I've been doing some thinking about how I got to where I am. I'm still not sure how the years have flown by so quickly or what I was doing with the time I should have been planning, but here I am. Living paycheck to paycheck without any savings.
In my thirties I thought I was living the American dream. I was married, we had a child, we bought a house, we both worked and were spending money and accumulating debt, just like the neighbors. It was everything I had ever dreamed of as a little girl. I thought it was how things were supposed to be, what I was supposed to be doing.
Then I got divorced. As part of that divorce I got half of the debt but now had less than half the income . I also had full custody of our ten year old daughter.
I was a single mom, trying to pay off the debt that we had accumulated during our marriage and trying to raise my child. Just finding an apartment that I could afford, in a good school district, was a challenge. The burden of the debt from my marriage was overwhelming and I had to file bankruptcy to get out from under that mountain of debt.
After filing bankruptcy I found a much better paying job. Things were looking up. I cashed in my 401k, it was very small, I didn't open it until after the divorce, for a down payment on a house. That was the goal that I set for myself when I got divorced, I wanted my daughter to have a real home. She was so sad leaving the only home she remembered and I wanted to give that to her again.
The house was perfect, much bigger than what the two of us needed but it was a starter home in a cookie cutter neighborhood. It was within walking distance of the middle and high schools and close to work.
I was, once again, living the good life. I made a good income and spent it all, plus some extra, just to keep the credit card companies from financial ruin. Then the market crashed.
I struggled through several more years paying that mortgage, doing everything I was supposed to do. I was not accumulating much debt, mostly because those credit card companies didn't trust me very much, but I was not saving anything either.
Then I lost my job. I had a little bit of money, in savings not a lot, enough to keep us from being homeless. Then I lost my job and my house fell apart, all at the same time.
In June my swamp cooler quit working. Some people have central air, I had a swamp cooler. They aren't very complicated so the fix wasn't terribly expensive but it ate into my savings just the same because I was unemployed.
A few days later the water company knocked on my front door and said that I had a leak somewhere because my water usage was through the roof, like several hundred dollars over the normal cost.
The water main had to be dug up. Just my luck the leak wasn't on the county side, it was on my side of the meter which meant it was my problem. After digging that same hole three times and throwing the rest of my savings down it, the water main was fixed.
I thought I could finally take a breath, then my dishwasher hose broke and my dishwasher leaked into the basement. The basement that I really only went into when I had to do laundry so by the time I realized that my dishwasher was leaking, the drywall and carpet in the room below the dishwasher had to be ripped out and replaced.
Then, just for fun, we had a really bad storm and my fence blew over. I was out in the rain trying to get the fence to stand up enough to keep the neighbors dogs from destroying my yard. It didn't work.
At this point I was done. I had no money, no job, a house payment and all my bills, but all my savings was gone. So I called the bank. I don't know if that's what you are supposed to do but I told them I couldn't pay for the house anymore. I packed the few things I hadn't sold to pay for silly things like food and electricity and moved out.
Of course my house went into foreclosure, that's what happens when you stop paying the mortgage. A realtor who specializes in things like this, tracked me down at my new apartment and asked me if he could sell the house for me.
He told me I wouldn't get anything out of it of course which I didn't expect because I was upside down in it since the housing market crashed and still hadn't recovered. I didn't care if I got anything out of the house I just wanted out from under it. Fortunately within about four months he was able to sell it and somehow literally broke even. It was depressing, I had lived in that house for eight years and it was worth less than it was when I bought it.
So there I was in my tiny little apartment 700 square foot apartment, with no money. I taken the last money that I had to pay the security deposit and first month's rent on my apartment.
I was able to find a job before my rent was due, so I was back on that treadmill, trying to keep my head above water. It's a little easier because of course my expenses were much less without the house.
I realized that I was in my 50's and I had no savings, no retirement, basically my net worth was in the negative. I was still paying on my car, owed about $6,000 in credit card debt and had nothing in my savings account. I made enough money but I also had really bad spending habits and really bad money management habits.
After paying my bills anything that was left I just spent. I would take my daughter out to dinner, eat lunch out at work every day, buy myself new shoes, new clothes, buy my grandson whatever his little heart desired.. Bottom line, if I had money, I spent it.
Then one day I got an email or something that triggered me to check out the Social Security website. I looked on that website out of curiosity, and found that because I was born after 1960, my retirement age is 67. If I retired prior to that I would only get a percentage of what at could get at 67, or my full retirement age.
So what the heck is my full retirement benefit? I logged in and created an account. I found that my full retirement benefit is actually half of my current income. Well with my current income I run out of money long before I run out of month. There were still times when I was juggling bills so that they wouldn't be paid before my paycheck hit the bank and sometimes my checking account was overdrawn. And let's not forget the credit cards. They so helpfully kept increasing my limit.
I was tired of living that way. Tired of not opening the mail because I didn't know what would be waiting for me in there. And then the icing on the cake, I go to work and I get an email from my payroll department that says my wages are being garnished for an InstaCare bill from two years prior that I never paid. Yes, I was pretty financially responsible.
I was determined to make some changes. Save some money! Retire early if I could! That was three years ago. And I'm sad to say, I didn't make the necessary changes. I looked into things like paying off my debt and investing money. I set some goals and started off strong, putting some money in my savings. But it never lasted, as soon as I would have a little in savings there would be something I wanted or "needed" so I'd pull the money out fully intending to put it back. It never happened and I forgot all about making changes.
Today, my car is paid off, not due to anything special on my part, I just paid the payments long enough to pay it off. I have over $10k in credit card debt and still no savings.
I lived my whole life thinking I had plenty of time, so if I wanted to spend my money on random things, and trust me I'm a collector of random things, then why not? I thought I had plenty of time to plan for retirement.
Now I'm turning 56, and haven't planned at all. Am I too late? Did I wait too long? Is it possible to go from zero to retirement on a single, middle class wage? I'm going to see. The bottom line is I can't live off what Social Security will give me when I reach the magical age of 67 so it's now or never.
This blog will become my personal financial diary. What I'm doing and how I'm doing it. I'm hoping it will work out and then there will be a record to help other people who waited too long. I don't want to work until the day I die or be a burden to my daughter.
That's really my biggest fear. I don't want my daughter to have to take care of me while she is trying to raise her family. It's not fair to her. I've often told her, when the time comes, put me in a home. Someone has to pay for that home though, so I better get a move on.
Tomorrow, I'll catch up to where i am now and start making some changes. It's not going to be easy, but it is so very necessary.
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