That is what I was just told.
3 years ago, I went thru bills and finances with a spendaholic co-worker of mine. She had gotten herself into about $60,000 debt. We stayed up many a night reviewing her receipts, learning how to shop and cook, and going over ways to save money. She thought the terms I set up for her were too hard core, and I was being mean. (I cut up over 40 credit cards and "made" her call and cancel them all)
At the time, she was loosing her home. Her loan was at the local bank so we went in. They reworked (basically a refi) the terms of her loan back to 30 years so she could get a lower payment. We had the payment come directly out of her paycheck (saving $89 late fee each month) and put her house for sale by owner. Her house sold and she rented a $300 a month cheap cheap apartment. She was allowed $50 a pay period for fuel, and $50 a week for food. Her electric & water came autoatically out of her bank, as did all her credit cards. Anything above what she would need went into her 401K or credit union savings. I had her use cash only, and for awhile I had her checkbook, then when I moved I gave it to her mom.
She agreed to it, basically because she was desperate, and her family had all turned her away, as they had been burned by her many times.
Well, today she called and told me she had been laid off. She also told me, all her credit cards & debt have been paid off. She sold her car for what she owed on it, and bought a $3000 car intead and has already made the last payment on it.
She is still in the $300 a month apartment. She has no cable or dish, only a cell phone, no internet..... Only her rent, electric, water and food & fuel. Her auto insurance comes out of her bank account also.
Her 1 and only credit card is paid in full and at her moms house hidden where only her mom can get to it.
She walks to work (and has lost a lot of weight as a result).
She now has a college girl living with her who pays $300 a month rent!! (so she covers all the rent!!).
She paid off all that debt and has her 401K built back up, and around $20,000 in savings.
She had been earning $62,000 a year and had not been able to pay her bills with it, until she took the plunge.
Said she is looking for another good job, but meanwhile can live off her EF for over a year if need be. She did take a job this morning at McDonalds, and that will cover her basic monthly bills till she gets a "real" job again.
She takes a night class at the university, so that will allow her to get a basic medical insurance package for the semester. She is thinking of applying at the college for a job to get 50% off tution and better insurance that has vision and dental also.
She just made my day. She was one of the ones I was worrying about with the layoff. But she turned it around.
I'm not so mean after all...
January 24th, 2008 at 11:27 pm
January 24th, 2008 at 11:31 pm 1201217479
It's stories like these that make me really want to work harder at my own "get out of debt" plan.
January 24th, 2008 at 11:31 pm 1201217511
January 24th, 2008 at 11:38 pm 1201217902
That is a great success story!
How did you become so frugal? Have you always been frugal, or did the "school of hard knocks" make you become financially smart?
January 24th, 2008 at 11:42 pm 1201218136
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