OK, I’m a little embarrassed…

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 :)

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4 Comments

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4 responses to “OK, I’m a little embarrassed…

  1. I’m so glad you decided to share your journey, Erin! I am thrilled to follow along. My parents have followed Dave Ramsey’s plan for a few years now and it’s amazing what they’ve been able to do. I’ve read his book but have yet to make it an actual system in our home (it’s so tough when you’re living on one “unplannable” income!). Thankfully, neither of us have really ever gotten caught in the credit web. We own all of our cars (only buying used with cash) and we don’t own a home (don’t really have a desire to, honestly). We each had a few piddly credit cards in college that in total racked up maybe a few thousand, all of which are no longer around. Our biggest financial problem: student loan debt. I know we’re well over $100,000. Stupid private college. Really hoping there’s a change in government for handling these things, because geez – it’s like a mortgage!!

  2. Juliet

    What a great introduction to your blog. I am so excited to learn from you and journey with you through this experience. Thank you for being brave and focused enough to share your ideas. And thank you to that other special person that helped kick-start your new approach to spending and saving. She has helped us a lot too :-) As far as our debt goes . . . student loans are looming over us, and since we consolidated our loans, they will be for the next 30 years! Historically, we have made many, many bad decisions to put things on credit cards. Using cash is really the only way we can do it without accruing more debt. Even debit cards are too tricky for us.

  3. Allie

    Love it :) I’m inspired to get an early start on being debt free. When I first got a credit card I thought I could afford anything! I had all the best clothes and no money to pay for gas to go anywhere. Wow.

  4. Sue

    I have read Dave Ramsey’s book The Total Money Makeover. It should be required reading for every high school student…. but they wouldn’t read it. Like you said Erin, you tossed it aside at first, not thinking you needed it. This blog has me wanting to update my own progress in my budget book. (Yes!!!, says Erin)
    I always looked at our debts and payments as “under control”. We financed second hand vehicles, consolidated loans and refinanced our home mortgage a couple times. We bought every day needs with cash, shopped at second hand stores and wore a lot of hand-me-down clothes. But now I wish we had saved for things (interest rates on home improvement store cards were hard on us) and I wish we would have had that rainy day fund… we would be out of debt by now if we had. Debt takes away your freedom. It takes a lot of self discipline to get out of debt and especially when you’re young and want the things that the Joneses have. But things don’t ever make us happy. Glad you are “gazelle intense” at this stage in your lives. Don’t be embarrassed because life is your teacher. I think you have learned the hard way, but don’t we all??? Debts and finances are only for this life. Quality family time is more important than two incomes just so there is money to invest….. that’s just how I feel. I’m thankful, as well, for the people who encourage me to invest time in my daily life for things that have “eternal value”. The benefits begin in this life and will last forever.

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