How we got to this point

I thought I should tell you a little about how it was that Mr Wooly and I got to where we are today- slowly, but surely paying off our debts one at a time.

Where the money went
Who the heck knows where the money went, that is the sad truth :) I wish I could tell you my house is decked out in riches, but it is not, I am afraid the money just bled away one dollar (and penny) at a time.

I have been in university on and off since 1991. When I started school I had never had any debts. In fact, in 1992 when I got my first credit card I was so petrified of being in debt that I was really really good at never carrying a balance. I remember a friend told me that she did, and I was horrified. When I finally received my BSc in 1998 I had a moderate amount of student loan debt (about $10,000), but this did not worry me. However, I did not find a full time job after graduation (in looking back I wished I had kicked my butt into gear, but hindsight is 20/20), and so I did not pay off any of this debt.

In 1999 I started an MSc program and the financial problems started to accumulate. I: took on more student loan debt; opened a student line of credit; bought a vehicle with a loan; racked up my visa card to its $7,000 limit. What was I thinking? In 2002 I graduated with an MSc and about another $15,000 in debt.

From 2001-2003 I worked full time and made significant head way paying off at least $6,000 in debt. But I also made the decision to return to school to complete a PhD. From my career perspective this makes sense, but it did not allow me to pay much of the debt down.

During my PhD I bought another vehicle (having sold the previous vehicle) which required an additional loan of $18,000.

Pivotal Moment
The pivotal moment was me sitting in my car reading David Bach's Smart Couples Finish Rich, crying, because: 1) Mr Wooly and I were so broke all the time, quite often unable to afford groceries by the end of our paycheques, and 2) what the book said made so much sense, I finally felt a little hopeful that we could fix the problem.

That was July 2005.

Looking towards the future
Since that moment, there have been ups and downs in our debts. The main down has been borrowing money from our parents to purchase a house. The ups are starting to be more numerous and include:
- getting married without increasing our debt by one penny!!!
- paying off one set of parents completely, and developing a fast track plan to pay off the other
- for the first time for Mr Wooly, opening up RRSPs and making regular monthly contributions
- investing in mutual funds as a (small) rainy day fund
- purchasing a house, having saved the down payment (our borrowing from family was for additional unexpected expenses and for appliances)
- making a debt snowball plan (which I am going to post here soon) and paying off some of the debts in the plan after only 3 months.

And in 2006 I finished my PhD!! I just graduated last week, got to wear the funny cap and gown PhDs wear, and I am happy I finally made it to this point.

I don't rely on David Bach anymore, although he was a great starting point. It also opened up the discussion with friends and family who we shared his books with. We read a lot of other blogs, books and magazines for help as well.

I look back and I have certainly simplified the story. And I did not tell Mr Wooly's side, I may try and corner him one of these days so we can work on this together. I also want to emphasize that I have pointed towards my schooling as part of my financial problem, but I made all choices along the way, picking the right path for me at the time. I am cleaning up a bit financially after the fact, but I can hope that the education will help me do this in the long run.

Thanks for the listen!



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