Why would you want to wait to save up for a vacation when you could use a credit card and earn cash back or skymiles and take the vacation now instead of having to wait? Why would you save and save for a car that you don’t necessarily like when you could just go get a $20,000 loan for one that you do like?
These are all questions/statements that my husband and I have received since starting the debt-free journey from our friends and family. I think they all thought we would have abandoned this journey a long time ago because Lord knows I like looking good in a car that looks good. (Seriously, I’ve had 7 cars and I’m not even 30 years old yet…)
So why? So why are we making sacrifices and delaying fun in order become debt-free?
If you read my “Is an Emergency Fund Necessary” post, you’ve already heard a little of this story. You see, back when my hubs was technically still self-employed (he was working for another company but to avoid paying taxes on my hubs they paid him as a 1099 contractor making him self-employed) we ended up dealing with a major financial blow.
I had only been graduated for a few months and my student loans weren’t technically due yet (I was in the six month grace period), we had an 8 month old baby, we had private health insurance, two credit cards, and a car loan. We had also just “paid for” a fancy vacation to Mexico on our credit cards and then….
My husband fell out of a two story window at work.
He shattered his left wrist and fractured his right elbow two weeks before our planned vacation. My hubs had to have surgery on his wrist and was facing months of physical therapy. Oh and did I mention that he’s left-handed and was working in construction? That meant he couldn’t work because you can’t swing a hammer if your wrist is shattered.
Of course, we still went on our planned fancy vacation but we returned home to face the music…..our vacation bill, Pat’s medical bills, and the fact that my hubs could do very little work.
That left it up to me to work as many side hustles as I could to bring in income and it also meant that our savings was completely drained.
Once we had paid for the medical bills and my hubs returned to work….we were pregnant with our second child. We were facing bringing another mouth to feed into our home with no savings and no real plan for our money.
But, that is isn’t the seed that took root to us wanting to become debt-free….it was the realization that had my husband become permanently disabled we would have been screwed financially. I would have had to go back into the work force which would have cost us in childcare plus care for my now disabled husband plus it would have meant that my income would have to pay for our $55,000 of debt and the mortgage on top of that.
It didn’t take a rocket scientist to figure out that we would have ended up in the poor house had that happened. So, we decided after reading The Total Money Makeover* to literally makeover our financial lives and become debt-free. We didn’t want to lose any sleep at night over money and we wanted to be prepared for life’s hard times.
There you have it. The whole story on how in a few months after my hubs’ accident we decided it was time to change the way we think about money. Now, don’t get me wrong, being almost at the finish line to 100% debt freedom is incredible but it doesn’t make us rich. It doesn’t mean that we get to go buy a $20,000 car just because we have no other debt. It means that we only make purchases we have the cash for and that usually means we have to save up our money in order to make those purchases.
Are you debt-free? What was your reason behind jumping on the journey if you don’t mind sharing?
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I think as personal finance bloggers we take being debt free for grated. This post is a perfect explanation as to why it’s important to talk about “why” being debt free is important — especially for people who are just getting started on their financial journeys (like me three years ago). This is a great starting place!
I never thought we wouldn’t pay off our substantial debt, but it was still accruing and I felt really out of control. I was literally experiencing sleepless nights about it, plus I didn’t want my daughter to have to deal with any potnential negative ramifications of our debt. We opted for a home equity loan to consolidate our substantial credit card debt, and get a more managable interest rate. Now that we’re actually making slow but steady progress toward paying it down, I feel a lot better.
You are so awesome Amy! I love following your story and I can’t wait to hear you give the debt-free scream! 😉
Have you though about changing your blog name to “Keepin’ It Real with Jessi” ? Because that’s what you do! It’s so nice to read a blog that is honest.
My husband and I are gazelle intense in our journey to being debt free. We have paid off a little more than 10k since February, and paid CASH for our wedding (with 200 guests). What made a difference for us in taking the FPU course was that we STARTED LOOKING FORWARD. I think most people in debt (guilty here) want that instant satisfaction and gratification and don’t think about what could go wrong…like being out of work.
Thank you for spreading the debt free good word and being an inspiration!
Heck freaking YES Savannah!! Congratulations on your wedding and for doing it debt-free!!! That is amazing and I love the blog name! I may just have to buy that domain name! 😉
My husband and I were both raised in households which were averse to debt; so for us the idea of going into debt for anything other than a (modest) house, a (reliable but not flashy) car, or education is a foreign concept. Going into debt for a holiday or consumer goods? Not even on the radar.
The “why” of becoming debt-free is always so important, because that’s what makes people begin to prioritize. Thank you for sharing your story!
Being debt free is amazing. Its worry free, teaches our entire family about patience, appreciating what you get, and being thankful. Getting there is a bit harder.. just ask our grandparents. This is how they ALL lived and they are now retired with no debt. For our family we have been debt free except for our home. When we closed our business and my husband couldn’t find work for a year we quickly realized that being debt free wasn’t always enough. Having saved money and emergency funds are a necessity. We would have lost everything if we hadn’t.
Now our biggest asset is now making us what some people call house poor. Our income will never be what it once was. We are currently trying to remodel our older home ourselves to be able to sell our home for what we originally bought it for is our new task at hand. We have a beautiful farm and don’t want to leave it but it would sure be nice to have a payment that is quite alot smaller. Thinking about these things have always made me look up.. to my heavenly father and realizing all these things are just temporal.. Being content is about relationships and not having things.
I’ve been looking for stuff to do that doesn’t cost more $$.. such as Having folks over more often, even having potlucks, game nights, bonfires and we’ll buy the marshmallows, These are truly meaningful memories.. and guess what.. it doesn’t cost much. . I hope somehow I’ve encouraged someone to keep up the good work. Merry Christmas everyone.. .
I had just graduated from optometry school. I had about $230,000 in student loans, and I (too) was in the grace period. Then repayment hit. I heard that you should pay extra on your loans to get out of debt faster, so I paid $10 extra on that one, $50 extra on that one, etc. I made a pact with myself that I was going to pay off my student loans in 7 years since that was how long I was in school (I did my undergrad in 3 years, PTL), but I didn’t have a PLAN! Just a vague idea.
Then my friend invited me to this “Financial Peace University” class that is “apparently really good.” Well, I told her I’d come to the first class, but, you know, “I am a doctor, I’ll be fine. I’ll just give it a shot.” Well, I was hooked after the first class! Wow, to say it was life changing would be an understatement! I wrote a check for the materials (and hoped my check wouldn’t bounce) and committed to going all 9 weeks.
During the fourth class, I just broke down in tears. The reality of my $3k/month minimum payments was settling in, and I just felt like I was NEVER going to be out of debt. Other people in the class were so encouraging, and my little 25 year old self was so thankful that they were pouring all this confidence in me that I was struggling to find myself.
I canceled my credit cards when they had zero balances, and I pretty much at pasta and green beans for dinner until my now-husband and I got married last year. We are on the same page with how much we hate debt, and we are so thankful that it’s becoming “a thing” to be debt free. I like this crazy debt free movement 🙂
My (now ex) husband and I did FPU. and we paid off our credit cards, and closed the accounts. But then, we stopped.
Now, I’m in a thousand dollars of credit card debt, and $4,000.00 of personal (Family loans) for my car, and down payment for house.
I just made up my mind this month to buckle down, and get those cc s off my back and NOT use one ever again!! So help me GOD!! I’m too old to recover if I do it again.
Thank you for speaking this truth!