PANIC!

So, for a blog partially about finances, I’m probably about to alienate most people interested in reading on that subject. Here goes! I reject the debt emergency mindset, at least for student loans. (I might think differently about 18% interest credit card debt.)

When I first started to face the cold reality of our student debt, I started to panic. For help figuring things out and calming the heck down, I turned to the debt gurus of the world wide web, your Dave Ramseys and the like. And you know what their sage advice was? PANIC!

So I spent the next few days doing just that. I stared at our debt summary for hours whilst crying and panicking. It is one of the least productive things I’ve ever done. It left me insanely frustrated because no matter how hard I tried, I could not think of a way to move forward (other than me going back to work, which is frankly not on the table for us).

Taking a step back, I realized we are already moving forward. We are on track with our payments, and making strategic extra payments when possible. We have frugalized our lifestyle a lot and are constantly brainstorming more ideas for saving. We are avoiding credit card debt like the plague. And we have plans to sell our car and buy a cheaper one to eliminate our car loan.

Our plan for paying off debt is about nine years. It’s a long-term plan no matter what. Even if I were working, it would probably shave off a couple years at best. I worked in higher education, so it’s not like I’d be flush with cash. Working would certainly help, but with daycare for one kid now and a second in a year or so, the extra would not be much. We cannot panic for six to ten years. It helps nothing.

Dave Ramsey would tell us we are gazelles about to be killed by a lion. But that’s kind of bullshit. There is an end to our debt, we are planning for it, and it is definitely not going to kill us. We acknowledge our debt, we manage it responsibly, we pour our energy into eliminating it. Essentially, the same things we would do in emergency mode, but without the completely unproductive panic. It’s a marathon, not crisis.

We want to get out of debt because we want our life to be about more than money, so why would we make our life all about money for the next several years to make it happen? We can’t get those years back, and we can’t short-cut through them either. What we can do is live our life accepting that debt will have a place in that life for a while (because it will whether we go into crisis mode or not). We plan for our debt, we take it seriously, and we are going to beat it. We don’t panic.

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Living My Dream

My dream for quite a long time now has been to be a stay-at-home mom. I am living that dream! I had my first child last December, and officially quit working in May. My husband and I also have massive student debt.

For a lot of reasons I won’t get into here, we decided not to wait until the debt was paid to have children. It was an excellent choice. No amount of money or financial freedom could convince me otherwise. (And, for the record, raising children is way less expensive than we are led to believe. More on that in a future post).

I had planned to work for at least a while longer, but during maternity leave two things happened. First, my husband got a new job, with better pay and potential for increasing that income over time. It was also cut his commute from fifty minutes in the car to about eight minutes on foot. Second, I realized I could not go back to work full time. I had spent two months home with Little Guy, and they were the best two months of my life. I knew this was where I was supposed to be.

We will never regret this choice.  I am happier than I have ever been. I feel I have found my true calling and passion. I am also much healthier! I lost ten pounds beyond my pre-pregnancy weight, without really doing anything other than not working at a desk all day and eating way less fast food. Beyond that, I wasn’t giving up as much as it seems, when you factor in the cost of childcare, convenience spending, commuting, and inevitable lifestyle inflation. And our family has greater flexibility to better my husband’s career and maximize his income.

I am actually oddly grateful for the lower income–I am convinced it has changed our financial life for the better. When I quit my job, we had to seriously evaluate our finances, make a budget, and cut our spending drastically. This sounds miserable, but actually it was very freeing. Had I kept working, our two-income family would have coasted comfortably along, without ever really facing the reality of debt. Though we would have been making enough to pay our debts down faster than our current plan (nine years or fewer, BTW), the truth is we probably would not have. We also would have just made standard payments, rather than choosing a strategic approach, which will save on interest.

Our family’s plans are not exactly traditional, and our path to the debt-free life isn’t going to be traditional either. Making this dream of mine a priority caused us to finally make our debt a priority as well–so, despite the loss of income, we are actually on a better debt payment track than before. We don’t have to choose between following our dreams and crushing our debt. We choose both. This blog is about dreams and debt and how we do life with both.