Read The Intro
PREFACE
I used to be broke. My bank account balance usually hovered around $4.13, and I celebrated because it was positive!
My financial story began the first day of my high school senior year. I knew that I was going to attend college because the idea of obtaining a full-time job immediately after high school graduation was very unappealing.
For the past year, I had received about 17,000 brochures from various colleges and universities. Each one attempted to convince me to attend their school. I knew my college decision would make a huge impact on the rest of my life, but I had no idea how to decide which school I should attend.
As I walked into the halls of Southwestern High School the first day of my senior year, I saw an application for Purdue University sitting just outside the guidance counselor’s office. There was no application fee, so I picked up a copy.
I had no idea what subject I should study, but in my calculus class I heard the teacher say that there was going to be strong demand for engineers in the next five years. He followed that by saying that engineers are paid an excellent salary.
I grew up in Indiana, so I was very aware that Purdue had an outstanding engineering school. I pulled out the application and filled it out. In the section stating “school you are applying to”, I checked “School of Engineering.” I noticed a statement on the application that it would be several months before I would receive their decision.
It was only about seven days later that I received a letter from Purdue University with “Congratulations!” printed on the outside. The letter informed me that I was accepted to the school of engineering. Since Purdue was a great school, and they had already accepted me, I did not apply to another school.
I graduated from high school in the spring and began getting ready to attend college. It was a very exciting time as I prepared to move away from home for the first time in my life. I was ready to take on the world. I had a few scholarships, but they did not come close to paying for tuition, room and board, books and fees. As I looked for ways to pay for the rest of my college bills, I was encouraged to apply for financial assistance using the FAFSA (Free Application for Federal Student Aid). It was an easy application process, and shortly afterward a ton of student loans were approved for me. This decision would have a major impact on my life.
I arrived on campus about a week before fall classes began to start working a part-time job in the residence hall cafeteria. With 37,000 students on a single campus, I met a lot of new friends. I met people from all over the world. It was awesome! I also met my future bride that first weekend of college.
I was also met by something I was not prepared for – credit card companies. They had people scattered throughout the campus, and each one was offering free Purdue gear in exchange for filling out their credit card application. I did not fill out ONE of them; I filled out ALL of them.
I received free t-shirts, two-liters of soda, frisbees and various other trinkets. I never dreamed I would be approved to receive a credit card. After all, I had NO money and almost zero income!
In spite of that, it was just a short while before my first credit card showed up. It was a fancy-looking black plastic card that had a metal fleck finish. It said “ADVANTA” across the top. They said they were excited to offer me this credit card, and all I had to do was call the number on the front to activate it. I did so immediately and put the card into my pocket. This decision would have a major impact on my life.
I graduated just four short years later with a degree in mechanical engineering, a mountain of student loan debt and credit card debt.
To reward myself for graduating college, I wanted to upgrade my vehicle. I purchased a used truck with no down payment – 100 percent financing.
I proposed to my college sweetheart, Jenn, and she said, “Yes!” I financed the engagement and wedding rings.
Jenn graduated from Purdue a year after I did, and I wanted to give her an amazing graduation gift. I bought her a brand new car. I had no money, so I financed the entire purchase price – including the sales tax. It was amazing to give her the new car, but the payments for the next 48 months were not so amazing.
We were married in June 1997. One year later, I accepted a job transfer to South Carolina. We had very little money, but we managed to buy a house. This was debt of an incredibly different type – it had six figures!
Do you see the trend? We were making great decisions with our lives by attending and finishing college, marrying each other, and obtaining good jobs, but we were making poor money decisions.
We spent our twenties earning excellent money, but piling up debt even faster. When we were 28 years old, we had what I call an “IHHE Moment.” An IHHE Moment is an “I Have Had Enough!” Moment. We knew we had to change the way that we were managing our money, or we were going to live a life full of regrets.
We made massive changes to the way we managed our finances and became debt-free except for our house. We have lived free of debt ever since! It is incredible how much of an impact money, or the lack of it, can have on relationships and fulfilling one’s calling.
As we walked out of our financial mistakes, Jenn and I learned a lot about how we can ensure that we make wise decisions with money. It is my hope that this book will help you prosper and avoid making some of the poor decisions we made. Although the principles taught in this book are relevant to every person who deals with money, my primary audience for this book are those who are preparing to enter the “real world” for the first time. A place where things like house payments, utilities and car repairs exist.
It is an exciting and scary time, and you have a great chance of prospering in life if you apply the principles taught in this book. It is what I think everyone should know about money before they enter the real world.
I hope this book helps you accomplish far more than you ever thought possible with your personal finances.
