We lived with my parents for five months. Then we bought a home. We qualified on my income alone (my wife stays home with our kids)… but barely. The first year was rough. We ate eggs and oatmeal a lot.
Still, I was seeking “the” opportunity that would make me rich. So I began blogging about alternative health. I began studying to become a financial planner. And I continued to work through a freelance copywriting course I had purchased from AWAI.
Long story short, I quit my job on April 19, 2005 to become a financial planner. It didn’t work out.
Then, with only two weeks of money left, I launched my freelance copywriting career on June 13, 2005. I had been learning how to write advertising copy in my job at Sonlight Curriculum. And I had completed the course about how to become a freelance copywriter. So it seemed a natural fit.
The good news is, I quickly picked up some clients and never looked back. To this day, I am still a freelance copywriter.
The bad news is, I continued to wrack up debt to fund my new business. I paid for home study courses, coaching programs, and marketing seminars. I paid for traveling expenses. I paid to register, host, and build web sites. I paid for accounting. I paid for a new laptop computer.
The expenses never seemed to stop.
What’s more, being self-employed wasn’t all smooth sailing. For a stretch of 45 days in late 2005 I made only a thousand bucks. I went in the hole nearly five grand just to pay the bills.
Ultimately, our debt wasn’t going away. In fact, it was increasing.
Finally, in the spring of 2006, I waged war on the credit card companies. Why? Because MBNA (now Bank of Amercia) jacked up the interest rate on our credit card to 26.99%, virtually without warning.
I called the company to find out why. They said it was just the way it was; they had sent a notice. I pointed out that I had paid all my bills on time and was below my credit limit. They told me it didn’t matter.
I was livid.
I did some research online and found that this practice is commonplace. Many people have posted angry rants about the unethical business practices of MBNA and Bank of America.
Anyway, this event became the catalyst that convinced me that I needed to turn things around. We couldn’t keep borrowing from the future to pay for the present. We had to stop spending as much and start paying off our debt.
To begin the process, I pulled a credit report (with credit scores). And I built an Excel spreadsheet to see how much debt we had accumulated… because I really didn’t know. To my horror, our total debt came in at $46,351.39. That was on May 23, 2006.