:::: MENU ::::

Browsing posts in: Member Stories

How it All Began

by

How it all began……

I was never good with credit. When I was 16, Lane Bryant sent me a credit card. I had ordered from there catalog for several years. I don’t remember filling out a credit application, just this very pretty purple piece of plastic coming in the mail, and I then could order clothes and pay a small $25 a month until they were paid off. Easy, right? I had my first charge off on my credit report at 18.

I was a single mother at the time, and on welfare. The next step was to go back to work, and I needed a car. But with a new job and a small awful credit file, I needed a co signer. I don’t know how I did it, but I talked my Dad into it. I bought a 1990 Ford and went to work 3rd shift.

I behaved at 1st, making payments on time, and then I moved out on my own. I lived in an apartment with my son, and my soon to be husband. (now my ex husband). Living on my own was hard, and things started to slide. First my car insurance didn’t get paid, then it was canceled. So the finance company added their insurance to the car. Then I fell behind in the payments. Eventually I had to give the car to my Dad, and borrow his paid off car to drive back and forth to work. He was nice about it, but swore he would never co sign for me again, and he never has. Not that I would ask.

When my ex and I got married, we moved south with the military. He then took over the bills. I had given my Dad his car back when we moved, so we were down to one vehicle. We decided to trade his truck in and buy 2 cars, one for each of us. His credit was good, so it was no problem.

Fast forward a few years, and we are out of the military and permanently living in the south. Thing are tight, and my ex and i fight about money a lot. Eventually we end up splitting the bills 50/50, and each of us have to pay out of our own paychecks. He doesn’t care about any credit cards, just that if they are in my name, I have to pay them myself. Me, having no self control with money, rack them up. We split in 2001, and he walked away with a paid off truck. I was left with 10,000 plus in credit card debt, student loans, and a single wide mobile home with a 20 year mortgage.

I then decided that I wanted a new car. The one I had was with a credit union, and I was upside down a lot. But it was in my ex husband’s name. So, I let it go back, and bought a car on my own. Took out more credit cards. Move to a rental house that was $250 more a month and let the single wide trailer go back to the bank.

Are you starting to see a trend?

Don’t get me wrong, I was making it, but by the skin of my nose. By then I was at my current job but a single mom of 2 kids. Do you know how embarrassing it is to have collection agencies call you at work, while you are a bill collector for your job? One time, they even faxed my boss about my debt. I blamed my ex husband, and prayed that they would stop one day.

Then the rental house caught fire. Thank goodness I had renters insurance. I had a ton of cash, and a spending habit that I had not fixed.I found a new place to live, a rent to own house. I had one year to rent, and I had to get the mortgage in my name. I did it in 6 months. That was the height of the housing bubble, and I got a 11.75 % variable APR mortgage on a $125,000 house. But I had a ton of money from the insurance, that made it easy. My spending habits didn’t change. My kids and I had more stuff then we knew what to do with.

I then met my current husband. He is 6 years younger than me, and still was living at home. We has a speedy courtship, 4 months from our 1st date to our marriage. The money from the fire had run out by then, and he didn’t have a well paying job, so I robbed Peter to pay Paul to pay for the big wedding we had. The mortgage company did the 1st loan modification on the mortgage within 6 months. They lowered my payment and my interest rate to 7.5 % fixed. I thought everything would work out.

Traded and bought a few vehicles, and racked up more debt. Was kinda of keeping my head above water, then my husband got sick. We then had huge medical bills that included a bill for a cornea transplant. Everything got past due, even the house again. We went and filled out the paperwork to file chapter 13 bankruptcy but didn’t have the filing fee until we got paid on Friday. Thursday, I went out my front door to goto work, and my car was gone. It had been repossessed in the middle of the night. So, I borrowed the filing fees to file a day early, and the next day, the lawyer got my car back from the bank.

Again, things were fine for about 6 months then hours were cut. My husband had to find a new job, and took a $2 an hour pay cut. That hurt. Our Chapter 13 payments were self pay, so we stopped them. And our plan was dismissed.

We went back to the attorney, and asked what to do. He said to keep the house, we would have to file chapter 13 again, but reduce what we were paying in the plan. We gave back my car, but kept my husbands truck. I went out and found a mini van on a buy here pay here lot and got that for transportation as our family by then had grown by our twins and we didn’t fit into the truck by then. This time my pay was garnished for the payments, and my take home was about $250 every two weeks. My husbands was about $600 every two weeks. Everything else went to bankruptcy. It was very tight. So tight, that I even went behind my husbands back and got 4 credit cards while in bankruptcy. See the trend.

Then the layoff. My health insurance at the time was 100% paid by my employer, but my husband carried the girls and himself. To add him and the kids to my heath insurance was $300 a paycheck. His unemployment was $115 a week, and I only was clearing $250 a paycheck. The bankruptcy payments had to stop. My attorney got the trustee to stop the garnishment, and I put everyone on my health insurance. We saved up and filed income taxes, and converted to a chapter 7. We bought 2 salvage titled cars, and let the truck and van go back to the banks. We did another modification that included stretching the mortgage to 40 years from 30 years, and kept the house. We were discharged from chapter 7 in July 2013.

Stay tuned for part two…


Finance Management in Your Forties: 5 Important Factors

by

Many people consider their career high to be somewhere in their forties. Combining the ambition and excitement of their earlier years with the experience that comes with time, your 40s could be a time where you have made the right decisions and are enjoying a certain stability in your life. It could also be the most important time to start some serious planning about your family’s future and to think about slowly easing into retirement.

Here are some tips to manage your finances in one of the most crucial junctures of your life. These can make a significant difference in your life 10-20 years from now. That may not be the most compelling case for a look at your financial profile now, but it is certainly something you will come to appreciate at a later point.

Asset Allocation

Your risk profile should and will change with age, and it’s important that you adjust your investment portfolio accordingly. Make sure it suits both your short-term and long-term goals. Investment in equity may be a great plan for when you retire, but it be would less suitable if you have financial requirements that are coming up sooner – maybe your kids are graduating in a few years and you need to plan for their tuition; maybe you are expanding your family and plan to buy a bigger house. Your plans must fit into your investment portfolio. Make sure they are well-diversified and that there is no allocation overlap.

Invest in Profitable Assets

If you have been fortunate enough to have a stable income in your 40s, you should look into making well-thought-out investments in solid assets, but you have to be careful as to what that “asset” might be. Investing in a second car might sound like a convenient idea, but it wouldn’t count as an asset because the capital cost would be depreciating down the line. Ideally, you should look into income potential for capital growth, short-term capital gains and the risk involved before you decide about investing in an asset.

Maintain an Emergency Fund

By this time in your life, you must have a decent emergency fund. If that is not the case, it is important to start now. You will find that your emergency funds will be tested more and more in your forties. Be it health troubles or your child’s education, health or even wedding expenses, it can hit you from any direction even though you might have insurance Winnipeg coverage to offset some. Make sure you maintain an appropriate-sized emergency fund and keep replenishing it as necessary. Also, it might be a good idea to reinvest it in some other taxable investment account so that it can grow, especially if you feel like you have less use for it. Withdrawing it can come with some penalties, but you’ll have a higher chance of making a sizeable growth over time.

Insurance

Making sure you have appropriate insurance coverage is one of the most important factors to take into account. Your insurance needs at 40 may differ greatly from your 30s, especially in relation to your health. Even if your employee package covers this, it would be prudent to review it now and then. Do you need a long-term care package? Would taking out disability insurance be appropriate? It could be a lifesaver in the event of income loss due to unforeseen emergencies. Have you renewed your term insurance package? Have you reviewed your claim beneficiaries in the event you’ve had some major life changes, like a divorce? If you have large assets, consider an umbrella policy that covers life, health, auto and home insurance all in one with good coverage so you don’t have to manage separate policies.

Retirement

Are you earning more now in your 40s than you were when you last upgraded your retirement account? Perhaps it is time you review your investments in that area now that you are getting closer to retirement. Many people make the mistake of siphoning off excess income into an inflated lifestyle, the net gain of which is zero. Consider boosting your retirement contribution. This could take the shape of adding to your 401K, or if you aren’t satisfied with the matching contribution you are getting, you could roll it into an IRA that you control.

With that said, don’t forget to take out some money to invest in yourself. You have worked your way up to this stage, and you deserve to sit back and enjoy some of your hard-earned money. While retirement planning is an important factor that you have to start considering from now on, don’t forget that you only get to live your 40s once.