Like so many people, my family has lived with debt (of one sort or another) our entire lives.
On a website and blog that’s focused on dispatching debt, padding savings, and improving net worth, I feel it’s important that I keep readers abreast of my own money situation. Moreover, when it comes to achieving debt freedom, in my case, I’ve accomplished much more since I’ve made myself somewhat “accountable to the world” in this fashion. I began IYM in early 2002 with just this intent, and it worked beautifully.
A Brief History
I’ve been up to my neck in debt, and I’ve been debt-free except for the mortgage.
Debt-free is better.
As I relate in my IYM: About Us page, we first became “debt-free, except for the mortgage” in 2005. That all changed in December of that same year — see (“How Quickly It All Changes” for more info. Automobile debt (“There’s Something New in the Garage”) crept back into our financial picture.
So what debts do we have now, and why?
A Mortgage
At an effective interest rate of 2.75% (thanks to MCC tax credits) for 15 years, I’m in no great hurry to pay this off. It’s not included in our Debt Paydown.
… And Nothing Else!
On the right column, the amount shown in my Debt Paydown reflected my balance on our last auto loan. When we bought our 2006 Accord in December of 2005, we put $4,000 down and financed the balance for 5 years at 3.95 percent. We paid this loan off in early September of 2008, after a mere 990 days.
What About Student Loans?
I paid off the last of my student loans (“So Long, Sallie Mae”) in May of 2005. I’d taken out the first of these loans way back in 1990. (Oh, all the interest I paid!)
What About Credit Cards?
We became free of credit-card debt in December, 2004. And yes, it felt really good. As I recall, the highest balance we ever accumulated was in the $10,000 range. (Seeing those red five-digit numbers in Quicken wasn’t fun, either.)
These days, a glance at our household balance sheet will almost always show that we have credit-card balances outstanding. Don’t let your head explode, though.
Instead, rest assured that if there’s credit-card debt on our balance sheet, it consists of portions which are either (1) non-revolving, and paid off every month; or (2) for 0% credit-card arbitrage. I hold these balances in either my ING Direct (review) savings accounts or in short-term Treasuries.
And that’s the lowdown on our Debt Paydown!
Jason wrote:
You’re playing a dangerous game with the 0% credit card scheme…. I’m sure you know what Dave Ramsey says about that…