Debt · Financial Independence · Our Story

Debt-Free … Now What?

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We did it! After paying off more than $130,000 in non-mortgage debt, we were finally debt-free.

We continued to put away the Dave-Ramsey-recommended 15% of our income into retirement plans, year after year. But as our incomes increased, the phenomenon known as lifestyle creep slowly began to take hold of our lives.

We bought a third car, a BMW (but it was okay, because we bought it used). We stopped couponing and started eating at Whole Foods (but it was okay, because we were trying to get pregnant and needed to eat healthy). We traded in our “small” 2100 sq. ft. home for a 5,000 sq. ft. monster with five bedrooms and four full baths (for all those children we were going to have).

Then I needed new furniture for my new house, right? And it only makes sense to paint before we move in the furniture. And new carpets, of course; we can’t have a baby crawling around on who-knows-what on the old carpets (we still didn’t have a baby at this point, I should mention). And we put it all on no-interest promotional payment plans. But it was okay, we could afford the monthly payments and still contribute our 15% to retirement. No problem.

I puttered around on the T. Rowe Price website every few months, putting our money into a mix of funds I sort of researched. The account grew slowly but surely, and I patted myself on the back for a job well done.

Then, for some crazy reason, we decided to buy a second home in my hometown so we could have our own place to stay when we visited my family. I bought a bank-owned property for $25,000 and began the process of fixing up the house. I convinced myself that it wouldn’t be too much work, and besides, a relative had agreed to stay in the house and pay me rent while I fixed it up.

Then an amazing thing happened…

I got pregnant!

After twelve years of marriage, we’d just kind of assumed it wasn’t going to happen. But there I was, a summer day in July, staring at a positive pregnancy test.

My first thought was pure happiness. We were going to have a baby!

My second thought was, Oh s&$t! We’re having a baby!

Everyone knows how expensive it is to raise a kid. Everywhere I’d turn, there would be constant reminders about the cost of raising a child. I started to worry. Deep down, I knew we weren’t saving enough, and the guilt started to creep in. I’d only just found out I was pregnant, and I was already blaming myself for not being disciplined enough to save up for a baby we were beginning to think we’d never have. I thought about our Dave Ramsey days and how much that “gazelle intensity” impacted our financial lives back then, and I felt ashamed for letting it spiral out of control again.

Our giant house came with a giant mortgage and property tax bill. We hired a lawn service to keep up with the yardwork. The renovations on the second home were not going as planned and my relative was spotty with the rent payments. We watched a lot of television and sprung for premium channels like HBO and Showtime on top of our cable subscription (on top of our Netflix and Amazon subscriptions…). We ate out for half of our meals, if not more. I gained a lot of weight.

A little marriage counseling and/or one-on-one therapy probably would have gone a long way back then, but we didn’t think we needed it. It didn’t even occur to us that we were unhappy. We had the nice house and the luxury cars, but looking back on it now, it’s clear that we were missing something in our lives. We were the first of our circle of friends to get married, but now they were all on their second (or even third!) kid, and we still just had our three little dogs. We joked about not wanting kids, about being able to do whatever we wanted, because it was just too much to explain it any other way. Our families constantly badgered us about having kids, to the point of actual shouting matches between my husband and his parents. My uncle called us selfish and shallow.

It’s no wonder that we filled our days and emptied our wallets with useless things.

But now, this teeny tiny line on a stick had just changed everything.

From that moment, I was determined to get things back on track. Not just financially, but in other areas of our lives as well. We’d gotten soft and complacent and bored.

I’ll never forget walking around my house that day. I saw the place in a whole new light. The clutter on the dining room table. The messy, unorganized kitchen. The basement stuffed with … well, stuff. I felt bloated, but not from the pregnancy!

I kept the pregnancy a secret from my husband for a few weeks until I could plan a photoshoot reveal. I wanted to capture the look on his face forever when he found out the news! In the meantime, I began working on a plan.

Of course, every good plan begins with research. Every free moment I had, I was reading. The more I read, the more I realized how little I knew. I didn’t know what our insurance covered. (I didn’t even have a doctor!) I had no idea how much daycare cost. We would have to get wills and life insurance. And, at 38 years old, I had yet to change a single diaper in my entire life. I had a lot to learn in a short amount of time!

After devouring the required reading for any new mom (What To Expect When You’re Expecting, Ina May’s Guide To Childbirth, among others) I turned to the Internet. One day, while reading through the comment section of a popular mommy blog, someone linked to the following article: What do newborn babies really need?

The article was on a website titled Mr. Money Mustache. What a weird name for a website, I remember thinking. But I was hooked! I probably read twenty posts that day, and so began my journey down the rabbit hole of FIRE.

FIRE is an acronym for Financial Independence, Retire Early. It can mean different things for different people, but the essence of the movement is maximizing one’s savings rate through lowering expenses, increasing income, or both. According to Wikipedia:

The objective is to accumulate assets until the resulting passive income provides enough money for living expenses in perpetuity … Upon reaching financial independence, paid work becomes optional, allowing for retirement from traditional work decades earlier than the standard retirement age.

I finished the entire MMM blog in the span of a week, and I wanted more! Before long, I discovered the Afford Anything and ChooseFI podcasts, and I listened obsessively. I read J.L. Collins’ book, The Simple Path To Wealth, in a single day. My excitement grew with every post I read on blogs within the FIRE community. I began to envision a future where my husband and I could do meaningful work on our schedule while raising our child and traveling the world.

I couldn’t wait to tell him all about my new plan. But first, I had to tell him about the pregnancy!

My sister is a professional photographer, so we planned a photoshoot day under the guise of scouting out some new locations for an engagement shoot she had coming up. We trekked all over the city, posing and smiling. The last location was a special place: a bridge on my mother’s farm where I grew up. At this location, my sister gave us each a chalkboard and had us stand back-to-back. On the chalkboard, we were to write three things we loved about the other person, and then on the count of three we would turn around to reveal what we’d written and my sister would capture the expressions on our faces. My husband obediently wrote down his three, but my chalkboard had a different message:

Needless to say, he was thrilled!

After the shock wore off (this took at least several weeks), I decided the time was right to drop some FIRE knowledge on him. One day after work, I sat him down and began spouting off about expense ratios and the 4% rule and travel hacking and how he could retire in ten years … and then I saw his eyes glaze over.

“Okay, whatever you need to do,” he said. The conversation was over.

I was disappointed that he didn’t share my enthusiasm, but looking back on it now, the approach was all wrong. My husband has never been “into” the finances; since he travels for work, it’s just something that I’ve handled since before we were married. Admittedly, I’ve made some mistakes along the way, but we were fortunate enough to have a decent start on some retirement savings, and we could pay off our debt if we sold the second home. I began to realize that I didn’t need to inundate him with facts and figures and spreadsheets to prove to him this was the best path for us. All I needed was for him to trust me and eventually (I hoped!) the results would speak for themselves.

It’s been two years since I found out I was pregnant, and we’ve been dipping our toes into the waters of financial independence. We’ve had several setbacks but also some triumphs along the way. My husband has stayed pretty hands-off, as expected, but we do celebrate our wins together. I feel much more secure with my decisions now, and I know we are on the right path for our family and our future.

Here are a few things we’ve accomplished so far:

  • We lowered our monthly expenses by $350 just by cancelling various subscriptions
  • We sold the BMW
  • We saved $120,000 by switching to low-fee index funds
  • We opened Roth IRAs
  • We opened an HSA
  • I quit my job to stay at home full-time with my daughter
  • I’m learning to cook (a work in progress!)
  • I began side hustling to increase our income
  • We bought a third property (still working on the second one!)
  • I lost 45 pounds (20 to go!)

I started this blog for multiple reasons: one, to document our journey to financial independence; two, to hold myself accountable; and three, to help others on their own path to FIRE. We might not be a shining example of how to achieve financial independence, but at least we can help others learn from our mistakes. I plan on updating this post with our achievements as a reminder of how far we’ve come, and to show others that FIRE can still be possible, even if you screw up a few times along the way!

Get started on your own path to financial independence!

2 thoughts on “Debt-Free … Now What?

  1. I love your story! It’s so inspirational to see people that had all the nice things but then realized it didn’t make them happy and they work to discover what happiness truly is to them by being more mindful. Also, I love the way you told your husband you were pregnant! I wish I was that creative with my announcements!

    1. Thank you so much! It is very much a work in progress for us but it’s coming along! And I can’t take credit for the announcement idea; that was all my sister! 🙂

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