Two of my best friends are currently working their way through paying off all their debt. My girlfriend said she thought paying off debt was a bit like having a child in that you forget about how hard it was after you get the outcome of the labor. She might be right.
About five years ago, I had a surgery that forced me to leave my current job and accrue $30,000 in medical debt which wasn't covered by the insurance I had at the time. We didn't have a savings and we'd just sold our three bedroom, one bath house and bought a four bedroom, two bath, two living area house. In total we owed $160,000 including our mortgage. It seemed pretty clear that we had put ourselves in a bad situation and we needed to work hard to get rid of all that debt.
My husband took a second job. I took an on-call overnight job that I was allowed to work while I was on medical leave. When my medical leave was over, I also took a second job. We each had two jobs (one full-time and one part-time) and we also decided to rent out our extra bedroom and living room to a relative.
This was a hard time. Our marital relationship suffered horribly. We were never together. Never. Our kids would even say things like, "Mom, Daddy's home. Its time for you to go to work." Still, we pushed through and paid off all debt except our mortgage. Even though we didn't pay the mortgage off, we did manage to get it down to $98,000 from its original $130,000.
Once we got rid of the $30,000 in medical and paid our mortgage down to the point that we could refinance into a conventional loan (because we finally had at least 20% in equity), my husband quit his full-time job and took a part-time job elsewhere. I got promoted at work and quit my part-time job. So, we were down to one full-time job (me) and one part-time job (him). Once we finally had the savings account we should've had before, I left my full-time job and took a part-time job on-line so I could began homeschooling our kids. We were living on two part-time incomes comfortably even though we still had a house payment of $750/month! The reason this wasn't a struggle was because we were so used to living ultra frugally in order to pay off all that debt!
We both really loved working part-time and homeschooling our kids. It was nice to finally spend some time together as a family (although there was lots of initial conflict as my husband and I were not used to spending time together). We decided our ultimate goal was to live debt free and to make our home as self-sufficient and thus, as low cost as possible.
We were still living in our four bedroom home, although our relative who was renting had moved out. We had fruit trees, grapes, gardens, and chickens, but in order to start on our path to being debt free we needed to get rid of the $98,000 mortgage. We looked at buying a cheaper house in our current city and found a place for $80,000 which we really loved, but it had a small yard and was on a busy street. Still, we could sure pay an $80,000 house down faster than a $130,000 house. We prepared to make an offer on that house, but someone else bought it because we dragged our feet only one day too long!
That summer we went on a camping vacation where we visited a more rural area. We liked it. We made a couple of friends who lived nearby. It seemed like a place where people were living a simpler, slower pace of life. We went home and talked about moving there, but doesn't everyone talk about moving somewhere after a good vacation?
For the next two months we focused heavily on repairing our marriage from our years of disconnect. Then, one day we decided we should really just take the plunge and move. We had looked at a house in the area of our vacation and we decided to make an offer on it. It was listed for $17,500 and was in pretty rough shape. There was mold in the attic, ceiling leaks everywhere, and it smelled horrible. We offered the owner $10,000. We thought he might be offended, but he came back with $15,000. Negotiations had begun! As you all know, we got the house for $13,000. He was holding at $14,000, but when we said we would close quickly and pay in cash, he agreed to the lower price.
Perfect, right? But, wait. We still didn't have a plan for that big $130,000 home.
Our old house in the city
The housing market was terrible and we didn't think it would sell. We went back and forth between whether to list it with a realtor or put it up for rent. We decided to go with a realtor because we knew we were going to be living on a very small budget and we didn't want to deal with someone deciding not to pay their rent.
The realtor came by to pick up the key. Luckily, though we didn't sign a contract with her. Here's why . . .
Our old house was about 1800 square feet and our new house is 850, so we were selling things like crazy on Craigslist to prepare for the downsize. Things were selling so well and quickly, I thought, "What if I listed the house on Craigslist?" I did, and it sold in five days! The best thing was the new owners wanted to move in right away and they did not want us to fix or paint anything because they planned to remodel the place to their tastes. This was great news because I really did not have the energy to do a bunch of painting on our old house and then turn around and do a bunch painting for our new house.
My husband quit his part-time job, we packed up the U-haul, and moved to live our simple, debt free life, on only one part-time income. As I tell this story, even I am amazed that we paid of so much debt so quickly. I always tell people that we paid off $30,000 in a year and a half. That's true, but we also paid down $32,000 on our mortgage! I honestly forgot about that. So that's a total of $62,000 in debt repayment in a span of about four years.
That's our story. We have been there. We have paid stuff off. We have worked two jobs each. What we have now is our reward, which is a simpler life with lots of time together.
What about you? Do you see yourself somewhere in this story? Was it helpful to learn more about our journey?
Some people are so poor all they have is money.