I was in conversation a few weeks ago with a close friend and we were talking about bills. I mentioned how hard we were focusing on paying bills because we were close to getting out of debt and only having our home left to pay. “Wow, you’re lucky. Must be nice.” That was her reply. That stuck with me… we must be lucky.. it just didn’t sit right.
Over the last few weeks that’s been stirring around in my mind between errands and other thoughts and I finally am able to articulate why I don’t think luck had much to do with it and I certainly wouldn’t call the experience “nice”. It was hard. Really hard. It is/was raw and real and I feel like we’ve been paying off debt FOREVER!
Fair warning- this post is really honest and really long.
I believe in going after dreams, in living a big life and in living in true authenticity and joy. I want a life that is full of love and experiences that make me grow and expand my life and relationships.
Let me rewind to 2011, our life was busy and full of joy. We had a small modest home in the suburbs of Minneapolis, 2 used cars we drove, a few acres of land a couple of hours away with a camper, atv, an extra truck that ran and an extra truck that didn’t. We’d spend the week working our tails off then pack up and go up to the “cabin” for the weekends. As Sky got older and had more sports tournaments over the weekends we noticed that our attention, time, and money were being pulled in more directions.
It was getting harder for us to really enjoy each thing we were doing because we were always racing to the next thing. With a preteen and an infant we knew it was going to be many more years before we re-gained full chilled-out weekends. At the same time we were getting by financially, we didn’t think about all our payments since we were able to pay them all each month. We didn’t consider ourselves paycheck to paycheck… looking back we had about an extra 2-3 paycheck buffer that kept us feeling falsely safe.
A possible way out of debt?
During a vacation to Colorado and out West in 2011, one of my dearest friends introduced me to Dave Ramsey and we talked about debt and dared to dream what it would be like to have no payments (2021 update – I no longer follow Dave Ramsey and disagree now with much of outlook on the world, I am grateful for the baby steps and the simplistic path to debt freedom he provided. Nowadays I would recommend researching the FIRE movement, Ramit, and balancing out those various advices).
It was after we got home that we had some serious conversations about money, goals, and life. We made a choice to stop reacting to life and instead make some hard decisions that would help us in the long run. Someday we wanted the best of both worlds, not the home and a cabin but instead a home where we could live like we were at the cabin. We set the intention and we got to work; that first year we sold the land, the camper, the ATV, the trucks, extra furniture, and everything we could think of. Doing all of that also allowed me to continue to work part-time and be home more to help raise the kids. It was a win-win.
Years before, after I was going through my divorce I remember feeling so hopeless financially. I remembered sitting at the kitchen table with my dad and I was crying my eyes out. I had just gotten a notice that my credit card with an $11k balance was raising my interest rate to 33%. As a single mom at the time I was panicked. I couldn’t see out of the 10’s of thousands of dollars of consumer debt I was left with after that world came crashing down on me.
From that hopelessness, I filed for bankruptcy. I justified it in my mind and at interest rates of greater than 30% at the time on all my credit cards I had paid my original balances plus some but because of all the interest, I couldn’t seem to gain ground. I filed and felt like I got a new start. The ironic thing.. even the day after filing bankruptcy I still was never debt-free. There were still student loans, a lifestyle that was too much, and other things I was still paying on.
Fast forward back now to 2012 and the hubby and I was in the midst of working to pay things off then our main car broke down. Note – this is was a defining moment for us looking back – We chose to let that car sit for a bit while we figured out how to fix it and we went out and we finance a newer one. Eventually, we fixed up the first and sold it for a loss. This cycle went on for the next couple of years. 2 steps forward one step back.
At the end of 2014 is when we officially had it. I was fresh back from a life-changing European trip working with women and had a glimpse of how big life could be! I knew that life was so much more than work, bills, and being tight on time. We were done playing this game, especially with money.
Big Changes Coming
We bought a used car for cash and put our financed SUV up for sale. It finally sold in the spring of 2015, we owed more than it sold for and we had to pay the difference and take a loss but we wouldn’t change it. At that same time, we were down to just around $1500 of debt. Free of car payments and only a small minimum payment on 1 card left we felt our world start to open up again. We’d been dreaming of moving out of the house we were in but were upside down in it and couldn’t figure out how to make it happen. You can read all about that miraculous story here. From paying down all that debt we were finally almost debt-free but we were cash poor. We knew we had to make that move happen.
In the meantime, it built back up over 20k in debt again fixing up the old and new house and all the extras that come with a move. Add in a school trip for Sky to Europe at over $5k and other life that was turned to payments our world turned back into one of frugalness and very strategic spending. Thank goodness for all the joy and how much we love it here, I admit it made it all worthwhile!
From January of 2015 through Sept of 2016 (21 months) – yes we managed to clear $48,986 in debt. HOLY MOTHER!!! I see that and it gives me hope. We are a family that loves the simple things in life and living out here really made that easier to pull off but it has been anything but easy to make that happen. We’ve had to say “no” hundreds of times a day to spending. I’ve laid out all the details of how we saved money and what we did to bring in extra in this blog post for those that want to read all the nitty-gritty details.
Some of the biggest changes:
- We set a budget every month. I can tell you what we spent in each area of our life for any month going back years, exactly where all our money was going and then from there decide what to cut and what to allow. I keep really detailed spreadsheets and I LOVE it, it must balance out my artsy side but I get a completely natural high from doing our finances and calculating all the numbers.
- We worked as a team. The hubby and sat down at least a few times a month and laid out our goals where we wanted our money to go, saw what was actually being spent, and made adjustments to get the two areas to match. We stopped reacting to things and became very intentional. We decided what to keep and what to cut, where to spend, and tried to minimize unexpected things anywhere we could by predicting needs and planning ahead.
- Our entertainment budget averaged only $20 a month. FOR THE WHOLE FAMILY!! That is pretty much a few Redbox rentals and then we’d add up the extra over a few months and eventually have enough for a cheap night out. We saw 1 movie at the theatre as a family and went to 1 county fair as a family in 22 months. We had tons of bonfires, game nights, movie nights at home, and work nights. Plus we knew that we wanted to pour money towards debt and a couple of strategic vacations. (this was not counting our family vacation – where we flew then stayed with a family member)
- Our restaurant budget averaged $30/month. That meant a few drive-through trips a month and we saved them for when we really were short on time or energy and savored them, or we’d stock up so we could go out to dinner with family or friends.
- We swallowed our pride and embraced a more minimalistic lifestyle. This was actually the most enjoyable part. After my mom passed away, it took years of going through her things and sorting through the layers of guilt, grief, and the reality of physical space that “stuff” takes up. Year after year I was able to let go of more of it. What happens is it becomes a bit addictive when you start to feel empty space around the house. It’s freeing. Craiglist, eBay, and FB groups became our selling machines. We sold and donated a TON of stuff. I let the kids re-sell their clothing they didn’t use anymore and they could keep that money as well. It became a family mission to live with less stuff and instead enjoy each other more and free up more time for life.
- My husband packed a lunch EVERY DAY for work. For years he ate these garbage burritos. Super cheap and filling.
- I learned to make my own laundry detergent, toothpaste, from-scratch recipes, cleaning supplies, and more. I did this both for cost savings and also for the health aspect of knowing what was in our products.
- We cut our cable and only late last year got a Roku. We got cheap cell phone plans and have scraped by with cheap phones. (one of my next goals is to get a phone that actually has enough memory where I can have more than 6 pictures and also have Instagram, FB, Gmail, yahoo and Etsy apps all installed at the same time… seriously)
- We sold the financed car mentioned above and knocked out $12k in debt!
- A better interest rate on our house meant that we were paying down $400 more a month off principal than we were in the old house. We switched to a 15-year loan and had the same payment we did in our old house where we had a higher interest rate and a 30-year loan.
- When I did have to buy something I used browser extensions like honey, rakuten, or even Mr. Rebates. I’ve updated these to have my affiliate links. If you click them and sign up it won’t cost you anything but those companies may give my account a small bonus. – I’ve saved HUNDREDS of dollars over the years using these extensions. I even use them when ordering art supplies, or business supplies.
The Tough Decisions
Those are just a small sample of all the behind-the-scenes things we did while no one was looking so that we could be so “lucky”. We had to consciously decide to not keep up with those around us who were able to go out and eat dinner out multiple times a week or month, drive fancy cars with payments or even get to buy new wardrobes each year. Whether it was true or not we had to decide 100% that we didn’t EVER want to feel so stressed out about money again.
It’s funny, I can honestly say that over the years the times I had to make decisions based around money and feel the most consumed by thoughts of money are the years where it was the leanest. This summer was a perfect testament to that. In 2012 when our van broke down, we were in a panic we had no money to fix it right then nor did we have money to replace it. So out we went that weekend and financed a $20k used SUV.
In contrast this summer our car went out, we were able to calmly share a car for a week as we assessed what to do; then we stuck to a $2,000 budget for a new car knowing that we wanted to pay cash for this car and stay out of debt. It was our true test again, our do-over to see if we’ve FINALLY learned our lesson. 2 months later and we are so happy with our decision and have zero buyers remorse. (2021 update – Bruce is still driving this car!!!)
I don’t share this to brag and I don’t share this because I don’t think people should have nice things. Instead, I share this to offer hope to anyone out there who is feeling hopeless, feeling how I was years back facing 10’s of thousand in debt, and feeling like I had no options and full of shame. I share this to show it is possible to pay off debt and not have car payments. It is possible to give yourself breathing room instead of living from crisis to crisis.
I believe life should be about surrounding ourselves with things, experiences, and people that genuinely make us feel good. Living authentically and truthfully. Living within our financial means so we have breathing room when life hands us a curveball or a friend goes through a hard time and we then have some money to help them with.
When we aren’t paying hundreds (or thousands) in interest and debt payments each month it frees us up to be more in tune with our creativity, our goals, our truest authentic selves.
Benefits of not paying debt:
- Money to get select things that truly make us feel good (like art, ahem 🙂 ).
- It lets us come out of survival mode and into a part of our being that we didn’t even know was there.
- Get in tune with how strong we can be! It takes guts and courage to get so honest and real with a spouse about every cent. Things we think are necessities or secret spending. It’s taken incredible amounts of self-discipline.
- Develop patience – Once we decided we were done wanting to live the way we were it wasn’t like we could snap our fingers and actually be done. No, instead that was just the beginning of years of sacrifice and years of being patient and trusting the process. Years of feeling like some months there was only a hundred left over to pay towards debt and knowing that better months were to come. Patience and not giving up.
Other people will spend your money for you unless you learn to consciously control it. People shamed us, people judged us, people laughed at us, people talked behind our back about our choices, people didn’t take time to ask us our goals but instead assumed we were in a downward spiral. Looking back I can only imagine what it looked like to people close to us. Suddenly they hear we are selling the land, camper, ATV, trucks, furniture… they must have been scared for us. Wondering if one of us had a secret addiction or gambling problem. Wondering why we were giving up all the things we loved. What they must have thought when we sold our nice 2012 SUV and got an older ’02 model with some rust.
This is the lesson we learned in humility and believing in ourselves. The lesson in making a plan that worked best for OUR family, choosing how OUR money would be spent, and then learning to not care what anybody thought. We learned to know in our hearts that we were doing what we had to do for the best LONG term well-being of our family and put that priority over the short-term sacrifices.
HOPE – the light at the end of the tunnel
I am also partly sharing this just for my own self to fully grasp it and have it documented to share with our kids so they can understand all the times we said no to things. Also because it gives me hope, after living so lean for years I can see a light at the end of the tunnel. I see a year of intense saving coming up, making up for lost time and creating a buffer so the hubby can switch jobs and have more free time. There is the hope of more travel and let’s face it… some new bras.
Truthfully though I hope other things don’t change. I love the feeling of being a team, knowing we are working towards a goal, choosing time together over things and places. I loved saying no 900 times so that we could budget in a family vacation that we’d savor and never forget.
I’ll be back in a few days with a write-up of many of the things we did to make this happen. We’ve found inspiration in so many others before us who have paid things off. In theory, it doesn’t seem like it should be that big of a deal to not have consumer debt. Maybe that’s why it’s so easy to get into debt, we assume we’ll fall back out of it just as easily as we fell into it. But the truth is it was really freaking hard just to get to the point where we stopped accumulating more debt.
Some days were hard!
Our incomes both fluctuate so it was easy to live high during the good times then freak out during the slow seasons. It’s only when we figured out how to live within the earning of the slowest seasons and then consider the busy times as a bonus that things started to change. Even just giving up cable. It was years ago now and in my head, I was remembering it as no big deal.
However, I recently found a journal of mine and I was journaling through the process of giving up cable. It was hard! I was going through withdrawal, missing the shows I loved. Missing my ability to watch things when I wanted (thank you DVR). I felt completely disconnected from the world. It took a good month or so I noticed reading back through my entries before I started to really unwind and really enjoy the new quiet space in my life.
Last Saturday night, we put all four of our fingers on the computer mouse, and as a family, we clicked to make our LAST consumer debt payment!!!!! Then we had an epic hour-long dance party. Singing, dancing, and feeling thousands of pounds of pressure being lifted. Especially for the kids, I wanted to make that night a big deal. A celebration, an end of a chapter. A night they can use to bookmark these past few years as well. We all gathered around and counted down and did our own private scream, yelling, “3…2…1… We’re DEBT FREEEEEEEEEE!!!”. It was awesomely nerdy and fantastic and felt amazing. Next up… savings and house.
I thank you for reading our story. We are sending out love to all of you and we thank you for all your support over these last few years. We’re saying cheers to each of you on the same journey and saying prayers for all of us; that we may be able to live with a wisdom beyond our immediate knowing that guides us in love, compassion, and joy.