DH = dear husband
As I looked ahead to our journey out of debt in May of 2012, I wrote, “According to my rough calculations, it will take just over five years for us to get there. But I’m not very good at math, and I know that the unexpected will happen, so I’m not committed to the timing – just the direction of the journey: out of debt.”
We’ve been following Dave Ramsey’s steps to debt-freedom, and in his book The Total Money Makeover, Ramsey says it takes the average household seven years to get there. As we progressed along our debt-repayment in those first couple of years, it became clear that we were falling in line with that 7-year average. Our projected debt-freedom date: June 2019.
The numbers from our starting point of June 2012:
- Consumer Debt – $21,400
- Business Debt – $80,800
- Mortgage Debt – $155,000
- Total Debt – $257,200
- Emergency Fund – Non-existent
- Investments – Not happening (except for my automatic pension contributions through work)
Our progress as of December 2017:
- Consumer Debt – Paid
- Business Debt – Paid
- Mortgage Debt – $60,000
- Total Debt – $60,000
- Emergency Fund – Full
- Investments – Happening on a regular monthly basis
My mom passed away in November. I remember how heartened and relieved she was when DH and I became focused on debt-reduction. She and my dad (who passed away in 2007) had always been frugal and money-wise, and my many years of financial mismanagement had bewildered and often frustrated them. Our turn-around was of satisfying significance to Mom, and she cheered us on. My sister who lives out west told me that when she would talk with Mom on the phone, Mom would often happily share our debt-reduction progress as part of her newsworthy family updates. I don’t think we ever get too old to enjoy making our parents proud, and a big part of the encouragement I’ve felt over the years in watching our debt numbers drop was in knowing how pleased my mom was about it.
So I write this next part with mixed feelings. The inheritance that I am receiving will move our date of debt-freedom up by about 8 months. Instead of June 2019, it will likely be September 2018.
We can put one lump sum against our mortgage once per year to a maximum of $18,000, and while we had planned to take advantage of that option for 2017, we had no illusions about being able to make the maximum payment. But we have. So to update our update:
- Mortgage Debt – $42,000
- Total Debt – $42,000
Of course I’m grateful. Of course it wouldn’t be this way if I had the choice.
Resolutions for 2018
No mortgage penalty
We’re not going to wipe out the mortgage and incur a penalty – no need to waste a cent going that route. We’ll put another maximum lump sum down and pay off the balance with regular monthly payments. That intention in itself is an indication of how far I’ve come. Impatience was a major root of the financial chaos in which I operated for years, and for me, it has been the biggest challenge of our journey out of debt. But I’m not giving in to it. The wisest thing to do is to take our time, pay off the mortgage without penalty, and invest the rest. So that’s what we’re doing.
The moving plank analogy
A less S.M.A.R.T goal that I have is to fine-tune the self-discipline that I’ve been building over these last 5 years. For 2016, my resolution involved a planking analogy. At the end of 2015, we had recently finished Ramsey’s Step #2 (pay off all non-mortgage debt), and were adjusting to steps #3 and #4 (save a big emergency fund and invest regularly). I had found the change difficult. For me, it was more satisfying to attack the debt full-on, with no diversions into savings and investments. I wrote: “I need the core strength – the stability and balance – of patience in my approach to our shifted financial goals. Muscles in the human pelvis, lower back, hips and abdomen ideally work in harmony. Efforts towards our savings, investments, mortgage payments, and giving can also progress towards an ideal of harmony. No rush. Slow, steady, progress. Balance. Stability. Just breathe, and hold a little longer … like a plank.”
At the end of 2016, I managed to hold a 5-minute plank. And DH and I also succeeded in reaching a strong, steady habit of saving and investing as well as paying off debt. But I’ve learned something about planking: It’s much better to vary your planking position every 10-30 seconds than it is to hold a single position for several minutes. And I’d like to work that concept into the new steadiness of our personal finances.
I’d like to take another step away from the “all-or-nothing” financial compulsion that I’ve always had. This compulsion has moved from spending-max-out to intensive-debt-payoff to strictly-budgeted-savings/investments/mortgage-payments. The moves have been made in the right direction, and we have healthier finances as a result. But now, while I want the same level of strength, I also want more flexibility – less “strict”. No surrender to chaos, but more ebb and flow within a strong, steady effort. Less set-in-stone, and more room to adjust … like a moving plank.
Do you have a New Year’s resolution? Your comments are welcome.
*Image courtesy of Pixabay.