Any day you can wake up and not have but one piper to pay is a good day. As of last week, my mornings became a whole lot brighter.
Debt Freedom (Almost)
Late last week, we hit the submit button on our Chase Credit Card online program to pay the remaining bit of consumer debt we had. Boy, was that a good feeling. Only building from here folks.
After hitting that submit payment button, we went out a celebrated by buying our friends dinner and drinks. Ha! Just wanted to see if you were paying attention. We actually didn’t do anything different besides a small little private family dance to celebrate the last bit of debt being gone.
What does it feel like being debt free today? There have been multiple times in my past that I’ve climbed out of debt and back into the black only to fall back into debt. Debt freedom has been something I have attained then fallen back into the debt abyss. Being debt free today feels a lot different today than in my past. Why? We have a plan and we track our finances. Honestly, there really hasn’t been much more to it.
But if we are debt free, what’s that (ALMOST) doing in the section header? Well, we don’t owe anyone besides our home lender. We have a way to go on that, but it’s getting chipped away faster and faster with each two weeks that go by.
How’d We Do It
The question most people will ask us is how we did it. Why I say most people is because most people we know (give or take 75% of family, friends, & acquaintances) are in some form of debt beyond their home.
So, let’s get to the meat and potatoes which I already alluded to a bit already.
First, we didn’t get ourselves into major debt. No school loans. No significant credit card debt beyond a couple grand. No personal loans. Especially no car loans. We didn’t make any huge mistakes which, in my opinion, can be half the battle. We could always see outside the hole we were digging ourselves in.
Second, we built a finance plan around our established, trackable goals. Without a plan, I am pretty much just wandering about with no true results. We built a plan in the last year, stuck to it, improved it when possible, and kept moving forward even when times got rough.
Third, we tracked our finances without being meticulous. We used certain cards for certain types of purchases. We used cash for a lot of the day-to-day purchases like groceries. However, we didn’t sit and count pennies nightly. That would have killed us. The biggest thing has been tracking our net worth. That really kept me on my toes and doing anything possible to move the needle in the right direction.
That’s how we did it. We kept ourselves out of major debt then built a plan then tracked our finances.
If you notice, I don’t discuss paying down this credit card first then this other debt next. No. Why? Focus on the broader picture. Paying down $300 extra on some debt is great, but if I hadn’t built a plan, I would still be borrowing from Paul to pay Peter (or however that goes.) The plan and the tracking kept us focused on goals and benchmarks. They are far more crucial than which debt need to be paid down first or what type of pasta to budget for. Sure, do that stuff too, but not before a plan and the tracking has begun.
Throughout this week, I’ll share more on our process as well as what we are doing now. Stay tuned!