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Home > How we got here: Chapter 2, The Dual Income No Kids Years

How we got here: Chapter 2, The Dual Income No Kids Years

April 22nd, 2011 at 11:40 am

To bring you up to speed from our last chapter, DW and I started married life together in 1996. I was 23, she was 21. We were carrying total debt of about $13K between CCs and SLs.

This next chapter of our life can be summed up best with the following phrase: FINANCE IT!

We bought a car in 1997. FINANCE IT!

We bought an $87K house in 1998. We had a pittance for a down payment, but the mortgage payment was going to be very similar to our rent payment. FINANCE IT! with an FHA loan.

We needed a water softener for the house. The well water was rusty. FINANCE IT!

We needed a tough and rugged Cub Cadet riding lawn mower for our 1.5 acre lawn. FINANCE IT!

We needed a glass top stove. FINANCE IT!

The very old and undersized furnace for our house gave up. We decided we needed a much bigger high efficiency furnace. FINANCE IT!

We needed a new computer somewhere in there. FINANCE IT!

I needed another beater vehicle to drive back and forth to work. It cost $2,100. We didn't have the cash. FINANCE IT!

Between all the financing we did, we kept up on the payments. By the end of year 2000, we were making a combined approximate $80K. But what we did do is allow credit cards to make up the cash flow shortage. We also ate out. A LOT. We were busy professionals, and it was just easier after a long day to pay someone to make the food and wash the dishes. I guess we really didn't need that glass top stove after all.

I'm not really sure where our CC debt was during this period. My head was snugly buried in the sand. But, my best guess was that it was about $25K. Somewhere in there, a payment or two or three WERE missed. The interest rate on one of the card skyrocketed to 25.99%

We did start to get somewhat serious about debt repayment at this point. We stopped buying things. We didn't really stop going out to eat. But between 2000 and 2002, we started to retire some debt. A lot of it was done by shuffling debt to lower introductory rate cards, and home equity loans. But we also took bigger chunks out of the debt each month.

Then enter the next phase of our life: kids

Posted in Credit Cards, Debt, Personal Finance | 3 Comments »

3 Responses to “How we got here: Chapter 2, The Dual Income No Kids Years”

  1. Jerry Says:
    April 22nd, 2011 at 07:20 pm 1303500052
    1303500052

    I think we can all relate to some less-than-stellar decisions made in years past, as you outline here, and the painful realizations that they lead to as time goes on. Still, it is great that you are putting it all out there, offer other people in similar straits some insurance that it can be done! Way to go...
    Jerry

  2. patientsaver Says:
    April 22nd, 2011 at 08:52 pm 1303505572
    1303505572

    I can see how this could happen, although I noticed you described every expenditure as something you "needed." Maybe moving forward you should pay more attention to "need" vs. "want,"and whether there were alternatives to purchasing each new item.

  3. Bob B. Says:
    April 23rd, 2011 at 12:46 pm 1303562797
    1303562797

    patient saver - my intention was to describe my view as a twentysomething. The expenditures happened 11-14 years ago. At the time I viewed them as NEEDS and not "needs". In 2011 I view them as "needs" and not NEEDS. Now, with the passage of time and interest payments, I know I could have waited, or purchased used, or purchased less expensive models of most of those items. In the future, I will try to be more clear in my communication.

    Thanks

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