After my divorce, the first bit of extra money I got went to open a savings account. From birth, I had always been a saver and had something stashed somewhere. That went away when I got married for whatever stupid reason, and it stressed me out! Once I got back on my feet, I thought the days of living on credit cards were gone. Everything was rationalized with “it will get paid off when I sell the house”. At least at that point I was only charging my home improvement expenses, and not groceries. Well, the sale of the house fell through, and I had to get my finances under control. This is what I did, and still much of my plan today.

In the beginning, times were very tight, so I used all the resources I had available to me. I went to my mom’s a couple times a week for dinner to save on groceries. I let people that I had bought drinks for in the past, buy me drinks when I went out, or I was the designated driver. I sold a bunch of stuff in yard sales, which proved more lucrative than I ever imagined and it got a bunch of clutter out of my house. I got a roommate {Hi Leah} to help with the cost of the house. When preparing the house to sell, we did as many projects as we could ourselves, and borrowed tools and labor from friends.

I effectively refinanced the house with a real mortgage. Previously, I had taken out home equity loans and saved for my property taxes and insurance myself. Let me tell you, coming up with $1500-$2000 {depending on the year and how much I paid the previous term} every six months is no tranquil task. Doing this reduced my interest rate two full points, and my monthly payment $200. It was the first time I ever walked out of a closing and didn’t feel like I had made horrific mistake. Oh yes, I had done this many times before, something like six times in seven years, I was a pro at refinancing! Also, I didn’t take out anything extra, just paid off the existing mortgage so that was that.

Next I combined my credit cards into one big one. I know this sounds counter-intuitive, but at the time I was barely making minimum payments on the accounts I had. The company that I had been with the longest sent me some balance transfer checks, so I took advantage of the 0% rate for a year to get my balance paid down faster. This would not have been possible if that account was already maxed out, but since I have been a customer for so long they give me an enormous line of credit. I closed the other accounts to remove temptation, I didn’t care how it affected my credit at that point, my mortgage was already processed.

Being a homeowner, I knew I needed to stash away money for home repairs because it is my experience that when you have to call a repairman after hours, they don’t take credit cards. I also didn’t want to add anything to my existing debt when I could easily pay for something cash with a little forethought. It started with $10 out of my paycheck into my shiny new ING account. Because it takes a few days for any transfers to go through, this was the perfect option for my “just in case” fund. My other savings account was tied to my checking account, and way too easy with instant transfers.

Now that Robbie’s part of the household, he contributes to the “just in case” fund also. I try to only check the balance every so often, and when I do, I get giddy because it grows so quickly! Recently our central A/C broke and we had to call a repairman. For once, it was nice to not scramble for cash to pay the man.