I last left off in "Our Financial Journey" series with cutting expenses. Now I get to share about building momentum in the debt snowball. This is where it starts to get fun. As I mentioned in a previous post, in December 2009 we paid off Ciaran's car. This is what Ciaran and I identified as the moment when the momentum began to build. We were beyond excited. But before I go on, I want to take a moment and share exactly why this was a monumental moment in our journey.
Up until December 2009, we had been diligently working for almost nine months, without really seeing noticeable progress. Sure, we were watching the balance on Ciaran's car go down, but we still were feeling the incredibly overwhelming burden of debt. I think the biggest struggle was that even though Ciaran and I have very modest incomes as high school teachers, we'd still never seen this much money go through our hands before and to see it all going out the door as soon as it came in was so disheartening. Ciaran and I longed to have a house of our own with a nice woodshop for Ciaran out back and it just seemed to be a dream that would never come true for us at the current rate we were going. Then after school let out for break in December 2009, we watched that final payment post and received the letter declaring the car was paid in full. We danced around our little apartment, giddy beyond reason. This moment gave us the hope we so desperately needed! This plan was actually working! Ciaran announced at our family holiday gatherings that "Frank," as Ciaran lovingly named his car, was ours! We were so excited!!!!
When we got home in January and sat down to do our monthly budget, the momentum officially began to build. We now had one less payment and all of the funds we had been throwing at Ciaran's car, now could go toward my car. With one less payment, we paid off the remaining balance on my car by May.
I have to interject, before going on, to share our one major setback during this amazing, momentum-building time. In February, Ciaran and I had to suspend our debt snowball as both of us were potentially facing lay-offs. Every penny we had been applying to our debt snowball was funneled into a savings account in case we both lost our jobs. We were so disappointed. To experience the success of paying off Frank Sonata (hehe) and then to have to temporarily suspend paying off my car was really hard for me. We continued to pay minimum payments on my car and student loan all winter long. And what a long winter it was for me! Then spring came and once we found out at the very beginning of May that Ciaran's job was safe, we drained our savings back to just about $3500 and paid off my car in one single payment. [The logic here was that we needed our $1,000 baby emergency fund and $2,500 extra as one full month of actual living expenses, in case I lost my job.] It felt amazing! Looking back, the wait was worth it. Every single, agonzing extra day I had to wait was worth it when I saw the balance online say "Paid in Full."
After paying off my car, with all of the funds that had been going toward our cars, and the $2,500 left over in the bank from our winter of saving (once we knew my job was safe, of course), we were able to knock out our last debt, my student loan, in just under two months. June 19th was the day our last debt payment posted.
During this "momentum building" portion of our financial journey, I have left out something. As the momentum built in the debt snowball, something funny happened. We found ourselves becoming more and more intense, more frugal, more determined to cut expenses than we ever had before. Every little extra penny we could scrounge up, we immediately applied to debt. Before this journey, if a surprise rebate came in the mail we would have treated ourselves to dinner out, or to some fun shopping. But because of what we were learning in this journey, we wanted nothing more than to use surprise money and really, an money that wasn't being spent on necessities, to go directly toward our debt. This is where God really taught us a lot about being content with what we have, with Him and with each other.
Make sure to come back tomorrow as I wrap up this five-part series on our financial journey (thus far).
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