Debt Freedom

Hi, my name is Joe and I am debt free.

What is interesting about my journey to debt freedom is that I never found myself deeply in debt.  I grew up in a comfortably middle class family.  My dad was an upper echelon city bureaucrat while my mother stayed home to take care of us kids. I never wanted for anything and if I did want something my family certainly had the means to get it.

But when it came down to it, I didn’t want stuff.  The pursuit of material things for their own sake seemed pretty hallow to me. Growing up in a Christian home I was regularly taught that there was much more to life than having things. That made sense to me and still does - I am rarely, if ever, motivated to have something because it is cool or comfortable.

So even though I had the opportunity to have lots of things, I rarely asked for them because I didn’t need them. And because I didn’t feel the need to buy things, what little money I would earn from doing special chores around the house or from selling an item at a garage sale or from a gift given by a far off relative I would save.

I remember I would sit down and think of all the ways that my money would grow sitting in my savings account. The interest I earned was definitely not very much - but the thought of earning money for having my money in my bank made me want to keep my money there all the more. I rarely, if ever, took money out of that account and I have since seen my bank change ownership 3 times since I was a child. I became a cash hording kid at a pretty early age.

Then, when I was 15 my mother died.  Two years later, my grandmother died.  Due to life insurance policies me and my two brothers were each gifted with a substantial amount of cash for kids our age.  I believe that I had $25,000 in the bank by the time I was 18 years old.

But then came college.  I was of the opinion that I should be using the money I saved up instead of taking out student loans - but my father had different ideas.  I took out the federally allowed maximum in both my freshman, sophomore, junior year of college which pushed my debt level up to around $10,000. During that same time my cash reserves began a slow and steady drain and by the time I stopped going to Expensive U and started going to Penny Public School I only had about $20,000 left.

After I graduate Penny Public School I started graduate school to the tune of $4000 a semester - paid entirely out of my saving.  I still had $16,000 cash but now had about $11,000 of debt when you take interest into consideration.

Then I met my wife (who had been debt free her whole life, school included) and we got married.  I also stopped going to graduate school to get a job and support my family.

I worked and started paying down the debt until one day I decided that I had the cash to pay it now so I did.  By then we had combined finances and had around $21,000 in the bank and about $9,000 worth of student loans still left unpaid.  It was quite the relief to get that paid off and out of our minds.

Now we live a life that is completely, 100% debt free.  We do use credit cards for the rewards and we never, ever carry a balance.  That is really easy when you only buy things that you have the cash for and that you really need.

I don’t make much money, around $35k a year, and my wife stays at home with our 4 month old son.  We live in a pretty expensive city (San Diego) and at times our rent has been more than 50% of our month expenses.  Still with all that we have learned to keep spending down and stay out of debt.  We now have around 1 years worth of my salary in the bank.  I turn 27 this year and have only been working at my job for 2 years.

In the summer we will be leaving San Diego to move to Louisville, Kentucky so that I can go to graduate school.  We want to do that debt free too.  It is going to be a stretch, but according to the calculations I have put together it should be something that we can do.

I plan on including all the things we learn along the way here, so I hope you stick around, leave a comment, and come back as often as you like.

Cheers,

Debt Free Joe

Trackback URI | Comments RSS