Cash Monies

Fun little fact about me… I hate debt.

I know. I know.  Shocker.  But it’s true.

Although I am sure that no one really likes debt, based on the analysis of Federal Reserve statistics and other government data the average US household carries more than $7,200 in credit card debt alone.  And if you only look at those houses that are indebted, the average credit card debt among these homes totals over $15,600.  According to another source, the worst part is that these averages have stayed roughly the same for over three years, meaning people appear no closer to paying down credit card debt than they were back in 2010.

All of this information tells me that… like it or not, we’re carrying a whole heckuva lot of debt around with us.

And for me, the kicker is this:  according to a creditcards.com poll conducted in early 2013, 85 percent of respondents said they were unlikely or somewhat unlikely to talk with a stranger about credit card debt — a subject more taboo than religion, politics, salary and love life details.

Not only are we in debt, but we’re too ashamed to talk about it.  If the debt were caused by unforeseen medical bills or sudden loss of employment, would we really be quick willing to sweep it under the rug?  I can’t speak for others, but if there were some seemingly legitimate reason, I wouldn’t be so ashamed by it… so in a giant assumption, it makes me think that it’s not something of this nature that’s causing us to rack up credit card after credit card.

According to a TIME article referencing a survey released by the financial monitor Bankrate.com, 28% of Americans have more credit card debt today than they have in a savings fund. That means that if one quarter of Americans even wanted to use their savings to pay off their debts at this moment, they wouldn’t be able to.  And that’s NOT a good place to be.

Something that I found fascinating while looking up some of these statistics was also from creditcards.com and it said that those without credit card debt reported having savings nearly three times greater than average households with credit card debt.

Craziness.

So to me, this points to a pretty good reason why there is such a gap between those with credit card debt and those without – and it seems to be savings.

This may seem like a “duh” kind’ve thing, but think about it… having savings vs. having credit card debt.  Both tend to grow.  Both lead to higher numbers.  Both mean “more” and “bigger” and the only difference is that one is a growing cushion, while the other is a growing deep, black pit.

Anywho – I only brought up any of that, really, to start talking about our current situation.  As I stated at the beginning, I hate debt.  Hate debt.  And I refuse to be one of the statistics and I listed any longer than I have to.

When Studly and I first got married, we had a good bit of credit card and revolving debt.  It wasn’t crazy, but it was probably somewhere around $12,000.  The bulk of this (if not all, frankly) came from paying for our own wedding and honeymoon and also setting up our first home (though we only bought a couch, a mattress set, and a dining room table… the rest of purchased from friends we knew that were selling things).  Regardless of the reason, it was there and we were stuck with it for a while.  Due to our income levels at the time, it took us almost 2.5 years to pay it off (and that included a few situations where we had to add to it because of finances being tight some months).  We had been able to buy our first home during that time as well, but only because of the Hezekiah fund which helped us do so without a down payment (a fact that seemed perfect at the time, but we later regretted).

Needless to say, the day that we paid off our last dollar, I was beyond thrilled!  We went to dinner to celebrate and felt SO free.  I can remember back to that time… it was glorious.  I can’t truly explain to you the feeling, but it really was weightless and so freeing.

From that day forward, we swore we’d never get back into debt like that.  And we did really well!  We saved saved saved and paid for everything in cash.  Anything we put on the credit card, we did so to get the incentives and then we paid hose purchases off the same month.  It was glorious.  Fun fact:  we even paid to fully renovate our kitchen completely with cash.

It.  Was.  Amazing.

And interestingly enough, we were much more choosy with our purchases when we were using cash.  Funny how debt all starts to blur together and you are less frivolous when you are actually pulling cash out of the bank to pay for it.

Then…. this past year happened.

The home that we purchased back in 2008, we lived in until 2013.  Short version: we had some extreme neighbor issues, and decided that we wouldn’t continue to live in the situation, so we rented out our home, and found a rental not too far away.  Preparing the house for tenants after spending a good bit of savings to get into a rental hit our savings pretty hard, but knowing that we wouldn’t be miserable every. single. day. made all of that worth it.  Plus, we knew we’d be able to build our savings back up without too much trouble.  So with little to no savings remaining and now some credit card debt back on us, we set forth to pay the debt down and build the savings back up.

Unfortunately, since we knew we’d be able to do so pretty easily, we also thought that buying a couch was “necessary” because of the layout of the house we now lived in and needing seating for the second living space.  We didn’t go crazy and buy anything stupid expensive, but in retrospect, we should have waited.  This all happened at the end of 2013.

Enter 2014… we discovered that we would finally be moving to Texas and decided that since our tenant’s lease was coming up, we should try to sell the house and get just start over in our new home without any financial ties to the area.  So that meant more money just to wash our hands of the place… we had to prep it to show and sell.  Also, our “awesome” tenants took it upon themselves to do things around the house without asking and/or telling us.  And they were full on proud of themselves for it, too!  What is wrong with people?  The sucky part, we didn’t catch much of this stuff until after we’d said they’d get their full deposit back because we, ourselves, had to do the walk-through since our property management company at the time was absolutely terrible.  So we were stuck footing the bill for everything, which included painting, fixing their deck-staining job and having to suck up the now dented stainless steel refrigerator and carpeting that was “patched” with a piece of non-matching carpeting.  WHO DOES THAT?!

(sorry… movingrightalong)

Then came time for our house-hunting trip.  Due to all of our spending, we knew that we’d take a significant hit with trying to get into a rental in Texas, what with needing to pay a security deposit, application fees, and first months rent all at one time.  But fate intervened and we couldn’t find a rental anyway.  The market for rentals here is so crazy that (and I kid you now) people put in applications on houses without even seeing them first.  Good and notsogood houses, that is.  And we just could not compete with that.

So one day, after quite a rough patch of house hunting… I decided to just have some fun and worked with our realtor to set up a viewing at a house that was for sale.  We had discussed buying and both said we wanted to learn the area better first, so this was really just going to be for fun.  We went to see a house that was way bigger than we would ever need, very nice, and thanks to the Texas real estate market, still somehow within what our budget would be.

And of course… we fell in love.

Enter the cost of buying a home.  Since we weren’t planning on buying, we didn’t really have the money to do so.  But since we were struggling to find a home, period… and since we fell so in love with this house… we figured we would pull from one of our credit lines (which we normally never touched, mind you) to just make it happen.  With our pay not decreasing as we moved into a state without income taxes, we knew we’d have excess money and be able to recoup pretty quickly.  So we made it happen.

Something like 3 short weeks after we move in, Pup got injured and then came the $9000 in vet bills.

We. Were. Strapped.

Neither of us had ever been so strapped for cash.  Not even back when we were single.  And to top it all off, we had already agreed to host Study’s family for the holidays and didn’t even have enough beds for them OR enough chairs for us to even be able to eat together.  So as we slowly started to make the littlest dent in what was now around $28,000 in debt, we’d have to spend more money to uphold something we’d already agreed to (and tickets were already purchased, so there was no backing out, now).

It was really tough.  Very stressful.  And having known what it felt like to be debt free, it was all the more disheartening.  We suddenly felt the weight of it all over again after it snowballed out of control in less than a year.

We made a plan:  buckle down, cut out unnecessary spending, and only get the bare minimum to meet the needs or our impending family visit.  And we stuck to it (which pained my hostess heart, though I knew it was what would be best for us).

Well here we are.  It’s the beginning of February and we’re already had a MAJOR major win.  For those of you who get paid every two weeks, you are more than familiar with he 2 months every year that you get a 3rd paycheck.  It’s a glorious glorious time and it always seems to hit at just the right moment.  Well, for me one of those months was January.  Last month.  And holy goodness did it help.  And to top it all off, I found out that I would be getting a bonus from work as well.  SO unexpected and so so so beyond amazing.  A $1200 bonus, to be more clear.

To recap, in a single month, and the first month post-back-breaking debt culmination, on top of what I would call our “normal” monthly funds to now be put toward debt payoff, I was getting a full extra paycheck AND a $1200 bonus.  GOD IS SO GOOD!

Early in the month of January, we also learned that Studly was getting a raise starting at the beginning of February.  AND I would be getting a 1% increase beginning in February as well.

Guys – I seriously cannot express to you the level of awe we have been in.  God, in his loving and total faithfulness, has met us in this difficult situation.  He has provided for us in such unexpected ways and in a situation that we SO do not deserve.  We got ourselves into this situation with poor planning, the need to instant gratification, and without fully thinking things through from a long-term perspective.  And yet, here we are.

And today I can say with no real way to convey our true feelings about it… that we have officially paid off one entire line of credit, with a value of $5000.  EEEEEEEEEK!!  That combined with our being able to make payments pre-Christmas expenses and by minimizing costs in preparation for everyone coming, we have brought our debt down to $21,000.

There’s still a LOT to pay down, but oh my goooosh it feels so good!!  That’s one huge pile of debt and one entire bill that I can cross off the list.

Our plan going forward is to just continue using a “Debt Snowball” method to knock the rest of it out.  That means, we’ll pay minimum payments on everything except for the smallest total balance, and we’ll apply all extra finances toward that bill each month, now including the minimum payment we would put towards the bill we just paid off.  Then stand back and watch it all dwindle down.

It’ll take time and patience… along with some self-control.  But we’ll get there.

So how’re you guys doing? Any opinions on debt?  Any lucky ducks out there that are living debt free?

~Hope

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Posted on February 9, 2015, in Life, pains, thankful and tagged , , , . Bookmark the permalink. 6 Comments.

  1. OH gosh. Debt. IT keeps me up at night. My credit cards are fairly under control (meaning I used to have $20,000 and I’m down to around $6000 now, and still working on it) and we have a very low mortgage ($433 a month) but my student loans are pure insanity. Over $80K. It keeps me up at night.

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    • Wow. Your mortgage payment sounds like a dream! When I spoke of our current debt picture, it didn’t even include our car loan and/or our mortgage. That is a whole other battle for me. But someday… SOMEday! And student loans. Oh man – 80k is a good chunk. That certainly DOES sound stressful! Do you guys have any kind of pay-off plan?

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      • Well I’m a public servant, so if I pay under IBR for ten years they’re supposed to forgive the remaining debt after ten years. Our current plan is to file our taxes separately, because after the baby comes in June that will show me having an income of around $30,000 and a family of 3 to support (it leaves out my husbands income this way) which takes my payment down to $11 a month (from $500 a month-NOT feasible). I feel kind of bad about it. I told them I could pay $250 a month but they said it was sort of an all or nothing deal, so if that’s the way they want to play it I’m going with the nothing part.

        And we have car loans too, but they’re sort of close to being paid off-maybe another two years? Our mortgage is so cheap because we bought my in-laws house and it was in bad shape cosmetically. They sold it to us for what was owed on it which was 35,000+10,000 for a down payment for them on a new house. Then we took out another $20,000 on it for improvements, so we owe about $65,000 on a $135,000 house. We’re hoping to sell it and move in a few years and buy a house of around $130,000 with a sizable down payment from this one. we’ve put a ton of work into it and only have the nursery and the master bathroom to do before we can say “completely remodeled!”

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      • Wow – that’s incredible… both about the loan AND about the home. Good for you!!

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  2. Being debt free is such a great feeling! Keep up the hard work! 🙂

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