For the last few months I’ve shared the breakdown of our monthly budget, as well as what we pay each month towards our debt. I don’t share these because I want to boast. Goodness knows that’s not the answer. I share these because it is a way for me to keep track of our finances, both savings and spending, as well as seeing what accomplishments we made over the course of the year. I share these so that you’re able to see a real-life example of how one family is working with what they’ve got to reach a goal. But at the heart of my blogging is a simple way for me to track the ways I’ve saved and show how we’re getting out of debt.
Our debt. I haven’t talked much about it. I shared a little bit of how we got here and where we’d like to be in the future, but other than that, I just don’t talk about it. We didn’t go into debt through extravagant vacations. We didn’t feel the need to the newest iPhone, high definition TV, or car so we could keep up with the neighbors. We didn’t even go into debt trying to keep up on our bills. Our bills were always paid on time and we always had money to eat. That’s not how we got into debt.
No. Most of our debt was because Hubs and I got an education. A large portion of our debt is our student loans. And if you combine the balances on Hubs and my student loans, it’s more than our mortgage. {I’m still debating whether I will post what our total balance is.}
So here’s what I refer to as Our Big Three:
Student Loans
Undergraduate and graduate degrees for both Hubs and I. We did each have graduate assistantships, which waivered our tuition for 2 years. If we didn’t, our student loan balance would be a lot higher than what it currently is. However, a good chunk of my current balance came from interest capitalization on my loans while I spent 4.5 years in graduate school and 2 years of repayment in economic forbearance. For a few years I couldn’t look at my balance. I would get nauseous, be unable to sleep and start having panic attacks just thinking about how much money it was.
A lot of my anxiety stemmed from the fact that I was in the middle of my graduate degree when the economy tanked in 2008, and I was worried that I wouldn’t find a job. At the time, I was told not to worry; I’d find a job. I was told that a teacher entering the work force with an advanced degree and children was desirable among school districts because the district wouldn’t be paying for my maternity leave or an advanced degree.
But when 2012 came and I had graduated, a booming economy and growing work force simply wasn’t the case in our area. Teaching positions were being cut, and new openings were being filled by currently tenured teachers in order to keep budgets down. Four years later, this cycle is still the case. State budgets cannot be agreed on, school budgets are slashed, property taxes are rising, and many positions are still being cut. This cycle is not just limited to teaching positions either.
Mortgage
We bought our house in 2014, and it has actually saved us money. Sounds backwards, doesn’t it? We live in the heart of the Marcellus operations in Pennsylvania. At its height, we were paying $805 per month in rent for a 3 bedroom, 1 bathroom half double house with an unreliable heating source. The place had 6 rooms total. To say it was cramped for 4 people is an understatement; fitting 5 people there was just insane.
But it was the only available place when we moved to the area after graduate school. We were looking for places to rent months in advance, and were just fortunate enough that the gas workers were evicted not long before my husband called the landlord inquiring about a separate rental.
If you’ve followed my monthly budgets, you know that we’re currently spending $500 per month on our mortgage. We bought a 4 bedroom, 1 bathroom house ranch house. It has 12 rooms, a garage, and over 1.5 acres. There’s plenty of room for our family, and plenty of money left over after payments {and even saving for taxes} to help us reach our financial goals.
Credit Cards
When we started getting serious about our finances, we had 6 credit cards, 4 with balances on them. Currently, we still have the 6 cards, but just one has a balance remaining: my credit card.
The balance was run up via gas purchases and car maintenance while I was commuting long distances to finish up my graduate degree. I was commuting 160 miles round trip, five days a week to one university, and 240 miles round trip to my second university occasionally. I also was driving 260 miles round trip each time one of the boys was sick since doctors local to us were no longer accepting new patients on the insurance we had at the time.
What’s left after those three…
Car Loan
In 2008, we had two clunkers that we had put so much money into. Between head gaskets, two alternator changes, and a new engine in 2009, by the time the heater core went in 2010, we were done. We were tired of putting repairs on one credit card, and tired of worrying whether the car would leave us stranded somewhere again, let alone start when we needed to go somewhere. Rather than put the money back into the cars, we took out a loan for a new car. In 2011, we found out we were having Lady Bug. We sold that car {for the remainder balance on the loan} and took out another car loan. This is still the car we have today.
UPDATE: As of June 2016, our car loan is paid off!
But I know that I’m not the the only one out there in this situation.
We’re digging our way out as best as we can, while still paying all the bills on time. Since I became a stay-at-home-mom at the end of 2013, it’s taken a lot of learning, a lot of cut-backs, and a lot of creativity. But we’ve come a long way from where we were. And I’m still learning along the way.
That’s why I’m blogging about our debt repayment and monthly budgets. Yes, it is a way for me to keep track of what we’re doing to get out from under out debt. It’s also to show how far we’ve come. If I had started this blog back in 2010 while I was still in grad school and commuting insane distances, our spending would be a lot different than what you see now.
On the flip side, this blog is also about helping you. So what if you’re not in as far as we are, or you make more or less. I don’t care if it’s $500 or $500,000 in debt. Being in debt sucks. And I want you to see that if we can pull ourselves out of a mountain of debt, whether it’s 5¢ or $5 at a time, it’s pulling ourselves out.
And you can too!
I’m in the same boat. Though my debt is not because of student loans. I’m actually just going back to school now. Only working on my associate’s degree but I didn’t really enjoy school for a long time. Got out into the workforce for the past 10 years and finally decided it was time to finish one degree. If it couldn’t be a bachelor’s yet, at least let me get an associate’s! My debt comes from a few big purchases that didn’t really need to be made. My current debt stands at around $3000. We also work on paying off my mother-in-law’s mortgage which is thankfully only at around $16,000 to finish it off. And finally, we’re in savings mode. We’re working on a $400,000 savings to be able to pay for a house. I’ve worked up about 1/8 of that total, but am still working toward it. At this rate, it almost feels like I’ll never get there. But hard work, determination, it all pays off!
You’ll get there! You are absolutely right, hard work and determination will pay off. It’s a mindset change, which is the toughest part. There’s nothing wrong with waiting to get your degree; sometimes I wish that’s what I had done rather than just trudging on for our Master’s with young kids at the time because “university was what we knew”. That was seriously our reason! Our combined debt, including our mortgage, stands around $273,000. It’s still a daunting number, but it’s one that makes me no less determined. We’ll both reach our goals!