It has taken over 6 years, but WonderMan and I were able to retire just over $100,000 in consumer debt. This does not include our mortgage or any business debt yet (phases II and III). Six years is a loooooooong time in dog years and debt repayment sweat. Many a day I prayed for supernatural debt relief – Lord, willst thou wipe it all out…pretty please? Although I still think that would have been AWE-SOME…it never happened. However, six years later, free from a mountain of debt – this is why we did it.
My favorite bumper sticker reads, “I’m now struggling at the salary I used to dream of making.” (Yes, I have a favorite bumper sticker.) We were two, highly educated, very capable, law abiding, tax-paying citizens who were barely surviving, financially speaking, on a 6-figure income. Our crack-pot, financial analysis consisted of one question – can we afford the payments? Front-loaded with debt from student loans, credit cards, car notes, and now a cute little condo in the swanky, South Loop (downtown Chicago); we decided to open a business and spur economic development in inner-city America. For that, I decided to quit my job.
The income reduction forced us to seriously examine our finances. Looking around my cute, but oh-so-tiny condo; it hit me – there wasn’t much to show for the thousands of dollars in debt we’d amassed. I said it (maybe you’ve thought it); “We make too much money to be this broke!”
That was August of 2005.
A quick, Detroit get-a-way to accompany Mother Dear to an FAA conference changed my life. Dave Ramsey (Uncle Dave) presented a workshop and gave away his book, The Total Money Makeover. The first line asked if one could ever imagine living in a paid for house. A mortgage-free house? Maybe in my 70’s! From there, I rediscovered the library and all the wonderful personal finance resources available for nothing more than an occasional late fee. David Bach’s The Automatic Millionaire, Thomas Stanley’s The Millionaire Next Door, Glenda Bridgforth’s Girl Get Your Money Straight, and even Robert Kiyosaki’s Rich Dad Poor Dad were a few titles that facilitated a renewed sense of focus. I was developing a new mindset about money. Debt didn’t have to be the default option anymore.
Even though my epiphany was stark and immediate, WonderMan wasn’t so convinced. In 2005, our debt was about $60,000. According to our budget, we had a measly $400 extra to apply towards debt. After drinking the Kool-Aid, we still made poor decisions. We leased a new car. D.U.M.B. We didn’t pay income taxes. D.U.M.B.er. We were the victims of costly vandalism. Some things really aren’t your fault. We would take a step forward and then three steps back.
Along the way, through disagreements, job loss, mishaps, and poor decisions, we added another $40,000 to our debt total. I also realized that to expect a change in WonderMan, I should be willing to be the change I expected to see. Initially, I might be the only one to work on the budget. Each month, I worked it out, posted it, talked about it, and committed to live within it. Eventually, he joined in – even if just to dispute my calculations. As we made progress, the momentum grew. Our income increased over time. We applied cash windfalls (seldom as they were) to accelerate the debt repayment process. Today, we still post our budget on a monthly basis. He still disputes my calculations…no one’s perfect.
It’s been a challenging experience, but well worth the effort. I’m glad we decided to pay off our consumer debt. Now, I can definitely imagine living in a mortgage free home…well before my 70’s!
Have you made the decision to be debt free? What sparked your decision?