We Did It Once, We CAN Do it Again!

I've been reading a great book by Dave Ramsey. He's very inspirational when it comes to getting out of debt, and he makes a lot of sense. Some people think his methods are crazy, but they are methods that we employed prior to reading his material. Like working extra jobs, even while in college to pay for our little purple Ford Escort (oh, back in the day!).

But, then we changed. We had children (not that they are an excuse!) and decided that it was OK to take out an auto loan, and then take out student loans beyond what we needed to pay for school, in order to live. Granted, as graduate students, extra work wouldn't really be feasible, and the family has to eat somehow, but I kept wondering if the loans were really OK. Often, we hear that there are two kinds of good debt--the mortgage and education. Because, really, the interest on student loans (ours) was about 2.5%. That's like free money, right? Well, no, because we then calculated that our $100 payment every month, we realized that once every ten months, the entire payment went to interest. That's money out of our pockets! Yikes!
So, then, the tax refund came, and with some scraping and saving, the van got paid off. I'm blogging about this today because I got the title in the mail this week. What scared me most about my van purchase is that it didn't even dawn on me that I didn't hold the title, when in the past, I worked hard to hold that title in hand. It reminded me of the story of the frog in the pot of boiling water.
I was slowly becoming used to the idea that I'd have loans to pay off when we graduated. Scary. This is not how life was lived in the past, debt was another four letter bad word. And hopefully, it will become so again.
The good news here is that the van is paid off two years early, which frees up a few hundred dollars a month. The bad news is that It merely makes it possible for us to not take out student loans, it doesn't really mean that we can snowball our debts. Sadly, I just realized that means we would have been paying DOUBLE INTEREST had we not paid that van off before my husband graduated (interest on the car loan, then interest on the student loan). Luckily, our common sense kicked back in BEFORE he graduated, since interest accrument would have kicked in AFTER. Yikes!

This is where I thank God for reminding me where my brain is, that it works, and that I can do this. This is where I thank him for pointing out that we've done it before (had money in savings and no debt). This is where I buckle down and decide that it will happen again.