This guest post is from reader Natalie.
Our story is kindof a two part story. This is a second marriage for my husband and I. Our first marriages had LOTS of money fights/money problems and TONS of debt. When we were dating, he was trying to “rebuild” his credit from his ex but I had already done all of that. I had a couple credit cards that I could easily afford and everyone has a car payment, right? For the first few years of marriage, we still used credit cards but the “big” ones (Lowe’s which is his favorite store and a high limit Visa) were in my name and I was the “gatekeeper” of them. We’d make repairs on our house – 0% interest on the Lowe’s card – or use the Visa to pay for vacation (and repay it over the course of a few months). But, while we weren’t overwhelmed by any stretch, we also didn’t have a lot of money left over at the end of the month.
Then, I started downloading the Dave Ramsey podcasts just to have something to listen to at work. I consistently felt bad for the people overwhelmed with debt – but that was about as far as it got. Sure, I’d like to be debt free, but I didn’t expect my husband to get on board, so I just left it at that. During one of his business trips, he came across the Dave Ramsey “Total Money Makeover” and read it on the trip and was fired up to get out of debt. So, while he will gladly spend all kinds of money on stuff (mainly stuff for me), he’s also Mr. Spreadsheet. We started a budget and started paying off our debt. When we started, we had about $30,000 total (between vehicles and credit cards). We started chunking money at the credit cards and had them paid off in about 7 months (lots of overtime and staying at home for entertainment). After we paid off the credit cards, I left the high limit Visa open because we didn’t have an emergency fund but closed everything else. We still had one vehicle payment but decided it was time to have kids. So, when we found out I was pregnant, we “had” to trade in his truck for a family friendly vehicle. So, debt sky-rocketed back to $30,000 due to the one vehicle. When we were finished having kids, we got intense about paying off the new vehicle and had it paid off in 1 year (the biggest chunk was the tax refund with all the dependents – but now our withholding has been corrected).
We’ve been consumer debt free for almost 3 years and the Visa has long-since been closed. We have 6 months cash in our emergency fund, we have 401k’s and Roth IRA (that we couldn’t have afforded if we still had credit card/vehicle payments), kids’ college funds started and we budget a certain amount for all of the things we “might” need credit for. So, when husband was tired of driving a 10 year old car, we wrote a check to buy him a much newer truck. Next year’s vacations already have monthly amounts we allocate to them, a newer vehicle fund is in process, and now we’re working on paying off our house.
Thank you Natalie for sharing your debt journey with us. Natalie is a working mother who hopes to be able to stay at home with her children once their mortgage is completely paid off.
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