All my life, if I had money, I pretty much preferred to spend it rather than save it. Stephen was kind of the same way, so when we got married we certainly didn't budget. I remember buying a set of sheets because they were on sale for $60. I never used coupons. We had a Blockbuster subscription, we were regulars at Gamestop where we made weekly purchases of movies and new games, we ate out whenever we wanted to, we went to the movies at least once a week.... in other words we didn't worry about budgeting or being frugal. One thing that really got us was the furniture we bought. When we lived in Charleston, we just had a two bedroom apartment. But we knew that eventually we'd be in a house in North Carolina, so we went ahead and bought living room furniture and bedroom furniture. I don't even remember how much it cost but we put all of it on our credit card. Also on that credit card were honeymoon expenses, anniversary trip expenses, and to be honest, any random purchases we made - like the $60 sheets. We just had the one card and we always paid on time, so our credit kept being raised... and we kept using the card since our limit kept being raised.
Fast forward to five years later. Now I'm a stay-at-home-mom working only a few hours a week. We really need to budget and be frugal in order for me to be able to stay at home with our kids for the next few years.
Unfortunately, we have those purchases from five years ago looming over us. When we purchased our house is the first time I found out how much credit card debt we had accumulated. I was absolutely stunned. The crazy thing is, we still both had excellent credit because we had always made payments on time. But it just made me sick to my stomach to think we had both made it all the way through college without student loans (thank you mom and dad, and US Air Force!!) only to create this debt for crazy things!
We made a commitment to not use our credit card anymore. We only ever had one card anyway, so it wasn't really an issue for us to use it on anything frivolous. But we (mainly I) were determined to not buy anything we couldn't pay cash for, and pay off that debt. My parents have always set an incredible example of being debt-free and I would love to follow in their footsteps and set a good example for our children. It's so unfortunate that the "sins" of your past can affect your future so much!
In May 2010 I was reading my All You magazine and found a website I was interested in. It's called Smartypig. It's an online bank account specifically designed for you to reach financial goals (for a wedding, college, anything you want). I was looking at this time for a high-interest bank account and could not find one. I have a bank account at a credit union and even those rates are falling because of the economy. So when I found this bank account at Smartypig that had over 2% interest (it has now dropped to 1.75% but is still higher than any money market or CD account at most banks) I wanted to jump on it. I did a LOT of research because of all the information they would need from us. After weeks of research we decided to start an account.
On May 31, 2010 we made our first deposit of $25.00. Our goal? Make $1,000 by December 31, 2010. The cool thing about Smartypig is that once you set a goal, it suggests how much you need to deposit monthly in order to reach that goal. I can't remember how much it told us but it was too much to be taken out at one time - maybe $150 or something? Instead I set our own monthly deposit of $50 - totally manageable. Then, I would randomly deposit money as I got it. I deposited all rebate checks, survey checks, Paypal money earned from Swagbucks, and change that I came across. I started paying cash for everything, depositing the change in a big mason jar, and then depositing the change in the bank as soon as it was full. In September I decided to up our monthly deposit to $75.00.
I chose for my monthly payments to come out on the 5th of each month. Since this month the 5th was on a Sunday, my payment came through today. Know what??
Can you read it?? 100%+ of our goal! $1,016.76 saved as of today!! Wahoo!
I highly recommend Smartypig. It is so easy to transfer money to and from your bank account. It's completely secure. If you don't want to cash out your money you can put it on gift cards to TONS of retailers like Amazon, Travelocity, Chili's, Borders... tons more. Obviously I want to transfer to our bank account so we can write a check to our credit card company.
My personal goal is to pay off $2,000 more dollars in the next three years. I honestly think this is doable. I am so proud that we were able to do this in only seven months!! It's going to be very exciting to write a huge check to USAA. :)
I would love to answer any questions about Smartypig or refer you. If you would like me to refer you just let me know! I will send you an email link that you can sign up through.
This is also a testament to the money you can earn from online surveys and Swagbucks. I strongly urge you to use these resources I have given you to earn extra money. I would not be surprised to find that 50-75% of the money we earned for Smartypig came from online surveys and Swagbucks.
I know this is a very long post but I am so excited to share this with you! In the past I have been ashamed at the credit card debt we have, and I know it's kind of a no-no to talk about finances anyway, but I know we aren't the only ones who have made bad decisions in the past. And the important thing is we are taking steps to make up for those bad decisions.
Does anyone else have a story like this to share?? I'd love to hear it!