06 July 2019

A Decade Of Change

Ten years! Seemingly a long time, yet in hindsight a very short time. Ten years ago, I was deep in debt, going through a divorce, contemplating bankruptcy and very much ashamed of how my life turned out.

At 52 years old and besides having a small 401K I had nothing to my name. I was cash broke and asset poor. While I owned a home, the two mortgages against it made it virtually worthless.

As a recovering alcoholic I only have one thing in my life that I guard as much as my sobriety and that is my word. My debts were the mortgages, medical bills, and credit cards. Everyone of these debts I gave my word that they would be paid back. It was only this word of mine that stopped me from bankruptcy. So somehow I had to find a plan to get out of debt.

The first step was getting rid of the biggest debt I had – the house. I wrote a letter to the mortgage company and told them that I was walking away from it. That the house was theirs – to do with what they wanted. I did this to actually save a little money on court proceedings and eviction.

Within a year the house was sold and I owed a now manageable $9,000 on the shortfall from the house. Over the following year I paid that off as well as the penalties owed on taxes.

By leaving the house, I left behind a $564 a month house payment and found a $250 a month small apartment. I got rid of cable TV and lived with rabbit ears on the TV and watched other shows via the Internet. Instead of a 40 mile round trip car ride to work, I now had a two block walk to work, saving more money.

Being 52, it was time to start some kind of a savings account. My first one was with my checking account. I rounded up the checks I wrote and rounded down the deposits I made. It was a very small way to save money but it served another purpose. It stopped me from bouncing checks. At $35 a shot, the savings added up quickly. I haven’t balanced my checkbook in over ten years and haven’t bounced a check in that same time. While my account may say I only $10, the truth is I have over $500 in it, but just seeing that $10 in my ledger stops me from going overboard on spending.

Anyway, after the house was settled the rest of my bills fell into place. So many people worry about their credit scores. Let’s face facts, your score is already shot or you wouldn’t be in this predicament. I used this to my advantage. Instead of paying 10 different bills every month, I just paid one and I put every cent that was available for the other bills into paying just on that one bill.

I always paid on the smallest bill first. I didn’t care about penalties or late fees. I just remained focused on one bill at a time. Within three months, I was down to eight, five months I was down to six. The bills were disappearing and I began to see that I still had money in my wallet a day before payday.

I started a real savings account and kept paying on my bills and after two years I applied for a new credit card, since all my old ones were closed down. It was now time to start repairing the damage created by my reckless behaviour with money.

Ten years ago my credit score was 385 – can’t get much worse. By 2016, it was 725 – can’t get much better! I went from losing two credit cards with a line of $4,000 and both maxed out, to having five cards and a line of $16,000 and not one dime in interest ever paid on any of them. A nice savings account was built and an emergency fund that would take care of me for 28 months, instead of the suggested six months.

In 2016, I left America and moved to England, only to realize that the credit systems are entirely different. So once again, I was starting over. But the time in America taught me how to live on money alone and to not rely on credit. For three years, I lived with only cash and survived quite well. In January of 2019, I applied for a credit card and got approved as a very high risk customer. Which was fine with me. I learned how to pay of these cards in full and on time so the high interest rate meant nothing to me. Now in July, I applied for a second card, with better rates and now rated as a lower risk. I got approved for that as well. Now with two credit cards, a nice savings account, and a stable job, I’m feeling a sense of accomplishment that I wished I learned years ago.

At the age of 62, life is comfortable. I know I’ll never live the high life in retirement but that’s OK because I have learned how to live a comfortable life with a lot less. All of this happened because I wanted to keep my word with my creditors. All of this was possible because I tuned out the outside world with their thoughts on money and made a plan that worked for me.

That plan didn’t involved credit scores or penalty fees. It involved a program similar to my sobriety. Instead of staying sober a day at a time, I worked to get out of debt a day at a time...

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