Saturday, March 2, 2013
Something Amazing Just Happened
I am feeling mixed emotions. On the one hand, I am amazed and relieved that we no longer have any debt. On the other hand, I feel guilty that my husband’s big payout had to go to my student loan. He insisted, though, and he pointed out that until a few months ago, all of our money had gone to pay off his debt (we call it “our debt” but in terms of whose name was on the debt, “his” was smaller, so it came first). I still can’t help but feel guilty, but I know that in the long run, we will be happy that we paid off past mistakes so we can now plan our future. I am still shocked at how far we have come in the past three years. When I first quit my law job, I thought we would be in debt forever. Both of our student loans were on 25 year plans, I’d just bought a new car, and our home had dropped substantially in value. Today, we live across the country, we are renters, and we have no debt. Life is all about change, I suppose.
Our next step is a fully funded emergency fund. Then possibly a house, but in this market, I don’t think we will ever be able to afford a 15 year mortgage with a payment that’s no more than 25% of our take-home pay. So we are going to just save as much as we can and see what happens. It’s worked so far, so we are going to just keep plugging away at the baby steps.
The takeaway from all of this for me is:
1) Law school was a mistake. I was stupid to take out loans to go to law school, when I had no idea whether I really wanted to practice law, and I hadn’t done any research on what the legal job market was like. We have paid for this mistake with interest. All of our debts were mistakes, which we will do everything in our power to avoid in the future.
2) Working together with your spouse can do wonders for your finances. My husband and I got into the habit of calling my debt and his debt “our debt,” but I don’t think I fully grasped how committed he was until he told me he wanted to cash out his options to pay off my federal student loan. He really was on board this whole time, not just faking it to please me (!!).
3) Success cannot be judged by outward appearances. We rent an apartment and share a car, but we have zero debt and can now begin investing in ourselves. A few years ago, when we owned our own place and had two cars, I would have thought that renting instead of owning, and downsizing in general, were signs of financial instability. I realize now how wrong I was. I like living below our means. It truly is the only way to be rich.
Has anyone else paid off a large amount of debt? I’d love to hear your stories!