Hi! If you found yourself here, you’re most likely a supportive Facebook friend, family member, or dedicated fellow nerdy frugie. In any case, I’m thankful that you are taking the time to read about our family’s exciting, but complicated journey to becoming completely debt-free. This blog comes from a few recent requests to share my
OCD frugal methods and tips and it is my hope that I can change at least one person’s perspective on personal debt and the need for “stuff.” But first, let me give you a little bit of our family’s background and explanation of why we decided to embark on this crazy and “weird” challenge.
I do have to admit that I’m embarrassed, even mortified, to expose some of our biggest financial mistakes. While our mistakes are not all that different from the average American’s, it makes the hair stand up on the back of my neck to think about how just plain stupid we were with our money and how much better off we could be now if we hadn’t given in to our need to want “stuff.”
Our debt began in college. We both attended a very modest state school (no problems there) but we didn’t pay a dime for it until after we graduated (big problems there). We also signed up for a total of 4 credit cards while in school (also a big problem). This was before the time when everyone and their 5-year-old had cell phones and the oh so well-meaning credit card companies would stand at the front door of our dining halls, dangling calling cards in our hungry faces. If we would just fill out a simple application, the cards would be ours. Missing home, and not having many other means to call, we willingly surrendered our social security numbers and income of $0 so we wouldn’t have to call our family collect and scream “momthisiserincallmeback” into the receiver. “We won’t use these cards, we’ll just tuck them away in our top dresser drawers in case of an emergency.” WRONG. When you’re in college everything qualifies as an “emergency” including A large fry at McDonalds at 2am. Fast forward through the 4 years of school and we had an almost $15,000 emergency!
Fortunately, we were both able to find full-time jobs straight out of college. We continued to spend on credit- eating out, buying clothes, and yes, we got MARRIED on credit!!! We moved to an extremely claustrophobic, 600 square-foot, 1 bedroom apartment. We also bought a brand new Chevy Aveo with no money down, 11% interest! I consider this now to be one of the stupidest impulse buys I have ever made. For a year we made minimum payments on everything, put our student loans into forbearance, and took weekend trips on credit just to get out of the tuna can we lived in. Somewhere in that year, Dustin’s Uncle Mark and Aunt Dana sent us Dave Ramsey’s book The Total Money Makeover. We skimmed through it, thought his ideas were great, and put it aside. “We’re much too young to be concerned about our finances,” we thought, or should I say, didn’t think. The only good thing that came out of that year financially was the decision to finally stop using credit cards and us taking out a loan to consolidate them all (totally Dustin’s idea).
We moved to yet another 1 bedroom apartment close to both of our jobs and continued to make minimum payments for another year while Dustin dabbled in some graduate courses and racked up an even higher amount of student debt. What was our next step? Why buying a house, of course! We kept our student loans in forbearance, reconsolidated our car loan with a credit union, and took out even more loans for a down payment on a house. Ouch. That hurts to even type it. We continued to eat out multiple times a week, but this time we paid in cash (making it a little better). I remember adding up one month’s worth of restaurant bills and ending up with a figure somewhere around $450. That is more than we pay now for one month’s worth of groceries to feed our entire family, 3 meals a day plus snacks. Double ouch. And then it happened… wheels came screeching to a halt when we discovered I was pregnant. Somehow housing, feeding, and supporting someone who you deem the most precious being on the earth changes everything. We went down to one income and I became a stay-at-home mama. Dustin began feeling the pressure as our sole financial existence rested on his shoulders. I began clipping coupons, calling all of the utility companies, asking for discounts, and reconsidering “unnecessary” items at the grocery store. Our hunting and gathering instincts set in. We sat down one night and made our first budget. It was long, it was gruesome, but it was also very satisfying. We had enough to slip by, if we just kept paying minimum payments and student loans could miraculously stay in forbearance forever. This just didn’t fly with Dustin and he began searching for better employment. Our beautiful daughter, Ingrid, was born in September of 2010 and that same week, Dustin was offered a new job. A few months later we sold our house, and bought another closer to his work with the equity (thank goodness there was some) from our sale.
We were starting to get on track. We were paying cash for everything, eating out far less, but still making minimum payments. A few months later, I was introduced to a wonderful group of mamas who were very like-minded in the way of parenting, sustainability, and frugality. I was talking with one particular mama (you know who you are) about budgeting and finances and she shared with me that she follows some of Dave Ramsey’s methods of using the envelope system and his debt snowball. The name sounded familiar, but I couldn’t place it. I went home that night and talked to Dustin about it. “We have one of his books!” he replied. “We just never did anything with it.” I ran upstairs, pulled it off the shelf and read it cover to cover. That week we set up our budget, emergency fund, debt snowball, and envelope system and we haven’t looked back.
Two years later, it feels like an obsession. We are angry enough about our debt and stupidity that we have gotten, as Dave Ramsey calls it, “gazelle intense.” Retail is not a word we use in our house and we are actually having a blast living below our means. Every single dollar of our income is accounted for and if it wasn’t for babies needing to eat every three hours, we could finally sleep soundly, knowing we have it covered.
While brainstorming a name for this blog, Falling Behind the Joneses immediately popped into my head. At first thought, it seemed too negative for a title, yet, after thinking about it, it is absolutely perfect. We don’t want to be the Joneses or even appear to be the Joneses. In fact, we despise the Joneses. Not because they have everything but because of their irresponsibility and childishness. We’re frankly too smart to be the Joneses and we want to leave a positive, lasting legacy for our children and our family tree. We don’t want to be slave to the lender for the rest of our lives. We want to be “weird.” For most people having no payments seems like a fairy tale, but it is our goal by 2020 to make it a reality.
So if you’ve made it this far through my ramblings, please leave a comment, introduce yourself, and just for fun let’s share the stupidest thing you’ve purchased on credit.
Thanks for stopping by :)