Debt Finances & Money

I don’t dream anymore

I should say “I don’t dream about financial windfalls that will wipe away our debt anymore”. Honestly, I would lay awake at night dreaming about winning the lottery. I would spend untold amounts of time dividing up the winnings in my head, figuring out how to cover our hundreds of thousands of dollars in debt, and then what I would do with the rest. Mostly though, I would just think about our debt. That was 2 years ago, which is also when I started this site.

Unfortunately, I never printed out our debt total back then, but based on some records, I estimate that we owed close to $100,000 in non-home debt, and another $390,000 in mortgages. Wow, nothing like being a half-million in debt and you’re not even 30 yet. So perhaps you see why I wanted a quick fix. A quick way out. A relief from the heavy burden of debt.

Stopping the Nightmares — Starting the Real Dream

Two years later, I don’t find myself thinking of winning the lottery in the same way. Sure, I still buy a Mega Million ticket once or twice a week (it used to be twice a week, every week), but instead of thinking how I would pay off our debt, I think harder about where I would donate it.

How did I change my attitude? Well, it wasn’t an overnight thing for sure. It took two things:

1. A plan

2. Dedication

For the first year, I muddled through our finances while posting what I learned here at Clever Dude. My only goal was to get out of debt. I was dedicated to the sole purpose of being debt-free Now, about 27 months later, we’ve gone from $100,000 in non-mortgage debt down to $27,000. We’re finally at the point that we can begin thinking about other things than our debt, like investing or vacations.

It all seems manageable now. I’m not living the nightmare of a screaming debt-monkey on my back. Unless you’ve been in heavy debt, you don’t have a clue how heavy that weight feels. Some people can ignore it and keep on spending, but it catches up to you eventually. And even if you try to ignore it and just pay the minimums, your subconscious remembers and you feel this guilt and despair shadowing you through each day.

Now I wake up to sunshine and butterflies, or maybe that’s just Stacie next to me. Either way, I can think about things other than debt and not feel guilty about it. I can begin to move on with my life because I have a plan to get out of debt the rest of the way. It may not be a clear, concise path, but I have a budget now. I’m using credit cards but always making sure I can pay them off each month…and then paying them off. One car is paid off and the other is halfway there. One student loan is paid off and the other is halfway there. Heck, I’m not even worried about how we’ll pay my graduate tuition bills anymore. I have a plan for that too!

I know many of you, my readers, are in heavy debt. Maybe even more debt than we were in. But don’t despair. I know the feelings of anxiety, sleepness nights, and fear. I’ve worried so much that I’ve broken down and cried (that’s a big thing for me). Debt, especially heavy debt, is overwhelming, but it’s still manageable. It’s not worth losing sleep over, because waking up groggy isn’t going to help you get through a full day of work, or a full day of finding a job.

Starting a Plan for Debt Reduction

I won’t get into detail here, but I will lay out just a few basic steps to getting your finances under control:

1. Organize: First, you need to find out ALL your income and ALL your expenses (including the ones that come directly out of your paycheck). Add them all up and see how much, if any, money you have extra each month. Track this every month. At first, you might even need to track it daily or weekly until you feel comfortable with your knowledge of what’s going on financially.

2. Reduce: We all have something in our lives we can give up. Your situation dictates how drastic your next steps must be. For some of us, we just need to cut out cable and dining out to get back on track. For others, you might need to sell the house and rent a cheap place for a couple years before you get your debt and expenses under control. But don’t do anything big until you think long and hard about the consequences and whether it will really pay off.

3. Increase: During this time, you shouldn’t forgo more job training or education. Find a way to get more knowledge, because knowledge truly is power. It could be night courses at the community college or trade school, or even just reading up at the local library. For us, I’m spending money on graduate school because I know it’ll pay off in the end. Just make sure it’s applicable knowledge that makes you a more marketable worker.

4. Prepare: Your life won’t stay the same every year. You may need to plan for a new child, or a wedding, or you might get a surprise raise at work. Be prepared for changes and emergencies with a savings account and updated budget. If you get a raise, don’t go blow it on a round of shots at the bar. Apply it towards your debt. In a few years when you’re debt free, you’ll be so grateful that you stayed committed to the plan.

I don’t dream of a magic eraser that clears away all my debt because our finances are on semi-autopilot. But I must be ever-diligent that we don’t start spending more than we should, or forget to pay a bill. I just don’t need to look at our finances daily to know we’re doing OK. It took years to get to this point, but it was well worth the wait.

You’ll do it. I believe in you.

About the author

Clever Dude


  • Your story sounds very much like mine.

    In the fall of 2003 I had a dramatic realization. Even with a healthy income my family and I had managed to accumulate over $90,000 of non-mortgage consumer debt.

    We were completely out of control and heading for disaster. Desperate to right the ship before it sank, I got my hands on every piece of financial literature available at the local library.

    We developed a plan, and within two and a half years all our debt was paid off, we had an emergency fund, and a strong down payment for our new house. It wasn’t easy (even with our income), and there were many sacrifices along the way. But the end result (being debt free except the mortgage) was one of the best things we’ve ever done.

  • Cleverdude, this is really hitting home for me. I’ve found myself also ratcheting down the ‘dreaming’. Not because I don’t have hopes for the future, but because it doesn’t seem like something that requires the lottery anymore.

    I also stopped buying as many mega millions tickets…even though I am staring down at three loser tickets as we speak. Its good to know that this is not just a matter of getting finances in order, but also changing attitudes. It seems to me that this mental shift is a big step…and that is not necessarily tied directly to how the money is handled. Its this realization that you get to once you realize that you don’t need a winning ticket to make things ok.

  • Great job finally making the switch.

    Fortunately we never got into much debt, house, car Mr Chiot’s has $12,000 in student loans. We’re trying to pay off our mortgage right now and hopefully in 2-3 years it will be gone. It will be so great to be 35 and have no debt -yeah!!!

    I never dreamed of winning anything though, perhaps because my parents were always great examples, work hard, save hard and do without.

  • I love what you said about continuing to increase your education and worth! Certainly this type of thing takes time and may not even pay off monetarily right away, but the long-term ramifications can be huge! Increasing your marketability in any job field is key.

    Thanks for the post. I like what you have to say.

  • I keep thinking that I am debt free, but I think I am lying to myself. I have a mortgage (very manageable), about 22,000 in student loans plus about 3,000 that I owe my parents (paying this back very quickly, probably in january be done).

    But now I am starting to entertain the idea of an MBA and that would add lots of debt back on or at least not let me knock out the student loans how I would like.

    Just out of curiousity, would you pay off student loans at 5.25 or mortgage at 5.875 first? Obviously the student loans I will pay off eventually, likely won’t live in the house long enough to pay it all off.

  • @Philip, in my situation, I can’t take student loan interest off as a deduction anymore as we make too much. If you can still deduct student loan interest, that’s something you need to account for in the calculation.

    The logical path would be pay down the highest effective interest first. By “effective”, I mean what the rate equals after tax deductions. I hate math, so I’ll let that up to you to calculate.

    The emotional path says to pay down the student loans because it’s an mentally achievable goal. However, if you go back for your MBA, you can get your loans deferred.

  • that is really impressive! congrats on your amazing debt reduction. we had a kind of nasty wake-up call too. i think after years of grad school we took the existence of a salary as a green light to go bananas. the damage is done now, but we’re still pretty young and so glad we discovered the desire and motivation to live in a different way. we feel so much better and more fulfilled now that we are.

  • Don’t worry, the true purpose of your post hasn’t been lost on me, but I find it really interesting that so many people dream about lottery winnings.

    While you may think this is crazy, I personally worry about winfall. I occasionally fill out contest forms without really reading what they are. If I were to win even $50,000, my business credibility would be shot in my own mind. If I went on to make $30 million through hard work and perseverance, people could say “well, he had 50 grand at just the right time – he’s just lucky.” While I don’t think about it often, it’s actually one of my concerns. If I won even a small amount of money, I would most likely funnel it through a family member in hopes that it wouldn’t be traced back to me.

  • I too have a 7 year plan to be totally debt free and that includes mortgage and 2 student loans. I was recently laid off from my job after 10.5 years and they hired me back. I am still on track and my plan is to pay down the debt with the highest rate and then apply that to the next debt. Snowballing my debt. By the time this is done we truly will be ready for retirement or semi retirement assuming we don’t get any more debt. I wish I started thinking like this earlier.

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