We were doing everything right. From earning good grades in high school to getting into a well-respected college. In the gaps between parties, we studied diligently to get through courses, obtained the degrees required to land decent jobs, and launched ourselves into the “real world.”
Old beater cars were traded in for new ones; we deserved them. We got engaged and got a cute golden retriever puppy to prove that we could actually keep another living thing alive.
After getting married and having a baby, a larger house was purchased – one with “enough space” to raise a family – a proper home.
We had a second child. We enrolled our children in a top-notch preschool. A floor-to-ceiling kitchen renovation. Another brand new car. And on and on.
My wife and I, at 31 and 33 years old, found ourselves living paycheck to paycheck and had somehow racked up nearly $30,000 of soul-crushing debt – in addition to two mortgages.
Over the course of several years, we had trapped ourselves under a plie of suffocating monthly payments. Endless recurring monthly fees amounted to a large portion of our paychecks leaving our account almost before it had even arrived. Although we were able to make all of our monthly payments on time without fail, it wasn’t a comfortable place to be.
Simple questions such as, “Do we have enough money for me to buy clothes for work?” quickly turned into arguments. Conversations about monthly bills were either nonexistent or unproductive at best.
Although the life we had built for ourselves projected great curb appeal, the day-to-day stress of maintaining it was accumulating exponentially. But how much would our freedom cost?
Time For a Change
Relief finally presented itself in the form of a financial education course held at our church. Childcare was included as well – a welcome two-hour break each Tuesday night for nine consecutive weeks.
We arrived on day one, workbook in hand, eager to showcase our financial expertise. What we found, however, was that each of the other six couples were experiencing situations that were strikingly similar to our own.
The Balance Sheet
The real work began when we were assigned to return with a completed monthly budget on the second week. Adding up all of our debt on paper proved to be a gut-wrenching task. It hurt.
How could I have allowed this to happen to our family? The total was simply astounding to me. I could literally feel the air being sucked out of the room as I presented my wife with the grand total.
Our First Budget
As our debt stared up at us from the sheet of printer paper on which it was recorded, the next startling realization was that, in over a decade together, we had never completed a real budget. Ever. We had yet to proactively plan what our dollars should accomplish for us. Instead, we had always reactively attempted to cover our prior spending decisions with each paycheck.
We set out to do just that, giving every dollar a job for the month.
The largest black hole into which money had seemed to simply disappear was our spending in restaurants. After tediously sifting through and categorizing spending for the previous three months, after checking and double checking math, a sum of $1,200 per month was the average. Could this actually be correct?
$1,200 was the cost of being “too tired” at the end of the day to cook food we already had at home. Trips to fast food restaurants on most workdays were, little by little, contributing to an annual aggregate of $14,400.
The silver lining to this realization was that we could pay off half of our debt in a year just by not eating out!
We identified many other areas in which we could reduce spending in order to payoff debt. Every recurring monthly fee was ruthlessly evaluated. Gym memberships were cancelled; instead, we worked in the yard, rode bikes with the kids, and Melissa joined a (free) workout group.
Our $140 cable bill was cancelled and replaced with a good old-fashioned antenna for local channels and a much less expensive Netflix subscription – an immediate savings of $125 per month. Credit cards were replaced with cash for our more discretionary spending categories, assuring that we would be more likely to feel pain as actual dollars left our hands rather than mindlessly swiping a card and counting the costs at a later time.
On the opposite side of the equation, we increased our income as well. There’s always a great place to go when you’re broke – to work.
By simply adding an extra day onto my usual 3-day week, I was able to increase my paycheck by greater than 33% after overtime rates and shift differentials were calculated.
This is one of the many unique advantages afforded to nurses along the path to financial independence. Even though I worked overtime most weeks, I still enjoyed a three-day stretch away from work every week.
Finding a Lot More than Money
Over the next several months, interesting things began to happen to us as a family.
We inherently spent more quality time together while cooking meals rather than getting takeout three or four nights per week. Because our efforts were focused on the same target, disagreements and fights about money became fewer, allowing us more time to concentrate on simple things in life with true value.
Budget meetings became less of a chore and more of a necessity. They naturally led to more open dialogues about how to make our hard-earned paychecks work better and smarter for us.
Life After Debt
With a boost from a large tax refund and a paycheck that included overtime hours, I made the final payment on February 24, 2017, a little more than a year since we’d started our journey. I stayed up until midnight that night; I knew the check would show up in my account at 12:01 a.m.
A few clicks later, it was done.
I soon realized that it didn’t feel much different to be officially debt free (aside from the mortgages) than it felt the day before. The real shift had occurred incrementally along the climb out of the hole rather than at the end with the final step. The true advantage is that sizeable portions of each paycheck now go toward funding our future dreams rather than past decisions.
We had bought our freedom.