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Friday, April 30, 2010
Money, Money, Money
When Johnathan and I moved in together in 2007, when I moved to Ohio, things were not great financially. I had a teeny tiny bit of savings put aside that I’d scraped together over about five months, and a loan that was supposed to be a temporary crutch until I found a job, hopefully quickly. Quickly didn’t happen, and “in a while” didn’t either – it took me five months to find a job, despite looking on an almost daily basis. Money was tight and our debt was steadily increasing as we each tried to make ends meet and keep our bills paid on time.
Once I found a job, things got a little better. Things weren’t so tight and we could breathe again, but I wouldn’t say we were financially stable. I wasn’t making a lot of money, and Johnathan was underpaid and overworked. But we were both employed, and making plans to get out of debt as soon as we stabilized. We got stable financially (well, enough, anyway) around the time we got married in September 2008, so we set up a “snowball” structure for our debts and began working toward paying that off.
I won’t say we haven’t had setbacks along the way. That would be a bald-faced lie. Some months, our debt went up instead of down, but for every single one of them, we can identify the cause (couch, new TV, vacation, etc), and since our debt graph was still going down, it wasn’t something to worry about. We’re now over a year and a half into the process and we’ve paid off all credit card debt, and I sent off the last payment for my student loan last week. That leaves our cars and my loan for the current school term. Three quarters of our debt is gone, and all of our truly harmful debt is gone.
After going through our bills the other day, it was interesting to realize that we’re… fine. We’re fine! If something were to happen, we would float. In fact, we’re talking about funneling all of my paychecks into savings as soon as the debt is gone, because there won’t be any other draw for it. This means that we’ll be able to put aside money for big things like a down payment for a house, like big vacations, college… anything, really! It’s already very freeing to be out from under so much debt, and heading toward true financial freedom. Realizing that we’d only have a few recurring bills left after we’re done paying down debt, and some of them may be able to be reduced in frequency.
We’re so close to being finished with debt payment – it feels absolutely wonderful. We should have both of our cars paid off totally within a couple of months, and I expect to see our total debt fall under $5,000 on Tuesday when I get paid. We’re saving for two vacations and have plenty set aside for the one in September, and are instead looking toward the one we’ve planned for May of next year. With any luck, we’ll be able to contribute the maximum to our IRA next year and start accumulating significant savings. Our financial outlook is beautiful!
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