From 2011-2014, my husband and I paid off over $36,000 in debt ranging from credit cards to student loans to car loans - everything but our mortgage. Once it was paid off, I felt like we could breathe again. We bumped up our emergency fund, started a Roth IRA for each of us, and maxed them out. We also paid off the remaining student loan (another $16,000) my husband's parents had taken out for him back in the day. We downsized our house and moved closer to work, family, and the grocery store. :)
Being out of debt, I was able to quit my job and take one for far less pay that made me much happier. I eventually switched to part time to go back to school to pursue a second degree. During this time, we bought a new-to-us car in cash, which turned out to be a lemon. After a few years of near constant issues, we gave up and traded it in for a much nicer new-to-us car, with a loan. It was fine, we could easily swing the payments and pay it off in about half the loan period, then we’d plan to replace our old reliable car. And then life happened.
Less than one month later, my beloved reliable car started having some new issues, making it not so reliable. A visit to our trusty mechanic and we had a reasonable quote for repair. But we’d be putting a fair bit of money into a car that was rusting out, had some electronics issues, and had engine issues that would not be resolved with this repair. We did some thinking and determined that the car had reached a point that we would just be throwing money at it to try to keep it going just a little bit longer. So we went back to the dealership and got another car, this time a new one (as it was the first year the model was available), with another loan.
And so we find ourselves back in debt. We reduced our Roth investments to pay for our two car loans (though we have been able to max them out thanks to tax returns and other extra income), but the payments and reduction in flexibility for our budget has been stressing me out (it doesn’t take much). So we have made a decision. We’re stopping our Roth investments and using those funds to snowball our lowest (and highest interest) loan. We’re also going through our house and trying to sell the things that we don’t use (some of which have been in boxes since I moved out of my parents house in 2006 - yikes! Does that make the stuff vintage though?). Join us as we take control of our lives through our second (and hopefully last) journey to debt freedom and back towards our financial independence (FI) goals.
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