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

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.