Show Me the $$$: Amanda's Story (Part 2)

Welcome Back to Show Me the $$$! As we continue to introduce our financial backgrounds for this component of the blog, I love how our different stories and backgrounds have shaped our journeys. 

 In case you missed it,

• Here's my story where I, Jamie the magnificent, divulge how I grew up with my financially stable family.   

Amanda on the other hand, had a very different experience growing up. When it comes to finances, my background was fairly ideal, while Amanda experienced a less than fairytale existence, meeting challenges and learning from them. But like the Phoenix from the smoke, she rose up from the ashes and created a beautiful life for herself. It's a longer story, so we are breaking it up!

• Here is Part 1 of Amanda's story.

And that my folks leads us to the present, where we shall continue our adventure with Part 2!

Embracing the College Commuter Lifestyle

When we last left off on our journey, I was about to embrace the college commuter lifestyle, having accepted a benefitted job at 20 years old while still navigating my degree. I very quickly realized that my ‘92 $5k used clunker that I’d had for four years was in danger of leaving me stranded without a way to get to school (or work) for that matter… and having paid cash for school I was strapped in terms of funds. So I did what I thought was the unthinkable. I got my first auto loan and haggled my way into a more reliable used car. Since I had no bills apart from car insurance, gas, and my cell phone, and now with guaranteed income coming in, I knew getting to and from school was the priority. 

I vowed I'd pay the car off within a year.  How I was going to do that I didn’t know, but I was determined. I decided that it made more sense to finish college in 3.5 years and use the financial aid to avoid the expensive J session and summer classes I’d have to pay out of pocket for. That would allow me to throw more cash at the car and knock out the loan within my time frame. So I pinched every penny. I recycled bottles and cans (yes, that type of penny pinching)-- but I managed to continue cash flowing the rest of college. My mom upfronted me a little money along the way when I was short, and I paid her back quickly when that happened. 

You are your own Advocate

During this process, I also started to advocate for myself at work. Shortly after my regular employee status began, I was working in excess of 40 hours a week and was working overtime regularly on top of school. I had applied for a 40 hour a week position, but they hired me on at 30 hours a week worried I couldn’t do 40 with school full time. But I was regularly working 40 plus hours perfectly fine. So I found myself taking this knowledge up to my Manager and  making myself a permanent 40 hour a week full time employee with the proper benefits to match. (I still can’t believe I brought my pay stubs to show the overtime and the guts I had to tell him I wouldn’t work a single hour over 30 if they didn’t give me 40 hours and the benefits that matched it… ).  

With the bump to my income and after reading some finance blogs I realized I needed to pay a lot more on my car then the minimum monthly payments to make it go away. I began to toss $1200 a month at the car. I realized I couldn’t afford to leave with the car payment and get an apartment, so I decided I'd pay my car bill ($378) plus “rent” to get used to that financial commitment. I figured this way I wouldn’t get used to having that money, and the car would get paid off and then I'd have money for rent and could move out. 

I continued to absorb the work of others as the Recession eliminated jobs and I continued to say YES at work when opportunities presented themselves. I was like a sponge and just absorbed things. I also hit all the blogs I could find about personal finance. I realized the benefits of starting to fund a retirement plan early and made the commitment to start that up once the car bill was gone. I lived like a broke college student and paid off the car by the end of the year.

After the car payment was done, I found a roommate and moved into an apartment. I cash flowed some dental work that never got finished with a 0% interest loan and made sure to pay off the whole balance before the interest kicked in. 

A semester into the apartment and I graduated College with my BA in 3.5 years without a student loan. (Summa Cum Laude BTW, with a full time job).  

When my lease ended on my apartment, I almost took my mom up on her offer to move back in so I could save money for a down payment on a place of my own, but I found out the hard way that she wasn’t sober. Within a week I got a new roommate, convinced the apartment manager to let me keep my old place and not raise my rent, helped my old roommate move out, and put some distance and boundaries between my mom for a few years. 

Post College Adventures

At this point I had an apartment, a roommate, and a full time job… I was debt free and surrounded by broke college students who didn’t have money and were either still living at home or working part time and going to school… So I continued to live like a broke college student.

My friends never really understood I had a full time job… I got up at 5 am and went to work and was off by 1 pm… I still hung out with everyone for our board game nights and football in the park. I didn’t hang with a bar crowd, but a church one and so over time, I just started to save up money and no one really knew about my pension and benefits. I researched my pension and purchased service credits from before I was a benefited employee, and started funding a Roth IRA to balance out any pension income I’d earn and have to pay taxes on. 

But I was also realizing I didn’t want to live with roommates forever.

The next step started with $4.03

I decided at the end of the month that I was going to start taking the extra money I had leftover and start saving up for a down payment on a condo. It was 2007, before the housing market crashed, and a studio $500 square foot condo was going for $489,000.00. I started listening to Dave Ramsey and realized I could make excuses, or I could start somewhere. At the end of the month, I transferred that $4.03 into a savings account.

The next month I added to it, and had $27.76… then  $48.85… a little overtime and $184.94.. $229.27… $385.22… $464.92… $550.71… $628.36… $790.95…  It took me 10 months of saving and writing a budget and tracking my spending, but I kept those principals…. and my snowball got bigger. I started being able to save $400 a month… and then five months later when my income went up, I saved $500 a month. I kept banking raises and holiday pay all towards the mission, and there were months where I saved $1,000.

27 months later, and I had $14,118.52 and was staring at a real estate market crash.  

That $489,000 condo was now $110,000.00. I realized with an FHA loan, I could buy with 3.5% down. Sure I'd have MIP (the equivalent of PMI, but for a Federally backed loan), but I wouldn't need roommates anymore.

I ended put in over 26 offers on properties because the market was that insane…and saw over 100 places. Eventually I bought a bank owned foreclosure. It was a 1 bedroom 1 bathroom condo that was a diamond in the rough (The old occupants actually took knives to the deck -- no joke), but it was mine and I bought it for $115,000.00. 

In short, to move in and get keys, I spent $7,057.08... and over time I cash flowed $17,672.29 remodeling and fixing the place. Friends and folks from my church helped and eventually I turned it into a home.  

I ended up staying there for about 6 or 7 years. Sure, I refinanced when equity increased into a better interest rate with no MIP, but I eventually sold the property to purchase my current condo. Rolling over a large amount of equity allowed me to keep my living expenses lower through an eventual marriage, family kiddo expansion, and then a divorce. -- But it was the principles I learned in those 2 years of saving for that down payment that enabled me to survive and thrive no matter where life sent me.