Wednesday, November 4, 2009

Being Debt-Free

Mark and I are 35 and 34, respectively. We have been married five years and two months, and two months ago today we made the last payment on our last non-mortgage debt. We liberated ourselves.

We started our journey three and a half years ago in January 2006. We had been married about a year and a half, and that month, Mark started his first professional job out of college.

Our income doubled overnight, and I feared that we would end up broke all over again because we were so unaccustomed to having any money. So I asked around, and several people recommended that I try Dave Ramsey’s Financial Peace University. So we signed up at the church. Money was so tight that we had to ask the church to cover the $100 cost for us. At that time, we had no commitment to being debt-free. It was a kind of pipe dream for us: something everyone said you should do and no one believed you could do.

During the second or third class, we watched the “Dumping Debt” lesson. If you never watch or read anything else by Dave Ramsey, watch him teach that lesson. You actually can buy just that lesson here. This lesson gave us our first glimmer of hope. I went home, pulled all our bills – from $45 owed to the dentist to $24K owed to student loans – added them up, and found that between us we owed $63,754 for cars, furniture, student loans, medical bills, computers, and general living.

Dave says that, “Children do what feels good. Adults make a plan and follow it.” By his standards, I guess we’re teenagers. We made a plan and more or less followed it. In fact, we even paid it off ahead of our original schedule; however, we could have gone even faster if we’d been a little less impulsive. For example, my husband encouraged me to buy a spinning wheel. We bought a laptop. We ate out.

All the same, on September 4, 2009, Citifinancial Student Loans debited the final $1,501.01 from our checking account, and we went to bed that night free of all debt except our mortgage. When we started, we had so many monthly payments that we could only pay $50 a month extra on our debts. By the time we focused on the final debt, we made a consolidated $2,500 payment each month on that debt.

I thought I could imagine how it would feel to be debt free, but I was wrong. It’s more liberating than the sweetest siren song could make it out to be. More importantly, our dreams have gotten much, much bigger. Four years ago, I could barely entertain the notion that people could live without consumer debt. Now we have a real dream: we plan to pay off our house.

Of course, paying off the debt really just brought us up to the starting line. We still have plenty of Responsible, Grown-up Things to Do. Right now, we’re working on our three-month emergency fund. After that, we need to replace Mark’s car, a decrepit 1986 Toyota Celica. We anticipate replacing the central heat and air system (including extensive duct work) and insulating the house. We plan to complete all of these without using debt by June 2010. Then we'll pad the emergency fund to cover six months of expenses. After that, all our extra money will go toward Burgundy’s college and paying off the house.

Get that: We have the freedom to decide what we want to do with our money. We can sell the house and live in a yurt. Buy cashmere goats. Carve totem poles and sell them on Jamaican cruises.

Anything. We. Want.

Note: This is a lightly edited post originally published on my old (mostly locked) livejournal account. Apologies to readers who came here from there.


  1. That's fantastic! Good for you! My husband and I are working really hard to pay off our debt too. We started with a grand total of $35,000 in Feb. '09, and now we're done to a collective $24,000. I'm really hoping that the last two-thirds goes a lot quicker, as we're getting better at weighing out financial decisions, and are more focused on the end goal!

    Thanks for the inspiration!

  2. Wow, Kristina, your rate of paying it down is really impressive; congratulations!

    We did get better and better at pinching our pennies as we continued to practice it. Stick with it, and you'll do great.