I remember the day well.
It was a bitterly cold, dreary January day in St. Louis; no leaves left on the tall sticks in our backyard that had recently resembled trees.
I was pacing the floor and holding our 6-month-old daughter, who had a propensity toward crankfests around dinnertime. Finally, I heard the familiar sound of my husband’s car in the driveway.
“Hi honey! How was your day?” I kissed him, suddenly embarrassed by the fact that I was still wearing pajama pants and a messy ponytail when he had already spent the day dressed in his usual business-casual attire.
I handed him the baby and started making dinner. It only took a minute for him to utter those famous and dreaded words, “Michelle, we need to talk.”
What he told me next made my heart sink. He had spent the afternoon going through our finances, and our swelling credit card debt had eclipsed the $US20,000 mark.
The minimum payments on those cards had now reached the point where we had virtually no money left over at the end of each month to start paying that number down. Even if we stopped accumulating debt immediately, climbing out from this hole was going to be a major struggle.
It was a difficult reality to swallow. Jefferson had a good IT job with a large local company and made a decent salary. We had been struggling to make ends meet after I had given up my regular income to stay home with our third child, but things had really spiraled from there. We had some complications with the pregnancy that left us with a large stack of medical bills, one of our vehicles needed some major repairs, and our home’s furnace had to be replaced.
Jefferson and I decided right at that moment that things were going to have to change. The path that we were on was simply not sustainable. We knew that we would need to create a financial plan and to embrace budgeting like never before.
Jefferson had recently started reading a few personal finance blogs, and suggested that starting one of these sites ourselves would be a great way to keep us focused and hold ourselves accountable.
The hope was that by sharing our struggles with the world, and admitting our mistakes, it would keep us on track. On the evening of January 21, 2012, we hopped online and created See Debt Run, the story of one ordinary family’s journey out of debt.
For the next fourteen months, we spent our time clawing our way through the mountain of debt that we had created. We started by taking a microscope to our family expenses, finding ways to shave costs wherever we could. We found ways to slash nearly all of our utility bills, and started shopping at discount grocery stores and using coupons. We cancelled planned vacations and declined social engagements, telling ourselves that fun could wait until after the debt was gone.
It was a boring and frustrating time, but we were both focused on the end goal, and we were doing it together.
Our main strategy was to set small goals for ourselves, and then to knock them out for the emotional boost that comes along with a zero balance. We took the essential first step of building an emergency fund of $US1,000, which provided a buffer against unexpected expenses (the very kind that in the past had us reaching for our credit cards). We attacked the small balances first, and then moved onto the larger ones.
We were starting to make progress by cutting expenses, but we didn’t really get any serious traction until we shifted our focus onto increasing our income. We sold hundreds of things from around the house, everything from baseball cards to musical instruments. If we hadn’t touched something in a year, we decided that the best way to use an item was by selling it.
At the same time, both of us picked up side work wherever we could. Jefferson took on a few tech jobs and delivered flowers on Valentine’s day, and I took surveys online and tried my hand at freelance writing. Every extra dollar that we made went straight towards paying off our debt.
When we finally reached our debt zero goal in March of 2013, the sense of freedom that we felt was amazing. The time that we spent paying off debt has provided a crash course in financial literacy, and that education is something that continues to this day. Without debt, we have been able to jumpstart our retirement and college savings, and have been able to turn our family’s financial picture completely around.
Even after paying off debt, we have continued to share our stories and advice on See Debt Run, hoping to inspire others to make the same choice and to learn to live debt-free!