Automotive Credit Debt Finances & Money

Our Journey to Debt Freedom: The Beginning

As of November 12, 2009, we’re free of consumer debt. In the article, I promised to tell you all how we got out of $113,000 in debt, but I realized that I first need to tell you how we got into the debt. I’ll try to be brief with the story, which means I’ll leave out some details that will lead to assumptions, whether right or wrong, but I’ll handle those in the comments.

Our First Debt: Student Loans for College

I started this blog back in June 2006, but really the debt began to accumulate in the summer of 1996 when I started college. Neither I nor my parents planned financially for paying for college, and so we just relied on loans (and 1 small scholarship) to pay the way (same with my sister who was a year ahead of me). Some fellow bloggers insist on saving up for their kids’ college educations, but I would debate the merit of that approach, but that is for another time. For me, I went to a state school (Penn State) and left with about $20,000 in student loan debt, not counting the loans my parents took out for my housing (off-campus). The investment paid off in the end with a series of great-paying jobs that I know I couldn’t have gotten without the degree.

I’d like to take this time to thank my parents for encouraging me to go to college and for handling the financing to get me through it.  My mom handled 99% of the paper and phone work to set everything up so that I could focus more on my studies rather than worry about the funding. I did have a job throughout college, but that was more of my “fun money”. I guess it wasn’t enough as you’ll see in the next section (credit cards).

There’s not much to say about my student loan debt except that in 2001 when I graduated, I consolidated all but one of my loans into one big loan at 6.25% for 15 years. For the first 2 years, I paid nothing but interest, but it kept the payments down as I could barely afford the payments (thanks to some of my other debt mentioned later).  From 2007 – 2009, since I was getting my graduate degree, the loan was deferred during semesters that I took 2 classes. That saved me interest, but I kept making the payments anyway.

As for Stacie, she also ended up with about $20,000 in student loans (and her parents absorbed some cost as well), but she went to a private college in PA that cost $25k per year AND she got her masters at Penn State (for free). She was able to get more grants and scholarships because she aggressively pursued them, and in the end she left college with a masters degree and the same amount of debt as I had from just an undergrad degree.

Total Debt Added: $40,000

My Second Debt: Credit Cards

I’m not really saying “Our Second Debt” because I’m going to take the blame for the credit card debt, even though a small chunk of it came when we were married. Honestly, getting my first credit card during college was my biggest financial mistake. Seriously. In just 2-3 years, I racked up about $15,000 in credit card debt in college, then another $5,000 shortly after college. Actually, the highest total hit $25,000, but that was a planned, temporary expense that I don’t really count.

I spent thousands of dollars on electric and bass guitars, bought a $600 TV, a stereo system, computers and even plopped a couple grand for a down payment on my first car (Saturn L300), all when I was making barely more than minimum wage. I bought $3,000 worth of bedroom furniture for my new place after college, but the room I rented barely even fit it. I was out of control!

After college, I got some control over our credit cards, but it took a long time to figure out how to pay them off.

Total Debt Added: $20,000

Our Third, Fourth, Fifth, etc. Debts: Cars

Cars are my weakness. Well, so are chocolate chip cookies, but cars are a bit more expensive. I wrote about how we lost $14,500 from stupid (car) mistakes, which tells most of our vehicular story, but ends when I bought my truck in 2006. As you know, we also bought a MINI Cooper in 2007 (paid off a few months later) and sold my wife’s old Pontiac in 2008.

Total Debt Added: $53,000

But with all those cars, how did we get to just $53k? I’m only counting the cars that we had when I started back in 2006, which were the Honda Ridgeline and Chevy Malibu. When we bought the MINI, I didn’t add it to the total, but I probably should have.


So from 1996-2006, we accumulated about $113,000 in credit card, auto and student loan debt. Some of it paid off many times over (student loans) while others were just wasted money and time (to work to earn the money).

The next part of our story: How we paid it off…

About the author

Clever Dude


  • I hear you, man. I’m really just starting to want to aggressively tackle the debt, and I’m dealing with a ton. Looking forward to seeing how you made it disappear! Also, have you stuck with the bass? I’ve been playing guitar for about 15 or 16 years and can tell you all about the bittersweet feeling of giving in to your GAS — that is, gear acquisition syndrome 🙂

  • Wow, I’m impressed you were able to actually get in debt by $15,000 in college! That’s awesome! I didn’t realize credit card companies give such high limits for students. These CC companies are geniuses at praying on unassuming people yeah?

    What was your psychology behind going into so much consumer debt (the $73,000 portion)) when you didn’t have the money to pay for it in full? I’m just wondering the psychological aspect of it all. It must have been fun getting all those goods at least right?

    Has your desire for things changed after this experience?

  • @Samurai, by the time I graduated, I had a few credit cards, including store cards (for furniture, computers). As for my psychology of going into debt, basically my mantra was “I have a good job, so I’ll pay for it eventually. I want it now!”.

    Yes, my desire for “things” has really changed quite a bit. I still desire cars and electronics and stuff, but I’m much more conscious of where my money goes.

    @Thirtysomething, I no longer own any bass guitars (sold the last one to a guy in Belgium last year), but I did keep an electric/acoustic Washburn 6-string. Just hope one day I’ll move from guitar hero to actual guitar.

  • Our family started with $86K of debt. So, I am very interested in hearing how you paid it off in such a short time. I so want to be agressive about paying it off, but not everyone is on board with being totally agressive.

  • @Money Funk, that is definitely one challenge I had going into “payoff mode”. I was ready to go all-in, just like I tend to do when I get excited about anything. But my wife’s enthusiasm was a little more tempered. While I was ready to lower the heat down to 50 degrees and just bundle up, she wasn’t really on-board with that plan and we found a “compromise” somewhere in the low 70s range.

    I have more examples, such as living in my car instead of renting a room when I worked in PA for 5 months, but those are for a different time.

  • CD – Why not just wait until you make doulbe your money so you can really afford it, since you know getting into all the debt is bad? Doesn’t material things get old, and the pain of debt just increase so you stop?

    I like getting super motivated to make more money before buying anything. “Why can’t I afford that” motivates me to work like a banshee!

    BTW, highlighted your mortgage post in my weekly wrap yesterday. Check it out.



  • Hi,

    I have a mantra like u “I can do” . It motivates me all the time when i was getting in to trouble. I am waiting for your next post to know how you paid all the amount within a short time.
    thanks for sharing.

  • I have been paying off my years of medical debt. I am so excited to say that I am down to under $2,000 and will be completely debt free in a few months. If feels very good to know I am almost debt free and will work hard to keep it that way.

  • Thanks for sharing this awesome experience and I feel everyone have to go through this. Getting debt free is the biggest challenge everyone of us is facing.

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