This is the second installment of a three part series of our get-out-of-debt story. It’d be cool if this was a Choose Your Own Adventure story, but it’s not. If you want to continue reading our debt story, scroll down. If you want to join the robot army in pillaging Humanville, turn to page 154.
After completing back-to-back summer internships at advertising agencies in New York City and Los Angeles, we returned to Utah to finish our final semester of college. As we sorted out our post-education plans (or lack thereof), we quickly came to grips with the fact that we owed a bunch of money to intimidating sounding banks and government organizations. We figured it was just a matter of time before stout dudes showed up on our doorstep with baseball bats and fixated gazes on our kneecaps.
So I got a job as an account manager for a budding tech startup earning a cool $30,000. With our first substantial paychecks rolling in, we really felt like we were rolling in the green. Think of all the IKEA furniture and Dippin’ Dots we could buy with all this money?!
And then serendipitously our good friends told us about a financial book they had recently read and let us borrow it. That book? Dave Ramsey’s The Total Money Makeover. ANGELIC CHOIR AAAAH’S AND BLINDING LIGHT!!! I drank that Kool-Aid right up and Joanna wearily accepted my purple drink. We suddenly felt empowered. “Our freaking budget” was now uttered in our home with 24% less disdain. And after all, it was our freaking budget that would lead us to the debt-free promised land.
Soon after our “coming to Dave moment,” Joanna landed a job as an editor for an online university. And that meant we needed a second car. We had roughly $5000 in our bank account, and we were confronted with a tough decision. Choice A: Ask ourselves, WWDD (What Would Dave Do?), and then find a used car that wasn’t a penny more than the cash in our bank account. Choice B: Tell Dave to take a walk and go for a slightly newer, nicer used car that would require another rendezvous with the Debt Monster for a couple extra loaned G’s.
Option B didn’t sound too unreasonable to us. We would still be buying used and putting a lot of our own cash down. But ultimately, the Cult of Ramsey beckoned us back to the fold and we found a four-year-old Ford Focus hatchback with 50,000 miles for just $4,500. Here’s a nice body shot of our babe.
It was a screaming deal and we were thrilled… until summer came five months later and we realized the car wasn’t equipped with A/C. Isn’t that illegal?! Is that not a basic human right?! But I digress. Even without A/C in 100º desert heat, we landed a great deal and avoided more debt. Victory.
$20,000 + $0 – A/C = $20,000 + sweaty back in under 2 minutes flat
So with two cars, two incomes, and two years of marriage under our belt, we were ready to take on the world. We set a goal to have our student loans paid off in 18 months — January 2012. That worked itself out to being a little over $1000 a month, roughly 35% of our monthly take-home pay, which we felt was doable. Debt snowball? Screw that, let’s debt avalanche this mother!
$20,000 – ($1,111/month x 18/months) = $0 by January 2012 — easy peezy
But life had other plans. A few months into our debt repayment, I got a job offer to work as a copywriter for a storied ad agency in New York City. Is this real life?! It was a no-brainer to accept the job. And in our euphoric delirium, we sort of forgot about that whole bit about NYC being the most expensive city in the country.
The Debt Monster lurked, awaiting our next move…
But wait! There’s more: ‘Til Debt Do Us… Part III: Debt’s Death