yearly vacations, the couple took mini getaways to nearby cities, such as Houston. On a trip to a family reunion, Sam even insisted that Doris buy a soda without ice to fill up the cup so there would be enough to share. “It’s funny now,” says Sam, “but it wasn’t funny then.”
The couple also let go of plans for their dream home; in 2000, they sold their acre of land for $18,000. They also paid off $15,000 they had borrowed to buy discounted Walgreens stock. Fortunately, the stock’s price had risen, so the couple sold their shares to pay off the loan and a few other debts.
By 2002, Sam and Doris were able to buy their first home–a three-bedroom fixer-upper in La Marque for $35,000–at a mortgage rate of 7%, which they later reduced to 4.5% through refinancing. They continued to live within their means and sold the home three years later for $57,000. The Collins family’s commitment to climbing out of debt and its financial discipline illustrates Declaration of Financial Empowerment Principle No. 2: I will be proactive in managing my budget, credit, debt, and tax obligations.
Today the couple earns a six-figure annual income and owns four properties in the Galveston County area. Looking ahead, they currently save more than $20,000 each year, and Sam is able to max out his contribution to his 401(k) at the $15,000 limit. “Too often, African Americans have a single-generation consumption mentality, leaving nothing for the next generation,” he says. “We wanted to change our family legacy.”
The Collins’ Advice:
Have a written budget. Track monthly spending so you know exactly where your money is going and where you might be able to cut expenses. It may seem like a small amount, but cut out postage costs by paying bills online. Consider that mailing 12 items a month results in an annual cost of almost $60. Online payment can also make it easier to track spending.
Consistently monitor your credit score. Be sure to check reports at all three credit reporting agencies, Equifax (www.equifax.com), Experian (www.experian.com), and TransUnion (www.tuc.com) and report any errors. Consumers can receive a free credit report once a year from any of the monitoring agencies at www.annualcreditreport.com.
Improve your financial literacy. The Collins family followed tips for financial peace developed by personal finance guru Dave Ramsey (www.daveramsey.com). They also found the following titles to be helpful: Taking Care of Business: Establishing a Financial Legacy for the African American Family by Lee Jenkins (Lift Every Voice; $13.99); The Great Investment: Balancing Faith, Family and Finance to Build a Rich Spiritual Life by T.D. Jakes (Berkley Trade; $13); The Gospel of Good Success: A Road Map to Spiritual, Emotional and Financial Wholeness by Kirbyjon H. Caldwell (Fireside; $13); and The Richest Man in Babylon by George S. Clason (Signet: $6.99).
Learn from others. Take a class at the local community college or learn from the successes of those around you. Some of the best advice the couple received was from Sam’s frugal, 78-year-old uncle, Edwin,