Cut up your credit cards. If you use a credit card, you don’t want to be rich. — Marc Cuban, How to Get Rich
What seems like forever ago, my wife and I were on a crusade to eliminate our debt.
A friend had turned me on to Dave Ramsey's plan, and we went after it with a vengeance. We killed our credit card and automobile debt and had money in the bank.
When our first child was born shortly after, everything stalled. We didn't incur new credit card debt, but we weren't making the kind of progress we were on other debts pre-kid. And then kid No. 2 came along. We needed a van, which we bought on credit.
The compromises began. We got credit cards again. And then in 2010, we purchased a house. Along with that came its own expenses, and because we weren't following Ramsey's plan, the expenses mounted up. The credit card bills started rising. We were fools.
A year ago, my wife and I took our 10-year anniversary vacation, and while we were traveling across the great state of Arkansas, we got to discussing all of those things above. We decided to change. We couldn't let things go any further, so on Aug. 1, we refocused our efforts on getting out of debt. I took on more side jobs, and by the end of the year, we had paid off the last of the credit cards.
Except we didn't; when you have a credit card you tend to use it. We didn't typically carry a balance, but it happened a couple of times. Finally we realized: any credit card was too many.
Since my wife closed her business in May, we've found that by embracing the constraint of a temporary smaller income, we can live within our means just fine. It's a challenge, but certainly doable. And so, we've decided to cut the last safety net and embrace constraints even more.
Today over lunch, I shut down the last two credit cards. We are done; no more of this. We will use cash and our debit card, and focus our remaining efforts on paying off the student loans for good. Perhaps the best part was that instead of using my children as a crutch for why we couldn't get out of debt, they've now become a driver for why we will. And so, I had them help me get rid of the last one.
So now, forward. We have no auto loans and no credit card debt. The only thing we owe is our student loans. For the first time since we graduated college, we paid extra on the student loans this month. And when those things are gone, it's "Hello, Disney World!"
It's a good feeling to be where we are today. Today is a good day.