Although 2002-2006 were the lost years, the year that had the biggest impact on us as far as accruing debt is concerned was 2004. In that year, the following events happened:
- We got married
- My husband finished graduate school
- I got a job with the State
- My husband got a job
- We bought a house
- We got a dog
- We bought a new-to-us car
That’s a lot to handle in one year. We didn’t buy a house that we couldn’t afford. We didn’t buy a car that we couldn’t afford. We both had full-time employment. What we weren’t prepared for was all of the additional costs of owning a house–the maintenance and repairs, the higher utility bills, the furniture, the longer commutes to work, not to mention the cost of the dog and the additional expense of a car payment (we had no car payment prior to buying the house. It’s a long, ridiculous story but I gave my little sister my paid for car and bought a new one). And the debt kept on coming and coming. Because we just kept buying and buying and buying. It was a leaky faucet that no caulk could contain.
It went on that way until November 2005 when we had had enough and took out a home equity loan to pay off our credit card bills. You would have thought that having to take out $25K of home equity would have been a wake-up call to stop spending. That should have been the moment where we said enough is enough. But it wasn’t. Nope, we then accrued another $10K or so after that. I don’t know how or on what but in March 2006, our debt totalled close to $60K, not including mortgage or student loans. Looking back and adding it properly, maybe it was only $50K. I can’t remember at this point. It was just a lot.
Then Easter Sunday, 2006 happened. Why is that so significant? That is the day I found out I was pregnant with our daughter. At that moment, everything changed. We finally realized we could no longer afford to keep going in the direction that we were going. Because later that year, we were going to have a small child that was going to be completely dependent on us and we needed to have the money to support her properly. She was not going to suffer because we were irresponsible and couldn’t manage our money.
That moment was the moment we stopped our descent into debt and began our ascent out of debt…