Part I – The Debt Spiral

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I’ve known my wife since high school. In fact, that’s when we started dating. At this point, she’s been my best friend for over half my life.

The problem with knowing your significant other since high school, is the same issue many large corporations tend to face and spend tons of money trying to combat. Lack of diversity. This is probably the number one reason we allowed ourselves to get so far into debt.

When we graduated college, we moved to a new state to spread our wings and start our lives together. We were fortunate enough to have a few thousand dollars in savings, 2 fully paid off cars and minimal student loan debt.

Financing our lifestyle

Not long after we started working, we absolutely had to have a new 50-inch TV for our living room. We couldn’t afford to buy it outright, but that wasn’t a problem. We could have it for only a few dollars a month for the next 3 years…it was a steal! And so began our slippery slope.

We have since financed her engagement ring, 3 cars, furniture and probably some other stuff I can’t remember. We were¬†always able to keep up with our payments, so that was never an issue. And with the exception of the last car, everything we own is now free and clear. I mention this to help you understand our frame of mind as we started out. As far as we knew, financing your lifestyle was perfectly normal. Because we both grew up experiencing this, neither one of us challenged the other to think differently about it.

Deep in the Debt Spiral

Right about this time, I decided to supercharge my career by going back to school and getting my MBA. I must have thought to myself, “you know one thing you don’t have? Student loans, you should go get some student loans.” And that is exactly what I did, I was even able to finance my study abroad trip to China! How could I be expected to pass up that opportunity?

Not to be outdone, my wife also returned to school for her masters degree. But, while I was able to take my classes part time and continue working, she had to go back full time. In order to make ends meet, we borrowed more to replace her salary in addition to the cost of her schooling.

Thankfully, this was the last major financial mistake we made before coming to our senses. Unfortunately, the damage was done and we were in a major hole.

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