Digging Out of Debt

Debt is a four letter word, isn't it?  I hate it.

  

I hate feeling like I owe anybody anything, especially The Guy at Some Big Company who could possibly ruin my life with a bad credit score.  I also can't stand paying interest on that money borrowed, which makes me different from nobody ever.

When Phil and I were married, we had between us $70,000 of student loan debt (two undergraduate degrees, and my Master's Degree).  We could have had a LOT more, but we both worked crazy amounts of hours, were savers not spenders, had a few scholarships and some help from the parental units, and Phil got his Master's degree for free.

Of course, it wasn't just student loans that we were paying each month, we also had car payments (once our cheap college vehicles went kaput), an IRS loan (when the government took back our First Time Homebuyer Credit) and a mortgage.  Although we never read or studied Dave Ramsey, I had heard a few things about it, and using the expensive degrees that got me into this debty doo-doo, I came up with a plan.

For the first few years of marriage (until Baby #3 came along) I was a SAHM and Phil was (still is) a Catholic high school teacher.  We made sure to pay off all our minimum payments each month, and the only way we could afford to do that was because we lived rent free in a house sitting situation.  I put an ad in the local newspaper that we were looking for a house to house sit (we live in an area with lots of summer homes) and that first day, we got a call from a really nice family offering their house in exchange for taking care of their lawn and sending them their mail.  Done and done.

Once that living arrangement wasn't working anymore, due to the fact that we had to move out each summer, find a rental, and then move back in, we were able to rent a condo from my parents.  As soon as we had to start shelling out $1000 per month in rent, I had to start making money or we would be homeless.  But I was a SAHM, and determined to remain that for as long as possible.  So Phil and I did the following little jobs to make ends meet:

Me - babysat extra kids, tutored math, had 3 weekly bookkeeping clients, and worked at H&R Block during tax season.

Phil - was a waiter on weekends, worked maintenance at the school in the summer, and was CCD Coordinator at our parish.

If there's one thing I can't stand, it's people that complain about money and then do nothing to make any. Where there's a will there's a way, and God helps those who help themselves, right?  We were determined and faith-filled that it could be done, and God provided ways for it to happen.  But we had to search them out and go after them.  I placed ads and answered ads until we got exactly what we needed.
{Shameful Blush Alert}
 We also took advantage of any kind of government help that was available to us during these really lean years.  Our midwife told us about WIC, and the WIC people told us about health insurance assistance.  So that was able to cut back our grocery and insurance bills.  We wished we didn't need it, but we did, and we qualified, and that's why it was there, right?

When all these things weren't making ends meet anymore (y'all know how little Catholic schoolteachers get paid, right?) Phil and I sat down and decided I needed to work part-time.  I was lucky to have a sister in nursing school at the time, and we coordinated our schedules so that we would watch each other's kids while the other was at work/school.

Long story slightly shorter....eventually all my kids were in school full-time so I got a full-time job.  (I also got pregnant with Baby #5 - definitely God's plans, not mine!) That was when were finally able to start really paying down our debt and not just managing it.  I made an excel spreadsheet with all our debt, the interest rates, and total owed, and listed each one in order of how truly expensive it was.  Meaning, the car loan with the biggest interest rate was going to get paid off before the student loan debt that had a small interest rate plus a tax advantage of claiming interest paid.  

Once the spreadsheet was created, I could see exactly how many months/years it would take to pay everything off, and adjusted it whenever necessary.  We paid way more than the minimum payment on the first debt we were tackling (my van), and once that was paid off, we rolled that amount of monthly payments on top of the minimum monthly payments we were making to the second debt item (Phil's van), etc. etc.  Sometimes I had to make adjustments because life would interfere with my master plan and money had to go elsewhere.  But, other times, we would receive gifts or tax returns that would speed up the whole process.  

This month we finally paid down all our debt, except our mortgage.  We have saved sooooooo much money in interest that we should have been paying for years.  We have also been able to really live within our means and we don't take any luxuries for granted.  Now, we feel like we have the ability to start saving for our next house...something that looked impossible a few years ago.  With 7 people in our family and only 3 bedrooms, we are running out of space.  A house that would fit us all comfortably is the goal, and one that is now within our reach in a couple years.  Not saving for all of those debt-paying years was a very scary thing indeed, and something we prayerfully considered.  In the end, we couldn't see saving our money at a rate of less than 1% while paying five times that on the debt we owed.  So we took that leap of faith. 

I'm not writing this post to brag or make others feel badly.  Pinky swear.  I want to encourage you to honestly assess your finances and debt and see how you can stop the madness, and I'm glad to offer any help that I can.  I never would have believed we could have done it in 11 years on 20 year loans, but hard work pays off!