Our Debt Story Part 1: Where Did Our Debt Come From?


Paying Off Debt / Wednesday, September 7th, 2011

I love reading stories about ordinary people who decided to get out of debt. And I’ve written about debt reduction strategies on this blog. But I’ve never shared our own debt story in any great detail.

And while I don’t plan to turn this into a “watch us pay off our debt” blog (although I love those blogs), I thought I would share in general terms what our debt history has been like and what our general attitude toward debt is today.

Where Did Our Debt Come From?

Once upon a time, we were debt-free except for our house and a single car loan. Then a few things happened in quick succession:

  1. We had our first child.
  2. I went from working full-time to working part-time.
  3. My husband started a business.

All of those were good things. We would do them all again in a heartbeat.

But one thing we would also do – which we didn’t do at the time — is radically reduce our standard of living so we could afford to do all of those things with a minimum of debt. We weren’t living extravagantly, but we weren’t as debt-adverse as we should have been.

It was the early 90’s and debt still seemed normal to us. We hadn’t yet heard of Dave Ramsey. In fact, Dave Ramsey hadn’t yet heard of Dave Ramsey. He was still recovering from his bankruptcy at the time.

So — even as the business began to prosper and our income grew — our standard of living grew right along with it.

We had a second child. I quit work altogether. We leased a new van. We bought a new house. And we sent our kids to Parochial schools.

It was a fairly normal kind of life. We never had trouble making our payments. And our credit scores have always been great. We managed to put little bits aside here and there.

So what was the problem?

The problem was that for 20 years we had allowed debt to hang around. And it was keeping us from making the kind of financial progress we wanted to make.

We wanted to save aggressively for retirement. And build a large emergency fund. And pay cash for cars and home improvements.

But all of those things took a backseat to paying off debt, which we always seemed to be working on. Because every time we made a little progress, we allowed lifestyle creep to erase it.

But late last year we began to reverse this pattern and start making real progress. I’ll be back tomorrow with the rest of our debt story.

24 Replies to “Our Debt Story Part 1: Where Did Our Debt Come From?”

  1. I am excited to read the rest of your story, especially now that you are at a point to pay for college without debt.

    Your story sounds very similar to ours. We only had my student loan debt at about $9,000 until I had our second and third child in rapid succession and took to very lengthy leaves of absence while my husband was a full-time student. Now I have quit working, and we are paying down credit card debt and my husband’s student loans too. It is a long road, but I find stories like yours inspiring!

    1. I know from your blog that you are making the tough choices that will pay off in the long run. I’m glad you’re inspired and thanks for taking the time to comment.

    1. You’re right, Shanendoah, debt can be a tool. We could have never started my husband’s business without it. But the majority of the time, I believe it’s a crutch.

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