In 2008 the company BF had been employed with for eight years went bankrupt. We were in our mid-twenties and didn't have a real financial plan in place. We quickly learned that decisions had to be made - and in our case it was taking a leap of faith and moving across the world for a chance at better employment in a country with a better economy. BF's new employer paid for our flights and two weeks in a hotel - that was all. We had to figure out how to get any personal belongings shipped over and what to do with everything we left behind - including our house. And I would have to find a job once we got there.
Through the transition we racked up $10,000 in credit card debt. This was in addition to the student loans and car loan we already had. We stayed overseas for two years working, traveling - living an adventure. When we finally wanted to return to the US, it was a challenge to find new jobs as the economy had not recovered. After applying for what felt like a thousand jobs we both eventually found something, and in our luck with the same company we were already employed with. What we learned though from the complete experience has set us up for success in the future.
We moved home knowing we never wanted to completely rely on a job as the deciding factor in our life. That meant we had to pay off our debt and start saving for our future. By this time we were still carrying the $10,000 in credit card debt, $75,000 in student loans, and $45,000 in vehicle loans and only had about $100 in savings.
We came up with an aggressive plan that created security while reducing debt. I used a variety of methods from Suze Orman, Dave Ramsey, MSN Money, and lots of financial blogs. The best tip for us was the snowball approach from Ramsey. It just means that as you pay off one debt, you roll the amount you were paying into your next debt's payment.
By living below our means, putting raises and unexpected income towards the plan, extreme budgeting, and saying no (a lot) we have eliminated $65,000 from our debt in two years. We still have $65,000 to go, but we are working hard to pay it off before the end of 2014.
B+C=F Financial Plan
1. Make a budget - COMPLETE
2. Enroll in company matched 401K - COMPLETE
3. Pay off credit card debt - COMPLETE
4. Save 3 months expenses in an emergency fund - COMPLETE
5. Pay off 2 of 3 vehicle loans - COMPLETE
6. Pay off student loans - IN PROGRESS
7. Pay off remaining vehicle loan
8. Save 3 more months in the emergency fund
9. Open and max out Roth IRA's for each of us
10. Save 6 more months in the emergency fund
*This post is not to be considered financial advice.