Our Financial Story
Hi, I'm Sal Fiorilli.
Welcome to our Financial Story and painful financial beginnings...
I've probably been where you've been.
Trying to be a financial success story.
Trying to live the American dream - full of life, opportunity, and free.
But failing, miserably...
My wife and I were debt into the tens of thousands
We were renting our dreams to big creditors...
How did it all begin?
Seventeen years ago, my wife and I bought a dog.
A pure bred mini-Dauchand, Gio.
Within his first year of life, he got mysteriously deathly sick.
We took him to an animal hospital and they said if they didn't treat him, he would die.
We didn't have money in the bank to pay for it.
We decided to charge $3,000 on a credit card and start making minimum payments.
Then, it happened again.
An unexplainably high fever that wouldn't come down.
A second trip back to the animal hospital.
We added another $3,000 to that credit card, plus new interest, of course....
That was the beginning of our debt that would shackle our life for years to come...
New income and expected income wiped out, with the stroke of a pen...
My wife and I are also New Jersey Public School teachers.
I also coached 2-3 sports per year.
Our income was fine.
But like most Americans who seek better for their family, I wanted to do better.
Especially because we were planning on having children soon someday.
So I spent 5 years getting a Master’s degree.
I did this after my teaching and coaching hours.
It was a long 5 years (33 credits, comprehensive final, and published thesis study)...
I was finished, and looking forward to start paying off my Master's student loans.
But then, the unexpected happened!
New Jersey passed a new healthcare and pension reform law for state employees
And with a stroke of the pen, that law wiped out my salary increase and the additional money we were working for - and then some!
In fact, we lost $12,000 worth of yearly income from that law!
There were several reasons for this, but it's 100% true.
Another reason was the salary increase (which actually didn't show up in my paycheck) pushed part of our income into the next Federal tax bracket.
So much for trying to do "better"...
Then, we lost our home (and 5 years of house payments)...
After losing $12,000 a year...
We realized we could no longer afford our home of 5 years...
The bank had to take back the house and it went through a short sale.
Five years worth of house mortgage payments - GONE!
Plus, all the time and work put into improving the house went with it.
The unexpected loss of income left us short each and every month.
Just when we thought our financial story couldn't get worse...
Our loss of income spurned on new debt...
We were burning through credit cards.
We were racking up new debt every month just to pay for living expenses, especially in the summers.
Sure, we worked summers...we always did.
But how do you make up $12,000?
Debt was spiraling out of control.
Not from expensive vacations, or new wardrobe...
Just to eat and pay the bills.
As you might expect...
Each new dollar of debt came with more interest and higher monthly minimum payments.
The pattern was unsustainable.
The outcome was unavoidable.
Creditors wouldn't help us...
Eventually, we could no longer keep up with credit card payments minimums.
Credit card and student loan debt totals were well over $60,000...and climbing!
I tried to negotiate with creditors...
I called them, over and over.
I pleaded with them.
I begged creditors! (sounds aweful, I know..)
I figured I would call them before they started calling me.
Pleading didn't matter.
They wanted their minimum payments.
One monthly credit card minimum payment alone was $400 per month!
Another minimum payment was $250 monthly!
We had 3 or 4 others credit cards too!
Our MONTHLY MINIMUM BALANCES totaled over $1,200 per month, and growing!
I couldn't afford to pay for my student loans either.
Yup.
You read that right.
The student loan compay agreed to put my student loans on forebearance for as long they allow anyone to
Of course it doesn't stop interest from growing monthly.
Something had to be done.
We were desperate.
But what?
Credit Counselors couldn't help us...
Eventually, I spoke to a credit counselor with 25 years experience.
She looked at ALL our income and expenses.
She said, "you have no other way out of this unless you file bankruptcy.."
Bankruptcy wasn't an option...
But bankruptcy wasn't an option either....
I spoke to 2 separate bankruptcy attorney firms in hopes of finding a way out...
We learned we COULDN'T file bankruptcy.
Why?
Bankruptcy law says we made too much money to qualify for Chapter 7 (debt forgiveness).
It doesn't matter if you owe a million dollars.
If you make "too much" according to the law, you don't qualify.
End of discussion for Chapter 7.
However, the Bankruptcy attorney said we could file Chapter 11 (repayment plan).
But when the bankruptcy attorney did the numbers, what did he find?
The MONTHLY REPAYMENT PLAN, would AS MUCH or MORE money, than credit card monthly minimums!
I thought, great.
If we could afford to pay creditors monthly payments, we would have...
Then, the sickening feeling set in... Is this our life? And for how long?
We knew we lost a significant portion of our income.
Nearly $12,000 yearly from a law we couldn't control and higher tax brackets...
We lost our house.
We were losing our dignity too.
As the husband and provider of my family, I felt I had failed.
My wife and I felt stuck, hopeless and desperate.
We were in over our head, with no visible way out.
We tried, and tried, and tried again...
To no avail...
Then this aweful feeling set in.... "this is our life, just accept it."
The financial stress was crippling us - personally and maritally.
We felt hard-pressed at every side.
Even worse...
At every turn, it felt like financial disaster would happen unexpectedly, again and again
And without warning.
Would we ever break free from the unrelenting grip and stress of debt?
Our hope was dissapearing.
Despite this, I began to imagine a different life...a better one for our family
Then, I really began to ponder...
What would life be like for us...
If we found a way to break free from debt.
And then, really start toward financial freedom.
If so, we could start living life - on NEW terms.
OUR terms.
Free from stress.
Free from hopeless despair.
Free to make decisions that would make us much happier.
In fact, TRUE FINANCIAL FREEDOM would provide a NEW future.
A future so bright, our past struggles would be - a distant memory....
Sounds great.
But, again, what could we do?
Everything we tried, failed...
But, our financial story and life was about to change, in more ways than we expected...
After speaking with a credit counselor and 2 bankruptcy attorneys, I realized one thing.
I had to find a pathway forward.
A way out.
It was our mess.
And it was our fight.
Plus, right around this time, my wife became pregnant with our 1st child!
It would be matter of time until new, additional baby expenses (i.e., formula, diapers, daycare) would be needed.
I needed to get things figured out, fast!
Thus, I became more determined than ever...There's was no choice about it.
I determined to set out on a journey.
A journey to find a way to change my family's financial future.
I REALLY wanted to change our family's financial legacy...
So my children would benefit from it, for the rest of their lives too.
Not just having (enough) money.
But, also modeling and teaching what financial success is.
I prayed to God every day, with utter desperation.
For me, praying to God, is the place from which all good things begin to happen...
Soon, I told my wife...
"we are getting out of this debt within 5 years. I want us to be able to retire from teaching and I want us to be TOTALLY financially free."
Her reaction was as you'd might expect...
"This is our life.
We tried to get out this mess. We can't."
But, I was determined.
I'm throwing everything I have at this problem - UNTIL...
So I continued to pray, and pray, and pray.
And I planned, planned, and planned some more.
I sat down with legal pad daily.
I jotted down every idea I could to improve our financial situation.
I created my own financial tools and spreadsheets for debt payoff, cash flow plans, and projected cash flow plans.
Very shortly thereafter, I figured out HOW and WHEN we would be debt free!
It wasn't the end, but the beginning - the first step.
Then, I discovered many other changes we would need to do.
Some little.
Some big.
Anything and everything that could speed up the process of Financial Freedom.
Prayers are being answered!
Our plan was working!
Our committment to act, and unified, were starting to add up...big-time.
The tide was changing.
The course was corrected.
A new financial trajectory began to emerge...
Within the next 3 or 4 months, we really started seeing the light at the end of the tunnel.
We didn't know if or when this day would ever come.
But it did.
It was based on prayer, hope, hours of thinking, planning...
And putting everything into motion we could.
Anything that could or would improve our financial situation.
Our conversations changed, from hopeless chatter...
To plans about where we'll go and what we'll do when we are debt free!
It continued to grow with EACH AND EVERY BENEFICIAL FINANCIAL DECISION we put in place...
No matter how small, trivial or seemingly inconsequential it seemed at the time...
"Little things add up to big things.
Big things add up to bigger things.
Bigger things become game-changers.
But it all starts with the little things most think won't matter.
But it did matter.
It always will."
My approach to Financial Freedom was unconventional in some ways...It wasn't always accepted immediately either...
I must admit, much of the changes that were coming which told my wife, was out of the mainstream.
No one we knew or heard of, did things the way we were...
And, as often is the case...
When you're disuptor of status quo, ideas were met with reluctance.
But as each decision brought more and more peace of mind to us...
And we were experiecing greater clarity, certainty, and NEW unprecedented levels of financial freedom...
Our confidence grew, and grew, and grew..
Eventually, reluctance began to turn into...
"Ok, this is the next thing we have to do."
Now, our story and life are different, as night is from day...
Most of our debt is eliminated.
Very shortly, completely gone.
And yet...
Along the way, we have money for vacations, and many other things we want to give, fund, or venture.
Today, we have so much peace of mind, joy, and satisfaction around money.
Money is now a source of blessing and enjoyment...
Not the source of stress, marital arguments, or conflict...
That's my story...
What will yours be?
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