How Our Debt Free Journey Began
The Beginning - I Got Laid Off While Pregnant
Back toward the end of 2010, I found myself in financial dire straits. I had barely been out of law school a year and had been working at a very small law firm which I hated. They were horrifically immoral and broke every ethics rule in the book. I hated the place and, even worse, it paid pennies. Worse than paying pennies, they managed their money so poorly, often times they couldn’t even make payroll. But it was still better than absolutely nothing, and so I stayed while I looked for something better. Then, I became pregnant with my first and only. Before I had time to reveal the news to anyone at work, the firm laid off every attorney and staff member with the exception of a single managing partner.
I was single, pregnant, broke, and now job-less.
To say I was scared and panicked and not sure where to turn was an understatement.
“I was single, pregnant, broke, and now job-less. ”
And job hunting got even more impossible as my belly grew. Who was going to give me a job, knowing I’d have to take a maternity leave almost immediately upon hire? No one, that’s who.
I Landed a Contract Job!
I eventually landed a contract job, pregnant belly and all, as a document review attorney. I’m convinced I only landed the position because they were, by definition, temporary in nature. Sometimes they needed people only for a month or 6 weeks. When the duration of the job was that short, no one cared that I was pregnant, and I was grateful for the income, even though, again, it was pennies.
The work was essentially mindless. It involved reviewing documents on a computer screen and marking whether those documents met a specific category (are they confidential? privileged? responsive? etc.). It was, to say the least, mind-numbingly boring, tedious, and unchallenging work.
We worked in rooms called “pods” with approximately 15-20 attorneys sitting at as many cubicles lining the walls. Most attorneys sat at their cubicles with headphones in place, listening to music or podcasts—which, thankfully, was allowed—and which helped the day to pass quicker. It was during that desperate time that I began searching for financial podcasts and stumbled across Dave Ramsey.
I will forever be grateful for the circumstances that led me down the path to discover Dave and his Baby Steps to Financial Freedom. Once we finally wised up and actually started living by his principles and implementing them in our lives—our lives were forever changed.
I Got Married, Had the Baby, and Found a Better Paying Job
But, it would take another few years before we got serious. I had the baby, married his father shortly thereafter, and stayed home with the baby for a few months while my husband worked a full time job that paid a good salary. Then I found a full time job (the same one I have to this day), which paid way better than any of my previous jobs and had full benefits. We were over the hurdle. Finally in a good place (i.e., no longer financially desperate), so we were no longer as interested or motivated in turning our financial lives around.
We upgraded from the one-bedroom apartment we were living in and rented a house. I continued to listen to Dave’s radio show and loved listening to the debt free screams. I day-dreamed about being debt free one day myself, but did very little to make that a reality. Quite frankly, I just didn’t think it was possible. Sure, I paid off debts here and there, but with absolutely no gazelle intensity, no determination, no drive. And no belief that I could ever free myself from $100K+ of student loans.
My Husband Got Laid Off
My son grew to be three years old, and we were living our lives like normal, everyday people. Until the day my husband came home from work and announced that he was being laid off. His salary accounted for about 66% of the household income. My salary was essentially just “play money.” We never intended to live off it, as his was double mine and met all of our needs.
Desperate times called for desperate measures. We had no choice but to get serious. While my husband looked for work, we lived on bare necessities and cut costs like crazy. I became a crazy coupon lady, but we were still obviously barely making it. When our lease was up for renewal, and he still hadn’t found work, and our savings were quickly draining (we didn’t have a fully funded emergency fund back then)—we made the choice we had to make to survive—we moved in with family.
“When our lease was up for renewal, we made the choice we had to make to survive—we moved in with family. ”
During that year, we paid off over $40K of debt, using the debt snowball, including both of our cars, a small private student loan, medical bills, and a credit card. We paid off everything except the consolidated student loan which totaled $105K and was comprised of both my undergrad and law school debt.
Once all that debt was gone, we were ready to live on our own again and my son would soon be starting school. We wanted to buy a home in a good neighborhood—even though we were still very much in debt and it went against Dave’s principles. So, we did. (Still being dumb financially here, folks).
“We paid off all debt, except for my six-figure student loan, and bought a house. ”
Violating Dave’s rules, my husband cashed out some stock from his retirement (dumb—don’t do this) to serve as a down payment for our home. We bought a house, and moved in.
RELATED: My Three Biggest Financial Mistakes (I should probably edit it to include cashing out a significant portion of my husband’s retirement to put a down payment on a house).
My husband found a job. Times were good. And I continued to ignore my six-figure student loan, making minimum-only payments.
We began decorating the house. After all, we had a new house. Now we needed new furniture and decor and all the rooms needed to be painted. Right? So we happily spent, still being dumb financially, still ignoring the six figure student loan looming in the background, an ever-present shackle around my ankle.
What Finally Woke Me Up
You’d think that being pregnant and jobless would have been sufficient to wake me up financially. And if that didn’t do it, you‘d think that my husband losing his job while we had a preschooler at home would do the trick. Nope. Neither of them woke me up sufficiently to make a change.
So what finally worked?
In the fall of 2016, I took $3,000 out of my savings account to have my kitchen cabinets painted white. I’d always, always wanted white cabinets, and I would dream about them constantly. I was so excited that we had finally bought a house because I knew this meant I could finally have the white kitchen I dreamt about my whole life. I talked about white kitchens for years and years, and finally decided to pull the trigger and have the cabinets professionally painted. (We were still doing stupid things financially at this point, obvi. But hey, at least we had an emergency fund—albeit one I clearly wasn’t using for emergencies).
Once the cabinets were painted, I wanted to put the $3,000 back in to savings as quickly as possible. When I got serious about saving up as much as I could to quickly pay ourselves back that $3,000, it only took me 2 months to do it.
“At that point, I thought, “What have I been doing with my money all this time?!” ”
At that point, I thought, “What have I been doing with my money all this time?!”
This cabinet-painting-epiphany occurred just about the same time that I was having an extremely rough time at work. Things were getting stressful, we were understaffed, and I almost couldn’t bear the thought of going to the office, day after day. I was on the brink of a true mental breakdown and wanted desperately to leave the practice of law. But, the student loan debt pretty much guaranteed I’d have to work as a lawyer for a few years at least—just to earn the salary needed to pay off all the loans.
The cabinet-painting-epiphany coupled with the dread of practicing law forever coincided in a way that snapped me into reality in terms of my ability to pay off debt.
I had a good heart-to-heart conversation with a fellow attorney and dear friend, who worked at the same firm I did. We had similar salaries and openly discussed finances. She handled finances expertly—had almost no debt, tons of money in savings and a significant retirement fund for someone our age. She was my goal, financially speaking. Casually she mentioned that she thought I could pay off the debt in a couple of years.
Bolstered by her casual comment, I began to think the impossible task of paying off $105K worth of student loans might not be as impossible as I once thought.
Time to Make a Plan
So, I sat down one night and made a plan.
I made calculation after calculation. No matter how much I ran the numbers, I couldn’t devise a way to become debt free in less than 6 years. That was a long time. It was kinda depressing. I couldn’t stomach the thought of staying in law for another 6 years.
I vowed that even though the numbers said 6 years, I would—somehow—do it in 3. I’d figure it out. I’d work more hours. I’d sell more things. Somehow, someway, it would just happen. I knew it.
That was at the end of 2016, and when January 1, 2017 rolled around, I began working my debt snowball, creating a tight zero-based budget, and throwing every penny to debt.
Fast forward 34.5 months later, and we are, as of this writing, only one week away from becoming debt free. Waaaaay less than the 6 years I’d originally forecasted, and even a little bit less than the 3 years I somehow knew I could make work.
Whew! That was a long story!
I share it to tell you that I have done more than my fair share of stupid things with money. Repeatedly. I share it to tell you that I have felt desperate and hopeless, financially. And, I share it to give you hope—something I did not have for years. If we can do it, so can you.
I’ll close with one last misconception I always had before starting this journey.
And that is this:
A long time does not equal forever.
I used to think that because it would take a long time to pay off our debt, the debt would simply never be paid. But 3 years (or 5 or 6 or whatever your situation) does not equal an eternity (even though some days it may feel like it!) 3 or 5 or 6 years is not “forever.” Relatively speaking, in the terms of your life, 3-6 years is but a blip—and it will past faster than you think.
So, if you are on the path to financial freedom, friends, stay the course. Keep pushing through. Keep working your debt pay off plan. As they say, it is a long journey, but quitting won’t speed it up.
