From a Hole to a Hill

I've written before about my struggles with debt and credit, and my attempts to remedy a screwed-up financial past. In a nutshell, at a bad point in my life, I got in over my head with debt. I once had my phone turned off and once had my ATM card eaten because I was so overdrawn on my bank account. I used to be ashamed to put those things out there for all to see, but I think more and more people are coming out of the "debt closet." And I see myself as a lesson others can learn.



I am proud and ecstatic to say that I have once and for all paid off all my unsecured debt.



While I still have a car loan (which I would label acceptable, typical debt), last month I wrote the last check to pay off the personal loan I had taken out to consolidate my credit card debt. The debt had been five figures. And it's all gone now!



I've been steadily paying on this loan for several years now. In the meantime, I got rid of all my credit cards, and got a new one with a tiny limit ($300) so I could work to rebuild my credit. I pay it off every month. I've also done a number of other things that years ago I never imagined I could accomplish:

1. I put 6% of my salary into a 401(k) plan.


2. I put an additional 3% of my take-home pay into a Roth IRA.


3. I put 10% of my take-home pay into an emergency fund.


4. I invested around a thousand dollars in the stock market shortly after the "crash" and have seen my money grow by 70%.

The best thing about having my debt paid off is that, instead of filling in a hole, I can start building up. I ran some numbers a little while ago. I do that when I'm either extremely worried about money or extremely excited. This time I am excited. This is what I realized:

• If I take the monthly payment I had been making on my personal loan and now put it towards my car, I will pay off my car four years early. The interest I'll save is in the thousands.


• When I pay off my car, I can put the combined loan-car payment into the bank each month (it's not like I'll miss the money; I've been writing it off for years). If I do that for three years after the car is paid off, I'll have enough money for the down payment on a house.

The down payment on a house. By myself. In the next five years. And I'm not talking about some 3% down payment for an FHA loan. I'm talking about 20%.

It's an almost unbelievable thought for me. I just want everyone who reads this (all four of you) that it can be done, with patience, dedication, and discipline. The rewards--financially, emotionally, spiritually--are great.