Read our last Financial Update here!
Since this blog was basically founded upon our quest to get out of debt, and it’s been ages since I’ve actually written about our progress, I figured it would be great to start 2013 off with a little bit of an update, for those of you curious to know!
The basic summary is that in January 2011 we realized we were broke, spending more than we were making (which was not more than $22,000/year), and had about $16,000 in debt, mostly in student loans. It was not a happy place to be!
We set a goal, and that goal was to pay off our loan and become debt free in two years, which would be this January, 2013. By becoming SUPER budget conscious and making some rather radical lifestyle shifts (probably the biggest of which was moving in with another family for over a year), that goal would actually have been quite attainable.
In a perfect world. Where there are no curve balls.
In late 2011, we started planning for a new baby. We had it all worked in to our budget plans, and it wouldn’t have made an impact on our debt progress, so we were excited to find out we were expecting in October of 2011. And here is where the curve ball enters.
In early 2012, we miscarried our baby. And it happened during a very short window of time (a couple of weeks) during which we were uninsured. During the miscarriage, I had to have an outpatient surgery procedure called a D&C which requires general anesthesia. Do you want to know how much it costs to spend literally 5 hours in the hospital for a D&C? $20,000 when it’s all said and done. I think we were charged some ridiculous rate like $500/minute to be in the operating room. I almost fainted when I got the hospital bill.
Luckily, we did not end up actually having to PAY that much money- we got our bills down to about $3,000 (if you ever want hospital bill finagling tips, I’m your girl). But that was still an additional $3,000 we were NOT anticipating having to shell out…. and still not have our second baby we were excited to be having.
Also, during this time we ended up moving unexpectedly. Our plan had originally been to get out of debt while living with this other family, and then think about the next step, including finding our own place.
“The heart of a man plans his way, but the LORD establishes his steps.” Proverbs 16:9 (ESV)
It should come as no shocker to anyone (least of all, US) that this tidy little plan did not pan out the way we thought it would. We ended up moving right at the tail end of this miscarriage, which for a few weeks felt a whole lot like, “HOW DID WE GET IN THIS MESS??” It felt a little overwhelming and unfair, honestly. We had worked so hard, felt like we were doing the right thing, had been faithful, and here we were with +$3,000 in debt, +moving costs, +no new job to PAY for all of this!
I think that’s the genius of it all really- for a good month or two it felt like utter chaos and confusion. And then it all came together so perfectly, I couldn’t have planned it in a million years. Mike got a new job, we got pregnant again with really GREAT health insurance this time (much better than what we would have had). And the world did not fall apart in shambles. A miracle really.
SO where DOES that leave us?
$2,500 in student loan debt (down from $16,000 exactly 2 years ago- that’s a miracle in itself!!!!)
$1,500ish in hospital debt (down from $3,000 on a steady payment plan)
$2,000 left to sock away for Baby Malachi…our first priority. That’s down from about $5,000 in June. We are going to end up spending quite a bit out of pocket for his birth for several care options that are not covered by insurance. I am sure I will blog about it more in the future- what we are doing and why. It’s not the most “economical” of choices, but I think part of this journey has been learning to not be cheapskates, but actually make wise decisions and know WHEN and HOW it is appropriate to spend money. It’s been a heart journey, for sure!
If everything else goes as planned, we will truly have knocked the the debt out for good by the end of this year, and hopefully much sooner than that. We will have paid the last $2,000 for Malachi within the next 2 months, and after that will be able to focus all of our energy on the student loan and hospital bill… which if we follow the same trend will take us an additional 4 months. Fingers crossed!
We’ll keep you updated!