Debt Free in 2013

Last weekend, Mike and I went out to dinner to celebrate a momentous occasion. Tucking into a plate of tater tots at Cambridge Common, we smiled goofily at each other, utterly giddy at what we'd just accomplished. You see, we had just reached a major life milestone shared by many people of our generation.

What could it be you ask? Did one of us get a big promotion? Did we buy a home? Did we hit the lotto?!? No, friends. It was better.

We paid off all of our student loan debt.

I know, I know. Not really that sexy. But work with me here. Mike and I will never have to write another check send another electronic payment to chip away at the debt we acquired getting the degrees that are now 10+ years old. We no longer have to pay thousands of dollars of interest to a bank. WE. ARE. FREE.

How did we get here? It started, as most things in our life do, with me getting a little obsessed. You see, after an expensive 2012 (our wedding, other peoples' weddings, vacations, kitchen island, not sticking to christmas gift limits, etc.) I started to take stock of our financial health. With no big expenditures on the horizon, what was the best thing to do with the little bit of extra money we had in our accounts at each month's end? Sock it away in an emergency fund? Save or invest it so we could buy a place? Contribute more towards our 401ks? Open up Roth IRAs? Start a college fund for our future children? Go on another vacation? Buy even more Apple products? Up Oscar's treat budget? The options were overwhelming.

My first thought was to see a financial panther planner. And we still may at some point. But I felt like I needed to get a hold on our basic financial strategy before I went to see someone who will likely just want me to invest my money. So I did a lot of Googling. And looked at savings interest rates. And retirement calculators. And home prices in our area (which was painful to say the least). And college costs in 2033 (perhaps even more painful). But none of that gave me any direction of what to do when. Then I went to brunch with a friend who mentioned she was attending a financial planning class based on Dave Ramsey's philosophy about paying off debt. And I was intrigued. So, I ran home from brunch, downloaded his book on my Kindle, and read it straight through.

You see, while I don't think Dave and I would get along personally (socially I suspect he leans further to the right than I'm generally comfortable with), we do have a shared hatred of debt. And paying interest. So his philosophy really appealed to me. You can read about his 7 Baby Steps here.

He outlines a clear plan to what he calls "Financial Freedom." Doesn't that have a nice ring to it? His path to this financial freedom can be a bit extreme, so I can't say we are following his plan to the letter. BUT, we did take one big step which put us in position to make the big student loan payoff. We sold Mike's car. And we took that money, and some savings, and we made the last payments on our loans. We decided to prioritize paying off debt over everything else. And I gotta say, it feels good.

Next step for us is paying off my car, which we are hoping to do in the next 6 months. Turns out you have a lot more money when you aren't making two student loan payments each month! Then, once we are completely debt free (in 2013!) we'll start our emergency fund and then start saving for our own little house or condo (Well, maybe. But that is a debate for another blog post. Is buying a house worth it anymore?)

It feels really good to be digging our way out of debt. And it feels even better to have a clear plan. So while 2013 won't be as exciting as our 2012, I think it will set us up for a better future. So here's hoping the sacrifice is worth it. I think it will be.

I Sold My Car Today

For the first time since I was 16, I am officially carless. There's not a single piece of heavy machinery registered under the name "Michael Briddon" in the state of Massachusetts. No, sir. No ride. No wheels. No whip.

I sold my Nissan today at 10:30 AM as part of our new plan, hatched by my beautiful wife, to pay off all of our debt in 2013. This chunky transaction is going to help me annihilate the rest of my college and graduate school loans. In a word: Boom. In four words: Take that, higher education.

What's amazing is how fast it all happened. On Tuesday, Bridget suggested a creative, aggressive financial plan she'll be discussing in an upcoming post. On Wednesday, we had a family meeting. On Thursday, I agreed.

And just like that, we committed to becoming a one-car family.

We opted to go to CarMax, which I highly recommend if you are looking to get rid of your vehicle. It took exactly 74 minutes from the moment we walked in the door to the moment we walked out with a check in hand. We met with a nice guy named Rob, someone drove my car for two miles, and we left with 500 dollars more than I expected. (They even returned the Explosions in the Sky CD I'd left in the player.) It was that easy.

As we drove away in Bridget's, er, our, car, I expected to feel a moment of panic. Didn't I just give up my freedom? What if I wanted to drive across the country next weekend? What if we got a huge fight about turning the cable off and the only escape was the open road? None of those thoughts, though, gave me pause. Instead, I was excited about paying off my loans and taking another giant leap toward a better financial future.

Plus, there were these reasons:

• We live in Cambridge and every mode of public transportation is minutes away on foot. 
• I was really sick of moving my car for street cleaning. (I'll never forget the day I came home and panicked because I thought our cars were stolen. Two hundred forty bucks later, I had them both back. It wasn't the best night of my life.)
• I don't have to pay an excise tax anymore. I don't really know what it is anyway. Do you? I mean, sure, I could Google it in a few seconds, but I'd rather just be ignorant on this one. Stupid excise tax. 

Are there risks with having only one car? Sure. It could break down. We could get in an accident. We could both want it some Saturday afternoon. But I think the benefits far outweigh the detriments and it's the right decision in the long run.

Just don't tell 16-year-old Mike. He'd think it was a dumb idea.