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We're Debt Free!

Two and a half years ago, my wife and I moved into our new home. After that move, we had one goal. That was to get rid of our consumer debt.

We started out by paying $700 extra on the one consumer loan that we had. It was a student loan that totalled somewhere near $32,000. Yeah, I couldn’t believe it either. Somehow, I managed to ignore the fact that I was that deep in debt.

I also started this process by reading Dave Ramsey‘s book “The Total Money Makeover.” While reading it I felt pretty good. I had not car loans. Our credit card was paid off every month, and I felt that I was on the right track.

Then came the section on Student Loans. That when it hit me hard that I was not different than other people. Sure, my interest rate was less than most. But the reality was that it was still that terrible four-letter word, DEBT.

Eventually, through pay raises and some other tightening of the proverbial belt, we started to pay $1000 every month towards the student loan. We also used the tax refunds and part of a company bonus to help us pay down our debt.

Finally on April 15 2008, I made my last payment on the student loan. I was debt free (at least on the consumer side, I still owe on my home).

I say was, because I then did something sort of stupid. I bought a new computer that cost almost $1000 dollars. I did this because I knew that buy the time the credit card bill came due we would have the money, and because our last computer was literally on its last leg.

Thus, I am waiting until today to officially announce that I am debt free. I paid of the computer and other credit card balance (like I do every month), and I can honestly say I am debt free.

Our next step is to build our financial reserves and my wife and I are adding food storage.  But we need a break from discipline.  So we are buying a few wants over the next few months.  These include a tent trailer (already purchased), a new computer (also purchased), a new washer and dryer, some furniture for our family room, a safe, and some other incidentals.

I just hope these next few months of “frivolity” don’t have us regretting our decision.  But starting in January, we will get really serious about our financial and food stores.


Just as a final note. Dave Ramsey does not condone the use of credit cards, and for the most part I agree with him. However, after 14 years of discipline has shown, my wife and I can handle credit cards. We don’t use them, unless we have the money to back up the purchase, and we always return to a zero balance at the end of each month. I only recommend credit cards if you KNOW that you will pay them off each month, and will use them wisely.

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3 comments to We're Debt Free!

  • Congrats! That’s a great accomplishment.

    I’ve been very fortunate in that my wife and I have never had consumer debt during our 21 years of marriage. We simply don’t buy consumer goods for which we can’t pay cash. We also both paid for school as we went (so we never had student loans).

    Three years ago we actually paid off everything, including the mortgage. Since then, however, we added onto the house and took care of some much needed home maintenance issues, so we have a (small compared to the average) mortgage that we are paying off.

  • Good job! My wife and I are on-track to eliminate all of our non-mortgage debt by November, enabling us to go down to a single income any time we wish. It’s really exciting to watch those balances shrink over time.

  • […] here who believes that we can have economic stability without credit?  As I have mentioned before, I am Debt Free.  I have managed to get along quite well in my life without racking up much debt.  It’s […]

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