About Personal Finance Literacy


Before anything, it’s important that I note that I am not a financial advisor, accountant or attorney. Personal Finance Literacy is where I share what I’ve learned about reducing and eliminating debt, improving credit and credit scores and many other areas of personal finance. I’ve spent thousands upon thousands of hours immersed in many areas of personal finance, and I’ve learned a lot about the subject. That really sums up why we’re here.

From the mid-nineties until 2015, I flipped houses on the side for profit. The idea is to buy low, make improvements, and sell high. I flipped a good handful of houses successfully from 1996, until 2015, when I sold my last fixer-upper. I now live in the first home I’ve ever purchased that didn’t require immediate attention! It was unbelievably refreshing.

During the time I was flipping houses, I considered myself to be “financially creative”. Which simply meant I used credit cards to finance repairs. The fact that I did most of the work on those houses myself proved my saving grace and I always made a profit. After selling each property, I would pay off my credit card debt from the proceeds. Whatever was left over was profit. In spite of my extremely risky financing plan, I actually did fairly well.

In the mid-nineties, when I bought my first house, I had a credit score of around 725. Since personal finance has always been an interest of mine, I had a simple grasp of what credit was about and understood credit scores on a very basic level. I enjoyed interest rates well under 10%. My cheapest credit card had an interest rate of 5.99%.

I’d buy a fixer-upper, live in it, go to work to pay the bills, and finance the materials I needed to fix it. I paid no attention to the outside world of financing or the economy.

In 2003, I purchased a home for $217,000 and planned to flip it for profit once again. Two critical things happened; First, I was going to spend $47,000 and four years to fix it up, and second, the housing bubble would burst in 2008, and affect me in profound ways. In May of 2007, I finally put that house up for sale. I went through my savings as I waited for 6 long months to sell it. During the entire time, only 3 buyers came looking. It was scary, to say the least.

I was unemployed, and I bet literally everything on that house. During that experience, I lived daily wondering if I would end up in bankruptcy court or on the street. I know and understand that fear intimately.

Eventually, a cash buyer came knocking at the door. He offered me a fair amount that would allow me a little profit, and I gratefully accepted his offer. I had already quit my job in 2006 to focus on this particular house. I needed to get out from under the huge mortgage.

Five garage sales and a lot of eBay activity later, I sold the classic convertible that I’d had for over twenty years. It was a beauty and in great running condition. I actually did well on it, and after the sale of the house, I had finally survived the financial drought.

After paying everything off, I walked away from that house with a check for $72,000, and a credit card debt of around $40,000. I felt like I was on top of the world because I walked away from a huge debt burden with a little money in my pocket. My “financial creativity” was wearing thin, and I still understood nothing about what was happening with the economy or what was about to happen. The closing date was November 10, 2007.

Sure enough, just a few of short months later, before I was able to pay away my credit card debt, the Fed bailed out the big banks, to the tune of $7.7 trillion as a result of the sub-prime lending fiasco. The housing bubble had finally burst. Things began to cave in around me while President Bush urged Americans to go out and spend more money. Then new laws were passed in response to the crisis. Americans would pay the bill for every failed subprime, ARM loan. It was now the spring of 2008.

Wall Street tanked and billions of dollars in Wall Street retirement funds were lost overnight. Millions of Americans were devastated.

I was affected head-on by the national calamity. By summer, Bank of America had raised my interest from 7.99% to 14.99% on an $18,000 credit card balance I still owed, nearly doubling the interest I had to pay. I began paddling hard just to stay on top of my minimum payments.

I owed $14,000 on another credit card (Capital One) and they froze my account. To their credit though, they offered me a choice: freeze the card indefinitely at 4.875% interest while I paid it down, or raise the rate to 16.99%. Reality came crashing in and my “financial creativity” was about to become a painstaking journey to financial recovery.

What happened? well, my utilization rate was too high, meaning I owed a high percentage of what I was able to borrow, and I had a recent history of making minimum payments. I was unemployed and scraping to make ends meet all through 2007. I had slipped into a “high risk” status I had never experienced before. My credit score took a deep dive.

With a total credit balance still exceeding $32,000, I tried to negotiate my rates and my credit limits, to no avail. I had no ground to stand on. The amount of interest I was paying nearly doubled, and I would have to learn to pay off debt the hard way: month after month over a long period of time, or default.

I started keeping a journal and maintained a spreadsheet for each account I had. I started monitoring my credit and began planning my payoff dates.

Despite my desperate financial situation, at the very same time, a miracle came into my life. I met the woman I would fall in love with and eventually marry! My wife and I got married in 2009 and our daughter was born in 2010. When I say everything changed, I mean everything!

Paying off credit card debt all at once had become a mere memory and falling in line with the ranks of much of the debt-ridden world was my new norm. Still, at the worst financial time of my life, I married an angel. She focused in right away on two important things about me: One, I was in crazy debt, and two, I had an entrepreneurial spirit!

Many entrepreneurs have an unnatural willingness to dive into debt without fear. I was certainly one of them.

Despite my flourishing love life, I was frustrated, bewildered and even angry underneath it. I was struggling like never before and paying off high amounts of debt. I decided to get educated and wise up about what was happening in the financial world. I knew there were lots of people just like me who were figuring all this financial stuff out enough to live happily, and even financially free lives without the burden of debt and the high cost of it.

I wanted to understand why and how this had happened to me. I needed to understand my rights and responsibilities and start digging deep into how to get my finances back on track. This time, I vowed to make a change like never before.

I began reading financial blogs and reading books about money and finances. I wanted desperately to understand the credit game and how banks worked and made their money. I bought courses and began consuming as much information as I could find on the subject of money, credit, and debt. I also did something that comes more or less natural to me. I documented pretty much everything in the form of notes and Word documents and all sorts of sticky notes and a lot of other things to help me get this stuff into my mind and subconscious.

Today, I’m a little wiser, and a whole lot smarter about the subject of money, credit, and debt. I decided to put all this information together, one more time, in a way that would allow me to share what I’ve learned in a comprehensive and easy to understand way. I own personalfinanceliteracy.com. I’m planning credit and debt elimination training material in the near future, as well. I really love what I do.

My greatest hope is that you will get real benefit from this website, so you won’t have to go through the same pains that I did. I am grateful for the passion and willingness to go out and acquire the knowledge I needed to make things right for me and my family.

I played a dangerous financial game, and I got played. Then I got angry. Finally, I got educated. I’m still learning, too. I adjusted my plan, lost the unfruitful attitude and documented what I’ve learned along the way. It’s been quite a journey. Here, I’m sharing what I’ve learned.

It’s an ever-changing world we live in. We all need to get smart about money and finances, and get busy learning and applying what has always worked and is working today, right now, for people just like you and I. We need it. Our nation needs it, and as we help and support each other, we will do it.

Here’s to financial understanding, the application of sound principles and financial success we can actually live with.

Phil Vandermeer