Fabulous Financials

On 9 March 2007, I denounced debt by stating “Consumer Debt is NOT Fabulous!” Then I made a promise to myself - even claimed 110% dedication - “to become consumer debt free by the end of THIS YEAR.” At the time, I had a little over $15k remaining (car and student loans).

To motivate others to join me, on 20 March 2007, I wanted to offer an incentive for successful end of year debt reduction plans. In fact, to make it fun and spread the love, I created MULTIPLE incentives!

1. Expense paid initial consultation to see a financial planner.
2. One year subscription to any financial magazine of your choice.
3. One personal finance book of your choice.
4. Three month commitment from Single Ma to be your personal “coach” as you strive for financial freedom.

The person who paid off the most consumer debt by 31 December 2007 would get first dibs at the prizes - then the 2nd, 3rd, etc. The incentives were eligible to ALL readers in the US who were highly motivated to pay off their consumer debt. The responses were slow at first, but they trinkled in with every related blog post.

YEAR END REVIEW

At final count, I had 27 participants - whom I later referred to as my DPI (Debt Payoff Incentive) Crew - and two very generous sponsors. I created a spreadsheet with each member’s name in the DPI Crew, their debt, and beginning totals as of 1 April. From April through December, I would send out pesky little emails requesting debt payoff updates and at least half the group would respond. Then I offered a mini incentive for the highest monthly payoff and the response to that was much larger. We had a tie with two winners who received a personal finance book or hosted ING referral links on my blog.

I’d also send perky emails as motivation to keep up the good work - or provide tips on debt reduction - or provide tips on how to avoid incurring new debt. Even had a DPI Crew member write a guest article about his debt reduction experience. Occasionally, a DPI Crew member would send me an email about their specific situation. They either wanted someone to release frustration, bounce an idea, or give a pat on the back - and I tried to be all of the above as needed. I’d also get a ton of emails asking for advice, to which I’d always respond with the caveat: I am not a financial advisor (or a licensed financial professional), but if I were in your shoes, here is what *I* would do. Sometimes I’d get a “thank you” if I helped the person in some way. But most of the time, they probably thought “this chic is a loony toon!” LOL!

**SIDE BAR WARNING**

When it comes to debt reduction, I give it to ya raw baby! LOL! Straight, no chaser! I hate debt because it is NOT fabulous. So if you can’t handle the truth, don’t ask Single Ma for her opinion about your debt situation. Got it? Good.

FINAL REPORT

Exactly eight months after making the promise to myself, I celebrated debt freedom on 10 November 2007 and I attribute my success to this blog, encouragement from SMFF readers, focus, and dedication.

Now I also want to celebrate the DPI Crew and their hard work. Many of them began this contest armed and ready, some fell off after only a few months while others admitted to incurring new debt. Unfortunately, only a hand full rode the debt reduction train with me until the very end and I would like to recognize the winners. So without further ado, here are the top four winners based on total debt reduction since 1 April 2007:

DEBT PAYOFF INCENTIVE WINNERS!!
First Initial	Beginning Debt	Ending Debt	Total Payoff
C.	$24,206	$10,800	$13,406
Y.	$60,455	$53,981	$6,474
H.	$72,794	$68,189	$4,605
C.	$12,040	$8,275	$3,765

I’m sure the winners recognize their numbers and know who they are. Congratulations!! Please email me so we can make arrangements for your prize. To all other participants, sponsors, and SMFF readers who followed my debt reduction journey from the very beginning - thank you.

GOOD LUCK luck to everyone in 2008 and Happy New Year!!

[image credit: www.usoge.gov]

[image credit: e-limidebt]
Although I have no desire to discuss MY debt reduction experience anymore, a Fabulous Financial reader has stepped up to the plate to share how HE stays motivated on his journey from $21,000+ in credit card debt. Due to his focus and dedication, he will achieve his goal of DEBT FREEDOM by June 2008. I hope you enjoy this guest article.————————————

A few months ago, I emailed Single Ma to ask her advice about dealing with my credit card debt. For the past 7 years I’ve been in debt to my credit cards. I’ve made efforts to pay it off, but while I would get it down some, something would always came up: like car repairs, bad business investments, being laid off, helping out friends in need, etc. I lived paycheck to paycheck and it felt like I was working just to keep my life at status quo, not to get ahead.

This year I got serious about paying it off. I started reading the personal finance blogs and some personal finance books. I read The Automatic Millionaire by David Bach and took his advice about building up an emergency fund. I paid the minimums on my credit cards so I could build an emergency fund and I was amazed at how quickly I was able to build up 3 months of basic security. In June I took advantage of a 0% Balance Transfer offer from Chase and moved most of my debt to a 0% account for 15 months.

When I emailed Single Ma in August I still had over $21,500 in credit card debt left. She told me that while saving was a great thing, my debt was making it counter productive. I agreed with her and decided to ignore David Bach’s advice and refocus myself on getting out of debt.

So how am I doing?

As of this Friday I have paid $9,209.86 on my debt. That amounts to 43% of my total debt in under 5 months! (I think I may be able to squeeze in an extra payment before year end too) When I emailed Single Ma to give her my update she was very happy for me and asked me to talk to you all about what keeps me motivated. After doing a little reflection I came up with some of my motivators and helpful tricks.

1. I want the freedom to not have to work a 9-6 job. My current job is very challenging and I enjoy the people I work with. But this has not always been the case. In the past I have felt trapped in jobs because of my paycheck-2-paycheck existence and the load of debt I had on me. I don’t want my debt to dictate my choices.
2. My girlfriend is in a similar situation. She is aggressively paying down a combination of credit card debt and college loans. Having her be on the same page financially with me is a great help. In fact, I think it is my biggest motivator. We both help each other to not spend on frivolous things. For example we used to go out to the movies almost every weekend. We used to order dinner nearly every night. We would both work long hours and when we got home cooking was such a chore that it was just too easy to order in. We solved that problem by hiring a local college student to be a nanny for our son. She picks him up from after school, brings him home and cooks dinner for us. We end up saving money and now my girl can go to work without stressing out about picking him up from school. And she is able to work a lot more OT. And the leftovers from dinner I take for lunch. This alone has saved me a few hundred dollars a month (and we’re eating healthier).
3. When Single Ma first wrote about my debt situation, I felt a bit of a spotlight on me. With my salary, it seemed just wrong for me to not get my butt in gear and get my debt done with. I read people on other blogs who have debt greater than mine and make less than I do who can do it. Having Single Ma write about my debt and then joining the Debt Reduction Crew forced me to publicly take responsibility for my debt.
4. I want to invest. Having paid credit cards for so many years, I am DAMN tired of being on the wrong end of interest payments. I want my money to make money! And In a few years, I want to be able to use my savings and investments to put toward a house.
5. I keep my debt on my mind every day. I do this by visiting a few PF blogs every day (of course Single Ma is always on the list), and back in September, I found out about a site called Yodlee.com. I use it to consolidate all of my credit card and savings information in one spot, and then it breaks it down for me in a number of ways. I love viewing my net worth statement. Watching my debt go down and my total net worth go up is a great feeling. This is my net worth chart taken today. (Note I do not use it to track my 401K allocations yet)
6. On top of all this, I am thinking about starting a software consulting/contracting business. This goes back to reason #1: I don’t like working as an employee. I think I can offer a far greater value to clients and see a better result in my take home pay if I branch off on my own.Before I can even consider doing this full time, I need to be debt free and have enough savings to see me through a startup phase. In the short-term, I have been aggressively seeking moonlighting opportunities to get me started. Finding contract work that I can do after hours and on weekends is proving difficult, but I am keeping at it. I recognize that this is an area where I will need to seek out advice of people more experienced than I am.

So this is where I am at years end. Thinking ahead to the next year I anticipate being completely debt free by June. I will resume my aggressive *saving* once I am paid off and I hope to be doing some consulting by then as well.

Thank you Single Ma for helping me get focused and stay focused. And thank you for your frequent postings. I know I speak for all of your readers in saying just how much we do enjoy reading about your thoughts and adventures.
[you're welcome, dear. ~SM]

Wishing you and all your readers all the best in the coming year.

[the other] Mr. C.

————————————

I’m so glad Mr. C. agreed to write about his motivation because I never thought to put it in those exact words. I didn’t think I had a reason to be debt free, it was just something I knew was the right thing to do. But since he was able to articulate what I couldn’t, I now realize my motivation to become debt free was similar to his #4 - I want to invest more.

His article further supports what another reader [NoFearingTheMoney] previously mentioned, “it is important to think about why you want to be debt-free in the first place….then the debt elimination becomes a means to an end…a necessary step to achieve a larger life goal.”

Fabulous Financial tip from Single Ma’s readers:

Identify the REASONS you want to be debt free (i.e. tired of working for someone else, mutual goal in a supportive relationship, desire to invest, it keeps you up at night, Single Ma put you on blast so now you gotta show and prove lol, etc.) then use them to fuel your debt reduction strategies. Get started, stay focused, and don’t stop until it’s ZERO.

Dang, my readers are smart! Ha!

~*~*~*~*~*~
Work to achieve, not to acquire.
And as always, BE FABULOUS!

When I mentioned that I wasn’t going to write about debt reduction anymore, some of you wondered why and requested that I continue to share my experience.

From the very beginning, I’ve openly discussed every minute detail of my debt demons. Remember back in June 2006 when I first confessed that I was $25,000 in debt? Man, that was eye opening! Then I asked for your advice about whether to save or not to save while paying off debt. I was torn between the two. But when I finally made the decision to get serious and hold myself accountable, I found my stride and shared what I considered the key to paying off debt.

Ya girl was so pumped, I offered an interactive debt payoff incentive for those who wanted to join me. Throughout the process, I shared how I took control of my student loan debt and provided regular status updates on other debt balances. When my first debt was paid off, I gained momentum and became even more dedicated to my debt reduction plan. Yea buddy, it was on and poppin! I continued to share detailed updates ad nauseum, as well as my thoughts on how you too can take your life back.

My debt reduction journey ended on 10 Nov 07 with an official notice of closure on 10 Dec 07. Seeing that final letter was refreshing, liberating, and motivating! It was a reminder that I can do ANYTHING I set my mind to. Paying off $25,000 worth of debt in 1.5 years is only the beginning of my financial plan. I have a long way to go, baby! So I apologize to any readers who come here specifically for debt topics, but since I’ve already written 33 posts on my debt reduction experience, it’s time for me to continue my journey to financial freedom.

~*~*~*~*~*~
Work to achieve, not to acquire.
And as always, BE FABULOUS!

Was this the most beautifullest? Or is THIS the most beautifullest?

Man, I feel like a 10 pound weight just fell off my shoulders. Now that it’s official, I can say this letter IS the most beautifullest thing in this world. Just like THAT!

LOL!

$13,888 in federal subsidized student loans…

I was thinking about writing a “how I did it” post but changed my mind. I’m done talking about debt reduction on this blog. []

~*~*~*~*~*~
Work to achieve, not to acquire.
And as always, BE FABULOUS!

The year is winding down and the Debt Payoff Incentive will soon come to an end. Back in March, I promised that I’d offer a few incentives as motivation to pay off as much debt as you possibly could by the end of this year. Well, there are only 2 months left!!! Just to refresh your memory, here are the incentives:

1 - Expense paid consultation to see a financial planner in your area.

2 - Free one year subscription to any financial magazine of your choice.

3 - Free personal finance book of your choice.

4 - Three month commitment from Single Ma to be your personal “coach” as you strive for financial freedom.

This means at least FOUR people will receive something, but it’s based on HOW MUCH you’ve paid off since April 1st. Maybe someone is on track to join me in the debt freedom club. Who knows? So if you’re a DPI Crew Member and we’ve communicated about debt via email throughout the year, please, get me your updates!!

K’thanks!

~*~*~*~*~*~
Work to achieve, not to acquire.
And as always, BE FABULOUS!