Back in January of this year, the hubby and I began facing up to debt at last. We resolved to pay it back and this time get rid of it for good. We’d tried several times before to pay back our debt with varying degrees of success but eventually, we racked it back up time after time for one reason or another.
This time everything feels different though and I’ve been thinking about what triggered this journey to debt freedom. It boils down to a conversation we had about our finances which effectively changed the way we view and manage our debt.
The conversation went something like this:
Me: “I’ve been thinking about the debts.”
Hubby: “Right… Why, what’s up?”
Me: “I just feel so fed up worrying about money. Everything is so tight financially, I feel like I can’t breathe sometimes. We need to pay these debts off once and for all!”
Hubby: “I feel like that too. But we are paying off the debts! We’re chipping away at them but at the end of the day, we can only pay off what we can pay off. We can’t magic up some extra money from thin air.”
Me: “I know. But I’ve been reading some stuff online and I came across this article by this guy Keith Rawlinson. Here take a look! He describes something called a debt ladder. You start by paying the smallest debt off then once that debt has gone, you use that old payment to pay extra off the next debt. It’s called a snowball approach or something. This other guy Dave Ramsey also says it’s the way forward.”
(Hands over a stapled document to the hubby. Note – I now know that Keith Rawlinson was in fact referring to Dave Ramsey’s approach in the article I read. But at that time, I hadn’t heard of Dave Ramsey or the snowball method!)
Hubby: “Yeah… looks interesting, I can see the logic behind it. But just paying off our small debts is hard enough anyway! I think we shouldn’t build up our hopes too much but just do as much as we can to earn extra income to pay off our debts and see where that takes us. Who’s to say these guys aren’t making this stuff up anyway? Those success stories all sound too good to be true. Do these people take into account financial issues that crop up everyday, you know like car repairs or unexpected bills?”
Me: “Yes! They talk about putting an emergency fund together for unexpected bills and whatnot. I don’t think they’re making it up – those success stories are down to hard work and commitment, not magic!”
Hubby: “But surely any money we save should be paid off our debts rather than put into an account for emergencies?”
Me: “Well, that’s something we can work out later. But the point is – I think we should aim high. We can do this. I really want to pay my credit card off by the end of this year.”
Hubby: “I would love for that to happen. But in all honesty, I don’t see how? We need to be realistic and I’m just saying not to get our hopes up in case we can’t do that. I don’t want us to be disappointed.”
Me: “Yeaaaah, I know what you’re saying. We just need to take small steps. But we have to try don’t we? Are you with me on this?”
Hubby: “Course I am. I’m still not sure how to even start paying off those small debts any faster than we are doing currently. But if you think we can change things, of course. Let’s go for it.”
This conversation was the starting point for making our debt a priority. Before this we honestly believed that we were doing everything we could to pay off our debts and making even the minimum repayments was really tough going (which it was). There was always the feeling of the debt being ‘too much’, insurmountable and never ending, no matter how hard we tried to change things.
But as we’ve demonstrated to ourselves during this past year, there was room for improvement, for working that bit harder, for becoming more focused. We have no desire to buy anything on credit anymore and we’ve made small but lasting changes to our budget and the way we live our lives. We’re still a long way off as you can see from our last debt repayment update, however, we now know that becoming debt free is not an impossible task! Facing up to debt is the best thing we’ve ever done.
Like anything in life, to achieve our goal we need to work really hard at this. That means not getting bogged down in the wrong mindset, but actually believing in ourselves and the fact that we can succeed.
“Success is not final, failure is not fatal: it is the courage to continue that counts.” Winston Churchill
Can you pinpoint a positive change in your financial situation?
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Related posts:
- I will not give in: the cycle of debt has been broken!
- September 2013 Debt Repayment Update
- Our debt ladder
* Image courtesy of Stuart Miles at Free Digital Photos (Same Change Signpost Showing)
25 Comments
Well I had a negative experience which led to my positive financial future. My car was towed (long story). But that was my rock bottom. Sure I’ve had shaky moments since then, but that was a huge wake up call. That’s when I got serious. Glad you an your hubby had that conversation. I think everyone in this PF journey has that lightbulb moment.
Budget and the Beach recently posted…Feeling the Power to Change Old Financial Ways
Sorry that your car was towed Tonya, I can imagine that was pretty scary. 🙁 So glad to hear your financial future is going the right way now! We’ve had a couple of experiences that have been shaky but even then we carried on as we were. I did feel despair when I had this conversation with my hubby. It was like I woke up one day and just felt sick at the thought of all our debt. That’s when I started reading up about what other people were doing.
Thanks for sharing your lightbulb moment Hayley. I KNOW you guys have made permanent changes this time. Mine is less glamorous. I met a boy who told me debt was not normal. He then told me to blog about it. I thought that was not normal. The rest as they say is history 😉
Thanks GMD! I love the story of how you took control of your debt and how J has both supported you and encouraged you to do something positive with your situation! 🙂
That was a great conversation to have, very positive, too! I know for my parents, it wasn’t that easy. According to my dad, communication issues were the reason they had so much consumer debt. I couldn’t talk about money with my mom as she would get upset every time. It’s only now that they moved to a lower cost of living area, and used the profit from the sale of the old house to pay off a lot of debt, are they in a better place financially. They are still planning on paying off two more remaining balances, and then they’ll be debt free. I’m really happy for them and glad everything worked out the way it did. I try to motivate them as much as possible and give them all the lessons I’ve learned from the PF world. They were very much hopeless and resistant to change (getting rid of cable and a smoking habit), which was unfortunate, as there was a lot of room for improvement in their spending habits.
E.M. recently posted…Family, Money and Jealousy
Thanks E.M. We’d talked many times before about our debts but nothing ever seemed to change. I guess we didn’t have a plan before. I’m so glad we had this conversation and finally took action! Debt is a tricky subject to communicate about so I can understand how your parents must have struggled. I’m so glad that things are looking up for them and I hope they clear the last two balances soon! It sounds like you’re doing everything you can to support them. 🙂
Thanks for sharing your lightbulb moment, Hayley. I see a lot of couples who communicate about everything but their finances and never have a lightbulb moment. I’m did you and your husband did. It does make a difference when both of you are united in your goal!
Shannon @ The Heavy Purse recently posted…How to Develop a Gratitude Mindset in Kids
Thanks so much Shannon! It’s taken us a long time to share the same mindset properly, even though we both wanted to get rid of the debts for a long time now. Being proactive and positive about things is really important as well as keeping the lines of communication open.
I love that you can have open and productive conversations with your husband about finances without it going to a bad place. This is what I hope for!
Stefanie @ The Broke and Beautiful Life recently posted…The Financial Pros and Cons of Community
Thanks Stefanie! We have had many arguments in the past over debts but we’ve kind of moved in the right direction together over time really. It took around 10 years for us to get a joint account and since then, our communication has been so much better about the debts!
It’s great that you and your husband are able to and work towards the idea of working to pay down your debt, with both of you listening and being supportive – communication is key! Being skeptical but accepting of new ideas is always good because you don’t want to always just take things at face value, it’s good to do your own research and make informed decisions.
My girlfriend and I still have split finances, as she still has a year left in school. We definitely share the same values and she is already a step ahead of me by taking out a lot less debt to go to college. She also respects my decision of not moving out just yet as I try to pay down my debt as aggressively as possible.
Thanks Debt Hater for commenting and stopping by! That’s great that you’re tackling your debt before moving out – sounds like the right thing to do. Your girlfriend sounds really supportive, sharing the same values around finances is really important. Good luck with paying down your debt!
Our decision to become debt free started with a similar conversation. I think it’s probably a shared experience for us couples who decided to go down that path (as is listening to Dave Ramsey, in a lot of cases!). It’s funny how all of our big changes start with a simple conversation with our significant other, and a real decision to take action. It’s like a seed planted.
Done by Forty recently posted…First Impressions of Peru
That’s just it DB40 – a conversation to make sure we’re on the same page and then a real decision to take action! 🙂 We have no desire to go back down that road of debt again, so the only way is up!
Rock on! Sounds like you two made your first real step toward being on the same page and working toward the same goals. Sometimes the hopelessness we feel about our current situation is exactly what ends up stopping us from making that progress we desperately need. Keep focusing on what is possible, set goals, and take steps toward achieving them. Even if you don’t hit a goal when you originally plan to, the accomplishment in itself (ie: paying off a specific card) IS still possible. Keep us informed on your progress!
Kyle @ Debt Free Diaries recently posted…My Compulsive Need for Controlling Our Finances
Thanks so much Kyle! Keeping focused is really important and like you say even if we don’t hit a goal by the deadline we set ourselves, the bottom line is not to give up. Progress is progress!
Nice story. It’s funny how a simple conversation which might have seemed so innocuous at the time turned out to be such a watershed moment when you look back on it.
Our turning point started when our HVAC system failed in late 2007. A new unit cost US$6000. I had to borrow it.
The day after Christmas, I developed several spreadsheets showing our current situation and my suggestions for improving things. Nearly six years later, we are free of all debts – mortgage included! – and have a year of living expenses in cash. Plus, we’re putting way more money into our retirement funds now that the debts are gone.
It wasn’t easy. It didn’t happen overnight. But it was (and is) worth it.
Thanks so much for stopping by, I really appreciate you taking the time to comment. 🙂 That’s really great about you becoming debt free including your mortgage – congrats! So inspiring to read about how you managed to turn things around. I think spreadsheets are brilliant, I now have quite a few that I enjoy updating!
I think one of the best financial step I ever took was to start an emergency savings account – if for nothing else than that it’s easier to sleep at night knowing that if my car breaks down or I break a tooth or I drop my eyeglasses and they explode, that I can handle that. And it’s still hard to find money to add to it, but as it started to grow, if felt so nice having the extra security that it’s become a little easier.
Mel @ brokeGIRLrich recently posted…Five Dolla’ Make You Holla’ Holiday Series: Teachers & Hostesses
I had that same conversation 2 and half years ago with the hubby and it’s hard but you have to keep working at it. My ah ha moment was in Vegas on a girl trip and I didn’t have any money. When I got back home, I decided to get my life back together.
The Frugal Exerciser recently posted…WOW-Workout Wednesdays 3 edition
Love this! It can be so hard to get started, especially when you’re running on limited funds. At one point we had almost all debt in our family paid off. Then our car broke down. We had no emergency fund. So we had to put it onto a card we had just paid off. It was horrible. Set us back months and months and months and months. That was the day we decided to start keeping an emergency fund.
femmefrugality recently posted…Financially Savvy Saturdays Thirteenth Edition
Making sure you’re on the same page with your spouse is so important. We had that ah-ha moment about 3-1/2 years ago, with a 6 figure income and we couldn’t afford a summer vacation. We sat down and had a similar conversation. In that time we have paid odd over $84K in debt. Feels so good.
Brian recently posted…Week End Round Up #8
I would also like to continue the positive outlook that becoming debt-free is not impossible. This is the reason why I enjoy reading blogs such as yours so that I continue to be inspired and also work on becoming an inspiration.
Jen @ Frugal Rules recently posted…Shout Out Saturday #44
I’ve talked a bit about my lightbulb moment, my card was declined for a very small purchase. Boy was that embarassing! That coupled with the fact that I was having harder and harder time each month figuring out which card I could charge to and which one I couldn’t since the majority were at or very near to their limits, pushed me to change. I’m still VERY new to this journey, but I am trying to change my ways now before it’s too late.
Shoeaholicnomore recently posted…Use it Up: Final Tally
The fact that you’re recognising that you need to make changes is fantastic! Once you’ve made up your mind that you really want to be debt free, you’ll be able to do it. Just keep doing what you’re doing! 🙂