At the beginning of 2017, my goal was to get both my husband and I completely out of debt by the end of the year. We started the year with approximately 27,500 in student loan debt, and approximately 2,000 in credit card debt, for a daunting grand total of $29,500 of debt. We have both been out of college for close to 6 years now, and have slowly whittled away at our student loan debt over the years. We’ve paid the minimum payments monthly for the most part, with the occasional larger lump sum payment we were able to sock away from bonuses, wedding/holiday gifts, etc.
I have said year after year, this is going to be the year we do it. The year we finally crack down and wipe out most of our debt. And year after year life has gotten in the way: vacations, moving, losing jobs, making large, not-well-thought-out purchases, etc. The list goes on and on. The excuses go on and on. I had an a-ha moment though at the beginning of this year. We are very close to our 30th birthdays. And what do we have to show for our 20s financially?
We both have bachelor degrees from an excellent school, and, while very costly, I wouldn’t trade them for the world. We both have jobs we enjoy. And we have some nice photos from the wonderful vacations we have taken. Also, we got married. But that’s pretty much where the positive list ends. We have been renting apartments now for close to 11 years each, with the idea of buying a home barely on our radar at the beginning of this year. We had very little retirement money saved up. We had an emergency fund of exactly $503. Which would not have gotten us very far in the case of an actual emergency. And we had $29,500 in debt. Most importantly, we were unhappy with our financial state. We felt like we were pinching every penny, and still had not come very far on the road to financial freedom. We could just barely see the beginning of the road through a telescope.
Over the past 5 years of trying to adult, I can honestly say that we had more failures than successes. We repeatedly overdrew our checking account. We relied on credit cards without a second thought for everything from paying for vacations to splurging on that $400 jacket that is still hanging in my closet with the tag on. We got ourselves into and out of $10,000 of credit card debt. TWICE. I try to live with no regrets but knowing that 20k could have helped us pay off our student loan debt years earlier ties my stomach in knots.
But throughout the years, despite all of our failures (and probably mostly because of them), we learned. Boy did we learn. We learned we need to make a budget. Even more importantly we learned we need to stick to said budget. We learned that we have a need to spend money on ourselves every now and again. And we learned to put that in the budget. We learned that waiting to buy something until we actually had the money was way more gratifying than putting it on a credit card. Well, we’re still perfecting this one. We learned the importance of automating our savings and investing. We learned how to treat each other as teammates rather than adversaries, and how to talk to each other about money in a way that is non-confrontational (although my husband can attest that I am still known to overreact to that unexpected $0.99 iTunes charge). Put it on the budget if you want me to remain calm!
We didn’t get 100% of the way to achieving the goal I had set out at the beginning of the year. But we came pretty damn close. Our student loan debt has gone from 27,500 to 3,000. And our credit card debt is down to 1,000. I anticipate being able to pay this off by early February of 2018. Our net worth increased by $50k this year. Suddenly buying a home in the next few years seems feasible. Was it a challenging year? Yes. Did we do everything in our power to achieve our goal? Probably not. Was this year still life-changing for our financial future? Absolutely.
In my next post, I will begin to delve into our successes and failures with budgeting. I hope that our failures can help you from making the same mistakes. And most importantly I want to open the conversation about money. It’s such a taboo topic, to the point that I do not tell my own family about raises or debt, and I have never shared with them my income. The more we talk about it, the more we can learn from each other. I hope you enjoyed reading, and I would love to hear your stories!