Regrets, I have a few

Regrets, I have a few

I’m going to be totally honest in this blog (anonymity is a good thing) so I’m going to share financial information that I usually keep to myself.

I did not learn financial responsibility from my parents. As a matter of fact, my mother hasn’t met a financial windfall that she couldn’t turn into a financial disaster. I’m not sure she’s really familiar with the concept of saving money. I love her dearly but her life has been a cycle of financial boom and bust.

I graduated from college with about $20,000 in college loans, which is nothing compared to the debt balances kids are graduating from college with now, and I got a good job right out of school making an amount that should have made it easy to make my loan payments. I did OK for the first year or so and then I started falling behind on paying my bills. I was overspending and I would find excuses not to sit down with my checkbook and my bills because I found it too stressful. Four years after I graduated, I defaulted on my student loans.

This was a source of great shame for me. Probably more than it warranted.

I made significant changes in my life as a result of the default. I had been living in the Boston area after college and I moved back home to the small town I grew up in. I rented a small apartment from a family member and I got a job in the closest city. I enrolled in a program through the college loan lenders that would wipe the default off my credit report if I could pay off the balances in three years. I lived extremely frugally. I remember having $20 per week for spending money. Everything else I made went towards necessities and making payments on my loans.

I first read Your Money or Your Life around this time and it had a profound impact on me. I knew I was in the wrong career and I thought financial independence would be great. Once I paid off my loans, I could continue to save that money and have enough to live off relatively quickly. I looked into cities where I could easily live without a car (Portland, OR was my goal long before everyone else moved there - this was twenty years ago).

It was around this time that I met the man who would become my husband. We very quickly got married and bought a house and had a child. It was a complicated and high conflict relationship. He picked up on my shame over defaulting on my student loans and my financial situation and used it (any other areas I was sensitive about) to control and manipulate me. He was very frugal himself but manipulated me into paying most of the household expenses from my income while he saved his income. He contributed just an annuity he received to the household expenses while I contributed everything I made. I continued making payments on my student loans and paid them off within the program time frame so the default never showed up on my credit report. However, I didn’t really save a lot of my own money even though I was still trying to live as frugally as possible. I now had the added expenses of a big house and a child. My husband’s annuity covered the mortgage but that was it.

When my daughter was four years old, I left him and moved the two of us into another small apartment owned by a family member. I wish I could say that I stayed there and saved my money for a few years, but no. Instead, I bought a house. It was June 2015. Housing prices were sky high. The house I had bought with my husband had more than doubled in value and I rushed to get him to buy me out so I could sink my equity into another house and fill it with new furniture (I’d never had new furniture before that I didn’t need to put together myself! We deserved this!).

This is, without a doubt, the biggest financial mistake I ever made. Bigger than defaulting on my student loans. Bigger than marrying someone I didn’t know very well and yoking myself to him financially. Bigger even than the stupid debt I have now. It is twelve years later as I write this and my house still hasn’t rebounded to the amount I paid for it. I’ve only been above water on my mortgage for a few years now. Luckily, I had a fixed rate mortgage and I’ve been employed this entire time so I’ve always been able to pay my mortgage payment. Plus, I’ve been able to refinance to lower rates as my equity in the house edged over 20%.

However, if I had just stayed in that small apartment for another year or so I could have avoided overpaying like I did. Yes, I wouldn’t have had the big payout from the house I owned with my husband but I would have made better decisions if I had had to rent for a few more years and save money. I definitely wouldn’t have gone on a furniture and appliance shopping spree!

Remember I said that my mother never met a financial windfall that she couldn’t turn into a financial disaster. The apple doesn’t fall far from the tree.

I got worse from there. I had another big house to take care of, an ever-growing child, and a stressful job. I spent money to reward myself. Our lifestyle inflated. Takeout or restaurant meals most nights, expensive vacations, and a nasty habit sucked up most of my increasing salary. I always said I was grateful for my job because it provided us with everything that we needed and most of what we wanted. Probably too much of what we wanted.

I look back at the times in my life where I lived frugally and I was happy because I was in control. I didn’t need a lot more. I valued freedom over things and I could see a path to freedom. I lost a bunch of years but I want to get back on that path.

That’s what Ms. Frugalette is all about.

Historical Financial Data - 2016 and Q1 2017

Historical Financial Data - 2016 and Q1 2017

2016 and Q1 2017 Expenses

2016 and Q1 2017 Expenses