Hi, r/personalfinance,
As the end of the year approaches, I just want to say thank you. In the beginning of 2017, I was terrified and depressed. Now I'm filled with hope and optimism for my future, and I can credit a lot of that to the advice I've received on r/personalfinance and r/financialindependence. Six months ago, threads like this were a huge inspiration to me. I hope this can be an inspiration for someone else.
I do not make a lot of money--like, I make $20k a year after taxes. I've been a starving artist, emphasis on the starving, for most of my life. I accepted debt and living paycheck-to-paycheck as a condition of my existence. So wtf changed?
A lot of my friends grew up. I'm closer to thirty than I am to twenty now, and my friends all started getting "real," salaried jobs. I went from feeling cool/artist-poor, to just feeling poor.
I found r/personalfinance during some sad, late night googling and couldn't stop reading. I downloaded CreditKarma and saw the damage--7 accounts in collections and a 450 credit score. I lost some time over being sad about that. And then I got started.
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I sat down with my online banking account and a notebook and I catalogued every. single. transaction going back three months. I figured out how much I'd been spending on food (too much), going out (way too much), and other bullshit (way way too much) other than my necessary expenses. Then I wrote a budget that I've honored ever since. Have not spent one frickin penny over my monthly budget.
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I was able to save about ~$500 a month with my budget. I took the Dave Ramsey method and I stuffed $1,000 into an emergency fund first, and then I started on my collections accounts.
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First I disputed every collections account in my Credit Karma account, basically asking for proof that they were mine. I think I got rid of one that way. Then I called every single remaining collections company and tried to negotiate a pay-for-delete. I ended up paying the full amount to get one account off my credit report, and a discounted amount to remove three of the accounts. I do still have two derogatory marks on my credit report from companies who refused to do pay-for-delete, unfortunately. But they're so old, they'll be gone by the end of next year :) My credit score is 650 now, which isn't great, but it is a heck of a lot better than 450.
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Along the way, I closed my accounts with my local bank, which I discovered had been charging me a fee to store my money. I opened free checking and savings accounts with Capital One and got a $300 sign-up bonus once the direct deposits from my day job hit. I also got my first credit card ever, with a $300 limit: a Capital One Quicksilver card with an insane interest rate. I've never allowed it to carry a balance, and now my credit limit is $1700.
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I decided to go back to school--a tech school--after reading here that I could do that basically for free. Actually, I got a $1,400 refund from my Pell grant this fall semester, which I was able to throw at debt and into savings. I love the program that I'm in. It's going to increase my earning potential by a LOT, and if I decide to pursue a four year degree when I'm finished, a lot of the credits will transfer.
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After getting my collections accounts sorted, I upped my contribution to my day job's 401k from 1% to 15% of my pay. I also opened a Roth IRA, which is invested in index funds, and to which I contribute a couple hundred dollars a month now.
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I have four separate savings accounts: one emergency fund, one for car replacement, one for travel expenses (so I can treat myself responsibly), and one to hopefully one day purchase a rental or investment property. I stash a little bit in each one every month, and it's already adding up.
So! That's where I am now. I have come a really, really long way in six months, and a lot of the credit goes to you guys and all your advice. I am so grateful I found this place. Thank you all from the bottom of my heart.
Submitted November 16, 2017 at 10:00AM by lattewatcher http://ift.tt/2zHiE9J
