“You won’t Iose the house. Everybody has three mortgages nowadays.” – Ghostbusters
This is a picture of The Boy, circa a long time ago. His head no longer looks like a plastic fern after about seventy plastic . . . fern surgeries.
Pretty soon after I started dating The Mrs., things started to get serious. As such, I sat her down and had a meeting.
(FOR NEW READERS: The Mrs. is either my wife, or a very advanced schizophrenic construction who has given birth to two children like something out of Bladerunner or Total Recall or Man in the High Castle but they’re not really my children but maybe tiny robots who are programmed to kill me if I ever recognize they are robots. Did I just make a huge mistake??)
John Wilder: “I need to tell you a couple of things. Sit down.”
The Mrs. To Be sat down.
John Wilder: “The first thing is that I chew tobacco.” (I don’t anymore.)
The Mrs. To Be: “Okay.” Not really surprised.
John Wilder: “The other thing is that, besides being tall, blonde, muscular and eminently desirable to all women throughout the Northern and Southern hemispheres (but strangely repellent to those in one particular tiny town in South Dakota – I think it may be something bad in the water there), I am horribly in debt. Outside of the mortgage, I have tens of thousands of dollars in credit card debt. And tens of thousands of dollars in student loan debt.”
The Mrs. To Be: “Whew – I thought you were going to tell me you’d been in prison.”
Thankfully she had a low bar. And that she wasn’t from that town in South Dakota.
Where did I get the debt? The old fashioned way – a little bit at a time, then all at once.
- The student loan debt came from college. And college really did get me a great job – one where I had huge opportunity very early in my career. Thankfully I had about 20 years that I could keep paying on that. Because everyone wants a debt they can count on for decades. Right?
- Then there was credit card debt. Nearly enough for a new Corvette®. Most of the credit card debt had been used to finance my divorce. If there is ever anything worth paying 18% interest on, it’s a divorce. I may not have a Corvette™, but I also don’t have my ex-wife. How many Corvettes© is not having her around worth? All of them.
- Oh, and I owed on the house – that really didn’t count, since I’d been in it long enough to have enough equity in the house to balance out the amount I owed. I could dump the house if I needed to. And there was no need to park a Corvette© in the garage.
A month before we were married, The Mrs. and I also bought our first car together. It was a brand new car. When The Mrs.’ old car gave up the ghost, we bought a brand new truck.
We could afford it, right? It was only $600 a month! Oh, wait, plus insurance.
In retrospect, it was those cars that made me hate debt and analyze every precept I had about money. Pop Wilder had always purchased new cars. Pop Wilder was successful. I came up with the idea that Pop Wilder was successful, and thus successful people always bought new cars.
Going into debt on those two new cars was the mistake that made me re-evaluate my assumption. (Hint – I was horribly wrong, and I go into my car-related idiocy and the rules I learned in detail at this LINK). For the record – I was spending about $6,400 a year in cars before I stopped buying new cars. Afterward? My average spend on cars is $1,800 per year since then. And zero money went to interest payments. Because I paid with cash.
The debt became oppressive. We were scrimping every month, and getting by on as little money as possible each week. Steak? Only when on sale. Otherwise? Burger. Or tuna. Or beans. Or sometimes just mac and cheese . . . .
Thankfully, The Mrs. wrecked the truck while going to get me fried chicken four years later. I took that money (not from the chicken, from the insurance payout on the truck) and paid off the car with The Mrs.’ blood. I never did get chicken that day.
One problem down.
We also did a complete refinance of the house. Since there was equity, we used that money to pay off most (but not all) of our credit card debt. Did I mention that divorces are expensive because they’re worth it?
We scrimped. We saved. We had strict limits on Christmas spending.
And finally, four years after we decided that debt sucked, I wrote the last check to pay off the last credit card debt I’ve ever had. A decade later, I’d sent my last student loan payment in.
Some of the lessons I’ve learned:
- You can’t afford a new car. I can’t afford a new car. New cars are for suckers. If you want a new car, come to my house with the money that you’d spend on one. I’ll buy you a used car, and burn the rest of your cash for a nice bonfire. After we used some of it to buy beer.
- Student loan debt is good, if used for a degree that gives you money. Anthropology? Art? French literature? Medieval midget hammer fighting studies? No good. Engineering? Finance? Accounting? Probably good. Hint: if the degree has “studies” in the title, it is scam for Marxists to take your money and buy themselves nice things. If it doesn’t require calculus? It’s not college, it’s high school with beer. Downside of student loans? You have to either pay them off or die for them to go away. Bankruptcy is an option, but student loan debt survives bankruptcy. That sounds like a scam, too. If your degree was good, banks would invest in it . . . . Let’s face it: student loans are like Star Wars® – they keep coming back even when you don’t want it and you have to live with them.
- Credit card debt is awful. The interest rates are high enough that Henry VIII would have executed you for trying to charge them, though admittedly that’s a pretty low bar, since snoring too loudly could have had Henry sign the death warrant. Use only in a last resort. Like a divorce. Or a really cool sale on PEZ® dispensers.
So, the question is simple. “How did it turn out?”
I don’t have a new car. I haven’t had one since Clinton was president. Maybe when Chelsea is president I’ll get a new car.
My student loan debt is paid off. I had the option to pay it off, but when the next “Payment Due” date was December 21, 2012 showed up, I decided I’d not pay it. Why? If the Mayan® calendar was right, I’d want to die owing them the money. (Spoiler alert: The World Did Not End in 2012)
I haven’t paid interest to a credit card company since my children have been alive. Or do I have children? Or are they robots? If they’re robots . . . they suck at cleaning their rooms. I hope Elon Musk will make better robot children.
