And Just Like That… I’m Debt Free

About 18 months ago, I set this crazy goal to become debt free, while working less. Today, I can report that I’ve reached my goal. As of Monday, July 15, 2019, I am debt free. You might wonder how I did it? I’ll explain in this post.

My History of Debt

I never accumulated much debt until I became an adult college student at the age of 30. My first couple of years of community college were paid by grants. But when I went on to a university, I had to depend on student loans. By the time I had earned an M.A. in Communication in 1999, I was $44,000 in debt. However, I wouldn’t trade my student loan debt for anything. It was my degree that helped to me get to where I am today.

As I was finishing my grad-school work, I got married. Guess what? That created more debt. We needed furniture and a new car. And then I got a job across the country. We moved via the help of Visa. By 2003, I was $60,000 in debt. But I was a fighter. Throughout 2003 and 2004, I was able to pay off everything but the student loans. And I paid a good chunk of those off, too. I was back down to about $35,000 of debt by the fall of 2004.

The Other Big-D Came to Town

Things were looking good. I was kicking debt in the ass. But there was trouble in paradise. I wound up in a five-year divorce and child-custody case. Cha-ching. Cha-ching. By 2007, I was back up to $60,000 in debt. Damn. But again, I wouldn’t change it. I was able to protect my daughter.

Meanwhile, several friends and colleagues kept trying to convince me that I should buy a house instead of renting. I was hesitant. I also never expected that I could get a home loan when I was already up to my eyeballs in debt. But after my divorce finalized in 2011, I started considering the idea of becoming a homeowner. In 2013, I bit the bullet and bought a $144,000 home. That came with more needs. More debt. A total of about $220,000 by 2016. And no matter how I tried to get out, I kept going deeper into debt.

I worked overtime to keep up with payments. I thought I was chipping away until I had to replace my heater and my air conditioner. Next, it was a leaky roof. Every time I thought I was getting ahead, something would come up and I’d have to get out the old credit card. It was making me sick.

The Decision to Take Action

I knew that my best recourse for getting out of debt was to sell my house. So in the spring of 2018, I called my real-estate agent. He convinced me to refinance instead of selling. That helped me get rid of about $20,000 in high-interest debt. But it still didn’t sit right with me. It still felt like I was up against a giant. My monthly income versus my monthly outgoing bills left me with no wiggle room.

It looked like this:

  • Mortgage: $1100
  • Personal Loan: $500
  • Car Payment: $300
  • Credit Cards: $100
  • Utilities: $200
  • Gas: $100
  • Food: $400
  • Phone: $150
  • Karate: $100
  • Orthodontist: $100

My monthly net income was just a little over $3000. If you do the math, you’ll see there wasn’t much spare change. In fact, every time things got a little tight, I’d reluctantly borrow a little more.

As I watched the real estate market continually improving, I saw my chance. After all, I was only one year into a 30-year loan. I owed about $160,000 and I could sell for $230,000? The math looked good. So I took action. I put my house on the market, secured an apartment, and the rest is history.

Leftovers Are Good , Too

And now I can enjoy a few leftovers. I’ve increased my monthly cashflow by about $800 by selling my house and going back to renting. And my apartment is a little nicer than my house was. I get that leftover money to do with however I want. I have to say that much of it is already tagged for use. Here are some things I’ll be adding to our monthly outgoing cash.

  • Extra to retirement: I’ll be adding $300 extra per month into my retirement account. That will boost my contributions to about 16%.
  • Oboe rental/lessons: My daughter has been playing oboe in band for three years. Her new school will only allow kids to play in concert band if they play in marching band. But marching band conflicts with karate. So we’re opting for private lessons and the local youth symphony-orchestra.
  • Karate/gym: Annie will continue karate. I’ll either get back into karate after a year’s break, and/or sign up for a local gym.
  • Dog grooming/care: We’ll be pampering Shep a little more to keep him fresh. He’s now an indoor dog.
  • Stock investments: I’m currently researching different avenues for investing in stocks.
  • Travel: You can expect a few more adventures for my daughter and me.

It’s a Brand New Journey

Living debt free is exciting. The goal will be to stay debt free, and to continue to simplify, while preparing for the next step of the journey. I’m not sure exactly what that step will be. Maybe the ocean? Early retirement? St. Louis? Buying another home? I’m still trying to figure that out. Time will tell.

I encourage you to start your own journey to live debt free. If you do, I think you’ll be glad.

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James Ewen
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