Note: In this post and several others coming up I will be writing about our debt and finances. Take what I write with a grain of salt. Maybe you have less debt, more debt or no debt. I’m writing this as a way to keep me accountable in paying off debt and in the process maybe motivate a few others to do the same. -Peter
In 2015 I wrote a blog post similar to this one. The only thing was, I never followed through on it. Fast forward to mid-2017 and we’re still dealing with the same problem.
It’s a nasty word. (Unless used for certain investments or real estate, I get that).
We’ve been married for six and a half years and of that time we’ve been in debt for six and a half years. Every year we get all pumped up to pay off our debt and be debt free but it’s never happened. Here’s what I’ve realized in the last few months.
It wont happen.
It will take my entire family making sacrifices. It will be difficult. The journey will be long but in the end we’ll be where 80% of Americans are not. For years I’ve had my head in the sand about our debt. After all it’s easier to not think about the fact that we have $58,446 in debt than it is to actually face that mountain.
To be honest, that’s embarrassing. Twice in our marriage we were THIS.CLOSE to being debt free. Both times we started a business instead. That’s neither here nor there. As of June 1st we had $58,446 in debt. For clarity, we used to have way more debt (virtually every kind of debt imaginable). We’ve been able to pay off a lot of it from flipping two houses in the last 4 years but now it’s down to the nitty gritty. We can’t keep buying houses only to sell them two years later and apply the profits to our debt. That never works and I’ll tell you why. Doing something like that might get the debt paid off but it doesn’t break the habit of creating debt.
(When I say debt free I mean 100% debt free. Some people will say they’re debt free when they have a mortgage. That doesn’t count. Sorry. If you’re keeping your mortgage in order to get a tax cut, that’s just dumb.)
Debt is not an income issue, it’s a habit issue. Even though most of our debt is over three years old (except for one of our vehicles) we still. have. that. debt. It won’t go away. Neither will yours. Over the last few months we’ve gotten sick (literally) and tired (literally) of this gorilla of a monkey hanging on our back. There’s got to be a different, better, way to life than sending $1,700 a month to creditors. Yes. It’s that much.
An extra $1,700 a month (which is all the minimum payments added up) would give us an extra $20,400 per year. Hello. You can buy a rental property ever year with that. You can vacation all over for that. You can take that and invest it in a conservative growth stock mutual fund and have an extra $4.3 million for retirement. Or, you can have $58,446 in debt.
The thing about debt is that it makes you feel like a prisoner. In a sense, you are. Ancient wisdom says that “The borrower is slave to the lender”. Did you read that? Really read it.
As in, the ancient Israelites and the-19th century African-Americans. These people did not have FREEDOM. They worked. Sun up to sun down. That was their life. There is another crisis of slavery going on in the world today and the slave owners are Visa and MasterCard. The slaves (you and me) are still working sun up to sun down to try and fix what WE got ourselves into. I made the decision to borrow money and then pay interest on it, and then only make the minimum payments. No one made that decision for me and they didn’t make it for you either.
Our debt is an EMERGENCY. There should be no such thing as “working on” your debt. Every dollar you pay in interest is robbing you of your future hopes and dreams.
We’ve come up with a plan. We’re calling it our “Badass-Budget-To-Pay-Off-Our-Debt” plan. Some people wont like it. That’s OK. It’s what we’re doing.
- We’re not eating out anymore. Don’t invite us to and if you do please don’t be upset with us when we decline.
- We’re not going out for drinks anymore. Don’t invite us to and if you do please don’t be upset with us when we decline.
- We’re not shopping at Costco anymore except for a few staples. Too much temptation! (Can I get an amen!)
- EVERY extra dollar we make will go towards debt.
- We’re selling our 3rd vehicle.
- We’ve moved into an apartment where half our utility bills are paid for and the other half are minuscule.
- I’m getting a job in addition to still running my business. (Humbling)
- We’re not purchasing gifts for anyone unless it’s Christmas. Don’t be upset if you don’t get a gift from us. (Sorry)
- We’re not taking any road trips this Summer.
That’s the meat and potatoes of it. (I should note that we have two week vacation planned for July in which we will obviously be spending money but it is all already paid for and any other expenses will be paid for in cash).
It really does. It’s a temporary state though and if we can stick to our “Badass Budget” we will be debt free in 13.75 months. And then we’re going to party like there’s no tomorrow. I want our kids to grow up in a household where debt is unheard of. Where things are paid for in cash, or they are not purchased. Plain and simple. What kind of a life would that look like? Free from the worry of car payments or creditors calling. Freedom to enjoy this beautiful life we’ve been given. It would be amazing. Picture what it would like for your family.
Today is day 1. It would be cool if some of you joined us on this journey. We could even start a private Facebook group where we can motivate and inspire each other while being accountable. Leave a comment if you would be interested in that. Everything feels better when you go through it together! You don’t have to agree to anything crazy like no eating out. It would just be a place to be open and honest.
I will routinely update everyone on the status of our debt-free-journey but it will only be once or twice a month. So be sure to keep checking back from time to time.