I have a lot to be grateful this year in 2020, although this year has been tough and really changed my life, I got to see a goal/dream that I’ve had for over twelve years come true…I’M DEBT FREE!!!
The journey itself to get debt free really took about 2 years as I was able to take on a job that allowed me to travel and have majority of my expenses paid for. However, as I noted the goal/dream for myself started a while back. I’ll always remember the day when I was back home in Chicago visiting and my friend said that she wanted to stop in the bookstore to pick-up a book by Suze Orman entitled “Young, Fabulous and Broke”. I asked her more about the book and why she was getting it and from that day I was on a journey to become more knowledgeable about money and how to be a good steward over all that I was entrusted with.
As a child, I wasn’t taught about finances and the only conversations about money in my home was the fact that we didn’t have any. We lived paycheck to paycheck and my mom really did the best she could. As I researched more about Suze Orman, I learned that she had a weekly show that came on Saturday nights. Every Saturday night, my DVR was set to record her show and I would watch it and get so much information. At that point in my career I was barely able to make ends meet and didn’t have much income left over for saving, but I knew that when the time did come, I wanted to be prepared on how to attack my debt and have financial freedom. When I wasn’t watching the Suze Orman Show, I was reading her books and desperately wanting all the information I could get on how to be financially independent.
I was a recent college graduate with more than $35,000 in student loans and just starting in my career not making that much money and living away from home. To sum it up, I was a broke college graduate spending more money than I made and trying to “keep up with the Joneses” all while racking up credit card debt.
I remember like it was yesterday, sitting on the couch in my apartment in Philadelphia watching the Suze Orman Show and seeing all the consumer debt others had and felt “ok” as long as my debt didn’t exceed $10,000. At that time, it was about $7,000 and I knew I had to change but never would I have imagined that I would get to a point of having $22,000 in consumer debt and taking out a $20,000 car loan.
I was also in the mindset of good debt and bad debt which doesn’t exist. All debt is bad and after Suze Orman went off air, I knew I had to find someone else to help me with my finances. Although I didn’t get out of debt, there were a ton of lessons Suze Orman did teach me before we parted ways:
- I learned about my FICO score and how important it was, so I worked at increasing my FICO score, making on time payments, and keeping my debt to credit ratio low.
- NEVER co-sign a loan for anyone. This one lesson has probably saved me more money than I would ever know. My ex boyfriends would ask me to co-sign a loan and my reply would always be “Suze Orman says to never co-sign a loan for anyone” and trust me this is the BEST advice ever
- Always invest in retirement and NEVER borrow from your retirement.
- Roth IRAs! If it’s offered from your employer invest in a Roth 401K, Suze taught me about the benefits of a Roth IRA.
- Don’t ever buy whole life insurance, always do term life insurance.
- Have a 3-6 month emergency fund.
- Don’t take out a car loan for more than 36 months.
As Suze Orman was transitioning out of my life I was lost on what to do, but the principles she taught me stayed with me for a while. Many years later I would find someone to pick up where Suze left off; enter Dave Ramsey! I learned about Dave Ramsey from reading his Total Money Makeover book. His 7 Baby Steps method to gaining financial freedom seemed very straightforward and a lot of people were seeing results from it so I gave it a try.
I accomplished Baby Step 1 quickly which was saving $1,000 and then I moved on to Baby Step 2, getting out of debt. Dave Ramsey says to list your debt from smallest to largest and pay off the smallest debt as quickly as you can which is what I did and two years later, I can say I am debt free and moving on to Baby Step 3. For more information about the “baby steps” check out Dave Ramsey!
I can’t really express how it feels to create my budget and have nothing going to debt. This also couldn’t come at a more crucial time as I have lost my job and therefore really needed to decrease my expenses to align with my income. My encouragement to you is to learn more about your money, check out Dave Ramsey and the “Baby Steps” follow the plan and it will work for you. Spend less money than you make, SAVE, SAVE, SAVE and NEVER CO-SIGN A LOAN OR BE A CO-SIGNER FOR ANYONE!!!
It’s not too late to start again! Happy New Year!
With Love,
