93 down, 10 to go

Let me clarify, that is $93,000 in debt paid off so far. Whew! I’m simultaneously amazed and somewhat embarrassed. In some parts of the country, that’s a house…in a good neighborhood. All we have to show for it are the battle scars. How exactly did we rack up over $100,000 in debt? A quick flip through my trusty budget sheets revealed the following:

 

Jeep Liberty Lease $15,000
Back Tax Bill $20,000
Timeshare $7,000
Student Loan Balance $9,000
Credit Cards $22,500
Home Equity Loan $12,000
401K Loan $8,000
Total $93,500

 

Six years ago, I read the financial-life changing “The Total Money Makeover”. The opening question asked if Americans could imagine living in a paid for house. At the time, my answer was a resounding absolutely not! The only person I knew without a mortgage was my grandmother; and it took her 30 years. Mind you, that was before starter homes and jumbo mortgages…or so I thought. For many of us, our biggest wealth building tool is our income. We dilute that wealth building strength by parceling out our income between a laundry list of creditors. I like to imagine what I’ll do with the money I used to send to Chase, Sallie Mae, Chrysler Jeep, etc…once I have more control over the cash for which we work so hard.

Timeshare and lease purchase aside (bad buys #1 & #2), each one of our financial decisions individually would not give me much heartburn. Bundled together, they become downright overwhelming. We initially realized that to get out of debt, we had to stop borrowing. No cash = can’t afford it. Second, we had to agree (this was and is a process) that being in debt sabotages our wealth building dreams. Two people operating on opposite sides of the “debt sucks spectrum” can create a financial nightmare. Ya think??? Finally, we needed a plan to eliminate our debt. I’ll talk more about our plan later.

Today, I want to savor the moment. We have about $10K left in my Phase I debt repayment plan: eliminate all consumer debt. Next, we’ll attack the business debt. Finally, we’ll work on the mortgages. While I’m doing a modified happy dance because another tax bill and my student loan balance are next on the chopping block, I see the $10K light at the end of this debt tunnel. It’s been a long, winding, irritating, exhausting road; but I’m glad we are pushing through.

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