A Story About Paying Off Debt and the Obstacles Along the Way

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We're Still In Debt, But I Don't Worry About Money All The Time Anymore

Looking at my Yoga Cats wall calendar the other day, I was struck by two things: (1) disbelief that it's already the end of May (how?) and (2) the realization that I've been blogging here at The $76K Project for nearly a year. (Sidenote: come June, there will be a couple of celebratory giveaways in the works, so stick around!)

I started to run through the list of the changes we've made and the accomplishments we've achieved since this blog was born in June of 2017:

We've created and honed a budget.

We have an emergency fund.

We've started to invest (we had some meager investments a year ago, but now we're actively cultivating our retirement accounts).

We've increased our household income.

We've weathered some financial emergencies, including an expensive hospital stay.

We've paid off over $18,000 in credit card and student loan debt, and we no longer have a car payment.

I'm proud of all of that. Every one of those wins was hard earned. Personally, though, perhaps my biggest financial accomplishment is in the realm of the mental/emotional: I don't worry about money all the time anymore.

A few years ago, we were living paycheck to paycheck, always one large bill away from disaster. Not that anyone knew. By appearances, we had it together: We owned (well, held a mortgage on) a well-kept house. We had two cars. We took vacations every year, some of them to rather expensive locales.

But like an iceberg, there was so much going on beneath the surface that other people had no way of seeing. I had a chronic aversion to checking our ever-paltry bank account, which meant we went into overdraft on a regular basis. Bills would sit unopened on the kitchen counter for weeks. I'd make impulsive purchases without calculating whether we could actually afford them. Our monthly credit card and student loan payments rarely exceeded the bare minimum. Emergency fund? Ha. We didn't even have a savings account.

Not surprisingly, despite our efforts to ignore them, financial worries hovered in our lives like a specter. 

Nowadays, we don't own a house (perhaps more accurately, we don't have a mortgage). We're down to one clunker of a car that gets us around town. And vacations - for the foreseeable future, anyway - consist of camping out within a couple hours of home.

We still have a long, long way to go to get to where we want to be. Debt-wise, we're on the hook for almost $60K, including nearly $10K in credit card debt, and we have some major ground to make up with respect to retirement savings. Our net worth is very much in the red. We still feel the pinch when it comes to saving up for pricier one-time items like wedding presents, new running shoes, race entries, or household furniture. Sometimes I see my friends doing things that I know we can't afford to do, and I feel jealous (yes, I'll admit it).

So yes, we're getting our act together, but don't be fooled - this is no quick fix.

And yet, now I know exactly how much money we have, where it's going, and when it's going to go there. Our finances have started to run like clockwork, especially given that many of our bills are set up on auto-pay. It's true that sometimes our bank account runs low - we're currently at $150 for the next four days - but because our budget is dialed in, I don't worry about that, either. We have enough money in our emergency fund that we can cover at least one large-ish unexpected expense.

In other words, we have some safeguards in place now, and I sleep easier because of it.

So the major win after year one isn't being debt free, or being well on our way to early retirement, or having an emergency fund that would cover us for a year in the event of a job loss. None of that has happened (yet). We need another few years to reach those big goals.

But the major win right now is more peace of mind, and that's pretty much priceless.
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2 comments:

  1. Great post. There is something so empowering about taking control of a situation, isn't there?

    As far as no quick fix, I think there is great value in going through this painful, lengthy process of digging out of debt. If it was too easy...it would be too easy to fall right back into it - for me, anyway. The years it takes to get my financial house in order are allowing me to really make mindful spending, budgeting and saving our habit.

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    1. Thank you, Deborah! Great perspective, and I totally agree with you: the digging out process is an opportunity for us to develop new habits. A year in, I can't imagine going back to my old habits. Keeping tabs on the bank account, making a budget (and striving to stick to it), and setting up auto-payments to our retirement funds and HSA are just things we DO now.

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