Welcome to the first installment of my debt free journey series. We will start with our debt story. The topic today is dealing with how my husband and I got into this bondage that we call debt. I would like to start with my financial background. Growing up, I was raised by my parents as a middle-class citizen. I didn’t always have the things that I wanted but I always had everything that I needed. Like most American households, money was not often discussed openly between parents and children. The extent of the money talk in my family was a brief overview of savings accounts and learning to write checks. Other than that, I was on my own with personal finances. My husband’s knowledge of personal finance was about the same.
My debt story started when I entered college, I was completely debt free. I was a recipient of the Hope Scholarship back when it covered 100% of tuition and I maintained the scholarship all four years of my undergraduate studies. My parents covered housing for me and my car was a used car that my parents paid for in cash.
The issue came when I began to receive student loans. At the time, I didn’t understand what was really going on when I took out a loan. I knew that it would need to be repaid but the reality of the situation did not hit me until later in life. All of my friends would get refund checks each semester and I wanted to receive a refund as well. I thought that I was being smart by only taking out about $500 (give or take) in student loans per semester, but I didn’t understand that this $500 would begin to add up quickly.
When I began grad school, I took out the full $20,000 that the government allows graduate students to take out. In hindsight, I wonder why the government allows students to borrow this large amount of money in one year in the first place. So anyway, I borrowed this money for two years in a row. That was $40,000 on top of the money that I had accumulated as an undergraduate student. I also had the “emergency” credit card that I used from time to time and only paid the minimum payment each month. It was during this time that I also purchased my first car from the dealership. I purchased/financed a 2011 Toyota Camry right from the dealership in February of 2012.
In May of 2013, I stumbled upon Dave Ramsey. Purchasing the Financial Peace University at home study was literally the best thing that I could have done for myself. I completed the lessons and began baby step one in June of 2013. I told my then boyfriend (now husband) about this amazing course that I was taking and how I was about to get my debt under control and win in life and he was not impressed at all. He had just landed his first “decent wage” job and was enjoying the large checks however he pleased. Since we were not married at the time, our finances were separate and I kept pressing on with baby step one alone. By September, I had paid my car off and had the title in my hand. This felt GREAT. I was more motivated than ever before.
In February of 2014, we got engaged and I knew that it was time for the money talk. My fiance and I talked about our debt, and by June of 2014, we were both excited about paying down our debt. At this point, we collectively shared about $100,000 of debt. It was time for that to go. We still didn’t combine finances at this point, but we did track our debt payments together. Although we were slowly paying down debt, we were not 100% on board with sacrificing a night out with friends or passing up on a clothing sale for an extra debt payment. Out hearts just weren’t completely into it.
Right around the time for our wedding, I saw that our church was hosting Financial Peace University. I felt that this would be a perfect way to start our joint debt story and marriage because we would soon be combining our finances. We didn’t have to purchase the materials because I already had the workbook and discs that I purchased in 2013. We completed each class except for one (we were on our honeymoon that week) and we were both ready to commit to paying off this debt as soon as possible.
Things were going great until April 2015 when my husband began to feel ill. You can read more about his diagnosis of Chiari Malformation in my earlier posts. We went from a two income household to one very suddenly. We have had to slow down our debt reduction drastically. Some months we aren’t able to pay anything extra at all.
Although we are still accumulating medical debt, we are not discouraged. We pay what we can when we can and any extra money that we have goes directly to debt. The plan is to create a happy ending for our debt story. We have learned to stay positive and focus on the end goal and we want to encourage everyone else to do the same. Everyone will have setbacks, but the true test is to stay motivated while going through them. Come back next week to see that detailed plan that we have written to pay off our debt. Good luck on your own debt free journey.