Business Debt ELIMINATED! Debt-Free Except for the Mortgage

Cycling on our good old bikes

  • DH = Dear Husband
  • DD1 = Dear First Daughter

“I think we can do it . . . today.”

Last Saturday, DH came upstairs. He’d been working non-stop, a strange burst of business having recently erupted. I was getting my Saturday morning blog post ready to publish. “I think we can do it . . .” He paused, “. . . today.” I didn’t have to ask what “it” was. He was saying that we could pay off the business debt. The debt that was just shy of $81,000 in December of 2012. The debt that we had been paying off for over 30 months. The debt that I had really, REALLY wanted to pay off at the end of May to mark the 3rd anniversary of our journey out of all debt. The debt that I had resigned myself to having around for another couple of months. And now, only two weeks later, DH was saying we could do it.

In that surreal moment, I deliberately chose calm. “Are you sure?” I asked. “Maybe it would be a good idea to wait until the end of the month.” “Yeah,” DH agreed. I strongly suspected that he was calling my bluff. That he thought I’d say, “No, no! Let’s go now!” I was the impatient one after all. He was the measured, logical, careful one. “OK,” I said instead.

Silence . . . until DH broke it. “Let’s go now.”

Our progress symbolized

We got on our bicycles. His is 20 years old. Mine is a double hand-me-down. It was my dad’s until he gave it to DD1 in 2006, and then mine since DD1 moved out west in 2011. We cycled to the bank and deposited that last $5,500 remaining on our business debt. Tim Hortons was just across the parking lot, but we didn’t even discuss the idea of indulging in a celebratory coffee or muffin. We cycled home. Slowly. A bit stunned. Chatting disjointedly about the beauty of the day. And what we had just done.

I think that so much of our excursion to the bank symbolizes our progress from having:

  • $21,000 in consumer debt
  • $81,000 in business debt
  • $155,000 in mortgage debt
  • a household debt-to-income ratio* of 254% – way above the record breaking Canadian average of 164%

– to having:

  • no consumer debt
  • no business debt
  • $128,000 in mortgage debt
  • a household debt-to-income ratio* of  113% – way below the record breaking Canadian average of 164%

We decided to cycle instead of drive over to the bank. Since starting our journey out of debt, we’ve become more attuned to the richness of simple pleasures. It was a beautiful sunny day, and a distance of 5 km (3 miles). Why would we drive? We weren’t cycling to save on gas. But we did save on gas. Our capacity to enjoy the simple things has developed with less travel and more soaking in the local scene. Less dining out and more slow home cooking. Fewer nights on the town for things like big screen movies, plays, concerts, and comedy clubs – and more nights at home playing board games, watching small screen movies, hanging out with friends and family.

Our bicycles are old. For many years, we continued to ride those bikes because of DH’s uncertain employment and low income. After DH’s home business got off the ground, we had the means to buy new – but we didn’t. Our debt-free mission has meant not only old bikes, but an old van. It turned 16 in January. It’s meant old furniture and old carpets – all thinning out, tearing, faded, and stained here and there, after 17 years of not-so-gentle use by a family of five with three growing children. We live in a neighbourhood where bikes, cars, furniture, and carpets are often new and shiny. We have chosen not to worry about keeping up with the Jonses. As long as it still functions, we choose old.

We made an event of it. DH and I almost never go to the bank together to deposit cheques. But this was a super significant milestone – not only debt-free except for the mortgage, but also a passing of the half-way point on our total debt. Our focus on debt reduction has heightened our awareness of our numbers when it comes to personal finances. I used to be the poster child for unconscious spending and chaotic money management. I honestly couldn’t have told you what our debts were for, how much they added up to, what bills we paid, what our groceries cost, how much we spent on gifts, how much we spent in restaurants and coffee shops … My head was entirely in the sand. But I’ve yanked it out, and I’m intentional about joining DH in looking at all the details. And as we address those details, the bigger picture comes into focus too, and we’re able to mark the milestones as we pass them.

We didn’t buy anything at Tim Hortons. Later, as we had planned in advance, we did indulge in some sparkling wine (left over from the New Year) and a wonderful meal at DH’s favourite restaurant. But Timmie’s wasn’t in our plans – so we didn’t go. It used to be that I would spend on impulse regularly. I haven’t completely eliminated that tendency, but in the last three years, I have spent far less on spontaneous urges to buy snacks and meals, and nothing on unplanned clothing or gift purchases. When we spend, it’s almost always because we’ve planned and budgeted for it.

DH and I cycled to the bank together. Our journey out of debt is something we have taken on together. I have a friend who often mentions that ever since DH and I started working on our finances, she has seen plenty of evidence of a better relationship overall. More joking, affection, respect. I have politely accepted her observations without necessarily believing them. But then DD1 – who has been living away from home for the last four years and only sees us once every six months or so – recently told me that she has noticed it too. Who knew that the drudgery of making budgets and tracking expenditures together would have a bonding impact?

Initial changes?

I’ve already noticed little changes. Someone asked me yesterday why I had chosen to teach summer school, and I said, “We want to pay off the mortgage before we retire.” Her response was, “Yep. That’s the smart thing to do. Get rid of that mortgage.” I always used to say something like, “We’re trying to get out of debt. My husband lost his job in the high-tech bust and we got ourselves into quite a debt hole.” The response would usually be a respectful and somewhat sympathetic nod of the head. So there’s been a shift. I’m no longer the object of sympathy. I’m “smart”.

About a year and half ago, a friend of DH’s shared a YouTube audio recording of Anthony de Mello, and we found it to be a great listen. One of the things de Mello said that has stuck with me was that happiness is not found in the acquisition of things. It’s found in the shedding of things. By “things”, he meant material goods, all kinds of dependencies, and limiting beliefs that we stubbornly cling to. Debt is one of those things that needs to be shed in a pursuit of happiness. Debt that is accumulated in a drive for “lifestyle” and material goods, in bondage to dependencies, and in a tenacious effort to support limiting beliefs. We’ve dropped a burden. And in the absence of that weight there’s a strange lightness. A bit of a giddiness. A new happiness.


Your comments are welcome.

* To calculate your debt-to-income ratio, divide your total debt (including mortgage) by your total take-home income (after taxes).

 

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30 CommentsLeave a comment

  • Congratulations!!!! Amazing accomplishment! You and the family should be proud. What a way to complete the final payment a bike ride with DH to the bank. I didn’t think getting our finances together would strengthen our relationship, but it has. We communicate better and we are far better working on things as a team than individuals. Enjoy the accomplishment and go kill that mortgage! 🙂

    • Thank you so much, Brian. Pretty cool that you experienced that same improvement in relationship. A welcome side-bonus that I wasn’t expecting – and it was so subtle, I needed someone else to observe it. We will follow your orders and kill that mortgage!

  • Ruth, you made so many excellent points about so many things, my head is spinning! I don’t know where to start! Let me just say that I am SO happy for you guys! Congratulations and Best Wishes on this new and improved lifestyle! You guys are DEBT PAYOFF ROCK STARS! 😀

    • Thank you, Kay : ) Now I just have this visual image of your cartoon head spinning! And it won’t go away!

  • Congratulations! Some great observations. I love this— “there’s been a shift. I’m no longer the object of sympathy. I’m “smart”. I am going to check out that video. I need to shed a few things.
    Good luck and you guys have been doing a great job.

    • Thank you so much, May. The de Mello on Youtube that we listened to was audio – not video. He gets pretty involved, but we were captivated enough to stick with it. My guess is that most people in North America have to shed a few things. I hope you’re able to identify the ones you would benefit from letting go. Thanks again for your comment : )

  • AUGHHHHHHH I AM SO EXCITED!!!!!!!!!!!!!!

    I was so not expecting to see this today, and it’s just thrilling!!!!!!!!!!!!! And maybe even more than the actual debt elimination, it’s thrilling to see all these positive changes in your life.

    • Wow, C. That’s a lot of exclamation marks! I remember hearing early on that getting finances in order had nothing to do with money. I think that your comment speaks to that understanding. The “positive changes” you mention are all about attitude – of which money happens to be one byproduct among many. Thank you so much for your enthusiasm at our good news : )

    • Here’s even better news: We didn’t even have the urge to spend more than we’d planned. That is definitely a new development! Thanks, Jennifer : )

  • Yay!! The relationship change is very interesting to note, that’s neat that it was gradual, but enough that people around you have commented.

    • It was so gradual that I really didn’t see it. People with outside perspective had to point it out to me. Thanks for your comment, Anne : )

  • Congratulations on being consumer debt free! I have been following your blog and can identify so much with your progress and struggles. Six years ago my husband and I were $97,000.00 in debt on a secured credit line and in just three more months we will be debt free!! It took a lot of effort and discipline and was a long road. We are both retired and the advice to never retire with debt is SO true. Even on a smaller income, it is still possible to get rid of your debt if you put your nose to the grindstone.

    • Nancy, I appreciate so much the fact that you’ve taken the time to comment. I am so interested in knowing the stories behind the people who read my blog. Thank you for sharing a part of yours. I would guess that you’re feeling an excited, agitated impatience for these next three months to pass. Six years is a long time. But how satisfying to know that they’ve brought you to this point of success! Here’s to keeping our respective noses to that grindstone!

  • I love every single part of this story! Celebrating with you down in Indiana today! I really liked how you deliberately rode your bikes to the bank – and how you chatted “disjointedly about the beauty of the day. And what we had just done.” When my husband mailed our last check to payoff our final debt, he took about 20 pictures of it first – to make sure we had “proof of payment” if something happened. 20 pictures! haha, that was definitely our “disjointed” moment.

    • How kind of you to say you “love every single part of this story!” I like the fact that you can relate to the “disjointed’ bit. Thanks for including your own story of debt payoff, Laura, Your husband had the right idea! I think the event warranted those 20 pictures. I hope you have at least a few of them framed : )

  • Congrats! That’s super exciting and I’m glad to hear that you didn’t stop off for an unplanned coffee either. I still struggle with unplanned spending sometimes, but I’m getting better all the time. Can’t wait to be debt free (except the mortgage) too. 🙂

    • I totally understand the struggle with unplanned spending – especially when it comes to food! I wish you a speedy journey to your debt free destination. Thanks, Kayla.

  • Congratulations! It must have felt amazing to make that payment 🙂 We’ve noticed that our relationship has improved since we started communicating about money and working together towards debt payoff.

    • Thanks, Tre. It’s interesting that your relationship has also improved. I never would have guessed that budgeting would have that effect!

  • Thanks for this! I am completely inspired by your blog as I am on my own journey out of debt. Thank you for making my day… =)

    • LB, you have made my day by making this comment! I’m so glad you feel inspired by our story as you take your own journey out of debt. All the very best to you!

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