"I'm Debt Free"

(from the Animal Crossing soundtrack)

I've crossed another thing off my list!! This one is super exciting for me, & I've been waiting a LONG time to say it:

{except for the house}

I cannot tell you how excited I am to finally say that! I feel like a huge burden has been lifted, and it is so incredibly liberating. I know that I have mentioned this burden before, but I haven't told the entire story (though I've said bits & pieces in my "Through the Years" series). So partly for you & partly for me, I want to tell about our journey. As any story should be told, I'll begin at the beginning...

Before Chris & I got married, we had read through Larry Burkett's "Money Before Marriage". We set up a budget, used the envelope system & only used credit cards for major car repairs. In our first two years of marriage, the most we had on a credit card was about $1,500 for a transmission. Then we bought our house, and that was our only debt for the next couple of years. When we finally had the extra money in the budget for a car payment, we bought a van. (We had been sharing a vehicle for a good portion of our first five years). Then a year or so after that, we bought a new car for my mister. We were slowly "becoming a slave to the lender". At some point along we way, we started using one credit card for most of our purchases, but we paid it off every month. {The reason we started doing that was because we earned points that we would redeem for gift cards that allowed us to go on free dates! It's not something I'd recommend to anyone, but it worked for us at the time.}

The real problem began with the move...We sold our house to a good friend, but there was about a month between my mister's last paycheck & closing on our home. Since we were in the habit of using our credit card, we simply continued to do so at that point. Christopher had joined a band & started his own business, so he needed a new bass, amp & computer. By the time we actually moved, we had already racked up a month's worth of expenses and his new equipment ~ all on credit cards. Rather than paying those expenses off with the proceeds from the sale of our house, we stuck the money in a CD that we had to keep withdrawing from in order to pay our car payments & anything else that we couldn't charge on a credit card. That money ended up lasting about a year.

For most of that first year, we lived at my dad's house. That helped us cut down on expenses, but it was never intended to be a permanent situation. We found a place to rent before the new school year started, but the added expense of rent didn't help our debt situation. I wasn't real concerned about it at first; but the more time that went by, the more we saw the debt accumulate. Clients didn't always pay on time (or at all), and there were unexpected expenses that would arise here & there. We saw many times when God provided miraculously, and it was truly an awesome experience.

For some unknown reason though, there were many times when that wasn't the case. I can't explain it, because I know how God feels about debt. I simply know that we would wait until the last minute, hoping that invoiced payments would arrive in the mail. When that didn't happen, we would use a "convenience check" to pay for whatever was due. We also played the "balance transfer game", where we'd get a 0% interest offer & transfer the balance from a card that had a higher interest rate. I can't even tell you how many times we did that!

We honestly didn't spend extravagantly during this time. The one splurge I can definitely name was LASIK for my 30th birthday. Other than that, the biggest "extras" were our "family fun" events on Saturdays & eating out a lot of Sundays for the first couple of years. {That can add up to a couple hundred dollars a month pretty quickly!} My main mistake was not budgeting. I had always been a budgeter up to that point, but it's a lot easier to do that when you actually have a dollar amount to budget with!! So I regularly spent more than I should have on groceries, household items & the dreaded car repairs!

In the Fall of 2007, we took a Financial Peace University class. We had known Dave Ramsey's principals, but it was incredibly helpful to really learn how to put them into practice. {He even had a few suggestions for those of us who were self-employed!} And it was amazing to see God's blessing once we truly made the commitment to be debt free! We stopped used credit cards & made a budget based on the least amount of money that we thought Chris would earn each month. In the Spring of 2008, Chris & Freddy sold their company and went to work for the company that bought them. We were able to pay off about 1/3 of our remaining debt at that point, which was awesome!

Little did we know that Chris would get diagnosed with cancer that Fall, and we would have a HUGE tax bill the following April (for the year that he had sold his company). We ended up having to rely on debt with those two little "hiccups", but we explored every other option beforehand. I even checked Dave Ramsey's site when we got the tax bill! [For the record: he doesn't want people in our situation to be tempted to use a credit card for that, because you can work out a payment plan with the IRS. The government's interest rate is pretty low, but our credit card's interest rate was less than 1/2 of theirs. So we did end up using a card. I think he'd be OK with us paying less interest, though!]

{One other thing that we didn't do quite by the plan was buy our house almost two years ago. We had been renting for four years, and the tax credit that year was too great to pass up! Plus, we got a great deal on the house, & the payment isn't much more than we were paying in rent. Now that we're out of debt, we'll continue with the Baby Steps & get the house paid off as soon as possible!}

So here we are, nearly four years later: DEBT FREE (except for the house), having paid off somewhere in the neighborhood of $72,000. That total includes two cars (we still owed around 1/3 of the original loans at the time of the FPU class), LASIK, part of our living expenses for 2-3 years, a hefty tax bill and medical expenses. Now that the burden is lifted, we have started on Baby Step 3: Build our 3-6 month emergency fund. Once we have that built up, we should have money in the bank to handle any future emergencies so there'll be no need to rely on credit cards. Ever again!

I didn't say all of that so you can think we're so great because we were able to pay off so much. Without God's help, we would not have been able to do it. Throughout our journey, my faith has grown tremendously. There were times along the road when I really felt like it was such a huge burden & I couldn't take any more. I would go through the numbers & try to figure out a way that we could cut more from our budget (sometimes obsessively). I would eventually get to the point where I knew there was nothing more that I could do. And it was in those times that I would cry out to God, and He would answer me. Sometimes, it was through a part-time job literally falling in my lap that would still allow me to be home when my kids were home (except for one job that I had for a few months when Cody was still a pre-schooler, but he stayed at home with his dad). Other times, He would use His people to bless us financially or show up at our doorstep with bags of groceries. And still other times, there would be a surprise check in the mail (for example, a year after our move we got a refund from our homeowner's insurance. Turns out, it had been paid out of escrow two weeks before we sold the house, so we got nearly an entire year's worth back!) Also, it had never even been a thought in our minds for Chris & Freddy to sell their business, and there's no way we can deny that God's hand was in that (especially considering the whole cancer thing that came up only six months after he started receiving way better insurance benefits). And there was a little photo contest that we somehow won, even though there were way better pictures than ours! {Thank you again to all our friends who voted & reposted on facebook!!} I could go on, but I think you get the point. I simply can't tell our story without giving Him the glory He is due.

One more really neat thing before I go...I just have to tell you about the money that allowed us to pay off our last bill today! It came from a client of Chris & Freddy's, and this client also happens to be a friend! His name is Bob {respect the 'stache} & we volunteer in the student ministry together. He & his wife have two beautiful girls that I love!! {they're a couple of the teenagers that I get to hang out with at church!} Bob is also an insurance agent who is endorsed by The Dave Ramsey Show. I thought it was pretty cool that our last remaining bit of debt was paid off because of a Dave Ramsey ELP and a friend! How cool is that?!

Believe it or not, this is an abbreviated version of the story! Thanks for sticking it out through this rather lengthy post. I hope it has been encouraging for you if you are still on this journey. If we can do it, anybody can!



Amy... that is just awesome! Congratulations! We are also on this journey and reading your success story is so encouraging! Thank you! :)
Brooke said…

i'm so happy for you! :) and of course a big "Praise the Lord from whom all blessings flow"e
Great story of God's faithfulness shown as long as we first strive to be faithful. God doesn't expect perfection,but He does expect us to "act" upon our trust!
Thanks for sharing....deb
Laura said…
Thanks for sharing! It is way encouraging to hear stories about how other people have conquered debt. Now you gotta throw a party! ;-)
Amanda said…

This is just amazing Amy!

God is GOOD!!!

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