Our Journey to Financial Freedom – Part 2 – How We Got Into Debt

I took an accounting class in high school which was a glorified how-to on balancing a checkbook. Other than that one class, real teaching on monetary topics never happened. Without a fundamental understanding on how to budget, why an emergency fund is needed, and what college really costs I became an adult without knowing how to handle money.

My first loan was from my dad when I was 16. I was tired of sharing a baby blue with white vinyl top 1987 Cadillac Brougham (look it up for some laughs) so I decided to purchase my own car. I had been working at The Pizzeria, mowing lawns and working for my family to earn and save up what I could. At the time I had about $900 but finding a reliable car at that price was difficult. Someone two years ahead of me in school was selling a burgundy 1993 Pontiac Grand Am sedan for $1,500. My dad graciously offered to close the gap and I could pay him back. Not wanting to drain every cent I had, I took out $750 and he kicked in the other $750. Over the next six or so months I paid him back in full without interest – quite generous.

When I was a senior in high school, that four door family car wasn’t cool enough. I was able to save up a bit more money, could use the Grand Am as a down payment but still didn’t have enough to pay cash for a cooler car. My dad offered to cosign a loan for me to get a 1997 Dodge Avenger. So at 18 years old, still in high school and working at the local pizza joint, I took out my first bank loan for $4,000 and a monthly payment of $120. 

Around that same time, our guidance counselor was helping most students figure out what college to attend. In 2004 the message was clear – either go to college and make a lot of money or be stuck at one of the local factories making minimum wage. Considering I already had a car loan on a measly $5.15 per hour, there was no money saved up for college so I had to apply for grants and loans. 

My parents once again helped fill out the ridiculously long FAFSA and I waited to see how much grant money would be provided. Grants were not enough to cover the local Ohio State University branch, so loans were needed. After six months I dropped out as I had no idea what I wanted to do for a living and preferred to party it up. After a year or so break from college and realizing I didn’t want to work at Sam’s Club forever, I enrolled in a local community college. Filling out the FAFSA wasn’t enough to cover everything, so student loans became an anchor to my life for the next 15 years. Normal student loans weren’t enough to cover my terrible budgeting or all the concerts I had to attend, so secondary student loans entered the picture.

We got married in 2008, Nolin was born in 2009 and making ends meet was tough. On someone’s recommendation, I decided to go back to college for a bachelor’s degree. Not only would a bachelor’s degree help my career, but the current student loans could be deferred while going back to school. It seemed like a win-win. Might as well rack up more student loan debt while not being able to afford the current student loans, right?

As can be seen, loan after loan after loan was taken out without the cost being counted. There was always something else that I needed to have or needed to do. It was ingrained in me that “If you can afford the payment, you can afford it”. It would take until 2018 to realize that was not the case. Bad decision after bad decision led us down the path to debt upon debt. 

We always thought debt was a way of life and that it would always be around in one form or another. How could someone afford a car without debt? How could someone get a college degree without student loans? In 2018 we began listening to Dave Ramsey and his debt snowball philosophy. Dave Ramsey’s steps are simple, but it takes intentionality to make them work. It’s easy to get into debt, but getting out of debt is a long hard road that is worth every step.