Our Debt Free Journey

In The Beginning

Today is a bitter-sweet day for us.

Five long years ago we were struggling with debt, overwhelmed with  multiple repayments and living paycheck to paycheck.  A story I am sure many of you can relate to.

Desperate, and with our tails between our legs, we trundled off down to the bank.  Mercifully {insert sarcasm} they approved a $50,000 unsecured personal loan and we consolidated all of our debts.

July 2011 was supposed to be the beginning of a new chapter for us.  Our path to Debt Freedom.

The new monthly loan repayment was less than the total amount we had been paying, and with a clear five year plan, we were set to be debt free… or at least that was what we thought that day walking out of the bank.

Debt consolidation was supposed to be our Get of of Jail Free card, our fresh start, but three and a half years later we had managed to rack up another $56,828 in car loans and credit card debt.  Plus we still owed $16,109 on our previous consolidation loan.  Our financial situation had not budged an inch – in fact, we had gone backwards.

Then Murphy struck.  My husband, who was the main income provider, was injured and unable to work full time.  Without warning  our monthly income had been slashed in half.

I vividly remember that night when the proverbial sh!t hit the fan in February 2015.

My husband came into the lounge room at about 4am.  My eyes were red from crying.  He asked gently if I had been up all night.  I had.  But I also had a plan.  A budget. It was tight, and it was going to hurt.  It was a lifestyle we were not use to.  But it was our only option.  The bank wasn’t going to bail us out this time – we didn’t have the income to secure another loan.

Murphy visited us a lot that year.  Our rent went up, the washing machine died and someone tipped an entire cup of water though the laptop.  My husband’s condition worsened and was finally diagnosed with a chronic pain disorder called Complex Regional Pain Syndrome that was not going away any time soon.  Birthdays were basic and Christmas was essentials only – our two teenage boys were given socks and undies as their gifts that year.

To put it mildly, 2015 was not our year.  We had spent most of it clinging desperately onto our old way of life, but towards the end reality had set in.  I had thought that night in February 2015, that things couldn’t get any worse, but they did.  I though we couldn’t tighten the budget any further, but somehow we did.  Amidst all the chaos of 2015 we had managed to pay $22,033.86 off our total debts.

At the end of what we were calling ‘The Worst Year Ever’, we were somehow financially out in front.

Then we encountered February 2016.  A meaner, more aggressive version of Feb ’15.   Our income was again cut, this time by another 20%.

One fifth of our income was just gone.  To complicate matters, a technical glitch meant all of my husband’s payments were coming in incomplete or late, or both.

Our minimum debt repayments had hit 42% of our disposable income.  We were drowning in debt.  $50,418.74 to be exact.

Again we approached our bank about consolidating our debts into one loan.  Again we were knocked back.

Given the uncertainty of our main income coming in in a timely manner, the possibility of applying for Financial Hardship was raised.  After being directed to another department in the bank and discussing the ins and outs of that route, the “B” word was discreetly dropped in the conversation.

Bankruptcy.

Although I had always felt a certain amount of shame about our financials, this was the first time I actually felt like I had completely failed.

As vividly as I remember the earlier ‘Night in February’ (in 2015), my heart still feels the heaviness of that moment in February 2016.

Again there was a sleepless night with many tears.  But by this point, I was completely broken.

Then something totally bizarre occurred.  One of my favourite fitness personalities on Facebook did a complete 180 on her page.  Danny Johnson went from free fitness tips to free financial tips.  And little did I know, those tips were 100% pure gold.

In February 2016 Danny ran #FindTheMoneyProject   It was a simple but effective set of steps to find extra money in your budget.

What did we have to lose?

We “Ate All The Food” instead of going shopping, and we “Sold Our Sh!t”.

Somehow we got through February 2016.

But the seeds of something bigger were also planted.  Danny and her husband had crawled out from under a mountain of debt, and were now financially free and living the kind of life I wanted.  If they could do it, then why couldn’t we?

Knowledge is power as far as I am concerned, and the biggest thing I took away from Danny’s videos was that I knew nothing about personal finances.  I went on a mission, wanting to learn everything I could about budgeting and getting out of debt.

I found my way over to Dave Ramsey’s world.  That’s an interesting place!  I read Dave’s book, The Total Money Makeover, and listened to every Dave Ramsey YouTube video ever made.  I started talking like a raving lunatic about ‘gazelles’ and ‘beans and rice’.

My family thought I had finally cracked.

I got a side gig delivering catalogues, and then another delivering newspapers.  I found creative ways to feed a family of 5 on $50 (Australian) a week.

I squirreled away bill money and a fortnights worth of rent, and saved $1000 for an emergency fund.  I kept selling all our stuff.  I said “No” a lot.  Every cent I could find went into our “Do Not Touch” account.

We are now two months into our debt-free journey and today we paid out what remained of our initial consolidation loan.  It took us 4 years and 8 months (we paid it out 4 months early).  We still have a long way to go; $24,799 in credit card debt, $5,508 in store cards, $25,667 in Higher Education loans and $13,364 to buy out our novated lease cars.

Today is bitter-sweet.  Today is a win and it will be the first of many.  But it is only the beginning and the road ahead will be unlike any we have encountered.

Our goal is to be COMPLETELY DEBT FREE by December 2017.

This blog is to keep us accountable.

And perhaps to inspire others to, as Dave says, “live like no one else, so one day you can live and give like no one else”

I hope you will join us

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