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In 2007, at age 26, I thought I was at my most financially responsible. I had defied the odds and managed to save $40,000 in a little under three years, even though my teacher’s salary had started at $39,000. My credit score was an 802 out of 850. And the year before, I had purchased my first home.
I was certainly feeling confident in my ability to manage my own money, so much so that I decided I was ready to start investing above and beyond mere retirement. I turned to a guy we’ll call Jack the Thief (JTT), for reasons that will soon become apparent. JTT had an expensive car, owned a penthouse apartment in New York City, and always seemed to have cash on hand. In my twenties, I didn’t realize that you could have expensive things but not really own expensive things.
I reached out to JTT and asked him to help me invest. He said the best way to invest is with other people’s money, so he advised me to open new credit cards and take out cash advances to use the credit card companies’ money to build my own wealth.
JTT said he owned several stores in Europe. The plan was to use the money to buy popular American brands and ship them to his stores. We had a contract, and according to JTT, the projected revenue on my $20,000 investment would be $2,000 per week for two years. His plan sounded solid and since he always seemed to have money, I didn’t doubt where he got it or how he managed his own.
Before this moment, I didn’t even know you could get money from a credit card. What I also didn’t know was that cash advances are the worst. You might as well borrow money from your neighborhood loan shark. The amount of interest you pay means you’re throwing money out of the window, stomping on it, rolling over it with your car, and allowing the elements to do their worst. Cash advances on credit cards are BIG bad news.
Needless to say, I took JTT’s advice; I went to the bank, asked for a $20,000 cash advance on the new credit cards I’d applied for, and then handed it over to him.
Apparently, one bad decision that week wasn’t enough, because I decided to use my new credit to further “invest” in myself. I always wanted to start a business, and one of my favorite financial writers was advertising an online “How to Start a Business” mentorship and training program for the temporary low rate of … $15,000. Sounded good to me!
In less than a week, I went from having no credit card debt to being $35,000 in the hole.
Predictably, Jack the Thief ran away with my money, never to be seen again. Yes, we had a contract, but no, I couldn’t find him. Everything went downhill from there.
I had a $52,000 student loan, $220,000 mortgage, and $35,000 in new credit card debt; my cash savings was nearly depleted; and I just found out the job I worked for and loved for 10 years was gone, due to the 2008 recession.
I was at this lifetime low when my good friend Linda finally got me on the phone. I’d been avoiding her for months. A large part of my identity was tied up in how well I managed my finances. I’d always been known as the girl in our friend group who had her financial life together. Now that I was a money mess, I wasn’t sure who I was anymore.
After telling her everything, I braced for her reaction. What she said totally surprised me.
She explained how most of our friends were still hot messes financially and how I wasn’t alone in trying to figure things out. She normalized my mistakes, and our talk allowed me to forgive myself. Once I was able to let go of the shame, I was able to focus on solutions. I started by writing down all the strategies I’d learned growing up: how to budget, how to save, how to get out of debt, and how to manage my credit. These are things that I knew how to do but temporarily forgot when things got hard.
As I started to fix my own finances and gain momentum, my friends took notice and started asking me for help — and then their friends did, too. Before I knew it, I was sitting down with someone every weekend and helping them make plans to fix their financial messes. For two years, I donated my time and helped hundreds of people while babysitting, collecting unemployment, and taking odd jobs here and there to make ends meet. My younger sister, Lisa, started calling me The Budgetnista. I liked the ring of it and decided that if I was ever able to turn my free financial coaching into a business, I’d use that name. That happened sooner than I might have imagined.
My volunteer work caught the eye of my local United Way, and it asked me to create a curriculum and to teach a series of financial classes to the community. My business was born! Because my curriculum was limited to my community, I created an online version and called it the Live Richer Challenge. It took me a year, but I reached my goal of getting 10,000 women to sign up for the challenge. The response was so amazing that I started hosting LRCs annually and dubbed those original 10,000 people my Dream Catchers.
Since I started my Live Richer Challenges, more than a million Dream Catchers have saved and paid off hundreds of millions of dollars in debt, bought thousands of homes, invested, gone on vacations, paid for college, started businesses, and raised their credit scores.
But make no mistake, getting good with money isn’t about getting rich quick or retiring on a private yacht off the coast of Monaco. It’s about becoming financially whole, meaning that all areas of your financial life are in working order, and you have a realistic picture of where you are on the path to reaching your wildest dreams. Remember: your current financial position isn’t the end; it’s just the beginning. Prioritize faith over fear, and believe that you can get to where you want to be.
Adapted from GET GOOD WITH MONEY copyright © 2021 by Tiffany Aliche. Used by permission of Rodale Books, an imprint of Random House, a division of Penguin Random House LLC, New York. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.