The Story of Our Debt
The story of our debt isn’t a very interesting one. I don’t have hundreds of thousands of dollars of debt. We didn’t go out and run up credit cards, purchasing things we couldn’t afford. The story of our debt is rather mundane, but it’s debt we no longer want or feel comfortable having.
Our debt falls mainly into a few essential categories. There are a couple of unnecessary debts, but I will account for those as well. We have a mortgage, a vehicle, a student loan, and medical debt. The unnecessary debts would be a credit card and another line of credit I took out to buy a computer. I call these “stupid tax” (as Dave Ramsey would say) and I of course regret those two greatly.
What We Owe
The House
We owe roughly $129,000 on our house. Compared to other places where the cost of living is higher, this isn’t a huge amount, but it’s still the bulk of our debt. However, we dream about downsizing in a few years. I would love to walk away from the sale of this house owing to the mortgage company nothing. That way, we could purchase a smaller home with cash. Paying off our mortgage is a high priority for us.
The Car
I drive a 2016 Hyundai Elantra. I’m excited to share that we only owe $4000 on this car. It will be paid off this year. This will free up $300 extra a month that we can apply to paying down other debt. This car is good, reliable car, and once it’s paid off I have no intention of going out and buying another. We have kept up the maintenance on this vehicle and it should serve us well for many more years. I see a vehicle now as just a means of getting from point A to point B. I don’t feel as if I have to impress anyone with what I drive, nor do I have to drive the latest and greatest. Having no car payment is going to feel absolutely wonderful.
The Student Loan
I regret ever having a student loan, but at the time it was the only way I could afford to get my degree. Not the only way, of course, but I was working a full-time job as a teacher assistant by day and attending school by night and in the summers. My salary was a meager $8500 a year and not enough for me to pay outright for college. What I do regret was having to prolong these small payments over years and years. I owe $9000 and my student loan will be paid off. This, along with the car, is a major goal for completely paying off as soon as possible.
Medical Debt
Medical debt is something I never factored into being an adult when I was younger, but the joke around my house is that “I turned 40 and fell apart”. Four years ago at the age of 42 I had the unfortunate experience of having heart bypass surgery. A gallbladder surgery followed that two years later. Every year I must have expensive testing for my annual checkup. Thankfully, I have medical insurance, disability insurance, and salary protection insurance, but we are always and forever paying medical bills. This may just be a fact of life for us. However, being able to pay it off faster would be a huge help.
The Stupid Tax
Two things I am not especially proud of about the story of our debt is my husband’s credit card and my line of credit with Dell to purchase a computer. A few years ago we were “cash only” and had no credit cards. However, it turns out unless you can buy a home with cash outright, you need credit to purchase a house and my husband had no credit. I did because of my student loan and car loan. We balked because it seemed ludicrous to go into debt to create credit, and it is. But we played the fool and got him a credit card with a small limit with the intention of paying it off each month to build his credit. And we did just that for a while. Then emergencies came up (AKA- this is why you need an emergency fund) and the balance just kept increasing.
I also needed a new computer at home because mine died, and it is essential for my work. So, not being able to afford to go and buy one outright, I took advantage of my good credit and financed one. Genius, right? The interest on this and my husband’s credit card is absolutely awful and we have only made small strides in paying these down. But, we are angry and fired up to knock this debt out as well.
The Story Of Our Debt
The Story of Our Debt
So, as you can see, the story of our debt is rather boring. We won’t have some incredible story about paying off hundreds of thousands of dollars in 5 months or anything like that. In total, we owe about $150,000. That’s too big for my liking and I’m ready to write another story. I don’t want debt to be the legacy of our family.
I started this blog to keep myself very publicly accountable for paying off our debt as quickly as we possibly can. It is here where I will share the good and the bad, the lessons learned, and hopefully offer a little encouragement to others who may be in a similar position. I am not a financial guru or obviously I wouldn’t be in this mess. We are just an average middle-class working family finally trying to get it right.
