I was turned down for a mortgage for 3 years straight before I bought my first property.
I kept asking questions. What does one need to be approved for a home loan? What do I need to change to be approved? How can I get there? What can I realistically do to achieve this? Can I actually even do this?
I grew up dirt poor and had no role models or financial IQ. All I ever knew was survival mode. I thought I was really financially responsible because I always paid my rent and utilities on time, a result of being evicted and homeless throughout my childhood. I always kept that money saved and never dipped below that balance. However, I was completely financially ignorant. I’d like to say that the worst of it was that I carried large credit card balances but that isn’t even the tip of the iceberg.
I went for years without even paying a DIME to my school loans…and it was intentional. I was mad. I took out so much money for school and living expenses to put myself through college, but I couldn’t even get a job in my industry, and I was at the top of my class. I graduated not long after 9/11 so the economy was junk, and then I gave myself a bigger challenge by moving to Austin which was still a pretty low key town at the time, especially coming from a big city like Philadelphia. So I couldn’t find work, went back to waitressing, and stayed broke. “Why should I pay these loans that did nothing for me? Credit? I don’t need credit because I’m anti-capitalist and anti-consumer so who cares about credit?!”
Very idealistic and naive, yes oh yes, beautiful youth. I’m still anti-consumer but as an entrepreneur minded person I can’t quite call myself anti-capitalist. Growing up in desperate poverty I had always followed the implicit tenants of money is evil and convenience is the enemy, but in truth, money is a tool and it’s just in how you use. It is also an energy, so it doesn’t have a singular essence. Again, it’s how you use it. You can assign it to good or evil. You pick. Further, that is banter created by the patriarch to disempower the masses.
So, how did I turn this ship around? First and foremost, I gave myself an education. I was already in my 30s when I started to hear myself say, “I’m so sick of being broke and constantly struggling financially. I’m smart and able but I literally can’t work any harder to get ahead. There has to be another way.”
It was true, I was working my tush off. I would work months on end on shows that would load in at 6am, work all day setting everything up, then breaking it down after the show and getting to bed at 2 or 3am. I would do it again the next day, and the next, sometimes with no days off for weeks or months, and then sleep for a week. How could I break the negative financial cycle and get some work life balance? What was I doing wrong? The answer, in short, was everything.
I didn’t know how to save. I didn’t know how to invest. I didn’t know how to manage debt. I didn’t know how to negotiate. As far as the banks were concerned, I was crap on paper. So I began by cleaning up my credit score which started in the 300s. I got into a credit rehab program with the school loans that I had neglected. Trust me, that was painful. If you get only one takeaway from this blog, let it be to take the initiative to thoroughly educate yourself about compound interest. It can make you rich or it can ruin your life. In my case, it shoved me down a large, deep, dark financial hole, and it was very hard to climb out.
I made it my mission to find ways to pay down my debt. The interest that had accrued in the 10 years I let my school loans simmer, made what I owed nearly twice as much as what I had started with. The only difference about my anger towards this debt was that it had become self directed. Now I wanted to have a good credit score so I could have access to buying a home, or access to capital to potentially start a business, and I knew that the reason I didn’t was entirely my own fault. What I learned was that I had written myself out of options and had to start from scratch as a middle aged woman to get myself on track.
From then on out it was just consistent laser focus on #GOALS. I stopped eating out so much, and drinking as much, stopped shopping mindlessly, and started to learn how to create a functional budget. I learned (and was shocked) about my actual spending habits by building and studying my budgets in MINT. It took a couple of years to really get it right through alot of trial and error. Not gonna lie, it was a big learning curve. When you think you’re responsible because you pay your rent on time and you don’t buy expensive things, and then you start looking at the actual data and categorization over time which causes your eyes to bulge and your mouth yells, ” I spent how much on what?! HOW!?” To my surprise I found out I wasn’t frugal like I thought I was, I was just cheap. Chump change adds up quick when you start collating. Once I was finally able to lower my spending on useless CRAP and pay off my debt with the #debtavalanche method, I was eventually able to invest.
I started with ACORNS which was perfect for someone in my shoes because I had VERY little to invest, not nearly enough to meet the minimum requirements of investment platforms like Vanguard, Schwab, or TD Ameritrade. I also still had a TON to learn about investing as I had only gotten as far as teaching myself about crushing debt and following a budget. I was still in the theory stage of investing and not really clear how to get into that. In fact before I even invested formally, I let Acorns take round ups from my daily purchase swipes. I am not exaggerating when I say I did not notice this at all. It made zero impact on how much money was in my bank account. It was so seemingly miniscule that I didn’t even look at my Acorns account for the first 6 months. When I did I was amazed to see that I had saved several hundred dollars. This feature is brilliant and was definitely a turning point for my progress. I kept taking one baby step after another. This is attainable. It takes educating yourself, but dang that internet sure is generous with sharing information.
Women were not legally allowed to have a bank account until the 1960s. They didn’t get the right to have a credit card in their own name until 1974. That is only one year before I was born. And that was white women. Black Women and all People of Color didn’t have it handed over as easily, just look at what happened to Black Wall Street in Tulsa, OK. Still today, systemic racism is so bred into our institutions that black homeowners have to have a white person stand-in and pretend they are the owner just to have their home appraised for what is actually worth. The disparities have been 10s of thousands and even millions of dollars. So, if you want to call someone a sellout for wanting to achieve financial control for themselves, I’m here to tell you that no one is getting one over on “the man” by staying broke and hating money. That sentiment is just part of the plot.
I decided I wanted to have enough to share because being opinionated and preaching to the choir wasn’t really gaining traction. I started to imagine what my childhood would have been like if I had been born into financial security, not rich per se, just secure. Where would I be now? Would I have followed my ambitions with direction and certainty instead of spinning my wheels like I had for so long? I went into deep contemplation over several years to battle some very deep seeded ideologies I had built around money. Along that journey I also had to learn that you must fill your own cup to be able to give fully. So now I am working on setting myself up for my future while simultaneously increasing donations to organizations that make a real difference with ACLU and NAACP, as well as contributions to IndieGoGo / GoFundMe campaigns for as many people and causes as I can. I also love supporting local businesses that pay a living wage and use sustainable products. That kind of money isn’t evil at all. It is a force for good.
10 years ago I would never have believed how quickly you can turn your finances around with a few simple tweaks and awareness, or that I would even be debt free in my lifetime. I hadn’t even started thinking about that 10 years ago. It has only been 5 years since I purchased my first property and I still had quite a hill of debt when I did so. Now I am consumer debt free, own 2 properties, have 2 retirement funds growing (401K, IRA), and a 6 month emergency fund. More importantly, I know I’m on a secure path, and my morals are very much still in tact, enhanced actually. I want you to know there is hope. There are methods. There are programs. It is never too late to start. I believe in you.
*I am not a financial advisor. This is my personal story. I believe in hope through education and relentless determination.