2 Years of Freedom

May 27, 2007 By Matthew Paulson

Two years ago today, I was pouring over my financial records, feeling the pressure of credit card debt and student loans piling ever higher. I was spending more than I made, I didn’t even know how to write let alone follow a monthly budget. I had $7,000 in student loans and close to another $1000 on a credit card. I had a very mediocre job at a gas-station for the summer, and was definitely not moving in a positive direction with my money. Debt was piling on as I went through school and I was getting sick of it. I was on track to have $20,000 in student loans and more credit card debt on top of that. What I was doing was not working, and it was time to make some drastic changes.

I was on a limited income in college, had tuition bills to pay, and had debt piling all around me. I decided that I never wanted to borrow money again. I would no longer be a slave to my creditors. I cut up my credit card and cancelled the account. I was once again moving in a positive direction. I knew I needed a bigger shovel to dig myself out of debt, so I found more work. I picked up some hours at my summer job, and worked three different jobs on-top of my full load of classes my sophomore year of college. I dramatically cut back my spending. At first, I was letting my self spend $100 a month, and that’s it. I was living in the dorm and had a meal plan which was enough to meet the basic necessities of life, and that’s all I spent. About a year into the plan, I loosened up a bit, but still live on a relatively tight budget.

It wasn’t easy, but between working quite a bit (30-40 hours a week on-top of classes and homework), and dramatically cutting back on my spending, I was able to create all sorts of cash-flow. I was able to pay cash for both semesters of college that year, and dramatically reduced my debt. By May of last year, I was able to pay off my last debt. Since then, I’ve been piling up cash to pay for tuition and a newer car. Yesterday I was able to go down to one of the local dealers and found quite a steal on a model that I really enjoyed. I’m a senior in college, and was able to write a check for $5,195 for the 2001 Dodge Stratus I had my eye on. I also was able to max out my Roth IRA this year as well.

I plan on continuing living on a budget for the rest of my life, living on less than I make, and generally doing what I can to be a good steward of money. I’m not telling you all of this to brag, but rather to show everyone that hard work really pays off. Do smart things with money for long enough, and you’ll be in a much better position with money. You will find a new found freedom once you no longer have to worry about where that next paycheck is going to come from and that you can handle a car-repair and not have to have a crisis about it. You can just write a check and fix it! How crazy is that?

Give it a shot, live on less than you make, put some money away, and live on a budget for six months. If you don’t like the progress you’ve made, you can always go back to whatever it was hat you were doing before!

Posted in Matthew Paulson, debt

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