Here’s a little story.
10 years ago I was completely lost and didn’t even know it. I was living paycheque to paycheque, borrowing money from my mom and sister to make ends meet, my credit was in shambles, I was living beyond my means and trying to “Keep up With the Joneses”. I had LV and Gucci bags, Herve Leger dresses and Louboutin heels but little to no money in the bank, bad credit and no idea how I got there.
Then my dad died, I quit my job, because “YOLO”, and if I thought things were bad at that point, little did I know that they would only get worse. Rock bottom for me was when I went to a bank machine to take out some cash, the machine kept my card and told me to “call a number”. And it wasn’t like I had a credit card I could use as an alternative because when my card expired the previous month, the bank said they checked my credit and I wasn’t getting a new one! So if I thought I was broke before, I was DEAD broke now. Oh and did I mention that I was going to the bank machine to pay for a cab and the driver was watching intently as I tried and failed to retrieve the money that I owed him? This very moment made me realize that my life was a complete NIGHTMARE and everything had to change ASAP. (I’ll tell you how I got out of the cab situation another time) but let me get to the point of the story.
Why am I sharing this? Because I hit rock bottom, turned my situation around completely and if I did it, you can too. Almost 5 years later to the day that my debit card was “confiscated” at the bank machine, I bought my first home and got a great interest rate. I paid off my credit card and student loan debt in full (almost $70,000 worth) and saved about $30,000 towards a down payment on my first home at the same damn time. And after that, I started doing something that I was never really taught how to do. Save and Invest.
A lot of people ask me how I paid off my debt and how I bought a home after all of that. I came up with almost $100k to do this and it wasn’t easy, but it also wasn’t as hard as some might think.
Here are a few key things I did that were instrumental to my success:
1. Get Honest About Your Situation
It’s the pretending and fake shit that got me here in the first place and that had to stop ASAP. So I got real with myself and told my loved ones about my situation so that they could keep me accountable. Most of my friends knew that my situation had gotten crazy so when I told them that I was going into “financial rehab” most of them were understanding. The hardest thing was telling my boyfriend (who is now my husband). He had no idea that my situation was in shambles. He just thought that I had it all together because that was the perception I gave him . But when I told him what was up, rather than running for the hills (like I thought he might do), he sat down with me and helped me write a financial plan. And he’s a Virgo so he also kept me VERY accountable. He was like the finance police, actually. But I love him so much for it.
2. Get paid for your performance
The first thing I did was find a job with variable income. Where I was lacking in personal finance knowledge, I wasn’t lacking in work ethic. I made a career switch to media sales where I got paid a base plus commission. So in other words, the harder and smarter you worked. The more that you got paid. So I went from making $60-$70k a year to $150k a year. My income varied and depended on many things but I was able to make a lot more money once it was tied to my performance. This wasn’t unique to the industry that I worked in. There are several jobs out there with a commission or variable income component. If you’re a fighter and you’re not afraid of hard work. I highly recommend it. And $100k is often just the starting point. I know several people in sales that make well over $200k a year. Real estate, insurance sales and corporate sales jobs are great places to start and often times you can get into those roles without a tonne of prior experience. You just have to be hungry, willing to work hard and know how to sell!
3. Save your Bonuses and Tax Returns
If a job with variable income is not for you, put all of your bonuses, and tax returns toward debt repayment or savings every year until you are debt free. Don’t rely on that money or count on it as income. You were fine without it. Put it in the bank and pretend like it doesn’t exist.
4. Corporate matching plans are the TRUTH
If the company you work for has a stock plan with any sort of matching. Stop what you are doing and sign up for it. RIGHT NOW. If you don’t sign up for it. You are playing yourself. I joined my company’s stock plan, where they matched a percentage of what I contributed. This was like free money! I contributed the maximum amount that I was allowed to contribute and they matched it by 50%. This was how I saved for the downpayment on my house while simultaneously paying off debt.
5. Stop Shopping PERIODT
I stopped shopping until I was out of debt. PERIODT. I mostly wore all black everything and had a few great white and black shirts, a few pairs of dress pants, jeans, heels an LBD and only replaced the essentials and only did that during ‘end of season’ sales. This was HARD at first and then I got used to it. I kept a few designer bags from my irresponsible days and used those to elevate my looks. I did this for years and I still looked fly. I stopped caring about impressing others and I actually got addicted to watching my debt go down and my credit score go up! Now when I splurge, I pay cash or put it on my credit card and pay it off in full the same day. No exceptions. I have actual PTSD from previously being in debt so now I’m literally allergic to owing money to anyone, anywhere at any time.
6. Move back home or get a roommate
I moved in with Sean. This was huge. I went from paying $2000 in rent and utilities to $800 by moving in with my then boyfriend and now husband. We shared a studio with one bathroom. It was not glamorous but it was dirt cheap and exactly what I needed to get it together. This also made me realize that this was the man I wanted to marry. If your relationship can survive living in a box with one bathroom, HE’s A KEEPER! And rather than squandering that $1200 I was saving. I put all of it towards paying my debt. If you don’t have a boyfriend you want to live with, move in with a friend you get along with or get a roommate. Or if your parents are cool, move back home.
That’s what I did to save $100k in 5 years. There were other things I could have done to save even more, like plan meals and pack lunches for work and not take any trips during that time but I did what I could handle and with the support of my friends and family around me I made it happen. I did have a few slip ups and splurged here and there but for the most part I stuck to the plan and got my situation together.
My main goal was to buy a home and I needed a credit score of at least 600 to qualify for a mortgage. It took me about 2 years to get it there but I didn’t want just the bare minimum score. So I got a credit card to build up my credit and for the next 2 years I used my card and paid it off in full each time until my credit was good enough that it wouldn’t impact the interest rate when Sean and I bought a home. So when it was time to buy a house I had enough saved and a good enough credit score to get a condo on my own with a decent interest rate. I say this because I want people to know that you don’t need a partner to make this happen. You can do it on your own but you might have to start with a more affordable property. Sean and I were married at this point so we obviously pooled our resources and bought a house together.
Wow, this post is a lot longer than I thought it would be but there it is. We bought our home 5 years ago. Since then we’ve maintained our mortgage, I’ve continued to save and not acquire further debt and now my credit score is actually over 800! It’s a great feeling but if you’re in a rut just know that you can get here too. And last but not least, if you can, don’t learn the hard way, like I did. You can do all of these things and SAVE $100k instead of having to pay off $70k first. Let everyone floss and flex on the gram. Save, buy a home and invest for your future and once you have that on autopilot, treat yo self all you want!
If you have any questions feel free to chime in below or send me a DM on social media. I’m not an expert by any means but I’m an open book when it comes to this stuff and I’m happy to help anyone that is looking for answers.
With love, Shannae