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Author: SlashdotAddict One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308547  
Subject: About to hit bottom (long) Date: 3/22/2005 1:54 AM
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I'm one who usually gives advice to people in my situation, but like the cobbler whose children lack shoes, I've finally realized taht perhaps I could use some advice myself - advice, or perhaps a good swift kick you-know-where.

Going back to the "beginning", I left school w/o a degree in 1995 )another story for another time) and got a job manning the phones for a Microsoft support partner just in time for the launch of Windows 95. I was making what I thought was a great salary (about $23K) - largely because I had only worked "college" jobs prior to that. I got a couple of credit cards in school, and the usual school loans, but nothing I couldn't handle.

From there I went to a help desk position at a local high-tech manufacturing company at roughly the same salary. That position lasted about a year, until I jumped ship for a consulting company that was doing some work for them. I stayed with that consulting company for about a year before they were bought out (by a company I wasn't too wild about).

Finally, in early 1999, I hit the "big time". I got a job with a startup consulting company in the Bay Area just as the dot-com boom was hitting full steam. And for a long while, business was definitely booming, as was my salary. In the space of 18 or so months, my salary jumped from $23K to $100K. And, sad to say, our expenses jumped up right with it. In 2002, I took a 4-month leave of absence to return to school, and completed my Computer Science degree - we had saved up enough to cover living expenses, but I still took out more school loans.

Fast-forward to September 2003 - the dot-bomb boom had been bust for a while, and I was actually fortunate to be one of the last ones to be laid off. We made it from September through December on unemployment checks, the little bit of severance I received, cashing out my 401K, and credit cards. In January 2004 I got a consulting job (with my old company), and that lasted until April. Now, this was our only source of income at the time, so I didn't set anything aside for taxes (a big mistake, as you'll soon see). I got a full-time job in March 2003 (making about $20K less than I had been), so for a month I was working the consulting project on evenings and weekends, and considered that money to be "extra". So much extra money, in fact, that we used it for a down payment on a house in June.

That brings us to the present - we love the house, and if we weren't carrying so much other debt, it would be much more bearable. But, I was checking this weekend, and our non-house debt has increased by roughly $12K since we purchased the house, largely because our budget doesn't have any room for error, and we still had credit available.

Unfortunately, although our current consumer debt is higher (and our available credit lower) than it's ever been, we haven't seen the worst of it yet. Remember the consulting gig last spring? Well, so did my old company, and they sent me the 1099-MISC for the full amount they paid me. That tells me the IRS will remember it as well. I haven't done our taxes yet, but I'm estimating that our tax bill will be somewhere between $5,000 and $10,000 - all money that we simply don't have, and can't even put on credit cards if we wanted to.

If anyone has some Foolish words of wisdom, I'm all ears. I'll post our debts/interest rates/etc in another post, so as to not mess up the formatting in this one. I know it will be a long climb back to financial stability, and I'm looking to all you guys for support.

Thanks,
Alex
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