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