Confronting Reality

Holy smokes. Holy schnikeeez. Holy suffering cats. Holy catfish. Seeing those numbers on screen and out in the open is a gut-wrenching eye-opener. Of course Nate and I have talked about our debt many times, but it all becomes very real when its laid out like that in the handy dandy spreadsheet. It’s terrifying, actually. But that is why we are going to get rid of it. We don’t want to be slaves to interest or loans. We are going to come together as a couple to get rid of that burden in our lives. For richer or for poorer, right? Sacrificing now for a couple three, four years (Nate will get into that) will allow us to reach our goals in a way that will make us so much more appreciative. Remind me of this when we are knee-deep into hardcore budgeting and I hate dislike my life because we are so broke and can’t do anything we want to do. Here are some of my thoughts going into this process:

·      I hope other young couples can relate. I know there are many other couples out there with a large amount of debt. There have to be other couples too, then, that are trying to do the same thing we are. That’s one thing that I’ve struggled with a bit—Nate and I don’t really have anyone to talk to that is in our same situation. We know people who have student loans, we know people who are paying off student loans, and we know couples, but we don’t know any other couples who are trying to pay off a large amount of student loans in a short period of time. So, in this process, I hope to connect with other couples in the same boat.

·      One of the reasons that I was initially “afraid” of this process was because it makes me adjust my timeline of life events that I had planned out in my head. For as long as I can remember, I wanted to get married young, buy a perfect little house that’s on acreage so there can be gardens and a tree house (so idealized, I know), and start having kids young. All of my friends know this about me, even though some of them roll their eyes when I talk about it. I had always “planned” to have kids around the age of 25. But now, because of what we are doing here, that’s not going to happen. And to be honest, it really...I don’t know what the correct word is...pains me to not be able to do that. Nate obviously knows this, and it bothers him that I’m hurt by it. Motherhood has always been something that I’ve so been looking forward to. It’s such a beautiful and wondrous thing and I’m impatient to get to that point in my life. So in the time being, Nate and I will be able to build a firm foundation of our relationship, have those years to ourselves, and totally be ready for when the time is “right” (as “right” as it can ever be). But I know that when it happens, it will be all the more beautiful. We both want a house and kids, so it will be motivation for us. Plus, I have my niece, Sydnee, and nephew, Taylor, to fulfill my “I want a baby!” urges. They are the cutest kids. Ever.

·      I’m really going to depend on Nate throughout this process. He is the money man. He is the one who totally understands all of this money business. I only understand the basics because my brain just doesn’t work like that, it never has. I’m so grateful for him and his ability to know the numbers and make a realistic and informed plan. And I’m so grateful that he is patient enough to explain things to me in a way that I can understand. Well, sometimes.

·      I’m thinking that we are going to need to get real creative with how we spend our money. We are going to need to rethink all of our purchases in terms of entertainment, food, things/décor for around the apartment, etc. But secretly, I think both Nate and I are kind of excited for that. It will be something that we can do together. We can look around the cities for fun, free (or cheap!) entertainment, ways that we can cut costs on food, and can start doing DIY projects around the apartment. I think it will be a good opportunity to get out more and do things like go to nearby regional or state parks with the pup, for example. If we need to do these things in order to put as much money as we can toward our debt, might as well have a little bit of fun.

·      It will help us live a more simple life. In today’s world, a lot of emphasis is put on the possessions you have and the brands of those possessions. Of course I like nice things. But I also know that these things are totally unnecessary to be happy. Am I jealous of people who have designer clothing and accessories? Sure. Would those items make me have a higher quality of life? No. Going through this process will really show Nate and I what the important things in life are. Even though we won’t be able to buy fancy clothes or items, go to dinner every week, or spend lots of money on fun things to do, we will be able to spend time with family and friends, make dinner at home together, and go on lots of walk with the pupperz (yes, I call Mazi that—don’t judge me). Paying down debt and being on a strict budget will force us to realize what’s truly important in life and how little you actually need to be happy. And there’s real value in that.

            Let the adventure begin.

Pregame

Seeing that this blog will most likely be maintained by my beautiful bride-to-be, Shaina, I thought that I would get in my two cents right away before the opportunity escapes. When I first suggested that we start a blog, it was more a result of knowing that paying off debt, being constantly in the numbers, and knee deep in my infamous spreadsheets and formulas, isn’t as exciting or even tolerable to Shaina as it is for myself. With my accounting background and currently working as a corporate accountant for a large insurance company, I’ve seen my fair share of spreadsheets. The nerd in me will definitely come out during this process, as I will be the one disclosing the facts about the debt we are tackling and giving updates in regards to the numbers. I thought this could be a way to not only allow others to join in the journey with us and offer advice from our experiences on what is working and what isn’t, but also give her a way to journal her thoughts and feelings on how someone who wants to be debt free (but who could care less about diving into the numbers day in and day out) deals with all aspects of this journey. We hope that this will also help keep us accountable to our readers and followers, even if they are few.

To start I will talk about a few of our life’s goals to set a stage for why we are taking this project on. We will be married on October 5^th of this year (2013), so life goal #1 – check! Secondly, we want to have kids. Even though I think this is both the #2 goal for us, the complication is that a few things need to happen before that, thus the sub-goals. Goals:

                 

#1) Married – check! (well, almost)

#2) Kids

                  #2a) Homeowners

                  #2b) One-income family - Shaina wants to stay at home with the kids

These may not be what everyone thinks is necessary to have kids, and in all reality it isn’t really necessary, but is something that we both have discussed and decided upon. We want to own a home before we have kids— to raise them in an environment that we would feel most comfortable and stable for our kids to grow up in. Again this is our personal opinion and preference.

When talking with others about our thoughts on this issue we got a few different answers, but most fell into two categories:

1) You’re young; paying off debt is a good idea now when life’s responsibilities are few

2) The “YOLO” response. You only live once, so don’t let debt get in the way of doing what you want.

While many of these responses were from family and friends, whose opinion is very much appreciated and respected, the decision is ultimately up to us. As long as we decide things together, are on the same page, and are headed in a direction that we both feel is best for us and our future family, I think it's important that we don’t let the opinions of others force us to change our plan once it’s in motion. It’s hard and sometimes frustrating to hear others’ opinions of how you should plan your life, especially when they may or may not know all the facts, but in reality it’s also important to listen to everyone’s opinions and take their advice into consideration while first deciding on a plan that works best. Everyone’s opinion is built off of something, whether general knowledge or past experience. For this reason, totally disregarding someone’s opinion would be foolish. However, applying it to this specific situation may be the challenge.

“The irony of the Information Age is that it has given new respectability to uninformed opinion.” ― John Lawton

For those who do not know us, and also for those who do, I will set up our financial situation so that maybe our opinion and decision to pay off our debt will be better understood. I’m sorry if this gets a little boring for some of you, but stick with me. I know transforming into super-nerd won’t save the world from over-sized robots, but hopefully it will help you understand our view point.

            I’ll get right to that point. We have a lot of debt. For two young adults, trying to start their lives in the right direction, debt can be a huge burden. For those who have not had debt looming over their heads, that’s a true blessing and I’d be lying if I said I wasn’t a little jealous (okay, very jealous). For those who know how heavy debt can be, we feel your pain. Almost all of our debt is student loans. Ah, student loans, the American dream buzz-kill. Looking at the table below, you’ll see that most of this debt problem is my fault. One can’t really know how going to a different school would have impacted their lives. But for me it’s hard not to wonder about that sometimes. For now I need to accept that my choice to go to the smaller, private, more expensive Bethel University to receive my Bachelor’s degree in Accounting got me a good job but a whole lot of debt. Roughly 2/3 of the debt has my name on it. Bringing that much debt into our relationship doesn’t make me feel like a hero by any means, but it does motivate me to step up and do my best to get rid of it.

 

           Referring back to our goal of home ownership as well as Shaina wanting to be a wonderful stay at home mom, I knew two things: with over $1,500 in loan payments a month, either we won’t be able to afford the house we want and would have to settle for something a lot less, or with the large amount of loans, our debt-to-income ratio would simply get our loan application flat-out denied. The second option literally won’t get us anywhere, and with a purchase at the magnitude that a house is, settling isn’t something I would ever consider. Either option doesn’t sound too appealing or acceptable, especially knowing that even if we did buy a house at this point, Shaina’s dream of staying at home with our future children would be very tough. Seeing that our monthly loan payments were essentially the amount of a mortgage payment on a more than decent house, to me it was a no brainer. We need to pay off this debt if our dream of having a house and kids is to become a reality anytime soon. It’s not going to be easy, but with my future family depending on it, I know we have more than enough motivation to make it happen.

           I can’t speak for Shaina, but some of the topics I hope to cover in my future posts are:

            -     Pay off Plan

      o    Time frame

      o    Plan of action

            -     Benefits of paying off the debt in the long run

            -     How we budget

            -     How we cut costs

            -     Saving for a house down payment

      o    What banks look for

            -     Plan after being debt free

            -     How I personally am staying motivated throughout