How Deep Is Your Sinkhole?

Our Consumer Equity (as of today)

A happy thought on which to end the week.

As you may know, we’ve been working Dave Ramsey’s system to stop paying debt interest to big banks and improve our standard of living. Well, this past week, I finally got paid for some contract work I did last year (yup—more on that in a bit), and this check will finally put us over the top. We’re not out of debt yet, as we still need to pay off Sallie Mae, but this will eradicate that last credit card payment, for the cards we cut up in June. Behold the power of extra work!

And just as significantly, we now are no longer worth less than $0.

Yeah, you usually don’t count consumer assets (like automobiles) when you compute net worth (or so I’ve heard). But when you have less than absolutely nothing, you count every last penny. So I included the Kelly Blue Book value of the cars (which we own outright) in computing our family equity.

And part of Dave Ramsey’s system includes tracking our equity with each monthly budget, which I’ve found can be quite encouraging, to see that our hard work is making a difference, because it increases month after month.

So I went and dug out our family budgets since we’ve been doing this, and put the figures into a graph… which looks a lot cooler than it actually is.

Back in June, we had to pay for summer school—an unexpected expense. But since then, we’ve been getting control over our budget and cutting back expenses, especially credit-card interest charges.

That’s what initially got me on board to pay off all debt, a few years ago. Back then, we had two credit card accounts. And one month, I looked at the statements. On there, they actually show you how much interest they charge you for that month. I added up those numbers, and they came to almost $600! Six hundred dollars every month that we were giving to these big banks, just for the privilege of having previously juiced up on crap that I couldn’t afford at the time.

Now, when Margaret and I first got married, we rented a small apartment for $525 a month. I know you probably can’t get the same apartment for that little now, but I’ll never forget that first apartment we had, and when I saw that interest charge, I thought, If we didn’t have to pay this money to these big banks, with the money we’d save, we could rent a small apartment!

Did you ever feel like the ground just fell out from underneath you? That’s how I felt at that moment.


Last year, I picked up some software contract work, which was quite enjoyable. And now that the account is closed and we’ll never work for them again, I can tell you about it. Every single invoice we sent in they were late in paying. The final invoices they took months to pay. And it’s not like they didn’t know the bill was coming.

And I thought, if it were me, I’d have set the money aside to pay the bill when it came due. This is what we did with the girls’ Bnot Mitzvah.

Or: Last week, Margaret paid her dentist up-front with a debit card. And they were, like, “Oh… Are you sure? We can send you a bill if you don’t have insurance.” No, that’s too complicated. The money’s there; we were planning on the expense; just do it. It’s no big deal.

And it’s hard for me to remember when it was a big deal, even though that was only a few months ago.

So this contract client finally paid off our bill, which accounts for the huge swoop at the right side of the graph. But I still can’t get over the irony of an international corporation that employs dozens of employees (or hundreds?) chipping away at at tiny $15,000 debt to li’l ol’ me. It’s like— They must manage their finances even worse than I do!

(And that’s some feat.)

Climbing out of the sinkhole…