This particular blog post is extremely long. It is NOT my intention to make my posts this long, but for the sake of building trust with you, I want to share my story so you can understand where I’m coming from.
My name is Nick. I’m passionate about connecting with and helping people. I’m a thirty year old husband to my wife Alana and father of three kids. As I’m writing this, my amazing kids are six, four, and two.
I grew up in a regular middle-class home. We weren’t rich but we had enough to live on. I was always dressed in clean clothes but I remember wishing I could have the same name-brand clothing my peers did.
My parents divorced when I was about fourteen. My dad remarried when I was 17 and my mom remarried when I was 24. My mom had a significant other while I was in high school that we lived with. I thought he was RICH! Turns out, he was normal.
What do I mean by normal? I mean he lived well above his means to give the appearance that he was well off. He spent A LOT of money. At the most impressionable point in my life, I learned that to be well off, you had to live (read: spend) nicely.
So when I left home to go to university, I did exactly that. Even with a full scholarship to arguably the best academic institution in the state (AND my dad paying my rent), I took out student loans to keep up a lifestyle. I used them to buy nicer clothes, to buy better food, better alcohol, and a better life. I used them to buy an engagement ring.
It turns out that decision, while a REALLY dumb financial move, DID turn out pretty ok. My wife and I have been together for almost thirteen years now and couldn’t be happier.
Back up, though, to when we graduated from university. I graduated with a degree in Finance. My dad and step-mom gave me a huge $5,000 seed-money check. This was HUGE! It meant that I could afford that “financial advisor” job I secured, since it was a commission-based role selling whole life insurance in 2008. Oops. $5,000 gone in three months. Actually, scratch that. $10,000 gone in three months because I racked up $5,000 in credit card debt trying to succeed in that role. I left that role in November of 2008 with the understanding that I’d be better off financially if I found a new role. Turns out, I would have even been been better off unemployed.
When we graduated from university, we moved back to her home-town and got an apartment together. We signed a two-year lease thinking, “oh, we’ll be here for a while!”
Ha!
Only a year into the lease, and about six months after I left my “advisor” job, I found a new job at a financial services firm and Alana was working as a teacher. We decided we should be in a house because we were “wasting our money by renting.” Wanting to please my wonderful fiance, I was all in! We went under contract to build our own home in a new “maintenance-free” community. She was making about $35k and I was making about $32k. We were approved at 100% financing for a $205,000 3 bedroom/2 bathroom 1500 square foot home. We’re living the American Dream!!! We only had to pay someone about $4,000 to convince them to sublet our apartment for the remainder of the lease.
We even used the 2009 Obama first-time homebuyer tax credit to pay for our wedding in cash! And my dad very generously paid off my $5,000 credit card bill. I thought we were killing it in the finance game. But something was nagging at me. You see, our realtor gave me an audiobook on CD called The Total Money Makeover. It had this handsome looking bald guy smirking on it. Hmmm. “This’ll look good on my bookshelf!”
We got married in early 2010. We had our first kid in late 2011. We were able to travel a bit between buying the house and having our first kid. We saw Paris, parts of Germany, Amsterdam, the Bahamas, and an Alaskan cruise out of Seattle. We were living the life! Luckily, we did at least pay for these trips by saving up for them.
Does this sound familiar to you? So many personal finance stories sound like this. Lifestyle inflation is SO FREAKING HARD to combat.
Somewhere between having our first and our second kids, I finally listened to the Total Money Makeover by Dave Ramsey. Holy cow! If you have debt, this book is a must read. I started listening to Dave’s daily radio show and eventually was talking about Dave so much that Alana joked that I had a man-crush on Dave. (I’ll never tell!)
So somewhere between early 2012 and early 2013, we began our journey to becoming debt-free. The problem was, I didn’t go about it the right way. Instead of addressing WHY we wanted to get debt free, I sold the idea to Alana by telling her we needed to be on a budget and limit our spending. How easy would it be to cut out our spending on dining out and Starbucks and cut cable, right? Wrong…We’ll talk more about this in a future post.
I left my financial services role in 2012 to join a content-creation company. It was a vendor that worked with large corporate clients to make their online training beautiful and effective. It was a dream job.
In 2013, the emotion and the math just made sense for Alana to become a stay-at-home mom. She left her teaching job (which she wasn’t really happy in anyway) to be fully present in our children’s lives. In order to achieve this, I accepted freelance work from my previous financial services company. Over the course of the next three-ish years, I worked between 60 and 80 hours per week to keep the income coming in. This meant sacrificing my time with my babies and my amazing wife. I was willing to do that for the family.
But now that 3/2 1500 square foot home we bought in 2009 was really small. Alana was a stay-at-home mom with two rambunctious baby boys and I was working from home. We NEEDED (yes, in hindsight that’s sarcasm – but we really did THINK we needed it at the time) more space. We told people that “the walls were closing in on us.”
So we put the house on the market only to find out we owed WAY more on it than it was worth. After trying to sell with multiple different realtors, we finally consulted a real estate attorney who advised us that the only way to get rid of the home would be to foreclose or hand the keys back to the bank. UGH. But we needed the extra space, right?
We moved in 2014 to a bigger home. And then at the end of 2015, we entered into a “lease-to-own” option for ANOTHER home because we thought we had found our dream home, but of course we couldn’t buy it because of the impending foreclosure. We moved in the same week our third child was born. Our baby girl!
In April 2016, Alana decided it was time to start looking for a new career. Being a stay-at-home mom was wonderfully rewarding for her for a few years, and her time had come to pursue building a career outside the home AND being super-mom. We agreed she would not rush and that she would only apply to positions that were “dream jobs.” So she applied for exactly ONE job a few days later, got a call, interviewed twice, and about two weeks later, she started work!
In July 2016, I was offered a job from an organization that’s a household name. Naturally, I had to take it. The pay increase and Alana having had re-entered the workforce would allow me to relax a little bit and enjoy time with the family.
In September 2016, the foreclosure went final. We got a waiver of deficiency at least, so the bank couldn’t come after us for the difference between what we owed and what the house was worth.
But then, our oldest son was ready to start kindergarten…and the school district we were living in wasn’t exactly up to our expectations (you’d think we would have looked into this BEFORE securing a home, right?!). Between Alana as a former teacher and me as an online training professional, we knew we placed a value on their education. We HAD to move to get them into a better school district. So, in April 2017, we moved AGAIN. To do so, we forfeited our deposit at the previous house to get out of the “lease-to-own” option. Another ~$5,000 gone.
At least now we’re in a neighborhood we love, can see ourselves living in for the next 10-20 years, closer to work for both of us, and love the schools for our kids.
I’m not sharing our story with you to complain about all our misfortune. I’m not sharing it with you to brag about our stupidity. I’m not even sharing this with you to make yourself feel better about your own personal financial life, although I hope that this DOES make you feel better!
I’m sharing our story with you to show you that even though Alana and I have made seemingly every financial mistake in the book, we’re committed to teaching our kids how to win with money. We believe financial literacy is one of those differentiating factors between success and otherwise. If we can share the good lessons with our kids and make a positive impact in their lives, then we hope you can take some of our wisdom through triumphs AND failures and put it to your own use.
In June of 2017, our financial lives turned around. Likely one of the most drastic turnarounds you’ve ever seen. Click here to read about it!
Trackbacks/Pingbacks