Jackie at the Debt Myth has started a movement and I am joining in! Debt can be insidious, but it doesn’t have to be forever. My personal story is still writing itself and I’ve been on a few different sides of debt so far.
My Debt Story So Far
Thanks to my parents and working up to 60 hours a week during my last year of college, I didn’t start off with student loan debt. But I did get a shiny car loan in 2005 as soon as I had my first real job a month out of college. It wasn’t a huge loan, $11,000 over 5 years, but that was nearly half of what I made per year after taxes. My new husband and I made the conscious decision to pay it off as soon as possible, and ended up doing just that a few months after we bought our first home in 2007.
So, goodbye to car debt, but hello to a 15-year, $92,000 mortgage. We made the decision to pay that off faster than necessary too, but while we were doing that, we took on another car loan for 5 years at $16,0000 on a vehicle for my husband in 2008. Oh, and we also took on a $6000 0% interest loan on furniture, but that was set aside in cash in advance…we were just taking advantage of the 0% loan. I never consider our loans like that that as real debt since it is strictly a payment method. BUT, that still left a mortgage and a car loan on our plate.
In 2010, we paid off the 2nd car loan. That means we were debt free except for a mortgage! To many people, that’s debt free. I don’t see it that way. It’s not evil debt or anything like that – not the same as high interest debt that sucks all of your extra money away – but it still means you owe somebody something before you own your property outright. “Bad” debt and “good” debt probably exists, hence billionaires still running lines of credit and whatnot. But for my personal life, debt is debt, and mortgage debt is just the lowest priority debt.
At the end of 2012, we had less than $30,000 left on our first mortgage, YET we bought our new house anyway. So to re-hash yet again, in November 2012, we had a $26,000 mortgage at 4.5% AND a $208,000 mortgage for 30 years at 4%. We paid off the remainder of the first mortgage in the beginning of 2013. Only one mortgage to go again, right? Yeah, then my Chevy Aveo started dying on me, and I bought a new Honda Fit. That was a 0.9% loan for another 5 years.
Currently, at the end of January 2015, we have $199,500 left on the house mortgage and $14,000 left on my car.
My Debt Isn’t Forever
It feels odd to say this when I seem to be a great example that debt just is a way of life, BUT it doesn’t have to be. From 2005, I have had debt. It was only mortgage debt from May 2010 through April 2013, but it has been debt. Yet, I am also living proof that it doesn’t have to last forever.
My husband and I paid off a whole house in less than 6 years. We paid off two different car loans in less than 2.5 years each while working on mortgage debt. Our plan is to pay off our current home in 15-20 years total but we’ll speed that along when possible.
Side note though, we’re not going to be paying off my current car faster since our investments are actually making more than 0.9%. I’m fine with paying $356 total in interest over 5 years.
Detrimental, money-sucking debt CAN be slaughtered. We’ve done it in a combination of ways. We’ll continue tackling our money problems in the same ways.
Actual Debt-Killing Methods We Have Used
Here are ways we have increased our income over the years:
- Blogging – my current main job along with other online, blog-related work, which is my husband’s job too. BFS has brought in $80,000+ by itself in the last 5 years, obviously some years have been more lucrative than others
- Pet sitting – my current side hustle, which brings in about $1000 a month
- eBooks – My two eBooks still bring in about $20-$40 a month
- Sports officiating – my hubby’s current side hustle and averages $1000 a month during varsity football and softball seasons, he’s been doing it for more than 10 years
- Baby sitting – I do this on and off for $10-$15 an hour
- Sell your stuff – we’ve made a couple of hundred off and on over the years
- Cow mascot – a past hustle of mine for $10 an hour
- Rent out a spare bedroom – we’ve done this on and off over the last 8 years, makes about $600 a month
- Sold my hair – yep, one of my 18 inch ponytails sold for $102
- Work part-time on the weekends – I worked for a book store for $8 an hour
Here are ways we have decreased our expenses at one time or another:
- Budget – we’ve had a budget for about 15 years now. It keeps us on track.
- Prioritize – figure out what you value and what doesn’t matter
- Cut luxury expenses like house keeping, cable, eating out, etc.
- Switch to cheaper alternatives and find the best prices – we’ve done this for electricity, travel, our cell phones (saving nearly $100 a month), groceries, and nearly everything at one time or another. Search engines make price checking easy.
Join the Movement
Join the “Debt is Not Forever” movement! Head over to http://www.thedebtmyth.com/debt-is-not-forever/, share a photo of your “why”, take a stand against debt, and encourage others to do so too! You can tackle your debt too!