Financial Mangement, Reducing Debt in Iraq: $68K to $10K in One Year

Mint.com — Tue, 31 Jul 2007 18:00:19 +0000

Financial management is something that we care about here at Mint. Learn more with great financial management tips in our blog article index.

I have a little bit of a twist on the dumb financial management story. After I got out of high school, I went to the US Air Force Academy. There are no tuition costs there, and I also got a small monthly stipend, so I thought I would be in great shape financially. It wasn’t long before that stipend wasn’t enough, and I started getting into debt. I racked up over $35,000 in debt by the time I left. This including a $25,000 loan, given to me at 1% that was almost completely squandered!

After I graduated, I had a commitment to Uncle Sam, and started working as an Air Force officer. I made a decent income, and thought I would be able to get out of debt. I quickly fell into old spending habits and racked up additional debt with a new car and home renovations. For each promotion I received in the military, my spending increased to match.

Early this year I looked around and realized that I was over $68,000 in debt, not including my mortgage. I was having trouble paying the bills, and knew that I had to do something. I desperately started searching for answers, and it wasn’t long before I discovered that my poor spending habits were to blame.

It was a turning point in my life. I started keeping track of my spending, and practicing sound financial management. I also needed to earn extra money. I sold my car, rented my house out, and volunteered for Iraq. Early this year, I had almost $70k in debt, and now I have less than $10k. If all goes well, I should leave Iraq with 0 debts, and some solid investments.

I am blogging about my experiences now, and all the details are there. Despite being in Iraq, I am very optimistic about where I am headed.

Mint’s Take Away:

Our Tuesday Train Wreck series are generally anonymous, but we feel that Nick wanted to share his story to more people. Nick is currently an Air Force officer that’s deployed to Baghdad, Iraq. As mentioned in the story above, he volunteered to go to Iraq because of the extra money he earns while he’s there. You can find his blog at Journey to Financial Freedom.

Nick’s story brings about an important aspect of keeping track of your spending. It may sound incredibly difficult to suddenly spend your way into five-figure debt without knowing, but when you don’t keep track of your cash flow and spend more than you earn, it can be extremely easy to go into debt.

This is one of the reasons why Mint will help you keep track of your money, so you can see where your money is going, and direct it to where you truly want it to go. We are incredibly impressed with Nick’s commitment to take up responsibility to diminish his debt. If you ever want to see an example of how tracking your spending, budgeting, and living below your means can save money, this would definitely be it.

Train Wreck Tuesdays are a weekly post of horrible financial mistakes. They are posted anonymously. Submit your story; if you’re selected, you get a free personal finance book. The best comment gets the same prize! Check out past Train Wreck stories here.

Poor Financial Management The (College) Major Stumble

Mint.com — Tue, 24 Jul 2007 17:00:01 +0000

The following article is one example of our take on one of issues we care a lot about here at Mint, including: financial management and debt management, etc. Click here to find many more.

My largest financial management train wreck was my unwillingness to accept that my major wasn’t cut out for me in college. I “worked” for three and a half years at Georgia Tech, trying to be a Computer Scientist. As such my GPA suffered, and I was eventually kicked out of school.

Had I accepted that I wasn’t a good computer programmer I could have saved thousands of dollars in tuition, and I could have avoided enrolling at a community college, trying to regain an acceptable GPA to get back into a four-year university.

Even past that though, when I got kicked out of college, I lost all support from those who were contributing to my tuition and living funds. I had a job at the time, but I was living slightly above my means. I then committed to a trip with roommates, which cost me nearly $3000 on my AmEx card — a balance I’m still working on paying off over 15 months later.

On top of that, my job at the time was an independent contractor; and while I had saved some money for Uncle Sam when tax time came, I had to spend that money just to pay bills before I moved home. When tax time came, I got hit with owing taxes equal to roughly what I make in a month at my current job. I’m on a payment plan with them, but it’s still a hefty chunk of my already-tight income.

My life didn’t end up in the toilet from this, but I’m struggling to make ends meet. I’m living free of rent with my family but I’m working a job which — although it doesn’t pay me much financially — I really enjoy. Sadly enough, though, I’m going to leave this job soon, because I need to make more money.

Currently I’m on schedule to have the balance on my credit card paid off in a year at most.

Mint’s Take Away:

Choosing the right major or career choice is certainly not an easy task. Before you decide on a program and school to study, you may want to consider how interested you are in the specific major.

Consider this fact, according to the U.S. Department of Education, the average cost of studying at a 2-year institution is about $6,200, while the cost of studying at a 4-year institution is about $14,500.

If you’re unsure of what you may be passionate about, it may be a practical financial choice to pursuit your academic studies at a two year institution first (such as a community college), and then transfer to a four year institution when you have a better idea of what you want to study.

Additional Resources:

Choosing a College Major: How to Chart Your Ideal Path

Cost of Higher Education

MintLife Blog | Personal Finance News & Advice » financial mangement

Financial Mangement, Reducing Debt in Iraq: $68K to $10K in One Year

Poor Financial Management The (College) Major Stumble