Rocky and his injured dew claw. One of our expenses these days.
DH = Dear Husband
“Step back for periodic perspective,” I wrote last week. “7 years IS a long time, and you’re more likely to make it to the finish line if you take stock of the milestones you achieve along the way.” Well, it’s time once again for me to “take stock.” We’ve been on our journey out of debt for exactly 3.5 years now. According to our personal finance guru Dave Ramsey, we’re at the average half-way mark.
Let’s go back to the beginning for a moment. Like the majority of North Americans – perhaps Westerners in general – DH and I considered debt to be a normal part of life. We had a mortgage, car payments, and credit card bills “just like everyone else.” We were gainfully employed with my part-time teaching position and his high-tech career, and we carried our debts very comfortably. Leading up to the turn of the millennium, we bought our big home (which came complete with a big mortgage). We were expecting our third child. And DH lost his job.
What followed was more than a decade of stress. DH went on a 5-year career roller coaster which included 3 well-paid positions . . . with companies that eventually went under in the high-tech bust of the era. With all of the uncertainty, I returned to teaching full-time. When DH lost heart and decided to make a career shift, we were in for six years of no-man’s-land. Stress turned to distress. Those were miserable years.
In 2009, DH launched what would become a successful home business. Hurray! We were able to live “normally” again! And we did. But it didn’t feel right. “Normal” felt hazardous. We knew something was wrong . . . We just couldn’t put our finger on exactly what it was. In May of 2012, we read Ramsey’s book, The Total Money Makeover, and in June of 2012, we took the first of his steps in our journey out of debt.
A 312% rate of improvement
A history of our numbers
Current finances: sloppy
Right now, our money is going 3 ways:
- Towards big expenses.
- Towards paying off our mortgage.
- Towards saving up a big emergency fund. (Ramsey’s 3rd step – to cover 3-6 months of income loss.)
Big expenses these days include our renovations to give DH a bigger home office space. We’ve replaced flooring and furniture, and it looks great! I don’t mind expenses like this – especially since we’re spending money we’ve saved. Another big expense is our dog. Poor Rocky broke his dew claw and had to visit the vet. While there, we made arrangements to have some bad teeth removed. Estimate: $1,600. Ugh! That is an expense that I DO mind. (And though we love our dog dearly, I would advise anyone trying to get out of debt NOT to get a pet.) A third big expense is our car. It was scraped in the spring, and now that winter is coming we know we have to get it repaired, or we’re just inviting rust to give it an early death. Estimate: $1,200. Another ugh!
Since we paid off the business debt, we’ve been doubling up on our mortgage payments. Strictly speaking, we shouldn’t be doing that since the official step we’re on now is to save an emergency fund. But we’re so driven to debt-freedom, we can’t quite take our foot off the gas pedal of debt-reduction. We are scheduled to renew our mortgage in February, and our plan is to make June of 2019 our last payment date.
We are making some progress towards an emergency fund, but it’s slow – partly because of our current big expenses, and partly because of our mortgage double-ups. (Ah! Maybe we should reverse them. We can without penalty.) I would be comfortable writing exactly what we’ve saved, but DH doesn’t want me to. He’s OK with me giving dollar amounts for our debts, but not for our savings. So I’ll just say that we’ve saved 35% of our emergency fund.
There’s a sloppiness to our finances right now that doesn’t sit well with me. I’m eager for the renovations to be done. I’m eager to focus on our emergency fund and bring it up to 100%. I’m eager to begin the regular investments (Ramsey’s 4th step) and mortgage payments that will see us to the finish line – hopefully in 3.5 years from now.
We have passed the half-way mark! We’ve paid off 53% of our original grand total debt. Time to tackle the rest.
Do you find it encouraging to step back and take stock when you’re working towards a long-term goal? Do you think we should reverse our mortgage double-ups to focus on our e-fund? Your comments are welcome.