Is Debt Really a 4-Letter Word?

All my life I have resented and feared debt. I’m sure I’m not alone. At various times in life you’ve got to face facts and your fears because sometimes there’s just no escaping it. I thought today I’d review my adventures in debt for your information (and perhaps my own therapy). So this is a story, not about a man named Brady, but of one named Gary! Sit back and take the journey with me and maybe when the dust clears you might just feel better knowing that you aren’t alone.

Is Debt Really a 4-Letter Word?

Early Experiences with Money

As a kid growing up, I was totally unaware of what exactly debt was, how you got into it, and how you could ever get out. Neither of my parents came from a well-to-do family and both worked hard at jobs most of their lives. We seemed to be always struggling, and I heard things like “we can’t afford that” or “you’ll have to just wait until we have more money to get that”.  We almost never went on a vacation (except for a rare daytrip to Atlantic City in the days long before casinos). We had an old car. We lived in a modest row home in Philadelphia and I spent my youth hanging out in the streets and playground in our neighborhood like most kids did. I didn’t have any money of my own until I was about 14 and got my very first real job and that’s when money started to mean something to me.

Suddenly, I could buy stuff! I was making about 50 cents an hour helping some college kid sell Italian ices and soft pretzels from a truck at our playground a few hours every day in the summer of 1963. At the end of the week I had about $10.00 and that was enough to make me  think about getting more of it. Debt to me at that age was lending someone a dollar and expecting (or hoping) that someday I would get it back. Sometimes I didn’t. I continued working at a series of part-time jobs throughout my teens including working at the corner luncheonette, selling light bulbs door to door, and delivering the daily newspaper. I managed to save some of it, depositing it at the local PSFS Bank (Philadelphia Savings Fund Society, you can Google it).

Off to College & Debt Becomes Real

I was the very first one in my family to go to college and my choices were really simple. We couldn’t afford for me to go away to school so I applied and got accepted as a student at Temple University in Philadelphia. The deal was that I could get a car to make the commute each day to school and back. I had some money (that I had saved over the years) and mom put up the rest to buy me a used 1963 Chevy Bel-Air.  I had to promise to pay her back and that was my first car loan. Debt…it finally had me in its grasp. I owed $250.00 to my mom and promised over the next summer I would pay her back when I got a summer job.

I can’t remember how many times I heard the threat of “I’m gonna take that car away from you and you’ll have to take a bus to school!” shouted during arguments with my mother. At the end of the summer, the loan was paid off and that ended those shouts and my first real debt.

After two years at Temple, I decided to look at going away to school and I got a job in a Maine resort for the summer of 1969. That’s when I decided that going away is really what I needed and I decided to transfer schools. Maine is where the realities of growing up, managing my money, and really being an adult sunk in. Although I had to get a federal student loan and a job while attending school, it seemed to be worth every penny.

$31.28 a Month for 10 Years

You can laugh if you want to (go ahead, I’ll wait), but I had to pay off my loan from 1971 through 1981 at the rate of $31.28 a month. In the beginning, it wasn’t that easy. I was making $150.00 a week, I was married (to unemployed wife #1 who was looking for a teaching job) and I was renting an apartment that was ½ a flight below ground level in a not-very-nice town here in NJ. I was fortunate enough to get a pretty good job out of school, not that school had prepared me for it! I also was an education major and there were a gazillion kids wanting to teach and virtually no jobs around. I got into an executive training position with Macys and somehow for the next few years, we built a little nest egg as I got promoted several times and increased my salary 400% (yay upwardly mobile me!!!) by 1976. My wife was working on and off as a substitute teacher so we saved almost all of her money and a good part of mine as well.

Meet Mr. Mortgage, Is Debt My Friend?

By 1976, I was getting in pretty deep. I had 2 car loans, had credit card debt, and now I was shopping for a new house in the ‘burbs. The American Dream, right? We looked around at new homes, and we kept on looking until we found ones we couldn’t really afford! But hey, we rationalized it away. After all, I was on a track for a promotion every year or so, my wife would get a full-time job and we didn’t have any kids, so why not? A house is a good investment (builds equity), even if we do have a mmmmortgage.  Our credit was good and, well we plunged ahead for a mere $54,990 and became the proud owners of a 4 BR colonial on a ¼ acre…we called The Ponderosa! Of course now we were really tied down and facing long term debt which I couldn’t even count. But isn’t that what most people do?

Do You Believe How Much We Made Selling “The Ponderosa”?

By 1986, with a growing family (two kids) and a need for special education for my now 5-year-old hearing-impaired daughter, we decided we needed to move to a better area and school district. We had to sell our home and when we did we made a small fortune due to the ever growing equity in our house. In ten years, our house had quadrupled in value. So we paid off that first mortgage. And then we bought the new fire breathing monster house along with an acre of land and a moat around it (ok I’m lying, it didn’t have a moat!). And the new mortgage, even bigger than before. Oh and the taxes…well someone has to pay for that special education, don’t they? The taxes were twice the amount from house #1. The new house we called…Alcatraz.

Early Retirement? I Don’t Think So!

Now, despite making good money and having a beautiful home, Debt had its own living space with us in the suburbs. There was the fire breathing mortgage, the kids and wild spending on their stuff and future education. Wife # 1, now was a stay-at-home-mom (it was the 80’s and 90’s and she was never a trend setter).There were car payments, swim club, family vacations, and on and on, quite literally living way above my means, misusing credit but staying just ahead of the curve and running as fast as I could. I was still managing to put money into my retirement plan but I was really starting to wonder if I’d ever really be able to retire. If that sounds scary, just wait until the next part of the story.

Two Divided By Love can only be…broken hearted”

Who could have ever imagined. There I was working hard, providing a very nice life for my family, and being the good guy (alright it’s my story and I’m sticking to this version) and then it happens.  Unhappy wife, unhappy life. I won’t go into those sordid details (besides do you think I really understand what happened?), but after 25 years…divorce.

Now it’s 1996 (do you see a 10 year pattern here?), and we’re involved in a very costly financial mess. Half of everything we own (which I paid for…yep, those are sour grapes) is divided and the house is sold. Dividing everything, less lawyers and other fees, leaves a lot less than half and despite dissolving the monster mortgage and her car loan, what’s left isn’t very much.  And now there’s child support and alimony to keep debt company.  So after 25 years, I’m back to square one in my quest for financial freedom and happiness.  Are you feeling any better yet?

The Big Change

The period following divorce saw me getting back to the grindstone pursuing my career, escaping debt, and changing myself into Mr. Frugal. I was fortunate to get involved on the ground floor of a new venture. I was hired to work with a regional bank to work with them in establishing what “supermarket branch banking” became. Ironically, my own personal finances were at the worst level ever and now I’m advising banks how to succeed in developing a totally new financial market.

Since I had just begun to recover and learn about good finances, learning the hard way, I used my lessons to preach the frugal gospel to just about anyone who would listen (are you listening?).

At Age 55, The Light Bulb Finally Goes On

From 1997 to 2006, 10 years (again 10 years!), I worked my way back up financially to firm footing.

I paid off all my credit card debts over a few years. I didn’t buy a new car for several years and saved those payments and took care of the old one. Eventually the alimony payments stopped and so did the child support. I rented an apartment and downsized in almost every area. I wasn’t keeping up with the Joneses anymore and I decided that I never would again.  I knew what keeping up with the Joneses and thinking that the bubble can’t ever break can do to you.

It took almost ten years from my divorce before I was in a position to find some happiness and that’s when I met wife #2.  It certainly was wonderful to find not only romance but a person with a like mind when it came to finances, health, success and happiness. You see, what I had finally learned is that’s what’s really important in life. Understanding what it is that makes you happy and that it’s not about the things you possess. It’s about the people in your life and the relationships you forge with friends and family.

So I guess the answer to the question I asked in the beginning is this: As long as you pay attention to debt, debt doesn’t have to be your enemy, or even a nasty 4-letter word. Debt is more like a semi-necessary evil that can teach you some life lessons if you pay attention in class. It can be your stepping stone to the things that are much more important in your life.  I know it was for me.

Is debt living with you these days? If so, check out how to pay off your debt. What would bring you happiness and success in your life when debt moves on?

Image courtesy of sicnag at via CC 2.0 (with changes)
My 1963 Chevy Bel-Air was a blue and white 2-door, and definitely not in the pristine condition shown in this photo!


  1. Jack

    Debt is a tool, like any other, so you can have good debt and bad. My rule of thumb is no debt for depreciating or negative cashflow assets, which basically leaves real estate and education, and even those aren’t guaranteed…

    Thanks for sharing your story. Brought back some good memories of my teenage stomping grounds in the Philly suburbs. Oh, and Go Owls!

  2. Debt can definitely be helpful. We couldn’t have purchased the house we have out of pocket. And if we’d waited to buy, we’d easily be paying 75% more. Instead, we were able to secure a foreclosure for $60,000 — $86,000 after necessary improvements. Now, our house is worth about $140,000. So… yeah.

  3. Jayson @ Monster Piggy Bank

    Very inspiring story Gary. Debt for me is a great teacher. Without it, I think I wouldn’t have learned how to be financially responsible. I’d like to consider that debt is part of life and it is up to us if we make it an enemy or a friend, depending on our purpose.

  4. Michael Belk

    I just hate to owe people. I really try to pay them as soon as possible.

    I love it when a credit makes less money off me than they counted on making.

    They calculate what the money will cost you before you pay the last payment. I love it.

  5. We don’t have to much debt, just a car loan. Even that was painful to take out, but my payment is wayyyy lower than the amount of income it allows me to bring in every month. So sometimes debt is good! It’s about how it’s managed, I think. We’ll probably be taking out a mortgage in the next few years, and looking at amortisation tables makes me sick.

    I’m glad you found someone more in tune with your life goals! As a woman, I can’t help pointing out the tremendous value there is in stay at home parenting especially when there is a child with unique needs. Not trying to butt into an old relationship I know zero about. Just putting that out there in a general way because childcare costs are insane!

    1. I agree that it’s about how you manage debt. It’s not that my debt has disappeared (I wish!), but I’m managing it so much better now than I did when I was younger.

      And you are right that there is tremendous value in stay-at-home parenting. I didn’t mean to imply otherwise, it’s only that relationships with exes tend to interfere with perspective sometimes! Ideally, the working partner and the stay-at-home partner each respect the contributions of the other, because it takes both to make things work. I can only imagine the stress on dual-income couples trying to afford childcare these days.

  6. I have had one car loan in my life–my dad was the lender so the terms were good. I bought a couch on time when I had no furniture or money. We had a mortgage. Other than that, we’ve avoided debt and I’m glad.

  7. Mrs. CTC

    Thanks for sharing your lessons Gary! It is indeed never too late to learn, even though the odds are more in your favor when you learn early on.

    I think much more attention should be given to teaching children and young adults about personal finance, it must be so nice to not have to learn the hard way.

    1. I couldn’t agree more about teaching children and young adults about personal finance. Teaching by example is good, but teaching by example and discussion is so much better. There are lots of outside influences talking to kids about money (from advertisers to friends), so we need to make sure that the right messages get through.

  8. I loved reading your story Gary, thank you for sharing this with us. I feel like I know a whole lot more about you! I think it’s brilliant how you picked yourself back up after divorce, it must have been incredibly difficult having to split assets down the middle when it was yourself paying for everything all that time. I’m sure this post will motivate other people who are really struggling. Everything can come good – in terms of finances at least – providing you change your spending ways.

  9. James

    Debt can be not part of life. I try as much as I can to be debt free. I hate the feeling of being in the the rut of debt because it feels like I am not free to save more as I have to deal with debt first.

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