Alternate title: How David Was Able To Get Us Financially Secure
Since March 15th our lives have been turned upside down.
The resort I worked at was closed, and for the following few weeks, I was one of the few employees to still be working in the building. In the beginning of April, we were given the tools we needed to be able to work from home and that was our life for the next few months.
At the end of June, however, the situation at work lent itself to my having to resign. It was the toughest decision to make; I absolutely loved working there, but the schedule I was given when we returned to the building wasn’t going to work with two kids at home and a husband who works from home.
Luckily, David had prepared us so that we could survive without the same income I was bringing in. A few years ago I started writing a post about how we were able to get out of debt, but just never got around to posting it. Hopefully this can help if you’ve ever found yourself wanting to improve your financial situation and/or get yourself out of debt.
When David and I first got married, the only debt we had was my student loan. He didn’t have a credit card, and the one that I had from college was always paid off at the end of the month. Growing up, we both understood the value of a dollar and to not spend what we didn’t have. If there was anything we wanted, we had to work for it. We were, however, very fortunate to have parents that worked hard to make sure we had what we needed and that included a great education. His college was funded by both his parents and his involvement in the military, and mine was also from my parents. He graduated with no college debt, and although I paid off my loans for the 2 years following graduation, my parents offered to take over in 2008 when I was working 3 part time jobs. That loan was paid off a few years ago (2006 to 2014).
Up until 2013, David and I drove hand me down cars, or purchased used cars with cash. When we both got new jobs at the beginning of that year, we upgraded…to brand new cars for both of us. I got a Toyota Corolla in January and David, a Toyota Sienna that July. We purchased a payment plan that had 0% interest. Not too long after that, David started listening to Dave Ramsey and learned about his “Debt Snowball” plan. Although we weren’t paying anything in interest, we still wanted to buckle down and get rid of the debt. In the summer of 2014, I paid off my car (~$19,000) and a few months after that, we paid off his (~$26,000). We used the snowball plan by taking any extra money we had and throwing that at the debt. We started using cash envelopes for groceries, dining out, clothes, etc., so that we knew where each dollar was going.
Backing up a couple of years…In 2011, David was deployed to Afghanistan. From March to December of that year, I lived with my sister in law and worked two jobs. Whatever income David was bringing in, we were saving it up. When he returned home, we bought a piece of land (with an old house on it) in central Massachusetts, with cash, for $40,000. From April to October, David worked primarily on building our house while I continued to work.
When the house was completed and we had been living there for a few months we took out a $100,000 cash out mortgage (15 year at 3% fixed) from our credit union (February 2013). I do also realize that it is a relatively small mortgage to have to pay off, but it was a debt nonetheless. The cash out helped us pay back the loans for building the house as well as the solar panels that had just been installed. Over the following years, we paid it off each month and any extra money we had (commissions, overtime, etc.) we threw at the principal. When I got pregnant in 2016, we were just a few thousand dollars shy of paying it off. David made the ultimate sacrifice and sold his Tesla stock so that we could pay off the mortgage just one month (March 2017) before Eleanor was born. And the house that David built also helps us to save money: there is absolutely no oil, gas or propane powering the house. It’s all from the solar panels on the roof and the dense-packed cellulose in the walls. These were absolutely big purchases up front, but they’ve saved us so much money in the long run.
From the time we started Dave Ramsey’s plan in 2014 until around mid 2018, David and I did not have any credit cards. We didn’t want to have that debt pile up unexpectedly. In 2018, however, we signed up for a Citi Cash Back card because of the 2% rewards you get for the purchases you make (1%) and the amount you pay off (1%). Every month, we pay it off and we take the rewards and put them back as statement credit.
As far as our expenses go, we keep them pretty low. As mentioned before, we don’t have any fossil fuels that power the house, only electric. Most months we end up having a zero balance on our electric bill. Overall, we spend about $400 a year. We have the most basic cell phone plan, the 2GB from Verizon (~$82 per month); we don’t have cable, just internet for our smart TV (~$49 per month); we also have basic Netflix ($8.99 per month) and Amazon Prime ($99 per year).
Man, you guys really buckled down and got things done; did you have any fun during this time? We absolutely did! We went on road trips, attended weddings and functions and even ate out every once in a while. But we always made sure to check our balance to see that we weren’t going out of control.
Do you have anything saved in retirement? We sure do! David makes sure that each year we have enough money to be able to fully fund our Roth IRA. I also signed up for each of my company’s 401k and maxed out what I could.
I do have to summarize all of this to say that I would never have been able to do this without David. He is always looking towards the future when it comes to saving money, whereas I can sometimes be more shortsighted and see where our funds can be used now. But because of his foresight, we have what we need to be able to survive this.
And because this was a very word-heavy post, here are a couple of pictures to lighten the mood:
How have you been managing through the pandemic? Aside from the financial, we’ve definitely hit some rough patches. I doubt any of us are getting through this easily. ❤