November was a big month for our family. It was the first time in almost a decade that we haven’t been saddled with credit card debt. If you find yourself struggling with debt, the first step is the hardest. Hopefully by sharing my story, it will persuade you to take action.
My husband and aren’t dumb. We have 8 years of post graduate education between us. I am an optometrist, and my husband is a teacher. We have a good combined income. We haven’t had any layoffs, health problems, or other emergencies to blame for our debt. We simply succumbed to lifestyle inflation with new cars, furniture, trips, sports gear. I could go on an on.
Ending the cycle
When we decided the cycle had to stop in June 2011, we owed over $30,000 in credit card debt. That conversation was the hardest one we’ve had in our ten year marriage.
I had cards. He had cards. We had cards, but we hadn’t added them all up out of fear and shame. It’s hard to admit you are wrong. It’s really hard to change your lifestyle. It’s impossible to live under the burden of debt forever. It crushes you and your spirit to live one payment away from potential disaster.
The first step in our journey out of debt
The first step in our journey out of debt was to sit down and write out all the balances and their interest rates. We then made a vow not to buy anything we didn’t need and certainly not if we didn’t have the money to pay in full. We sold lots of the things we used to think were important.
We started on the card with the lowest balance, which also had the highest interest rate. When it was paid off, we moved to the next one. [Jackie's note: This is the debt snowball method.] When we got the debt down to $15,000, we transferred it to a 0% credit card.
Around this time, I decided to take a contract job to supplement my income. My husband also joined several paying committees in his school district. We started putting most of our extra money toward debt while also saving. Although we had until August 2013 when the promotional rate ended, we made some extra money last month and killed the last $7300 in credit card debt. It is gone, forever.
Learning what’s important to us
Throughout this journey, we have learned what our values are and what is worth spending money on. When you buy everything you want, it’s hard to get excited about things. Now when we make a purchase, we appreciate and use it to it’s fullest. We value travel with our family more than most monetary items, so that is a big part of our savings now.
I have decided that I want to stay home more while my daughter is young, and paying off the debt has allowed me to see that is a very real possibility. We’ve also decided not to take on any debt that doesn’t provide income for us. With that in mind, we were able to purchase a rental property earlier this year that will provide passive income as I go to a part time work schedule next year.
Dictate your own lifestyle
You don’t have to be poor to go into debt. Lifestyle inflation is always around the corner and advertisers will continue entice with the latest and greatest. Your friends and family might expect you to live a certain lifestyle or think you’re odd for driving an 8 year old car when you make over $100,000 a year. For me, while I’m not proud of getting into so much debt, it was a powerful learning experience. I have found that you dictate your own lifestyle with the choices you make. If you choose to get out of debt, it opens up a new world of possibilities.