The Back Story

My husband and I met in college. We were 21 and 25 years old at the time, and both of us had student loans and some other small debts. 

Two years later we were graduated and got our first apartment together. Since we both had decent paying jobs, we weren't content to just get by. We got a nice place and promptly went about furnishing it - on credit, of course.

Two more years later the cracks began to appear. We were over our heads, and worse, employment problems began to plague us. Though we both had bachelor's degrees, one or both of us were at one point underemployed or unemployed.

It's a classic tale: credit card bills piled up and pretty soon we couldn't even pay the rent in a timely manner. Bill collectors started calling. I was solely managing the finances and I was doing a poor job of it. I'd pay off a chunk of debt and then 'something would come up' and we'd be right back where we started.

Then we got married and soon after, realized this was no way to live. We did what we had to do: tightened our belts, paid what we could, moved to a dumpy and cheap apartment, sold stuff, and hunkered down to weather the storm.

Finally, after what seemed like an eternity, things began to turn around. We both got great jobs that we still have today.  We had two used cars that were paid for. The huge student loans were lingering as always, but other than that, no other debt. I had credit cards, but there wasn't much on them. (My husband wisely abstained from credit cards after that first debacle.) Things were looking good. So, what did we do? We had a baby. And then we wanted to leave the crappy apartment, of course!

We built a modest home in a great area. We moved in July 2008 - and beside the mortgage we now had, and those ever-pesky student loans, we managed to stay out of further debt, largely due to a couple of unexpected cash windfalls.

But, alas, the self destructive spending returned as it always did, and shortly thereafter my aging Jeep began to act up. We purchased a nice used SUV - on credit of course.  And then, six months later, my husband's car needed major repairs worth more than the car itself,  so we financed yet another vehicle.

Since then we managed to pay off our credit card bills one more time. Murphy then again came to call in the form of two unexpected surgeries in our family, and despite having health insurance, we were left with some pretty hefty bills. Of course we fell right back into credit card debt again...except now, we had a mortgage, two car payments, the student loans, AND the medical and credit card bills. We were worse off than ever, albeit in nicer surroundings. Frustrated and tired, I vowed to find a way off the debt rollercoaster, once and for all.

In August of this year, facing my 35th birthday, I decided I'd had enough. Over the years when I was motivated and paying down debt I read every personal finance book, blog and message board I could. I revisited those sources and began to formulate a plan. Dave Ramsey's ideas stuck with me, especially since he advocated for an emergency fund - something we have never consistently had. In many of our worst debt crises, a cushion would have helped significantly if not solved our problem. Why hadn't I thought of this before? This August, I started cleaning our basement and garage and selling everything I could on Ebay, Craigslist, and at garage sales. In only a few weeks I had earned $850 outside of my normal job! I was stoked! I was only $150 short of Dave's recommended $1000 baby emergency fund. Then I would be rolling on eliminating debt next. I had a Plan for the first time in a long time.

So what happened?  Well, Murphy did, of course! (Murphy's a real bastard if you ask me.) My SUV needed some repairs. Luckily, we had the money in savings to cover the bill.

A strange thing happened when I left the auto repair center after picking up my SUV that day. I realized something: I had needed car repairs. I didn't stress about where the money would come from. I didn't reach for plastic. I had the money for what I needed. And while it sucked dishing out all that money, I felt.....calm.

Amazing.

Flash forward two months:  I had another epiphany this weekend. I was reading a personal finance blog (surprise) and the couple I read about became debt free this past Saturday, 10/9/10. The author went on at length about how they did it, and how good it felt to be free of the debt burden.

I thought: I said the same thing, but as I paid things off, I never stopped using credit.

I got up, went to my wallet, took out my cards and locked them in the safe in our basement.

Three days later, and here I sit, typing away on this beautiful fall day in Maine as I enjoy the sun. I haven't used credit or debted in any way since Saturday. And I began this blog. And you know what? I'm okay. I'm really fine. The sky hasn't fallen because I carried cash only.

And that's a good feeling.