As I mentioned in Part 1 of my story, I graduated in December 2007. Surprisingly, I was a reasonably responsible college student. Granted, I had few assets (how many college students have real assets?)… but I also had little debt.
I got a $60,000 job, and thought I could afford a bunch of stuff. So, I went out and bought… well, stuff. About a year-and-a-half out of school, my wife and I found ourselves $100,000 or so in debt.
The “straw that broke the camel’s back” was when I borrowed $5,000 from the bank to help pay for a part of our wedding. Not more than a month later, I wrote a $5,000 (plus interest) check to the bank to pay off this loan.
This really was stupidity at its best. Borrow some money, pay interest, then pay it back.
The $5,000 bank loan is the memory that I feel is most idiotic. But, gradually, I started to feel that all the debt I carried was idiotic. Borrow some money, pay interest, then pay it back.
So, I Google’d how to get out of debt, found some fantastic personal finance blogs, and began my financial journey.
Along the way, my wife and I made two more stupid decisions. We bought a house that we shouldn’t have. (We still live in it today.) And we bought an SUV that we didn’t truly need. That was in April of 2011 (buying the SUV, that is). We ended up paying the $27,000 SUV off in 1 year and 5 months.
And my memories from the $5,000 bank loan came back. If we saved up for a year and a half… if we waited to buy, we could have bought the SUV outright, not paid the interest, and maybe even paid less by using cash.
When we paid off the SUV, it was our last debt (not including the house). And we vowed never to go back into debt again. So far, so good.
Since paying off our debt in September 2012, we put together a $30,000 emergency fund and have boosted our retirement savings to nearly $100,000. (To be fair, we have always saved a little toward retirement throughout the years. But we made significant progress over the last year and 3 or so months.)
I mentioned in my Part 1 post, that my daughter was born in December 2009. My son was born a couple of years later in November 2011. With an emergency fund in place and our retirement savings well underway, we finally began saving for college for our two kids.
And soon enough, we will pay off our house. And most likely, move back to our hometown closer to family.
We’ve journeyed a long way so far. This blog will provide some general advice about how we’ve come as far as we have. And it will be a journal for the rest of our journey.