Bye Bye Debt

Warning: This is going to be a lengthy post because I’m writing it over time to document a very personal journey.

How it Happened

This is my journey of acquiring a large amount of debt and, more importantly, the journey of getting out from under it. This is a story that is not often shared because money is one of those taboo topics we’re not supposed to talk about.

But why the heck not? It’s something we all deal with. We all need it to fill our most basic needs.

This post is getting really vulnerable. I’m going to share numbers. I’m going to share feelings. I’m going to ask that if you have nothing nice to say, that you say nothing at all. Trust me, anything negative you could possibly say or think about me, this situation, and this post, I have already thought to and about myself ten times over.

The Backstory: I have always been good with money. I have lived well within my means, I have provided for myself and my furry family, I have excellent credit, I have never been late on a payment, I have owned homes, I have had savings accounts. I put myself through college while working multiple jobs the entire time and graduated with a student loan bill of $14,750 in December of 2011. It took me three years from that date to acquire a position that justified my degree and the accompanying debt.

I bought a (used) pickup in April of 2014. I did my research, selected the best pickup for my needs, acquired a 1.99% interest rate and a 6 year loan (the only way I could afford the monthly payments).

I got married. And a few years later, I got divorced. There was an 18-month period of time where I could not afford to live. I was paying for a mortgage on a house I was not living in while it was on the market, I was paying for an apartment to live in, I was paying board for my horses. I was paying the things that had to be paid in cash with my paycheck, and I was paying anything and everything else with my credit card (groceries, fuel, power bills, insurance, etc.). I had doctor bills coming out my ears (pun intended) trying to fix my ear (to no avail). And, if we’re being brutally honest, I was in a pretty dark place mentally and was not making healthy financial choices because of it – if purchasing something brought me a moment of joy, I was purchasing it without discretion. This period of time is where the majority, that is to say, the high-interest credit card portion, of my debt came from. 

In August-ish of 2018 I was getting my feet under me again, able to make minimum payments and cover my bills with my paychecks. I was also starting to research options because I knew making minimum payments on high interest credit card debt wasn’t going to get me anywhere. But goodness, was I afraid. I was so afraid of making the wrong choice that I wasn’t making any choice at all. I was burying my head in the sand, afraid to make a plan, afraid to make my situation worse, afraid to cause more harm to my future self.

I looked into EVERYTHING. What I knew for sure: I wasn’t interested in taking the ‘easy way out’ and tanking my credit in the process. What I found? InCharge Debt Solutions. They are an accredited non-profit organization with a fabulous Better Business Bureau rating that specialize in helping people pay off their debt. They are a debt relief program that does not function by making you miss payments and becoming delinquent. Instead, they work with your creditors to negotiate a lower interest rate on your debts and, if you have multiple creditors, they will consolidate your debt as you will be making your monthly payments to them rather than to each creditor. The only “hit” your credit takes is when your card/loan is closed, no different than when you pay off a mortgage or an auto loan.

What did they do for me? They worked with my credit card company to close my card and obtain a much lower interest rate on my remaining balance. While my monthly payments didn’t change much, the amount that was going toward the principal balance did, taking me from a 30-year payoff plan to a 4 year, 8 month payoff plan.

The process was easy: I completed the application online in late October of 2018, I ignored their phone calls for weeks while I wrestled with what to do, I finally called them back and went through a “financial counseling” session over the phone that lasted about 40 minutes (late November 2018), I signed an authorization allowing them to speak to my creditor on my behalf, and I waited.

In the meantime, I updated my financial spreadsheet (my “budget”) and formulated a plan of my own. When I accepted my job, I negotiated a salary that was higher than they wanted to start me at, based on my previous salary that I knew would cover my bills without the added expenses of doctor bills, board for my horses, two living places, etc. I also knew upon hire that my position was “eventually” going to be restructured into a manager role. I am very blessed that that restructuring happened sooner rather than later so in late 2018 I was in the process of being promoted and that promotion came with a substantial pay raise that I intended to utilize to get out of debt. While a small portion of my raise took effect December 1, 2018, the majority was to take effect January 1, 2019.

December 5, 2018 was the last time I charged anything to my credit card – and it was an oopsie, it was my AAA membership renewal I had forgotten was linked to the card.

Debt as of January 1, 2019

Pickup: $8,141 Interest Rate: 1.99% Monthly Payment: $460
Student Loans: $6,594 Interest Rate: 5.875% Monthly Payment: $163
Credit Card: $43,600 Interest Rate: 19.65% InCharge Interest Rate: 9.90% Monthly Payment $1,068

Total Debt: $58,335

Although my student loan payment is $163, I have ALWAYS, at a minimum, paid $200 per month. I decided to continue paying that $200 as if it were my minimum payment due. (It’s not much more than the minimum payment, but every little bit helps!)

My plan was to pay off my pickup first. Again, I wrestled with this because it was my lowest interest rate debt, but because it was my lowest interest rate debt, I would be able to pay it off quickly. At $460 each month, it was also my second largest monthly debt payment. If I paid an additional $600 on this payment each month from January to August of 2019, it would be paid off.

(Obviously this was neither the “snowball” method nor the “avalanche” method of paying off debt. Snowball would have had me focus on my student loans because they were my lowest balance and avalanche would have had me focus on my credit card because it was the highest interest rate. For whatever reason, I chose to pay off my pickup first… I guess I have always felt the need to buck some rules!)

In early June, 2019 I was laying in bed thinking about the way the paydays would fall and realized I could probably pay off my pickup a month earlier than I anticipated. I double-checked my calendar (we all know that calendar and clock reading aren’t my fortes) and indeed found this to be true. I decided to alter my payments to pay off my pickup in July and use what would have been my August pickup payment toward hay. 

On July 8, 2019 I made my final pickup payment. (WOOHOO!!!!)

Debt as of September 1, 2019

Pickup: 0
Student Loans: $5,063
Credit Card: $37,174

Total Debt: $42,237
Total Paid: $16,098

Next, to tackle the credit card. Beginning in September of 2019, with no pickup payment to make, I planned to pay, at minimum, an additional $800 per month to InCharge for my credit card. This would pay off my credit card in two years, in September of 2021.

Debt as of January 1, 2020

Student Loans: $4,358
Credit Card: $32,529

Total Debt: $36,887
Total Paid: $21,448

In November and December of 2019, I gave myself a reprieve from my extra payments to be able to use that money for both some Christmas shopping and a necessary hay purchase. 

It also became apparent that paying an extra $800 per month was stretching my budget on months when the electric bill was super high, so I allowed myself flexibility and started paying between $700 and $800 extra without feeling guilty for “not sticking to my plan”. As long as I paid everything off in 2021, I would consider my repayment plan a success.

Note: Somewhere along the way in 2020, I bypassed the “halfway” mark and it started to feel like an accomplishment.

November 2020

It has always been our long-term goal to move to Montana. In November, while not property shopping, we came across a property that was too perfect to turn away from. It was already rented and we knew we could continue to rent it out to pay the majority of the mortgage until we were ready to move… so we put in an offer and were elated to learn of it’s acceptance! 

There were a few large hurdles with the property status itself so we knew it would take quite a bit of time to formally close. Because Kelly’s job offered him the “opportunity” to essentially work as much overtime as he wanted, we knew we would be able to pay the part of the mortgage not covered by the renter (and the whole mortgage if necessary) without altering our budget and financial goals too terribly much.

Debt as of January 1, 2021

Student Loans: $2,007
Credit Card: $13,941

Total Debt: $15,948
Total Paid: $42,387

When 2021 rolled around, all I could think of was how close I was. So close I could, almost literally, taste it. We were still waiting for our Montana property to close and become officially ours and we knew we couldn’t afford to make the move until we had all of our debt paid off except the new mortgage… because, generally speaking, wages are much less in Montana.

I had never been more motivated than seeing my total debt balance in January of 2021. First of all, it was “normal”. Many Americans have that kind of debt… I felt less shame. Second of all, my goal felt obtainable. When I first started this journey in 2019, nothing about it felt obtainable. 

As I got closer to my goal, I decided to terminate my participation in the InCharge Debt Solutions program after my May payments. By then, the lower interest rate wouldn’t make that much of a difference but having control over when my payments were made would make a lot of difference in relation to my statement cycle and paycheck cycle. 

And then, in mid-June, I decided that on my next payroll cycle, I would pay off my remaining balances using part of my savings account in order to save the interest. Then I would just pay my next couple of scheduled debt payments back to myself before moving onto the next goal.

THE BIG DAY!!!

On June 14, 2021 I made my final payments. 

Debt as of July 1, 2021

Pickup: 0
Student Loans: 0
Credit Card: 0

Total Paid: $58,335

AND OH HOW GOOD IT FEELS!

My original goal was to be debt-free in under three years but things change… I’m not “debt free” because we purchased a house (closed in April 2021) and have a mortgage, but I did pay off my short-term/high-interest rate debts (vehicle, credit card, and student loans) in 2 years and 6 months. 

Next up: pay off Kelly’s pickup!

*Note my “total paid” does not take into account interest, only the original principal balances of my debts when I began this journey.*

Wait, you were paying HOW MUCH toward debt per month? 

Yeah, it was a lot. And I know everyone’s situation is different. I moved to Washington from Montana with my brand new college degree with the intention of being paid a good wage in my field (Business/Finance/Human Resources). That good paying job, paired with having a supportive partner, made it possible for me to really crack down on my debt.

But Briana, what about your credit score during all of this? 

I started with a credit score over 800 and it had been incrementally dropping during 2018 to a low-point of 720. Once I started diligently sticking to my plan, my credit score increased and held steady at 775. In mid 2020, it was creeping back up  to within a few points of 800 again and in early 2021 it tipped over 800.

Did life completely suck?

No. I think that’s part of what scared me away from following any well-known financial advisers or plans. I have a strong work ethic and I can stick to my budget but I needed the freedom to not feel guilty about still enjoying my life and not putting “every available dollar” toward my debt. I still needed some of those “available dollars” to fill my diesel tank to take us to the mountains, to help our budding horse breeding program, to take us out to supper once in a while. 

I set a realistic budget and I stuck to it. 

How do you feel about all of this now?

Honestly, I still feel pretty sick to my stomach to think about those numbers… that would have been a good nest egg to have! But I would never expect someone to bail me out of my problems nor would I ever expect my problems to magically disappear so really, there was only one clear way out: pay it off. And I’m proud of myself for doing that.

Why am I sharing my story?

This is the scariest, most honest and real and vulnerable blog post I have ever shared and I am definitely not sharing it to brag. But I felt so, so alone when I was in the thick of it and my own negative feelings were keeping me awake at night thinking about how completely stupid I was. 

I think when we find ourselves in significant debt, we feel shame and fear and often those emotions cripple us from facing the problem and finding a solution.

At least, that’s how it was for me. 

I was afraid to tell anyone because I was sure they would think something along the lines of, “wow, she must have been really dumb to get into this situation” or “geez, she must have zero knowledge about the value of a dollar and how to handle her finances.” And in all honesty, neither of those things are true. 

And yet I still found myself in debt.

So I guess this is me, a regular person with a regular occupation who makes a regular salary (and did not win the lottery!), telling you that there is help out there, that you can do this, and your financial situation can improve. 

But it starts with a choice.