This time last year our financial situation was pretty bleak. My income had completely dried up. Our savings were exhausted and our expenses exceeded our income by about 50%. How on earth did we get here? In this 7-part series I’m going to explore that very question.
Writing my story was more difficult than I imagined it would be. It reads like a trainwreck! Gah! But this is my story. If I can’t take an honest look at the decisions that led me to a financial meltdown, meaningful change is not likely to come.
So let’s get to it.
In March 2005 I purchased a house for $629,000. I financed it 100% with an 80/20 split loan. To accompany my spiffy new house at the lake I purchase a $50K wakeboard boat and a $30K SUV to tow it. Such a Yuppy! Could I afford the payments on my salary? Yes. Was I living on the edge? Absolutely.
Meanwhile, I was getting burnt out from years of working 70-80 hour weeks in a thankless, yet lucrative job. I had lost all passion for my work. Working conditions had me stressed to the point that it was actually affecting my health. I needed a change, but I had just taken on over $700K in debt.
As I contemplated leaving my job I decided to sell the income property I owned in San Francisco. The proceeds from the sale would allow me to pay off my $125K second mortgage and also leave me enough to cover my living expenses for a year.
So in March 2006 I left my six-figure income job to take some time off to use that awesome new boat refresh and pursue a new career. I naively thought that I could transition into self-employment and within a year make the same amount that I was bringing in at my six-figure job. I owned a house, SUV and a boat, all of which were financed…but I had no credit card debt. I was in good shape, right? Hmmm…..
It probably would have smart to have a contingency plan in case my plan to replace my income did not pan out. But I didn’t.
“By three methods we may learn wisdom: First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience, which is the bitterest.” ~ Hugh White
Hi, I’m Cathy! I’m a former career-driven professional turned stay-at-home mom. Living on one salary has its challenges, but it is possible to live the good life while spending less. Cool to be Frugal is all about how we’re thriving, not just surviving, on a single income.
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