It has been six years since my family and I began paying off our non-mortgage consumer debt and as of this writing I’m still convinced it was the best financial decision we’ve ever made.
We finally realized there was a problem when we woke up to $90,000 of non-mortgage consumer debt from buying crap we didn’t need.
Ironically, the crap we were buying wasn’t making our lives any easier or more enjoyable, it was actually making it worse. Owning more expensive vehicles meant more maintenance, insurance, and operating costs.
Our fancy vacations allowed us to temporarily forget the stress in our lives, but the stress would only return more intense once we returned home and opened our credit card statements.
The trips to the mall were just filling our rooms up with clutter for which we had to make time to rearrange, clean, and store. Eventually we ran out of space to keep everything!
Once we acknowledged the self-destructive nature of our choices, buying these little luxuries was no longer enjoyable and the prospect of paying off our debt and moving on with a more comfortable (and sustainable) lifestyle became a higher priority.
A friend of mine told me about Dave Ramsey and his debt snowball technique for paying off debt. I listened to Dave’s syndicated radio show and was intrigued by his ability to break personal finance into simple concepts that anyone could understand and I eventually bought a copy of his book The Total Money Makeover.
I became very passionate about paying off our debt, almost to a fault. I would spend hours each day budgeting and planning to ensure I was doing everything possible to pay off our debt in the quickest amount of time possible.
The idea of a more prosperous future was exciting for my family, but I fear my enthusiasm set me up for a surprising bit of disappointment once we actually paid off our final consumer debt account (an old student loan).
“OK, we’re debt free, now what”?
The guiding principle behind Dave Ramsey’s debt reduction plan is the motivation you receive as you continue to pay off each debt on your list. At first you may have ten debts, then nine, but eventually your down to the last few until finally you have all this momentum but no more debts to pay off.
After establishing an emergency fund, monthly retirement contributions, and an educational savings account for our children, the next goal on our “Dave Ramsey Plan” is to attack our mortgage.
Where we once had quick encouraging wins as we paid off our debts, we are now faced with one final “insurmountable” debt that will conceivably take much longer to pay off than our other non-mortgage consumer debts.
It may be going too far to say that becoming debt free “except for the house” was kind of a let down, by the euphoria we experienced on a regular basis as we paid off our smaller debts is gone(at least for a while) until we finally send in that last mortgage payment many years down the road (hopefully sooner than my current projections).
I first read about this “debt hangover” phenomenon on a money management discussion board where other people had worked their way through large amounts of debt. They too expressed “disappointment” that being debt free wasn’t as exciting as they had hoped it would be.
Maybe we just need to shut up and be thankful that we finally made it to the end of our consumer debt struggle, but there is still a part of me that wants to recapture the excitement I felt when we initially began paying off our debts.
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