The Long and Winding Road

Our dog, on a post payoff walk

I haven’t updated on my job situation in a while, so I thought I’d put together a little timeline of events, from when I first got out of law to our recent debt freedom.  It’s kind of fun to look back at how far we've come.

Mid 2009:  Gee, this law thing really sucks.  I should find another job.  Shouldn’t take too long since I have a JD, which is truly a versatile degree (it must be true – they told me that at law school orientation)!  (Good grief, I was so naïve. I wish I could go back in time and punch myself in the head.)

January 2010:  As a backup plan, I applied to a healthcare program at my local community college a few months prior and was accepted.  I had to complete some prerequisites, though, so I began taking a chemistry course at night.  

March 2010:  Shit, no one wants me because of my JD.  I’m too ‘overqualified’ apparently.  Or maybe they think I’m nuts for leaving such a ‘lucrative’ and ‘prestigious’ field?  If they only knew how not lucrative it is.  I don’t make much more than someone with a BBA, but I have twice the student loan debt.  And there isn’t anything prestigious about answering discovery in a slip and fall case, or arguing a sentence for a DUI when the statutory guidelines dictate the outcome.  Maybe it’s time to take up drinking to get through it.  A lot of attorneys do that, don’t they?

Something Amazing Just Happened

I wrote a couple weeks ago about our progress in paying off the last of our debt, my federal student loan.  Well, since then, something really great has happened.  As of today, we are officially debt free.  How did this happen?  Well, we had saved up about $20,000 and we had $50,000 more to go.  When we moved across the country a couple years ago, we did so because my husband took a job with a start-up company.  His compensation package included stock options.  The company has since gone public, and in February, we were allowed to exercise the options.  After taxes, they were worth just over $50,000.  We took it as a sign from the heavens to cash out and be rid of the debt, so we did.  Today, we mailed the payoff. 

The Pizza Diaries, Part 10: Sleepless in Seattle

By spring, I was tired. 

I’d been moonlighting as a pizza delivery driver for five months, five nights a week.  The original plan had been three nights a week, but given inflated fuel costs, it was tough for the pizzeria to hold on to drivers for any meaningful period of time.  Hence, more shifts to go around.  More nights sweeping Parmesan shavings and cardboard chads from underneath the prep area while waiting for the delivery screen to light up with orders.  More nights divvying up the last of the deliveries with Lou, my favorite driver (the Thai man who spoke kitchen Spanish).

“How long you plan on being here, Lou?  Delivering pizzas, I mean.”

“Eh, six month maybe.  Saving money to retire back to Thailand.”

“And you can’t just go now?”

“Nah, gotta pay the ex-wife.  She get everything in divorce.”

The Crock Pot Versus the Microwave

Savings, October 2012 – January 2013: $18,402.33

Average savings per month: $4,600.58

Savings goal per month: $5,400.00

Missed goal: $3,197.68

Accounting for missed goal: unforeseen vet bills, insurance premiums, holiday travel

Accountability is key when you’re getting out of debt.  So, for the past few months I’ve been tracking our debt snowball goals versus our actual savings.  For the months of October 2012 through January 2013, we have saved $18,402.58.  That seems like a lot, but our goal had been more.  We missed the mark by about $3,200.  Ouch!  Here’s what happened, judging by our bank statements.

The Question of Why

One woman paid off Christmas layaway accounts for complete strangers.  What would you do if you had money instead of debt?

Getting out of debt is hard.  If it were easy, everyone would do it.  When my husband and I first started following the Dave Ramsey plan, I often heard him say that knowing why you’re getting out of debt is important.  I didn’t fully understand what he meant until recently.  For the first year that we followed the debt snowball plan, my husband and I were paying off debt to gain some peace and simplicity in our lives.  We didn’t really articulate this out loud to each other; it was more of a quiet understanding.  

But then we got down to just my federal student loan, the payment of which is under $400 per month.  At that point, I could sense my motivation waning a bit.  Why did we have to pay off this loan so quickly, considering the interest is under 3% and the payment is such a tiny portion of our income?  We were already experiencing peace and simplicity, since we didn’t have a lot of debt payments anymore.  Couldn’t we just put my loan on the back-burner, while at the same time swearing off any future debt?  

The Thing That Couldn’t Die, Part 3: “I’m So Bored!”

Lindsay Lohan, in a still from Liz and Dick

When we first decided to get out of debt, I thought the hardest part would be finding enough extra money in the budget to actually put a dent in our student loans.  We always seemed to just break even with our income and expenditures, so I figured it was going to be tough finding more than maybe one or two hundred dollars to spare at the end of each month.  That certainly wasn’t going to get us out of $100K in student loan debt any time soon.

It turns out that finding extra money wasn’t that difficult.  Once we drew up our budget, got on the envelope system, and cut out most unnecessary spending, we found plenty of money to roll into our debt snowball.  When we paid off our car in only a few months, I felt like we were really on a roll.  And then, as we got to the bigger loans, the ones that were going to take more than just a few months to pay off, I realized I had been completely wrong about why getting out of debt is so difficult.  

It’s not the money.  It’s the sheer, unadulterated boredom. 

The Thing That Couldn’t Die, Part 2: Why Pay Off Debt? (The Math)

Photo courtesy of stockfreeimages.com

Warning:  I am not a math nerd. I used Excel to help me calculate the figures below, and I compounded the interest monthly, rather than daily, so the calculations are approximate.  

I was recently involved in an internet discussion regarding paying down debt quickly.  I talked a little about my experience delivering pizza, and someone interjected with this argument:

Hey, I'm really really not being a jerk here okay?

But I just want to interject something. When I was finishing my private school in law (I went to two schools, the first one I hated, the second was more expensive but it was so much better), we had a lecture on the "practical side of life." What came out in this lecture was that since student loans were so low on interest it was at times better to invest your money than pay down your loans.

The Thing That Couldn't Die, Part 1

I’m starting a new series, in addition to the Pizza Diaries. This one will be entirely devoted to our debt pay-off. I think it’ll help me stay motivated. Enjoy! 

“Great was the curse laid upon it

Great was the evil power granted it

Buried for 400 years, it still lives

Stare into his eyes if you dare

For every woman that does 
Becomes a willing slave to
The thing that couldn't die

And every man becomes a monster

Greed had made them unearth a monstrous evil centuries old

Now they and they alone have to face the consequences…”

Did Sallie Mae exist in 1958, when they made The Thing That Couldn’t Die?  Whoever wrote that trailer seems to be sending them a message.  At any rate, take out the “400 years” part (my loans have been due for only about five), and you have what amounts to a perfect description of how I feel about my federal student loans.

The Pizza Diaries, Part 9: Reality Bites

I never told anyone at my day job about my pizza delivery gig.  I don’t think they would have understood my motives.  Most of my co-workers live high on the hog, and don’t seem to mind being in debt.  I work a few hours per week balancing the books of an attorney who’s been practicing for over thirty years.  When I see his credit card bills, it makes me cringe.  He basically spends $3,000 a month on crap, and he still has a huge mortgage on his home, even in his sixties.  A co-worker and her husband recently borrowed money from both of their parents for a down payment on a condo.  And yet another co-worker makes substantially less than everyone else in the office, but has a remarkable shoe collection nonetheless.  How could I possibly make these people understand my fear of bending over for Sallie Mae every month for the next twenty years or so?

Driving around under the dark cover of night had given me a false sense of security.  Leading a double life had been fairly easy up to that point.  I simply didn’t tell anyone about my night job, except a few people.  I sometimes worried about having to deliver to a co-worker’s house, but I told myself that if such an occasion should arise, I would find a way to trade deliveries with another driver.  Most of the people at work were off bread anyway (they’d all been reading that book Wheat Belly).  I knew I’d be safe, at least until the next diet craze stormed the office.

And then one particularly rainy night in March threw a monkey wrench in the works.  

The Pizza Diaries, Part 6: F*&# You, Dave Ramsey!

I remember a particularly bleak moment during my pizza delivery career.  It was a Friday night, and I was already exhausted from working night and day all week.  It was pouring rain, it was dark out, and I had no umbrella.  I was to deliver a large pie to a sketchy-looking apartment complex.  When I got there, my heart sank.  There were no visible numbers on any of the buildings and no lighting to speak of. 

One thing that enrages me about the area where we live?  People around here have entitlement issues.  So much so that in the ultra-ritzy areas, there are many homes that are not even numbered and they’re surrounded by fences and moats and gargantuan trees.  Yet, people call up and order takeout with no special instructions as to how that takeout is supposed to appear at their doorstep. 

The Pizza Diaries, Part 5: One Drove Over the Cuckoo’s Nest

I previously mentioned that my marriage suffered from neglect during my days as a pizza delivery driver.  We suffered in other ways as well, from one complicating factor: my husband and I only own one car.

When we moved across the country about a year and a half ago, my husband and I decided to sell his car so we would have one less expense to worry about.  We owned a home, so we were going to have to make the mortgage payment on our old place and the rent payment on our new place, so we cut back on as many non-essentials as possible.

A few months after we moved, our home sold and we no longer had the mortgage payment to worry about.  But we decided to hold off on buying a second vehicle for a few reasons.  For starters, we wanted to make extra debt payments (although we had not yet adopted a strategic plan for doing this); we carpooled to work since my office was only a few blocks from his; and gas prices in our area are always high (about $4.50 right now).  So we figured we’d save a little money by sticking with one car as long as we could stand it.  Plus, my husband’s job pays for a free monthly train pass, and we live near a station, so if push comes to shove, he can always take public transportation for free.

The Pizza Diaries, Part 3: Just the Facts

For those of you considering taking on a second job to eliminate debt faster, read on for some of my experiences with moonlighting.  

We’ll start with the positive.

1.  The money was terrific.  The area I delivered in happened to be quite wealthy, and the pizza was obscenely overpriced, so on average, I earned between $21-25 per hour.  My base pay was $8.50 per hour, plus $1.50 per delivery.  I would make about two deliveries per hour, and the minimum tip was usually $5.  If I had a big order, it was not unusual to earn $15.   My shifts were usually about three hours – longer if I had to close – so I ended up bringing home over $300 per week. 

The Pizza Diaries, Part 2: What I Wouldn't Give for a Flux Capacitor

My first week as a pizza delivery driver, all I could think about was what I would do if I were ever invited into Doc Brown’s DeLorean.  I guess the first thing I would do is pay a visit to my twenty-six year-old self and beat the shit out of me with my LSAT study guide.  And then I’d rip up my Grad Plus Loan application. 

But according to the most senior driver at the pizzeria, I was supremely lucky. 

Drivers at Papa John’s have to make pizzas and wash dishes in between deliveries, "Reed" informed me.   At the local mom-and-pop pizzeria we worked for, on the other hand, drivers basically just sat around during slow periods.

The Pizza Diaries, Part 1: The Things We Do for Love

I didn’t have much of a family growing up.  That’s not to say that I did not have parents, or a decent number of siblings.  What I mean is that I never felt a real sense of family.

My mother grew up outside the United States, in a poverty-ridden locale.  She was functionally illiterate when she came to the United States, which limited her employment prospects.  In fact, the only jobs she ever had while I knew her involved cleaning up after people or animals.  I suppose this contributed quite a bit to her rage issues, although I have not quite gotten to the point where I have forgiven her for being emotionally and physically abusive to me.  I suppose that does not matter much these days, since she died this past November.  It had been a number of years since I had seen her, but it still hurts.  It’s funny, she never cared much for people, but she really liked animals.  So now every time I cuddle with my dog or watch one of my cats sitting near an open window pane, soaking in a warm afternoon breeze, I think of her.

The Start of My Blue Period

I took a long break from posting on my blog for one simple reason: I had no time.

A little background.  For about the past year, my husband and I have been paying off every debt we have, following Dave Ramsey’s seven baby steps.  We only had two types of debt, our car and our student loans.  Our car note was about $18,000 and our student loans, combined, were over $100K.  So we got cracking on our car note first, since that was our smallest debt.  A year later, we are down to my federal student loan, which means we’ll be living pretty lean for about one more year.  How have we been able to make such dramatic progress in only one year?  Work, work, work.

My husband works a salaried position (meaning he works a lot more than 40 hours per week), and he travels a lot for work, so there was no practical way for him to get a second job.  I therefore took it upon myself to find creative ways to generate more income.

The Trap of Student Loan Debt, Part II: Do You Want to Get Out?

Many unhappy attorneys feel they cannot quit practicing law because of the enormous burden of student loan debt.  If you have been considering leaving the law for another field or to start your own business, paying off your student loans affords more opportunity to take risks (perhaps in the form of a lower-paying but more satisfying position), as well as the feeling of hope that comes from building a future, rather than paying for past mistakes.  

A little over a year ago, I found myself in the position of having left my attorney job for a lower-paying one, but still carrying a large student loan balance of over $100K (between my husband's loans and mine).  Since then, I have gained more control over my finances, and my husband and I have decided to take radical steps in order to pay off both of our student loans once and for all.  Before you begin your own journey out of student loan debt, you first need to ask yourself whether you really want out because getting out involves a great deal of sacrifice.  Let's talk a little bit about some obstacles that might be standing your way.

The Trap of Student Loan Debt, Part I

Many people who would like to quit practicing law have an enormous hurdle to overcome before they can even consider it: all that student loan debt they took out to receive those invaluable JD's (which caused that slew of doors to fly open upon graduation, right?  Or did you miss that?).  

Rather than repeat myself by reminding you that a JD does not make one more marketable, and in fact works against one's marketability, I would like to discuss a more positive topic, that of paying off these soul-sucking debts and getting out of student loan prison forever.

Before I left the law, I assumed that the size of my debt would render me unable to pay off my loans any sooner than the 25-year repayment period I had agreed to just a few months after graduation.  I think the fact that I was practicing law somehow helped me justify a longer repayment period.  After all, if I was actively using my degree on a daily basis, the expense seemed like the cost of doing business.  And since I owed about $80,000, I figured 25 years seemed reasonable.  

Once I left the law, I began thinking more about my financial future and became angry that I had made such stupid financial decisions.  I had basically trapped myself into working full-time in a field I hated for the better part of my adulthood.  Was I going to die a bitter, alcoholic ex-lawyer, still owing thousands to Sallie Mae upon my death?  I couldn't believe my life was becoming an Arthur Miller play.

I should backtrack a little here and fill you in on my professional transitions since my first temporary gig ended.  That gig netted me about $380 per week.  Once that job ended a few short months later, I obtained another job at a call center (my personal low), and then miraculously I was offered a permanent, full-time position at my husband's company working in customer service.  This all happened within one month after leaving my first temp job.  The salary at my customer service position?  $33,000 per year.  Not quite the almost $60k I was making as an attorney, but it would do since it came with benefits and a guaranteed paycheck.  When I accepted that position, however, I did something radical.  I decided not to quit my call center job right away, and instead I cut back to part-time three evenings per week.  So I was working about 55 hours per week, with a combined income (from both jobs) of about $42,000 per year.  Coupled with my husband's income, we would still be doing pretty well, except for our crippling student loan payments. 

My payments totaled about $565 per month, and my husband's were $180.  So basically, we were paying two mortgages, our real mortgage and our student loans.  And the payments were only going to go up because we were both on graduated repayment plans.  Thinking about these numbers is what led me to work two jobs and try to come up with a plan of action.

I didn't have time to think long because about a month after working my two jobs and getting used to my new, hectic schedule, my husband was offered a position with a higher salary about two thousand miles from where we lived.  In a matter of three weeks, we had to put our house on the market, find an apartment in our new city, and pack up.  It was exciting, but scary.  I had no idea what I would do for work, but I was looking forward to the opportunity to start over with a clean slate in a completely different area of the country, where no one would know me as an attorney. 

Fast forward a month after we arrived (which was November of last year).  I am once again an administrative assistant (pretty high level) and I assist professionals on an individual contract basis as needed (a few hours per month).  Everyone I work for knows I used to practice law and no one seems to have a problem with it.  And the real plus side is that I now make 30-40% more than what I used to as an attorney.  This can be attributed in large part to a different job market, but since my husband and I have managed to keep our expenses down, it has made a huge impact on our budget, so much so that I am now hopeful about seeing my student loan balance decrease to zero within the next few years.  

I can't really attribute my new found hope to a simple increase in salary, though.  In reality, I can attribute it to discovering Dave Ramsey's plan for living debt free and building wealth slowly.  It's funny, I disagree with him on so many things - religion, politics - but his books and podcasts have been so inspiring that I don't really care about our differences, as long as I am getting out of debt. 

And I am, more and more each month.  In fact, this month my husband and I are paying off our car (the big shiny one I bought a year and a half ago to try and make me feel better about practicing law), and then we are on to the student loans.  It is not easy, and I am still resentful of the law school scam, the higher education scam, and every other scam I've been taken in by as an adult.  But I figure if I am ever going to have a chance at the life I want (a little cabin somewhere with my dog, my husband, and some good books wouldn't be bad), I am going to need to pay off my "stupid tax" sooner rather than later.

I am going to discuss more of the particulars of my get-out-of-student-loan-debt plan in my next post, but for now I just wanted to put something positive and hopeful out there.  A year ago, I was miserable and depressed, thinking I would forever be in debt and would never be able to have children or even take a vacation.  And now I am getting closer and closer to being debt-free.

Life can be so shitty sometimes, but every once in a while it is simply amazing.  
  

Are your student loans or other debts holding you back from the life you want?