The Credit Card is Paid Off!

It feels amazing to have this debt wiped out for the second time...and I hope, the last time.  I'm not sure how many of you caught my guest post on Krystal's blog a while back, but it described how we wound up here ni debt again and more importantly a theory on why it happened again.  I would like to re-post my thoughts here:

When I first started blogging, I wrote from a single person’s financial perspective. And I struggled to stay committed – not to the end goal, but to the process. I found it easy to come up with goals and to write about them, but I had a very difficult time tracking my spending. So while I could check my debt balances, I had no clue if my spending was in line with my budget. I also spent a good part of the first year of my blog worrying about job loss. Thankfully I survived three rounds of layoffs, and I continued to get recognition and pay increases – which helped the progress on my debt goals.

A year or so ago, Jordan (my now husband) and I merged all of our finances. We got a joint credit card that we used for all of our spending. We were able to start tracking where our money was going, and it was a huge eye-opener for us.  We found out that we spent a lot more on eating out and alcohol than we had imagined – including our groceries, we were putting an average of $1,000 in our mouths every month!  That realization brought us to a place where we were more focused than ever and we progressively curbed our spending in those categories each month.

We were able to pay off not only my debt, but his as well. Merging our incomes provided us with opportunity to re-think our spending and saving strategies. It also provided us with the financial power to pay off our debt.

We enjoyed being debt-free for about four months before we started to fall into the debt hole again.

We had convinced ourselves that because we had good jobs. And because we were not afraid of a job loss, we told ourselves we would be ‘fine’ no matter what came up. On top of that, we were both really really tired of thinking about, talking about and writing about money. Then, Jordan and I bought a new vehicle together, adopted a dog, got engaged, purchased a home (through a new home builder) and got married – oh, and we just adopted a second dog. With the wedding planning underway and having to make decision after decision about our new home purchase, we became – quite simply - exhausted.

Most of us have heard of debt fatigue.  Gail Vaz-Oxlade describes it as the mental state that occurs when you have been in debt for so long that it feels like you’ll never get out – so you stop caring and just continue buying. She believes that it is at the three year mark when debt fatigue tends to sit in. The description never really seemed to fit for us; we certainly got debt paid off the first time in less than three years – so why were we so tired?  Why did we stop caring?

My mom found an article in the New York Times that talks about Decision Fatigue which seemed to describe what we were going through. Here is how the article describes it:

No matter how rational and high-minded you try to be, you can’t make decision after decision without paying a biological price. The more choices you make throughout the day, the harder each one becomes for your brain, and eventually it looks for shortcuts, usually in either of two very different ways. One shortcut is to become reckless: to act impulsively instead of expending the energy to first think through the consequences. The other shortcut is the ultimate energy saver: do nothing. Instead of agonizing over decisions, avoid any choice. Ducking a decision often creates bigger problems in the long run, but for the moment, it eases the mental strain.

Wow! That described Jordan and I to a T.

I don’t want to use “decision fatigue” as an excuse, but it certainly helps explain so much of our behavior. We had been making so many huge decisions that our capacity to make small ones has been diminished.  

I’m hopeful that understanding this type of fatigue will help us to avoid getting in debt a third time. Come November, we will take possession of our new home and we will be debt free again – aside from our mortgage and car loan. 

It’s the awareness of our money and our energy levels with both paying off debt, and with the mental energy it takes to make good decisions, that will keep us on track. Combine that with the love and support we have for each other, and a couple of good spreadsheets – and we should be just fine.