And I just paid off $26k in debt in 54 weeks.
You might be wondering, How does one accumulate that much consumer debt? You might be thinking that’s car loan debt, or debt from student loans.
I Stumbled Into Debt Payoff
In February of 2020 I received a $6k raise at work. My employer paid me weekly at the time, giving me an extra $65 in my pocket every single week, after taxes. I was excited by this prospect. I even opened another account and was funneling my raise money into it. There it would sit until I could decide what to do with it. Did I want to invest it? Did I want to add it to my “Adventure Fund” every week and build that up faster for weekend outings and other fun adventuring for the family? Or maybe I just wanted to save it back for a rainy day.
I got to talking with my husband in March of 2020, about four weeks after my raise kicked in, to get his input on how to use it, and while we were talking I said, “Maybe I should use it to pay down our debt. My personal card is almost paid off and then we just have the Capital One and the AmEx to go.”
I Discovered How Important it Was to See Both Sides
My problem was that I was only figuring in our joint debt and my personal debt. My hubs and I maintain separate bank accounts and then we have a shared checking and a shared savings account where the rent money and our joint savings goes. I also have a couple other personal savings accounts, and so does my husband. We each have personal credit cards. This division in finances usually works very well for us, except that I didn’t have the full picture.
When we got to talking about this raise and the idea of using it to pay down debt faster, I figured I’d ask what kind of debt my husband still has so I could get a big picture idea of what we were still looking at. I knew we had about $10,000 left to pay from our wedding in October of 2017 (from a total wedding cost of about $22,000). And I was frustrated that we hadn’t paid it off faster.
So we sat down together and added up all of the debt from both of us. In my head I thought our total was about $15,000, which was bad enough, but then we added up each card and line of credit.
The actual total? $25,967.22.
This number left me in shock. So much so that I just stared at my Excel spreadsheet, the final number staring back at me in silent, black-and-white accusation. How could this happen? We had been paying off debt, and I only had about $750 left on my personal credit card after over-spending for Christmas. (Side note: I’d just paid off my personal credit card a couple of weeks before Christmas shopping.) I had anticipated having that knocked out by April and then cracking hard at our first joint card.
To say I was crushed, that I was panicky, that I was caught off-guard would all be understatements.
It turns out my husband had three additional lines of credit AND a personal loan from his bank, three of which had balances of around $5,000 each.
Twenty-six THOUSAND dollars, y’all.
How Did $26k in Debt Sneak Up on Me?
Here’s the deal. I always knew I was the saver of the two of us. But by not communicating regularly about spending and balances, I’d only been looking at half of the picture. That left me unable to see what was stopping us from moving to another place. It left me unable to understand why we had so little left over after bills.
Part of the reason this was able to sneak up on us is that we didn’t struggle. We still had pocket money after paying off our bills. But I knew we could have so much more, could do more, if we could knock out the debt. But I was endlessly frustrated that I couldn’t save much more than I was, and it was so. slow. going.
As of March 2020, I started keeping a spreadsheet to track both our debts, and I set up a reminder in my calendar to sit down with the hubs and update the spreadsheet each month to see our progress. It took us about a year to pay off all $26k of that debt.
Not Starting from Scratch Helped
I already had a nice $3,000 emergency fund, and we didn’t need to increase our income to make this work. Thank goodness. But we did need to curb spending on our lines of credit so our balances could go down for good. Now we’re able to look at more important things, like saving for a home, hitting travel goals, and investing heavily for retirement.
What made it a bit hard was the sheer number of lines of credit open. We spread ourselves thinner trying to hit all our minimums. Kyle had an especially hard time since he earns about 40% of what I do, working part-time, and he had many lines of credit open.
I started this blog because I wanted to invite others who may be struggling with debt to pull inspiration from my story, including all its setbacks and mistakes. I also thought it might be a great way for me to hold myself accountable.
Every Journey is Different
My story won’t be like your story. My husband and I are in a financial position to succeed, and I know others have harder struggles. Maybe you’re a single parent or you never graduated from high school or you have a medical condition to contend with. Nobody’s story is like anyone else’s. All I can hope is to inspire you, to give you a window into my journey toward financial independence, and to be inspired by your story as well.