This post has been one that I've been holding off on posting for a while. To be honest, I feel a strange mix of apprehension and excitement all rolled into one: Apprehension because I'm about to admit some pretty personal, embarrassing things about my past; excitement because it's crazy how far I've come from then.
I've also been nervous, because I'm trying to be super cautious to not make it seem like this post is in any way bragging, because that is NOT my intention. Over the past few years, however, it seems the trend in life is to quietly and personally celebrate your victories and complain loudly about your struggles. And ya know what? I think that stinks. I think it stinks that when you have a big victory, you feel like you have to hide so as not to make people feel bad. And if I'm surrounding myself by people who roll their eyes when I post something like this, then I probably need to reconsider who I am surrounding myself with. Because after all I've been through (I'll get to that), I think a victory like this should be celebrated!
Where do I start?
I received this letter in the mail two months ago, and it absolutely blew my mind.
We didn't just pay off my student loans in 2013...we OVER-payed my student loans this year after paying off our house at the end of last year. I'm still feeling a bit in shock 2 months later. It has been a very very long past ten years, and we've finally made our way out.
Ten years ago, I was in the middle of my senior year of college.
At this point, I didn't exactly realize that I was going to have to go an extra semester in the fall (making it 4 1/2 years to get my Computer Science degree), and I was already reeling over my $32,000ish in student loans. That summer, I took an internship in downtown Indianapolis and lived with my brother and his wife for the summer. I made good money (for a poor college student) that summer, but I certainly didn't do what I should have with it. To be honest, I don't know where exactly that money went to. I mean, I know that my first check was eaten up with car repairs and new tires - every single last penny. But while I did have a higher gas bill than usual, I was HORRIBLE with money. I would literally get a credit card bill (or 4...that were all on the brink of being maxed out), feel a sense of defeat, and then realize that while I was $50 away from being maxed out, that meant I still "had" $50, and what did I do? Go shopping! Or splurge on that caramel frappuccino.
It was BAD. I was out of control with my finances. When I finally graduated from college in December of 2004, I had almost $12,000 in credit card debt and $42,000 in student loans. $54,000 in debt. At 23. I think at that point, I had something like $120 in the bank, which was just enough for the minimum payment on my credit cards for a couple months. (This was before the rules changed for minimum payments, and minimum payments for thousands of dollars of credit card debt was something like $20) It was really depressing, and I didn't have a job. I had to borrow $300 from my younger sister just to make the minimum payments on everything.
Thankfully, about two weeks after I graduated, I received a call from my old professor at college with a job possibility in Sioux Falls. Two weeks later, I was starting! I made a pretty sorry salary at the time, but to me, it was a TON of money. I started getting (what I call) "serious" about paying off my debt, but I also found that I had to start paying actual bills (you know, like rent...car repairs...car INSURANCE...furnishing an apartment...a gym membership...gas...groceries...cell phone...some of which I had been paying previously, some of which I hadn't), which made it hard.
Three months after I moved to Sioux Falls, I met my husband.
We immediately had one of those very honest relationships, and he knew within a couple months how far in debt I was. It was embarrassing. I was honestly worried that with as far in debt as I was, I wouldn't be approved for even a loan on a new bed, but magically, I was. I began to whittle away at my debt slowly for the next 9 months, but in December, Mark proposed, and we began to plan for our wedding.
Planning a wedding with SO much debt over my head was crazy. Fortunately, early in the wedding planning process, we took the
Financial Peace University classes at First Baptist Church in Worthington, and it completely revitalized the way I saw my finances, and really, my life!
I had been making excuses for the way I was living. Having a bad day? I "deserved" the new pair of jeans or top for having it so "rough". Was I totally broke that month even though I had worked hard both at work, at home and at the gym? I "deserved" a night out with my girlfriends, even if that was going to cost me $50 I didn't have. Through this course, Dave Ramsey called me out. It was humbling, but SO very much needed.
After the first couple courses, and Mark's wise counsel, I managed to cut expenses and somehow begin to save $300/month. Mark reminds me jokingly about the time I told him, "I know I've got credit cards at 29% interest, but it's only fair - banks need to make money too. I don't blame them, it's my own fault for agreeing to borrow money from them, and they're doing me a favor."
I finally learned how to
manage my money instead of
spend it. I cut my gym membership, used my tax return to pay my car insurance 6 in advance (instead of go on a shopping spree as I had in the past), and moved all my credit cards down to 0% interest. Mark helped me out too, paying off one of my credit cards, and I worked on paying him back over the course of the next few months at ZERO percent interest instead of 29%. It was hard to say the least, but we managed to save a good chunk of the money we needed for the wedding. Thank goodness Mark came into our marriage with a better understanding of finances, and free of college debt.
Of course, that didn't mean that we were anywhere near debt free at that point. We still had all $42K of my student loans, probably $8K of credit card debt left, and Mark already had a mortgage of over $80K.
The first two years of marriage were rough on us, with me making a 90 mile commute to a dead-end job where I felt unappreciated the majority of the time and was horribly underpaid. Living in a small town in Southwest Minnesota, there really weren't a lot of other options. The commute was awful (especially during the winter), and I flat out missed my husband on the days I had to commute 3 hours round trip.
We took a leap of faith (admittedly NOT what Dave Ramsey would recommend in our position) and took out a second mortgage on a foreclosure home, which we lovingly referred to as the "
Eleanor House" in Worthington.
We flipped it within a year during our first year of marriage. It ended up being a VERY wise investment, as we came out ahead on it by a fair amount. We paid off half of my student loans as well as payed for two reliable vehicles outright. (Yay for no more car payments...OR repair bills!)
After working in Sioux Falls for four years (and commuting twice a week for two of them), a position FINALLY opened up in Windom in my field. I was so nervous that I wasn't the right fit for it, and that I wasn't skilled enough, but Mark pushed me and pushed me (and pushed me) to follow through with it. Let me say right here that this was a HUGE deal to me. I felt sick constantly thinking about how unqualified I felt. I was so nervous, wasn't sleeping well, and was sure I'd just get rejected and be laughed away. Sometimes it is just so easy to stay in the same rut (this goes beyond just financial or job changes) because it's comfortable and we know how to handle it, but let me encourage anyone in a similar situation that sometimes just taking a leap of faith is necessary.
Unfortunately, this was in the summer of 2008, and we were smack dab in the middle of a pretty nasty market crash, so this waiting on pins and needles for a call about an interview was taking forever! It was SIX months of waiting from when I applied in April before I got a call to schedule an interview, but after a long string of interviews, I finally landed the job! No more commute, and better pay and benefits!
With the increase in income, it helped us begin to build wealth, not just make money. First off, we paid off all our outstanding credit card debt, then decided to tackle our mortgage. I know it sounds a little weird to tackle your mortgage before your student loans (I thought so too), but the interest rate I got locked in for my student loans was actually LOWER than our mortgage interest rate. Locking in my student loans when I did (right before the big rate increase in July of 2005) was the ONE thing I actually did right financially without assistance.
We definitely could have been debt free sooner, but we figured that being young and carefree without young kids at home was the time to do some traveling, so we did it (also NOT something Dave Ramsey would have recommended - sorry, Dave!) We knew that barring any major catastrophe or losing our jobs, we'd be able to pay off our debt before having kids (or shortly after), so we had fun a bit.
We took long road trips to California and Mackinac Island, ran a bunch of races, vacationed in Virginia Beach, Vegas, California, Hawaii, Ireland, Alaska, Duluth, Omaha, Des Moines...you name it. We spent probably too much money, but we also knew we wanted to add to our family, and after seeing how quickly health can deteriorate with my Mom's Parkinson's disease, we decided that we wanted to do the things we've always wanted to do before we settle down with kids and count on our health in the future to have our fun then. So we had fun. We took a break from the oppression of living like paupers and just paying the debt off and just had fun for a few years. During those years, we also placed a greater focus on retirement planning and our 401(k)s, knowing that we need to start young to get the biggest benefit (that's a whole other story).
It was a long, arduous journey, but we finally made our last mortgage payment a few months after Cashel was born in 2012, and made my last student loan (over-)payment this past December.
It has been a long 10 years since then, when I was young, immature and heading completely down the wrong path. I am still stunned that we are starting 2014 in a place I never in a million years thought we would be: debt free!
For those of you who are struggling financially, let me be the first to say that I really do understand. I have been there. I remember those feelings all too well, and I really do sympathize with you. I absolutely do not look down on you whatsoever, because I understand. I know what it feels like to be in that rut, to be broke, to be worried constantly about how you would pay your bills. I know it really stinks when you face those giants, and how defeated you feel when you have to pinch pennies. But please let my story encourage you, not make you feel defeated. Debt is a beast, and it can feel so ominous, and so debilitating.
I am so humbled, and so grateful that the Lord has seen me through this rough time of life, and has provided a way out. It has been a tough lesson to learn, but freedom from the bondage of debt has been life-altering.
Here is a great article about
The Bible and Debt that I found interesting as a read, also as an encouragement.
So that's my story, like it or leave it. I really do hope it has encouraged you!
