I talk a lot about all the things Brad and I did wrong prior to reading Dave Ramsey and Crystal Paine in 2010, but I don’t talk a lot about all of the things we were doing right during those first four years of our marriage. Despite the fact that we entered our first year of marriage with $70,000 in student loan debt, a new house (with two mortgages) worth $150,000, and a used car loan for $18,000, we were doing a lot of things right. Now, once you’ve finished laughing at that statement, you can read on!
- I paid off my car one month before we got married, only two years after I purchased it for $13,000.
- Brad’s parents covered his first four years of college, and my parents covered a significant portion of my Bachelor’s degree.
- Brad and I applied for and received a lot of scholarships and financial aid throughout college.
- I lived with my parents for the 2 1/2 years between college and marriage. Although I had a long commute, I saved significantly on housing costs. Brad also lived with his parents for a year, and then for a few more months right before our marriage. During the summers between semesters in China, we lived with our parents and worked as lifeguards at a summer camp.
- Brad often supplemented his income with acting at a local dinner theater, coaching soccer, tutoring math students, lifeguarding, and buying and selling items on eBay and Amazon.
- When Brad and I got married at the end of 2005, we qualified for a house that cost twice as much ($300,000) as the one we bought ($150,000). We opted to buy a house that we could afford on one income so that if I became pregnant, I could stay home with our kids.
- Since we only needed one income to support ourselves, for the the first 1 1/2 years of our marriage we put the entirety of our second income into paying for my Master’s degree up front each month, incurring no interest.
- When we couldn’t sell our house in 2007 for anywhere near what we paid for it, we rented it out. We’ve been renting it out to the same renters ever since.
- When we received tax refunds, we used them to pay our mortgage ahead by a month, and then by two months. This was very helpful in 2010 when we suddenly found ourselves unemployed.
- While we were in China, we used our tax refunds to pay our loans out a year in advance. We still incurred interest using this method, but it gave us a year of relief from that debt.
- We always paid our bills on time, and we never carried a balance on our credit cards. We paid up front for everything, from large purchases to vacations.
- We communicated openly with one another and others about our financial situation. We were always seeking input and sharing with others what we were doing to pay off our debts.
- From the time we got married, we lived frugally, cooked from scratch, meal-planned, declined cable TV, and set aside as much money as we could to cover our debts. When Brad wanted to buy a treadmill, he sold his CD collection to pay for it. I have packed my lunches since I was in the third grade, and we’ve always packed our own food when we travel. I shopped for household items at Goodwill and yard sales, and often used gift cards for purchases.
- The $18,000 pick-up truck we bought has been a very reliable vehicle for us. We’ve had it almost 8 years, and it has only rarely needed maintenance. I owned 3 different cars prior to our truck, and it’s been the most reliable of the four.
- We have always chosen to live close to work, saving on fuel expenses.
- I had a purebred Shetland Sheepdog for 15 years who passed away just after we left for China. Although I love animals and grew up in a house full of animals, we’ve held off on getting any more pets since then. Pets (especially large pets) can be very expensive.
Starting off our new marriage by going deeply into debt was not wise, but year after year we have chosen to tackle our debts head-on. Although it may seem like we have paid off a lot of debt in the last four years, we began with a strong foundation of frugality, hard work, saving, and team work. Our parents also gave us a great foundation on which to build a debt-free life. In hindsight we can easily see the mistakes of the past, but it is also good to remember our successes along the way.
Now it’s your turn to brag! What did you do right when you found yourself in debt? What choices do you look back on with relief and gratitude?