintendent of a school district in a neighboring town. At the end of the school year, I was offered a teaching contract and a classroom of my own.

    When I got my own classroom, I began spending about $200 a month on materials for my students. The school-provided textbooks and curriculum was woefully out-of-date; some textbooks were 15 years old, maps still showed the USSR! Plus, many of my students didn’t have so much as a pencil to their name. To add insult to injury, our school started running out of basics like pens, pencils, notebooks, and copy paper just before the fall semester ended. My spring teaching expenses doubled.

    As a teacher, I made $24,850 that year, but I did side jobs and trades that increased my income by $6,000-15,000 a year. I bought used cars and fixed them up and sold them with help from my mechanic. I tutored. I cooked for my neighbors. I also traded my skills for services. I kept my chiropractor’s tax receipts and personal finances for free adjustments. I tutored my manicurist’s son every week for free manis and pedis. I traded my interior house painting skills to a professional painter for a letter of recommendation and the start of my portfolio, which then allowed me to get small custom painting jobs.

    When I went to pre-qualify for a home loan only 17 months after my legal separation, I qualified for $80,000 for only 1.5%-2% more than the rates that my friends with great credit ratings had recently gotten. My average credit rating had gone from somewhere around 460-480 to 700!

    ———-

    I bought a foreclosed house for $61,000, spent $3,000 in materials, $2,000 in labor (half of which I made payment in homemade foods and other trades), and untold gallons of my own sweat. I had made a sweet little home with only a $600 per month payment.

    About nine months after I bought my home, my credit score was 740-760 and still improving.

    Then I broke my hip on a school field trip and everything changed again…but that’s a whole nother story.

    ———-

    MC Miller
    mcmiller.mail@gmail.com