D.C. Couple's Journey out of Debt
Financial freedom achieved by Southeast family who climb out of $30G hole
Stacy M. Brown | 10/9/2013, 2 p.m.
David Mills remembers the date, April 14, 2009, as if it were yesterday.
Mills and his wife of 17 years, Danielle, waited until the last minute before mailing a $1,475 tax overpayment to Uncle Sam.
The Southeast Washington couple, both licensed real estate brokers, had hit bottom as the Great Recession cleaned out many bank accounts, including theirs.
“There were credit card bills, there were doctor’s bills, a little bit of everything,” said David Mills, 49. His wife noted that the couple’s debt had topped $30,000, and their income proved anything but steady.
“So, scraping together the $1,475 to pay our taxes was a challenge,” said Danielle Mills, 48. “We debated and debated, thinking about how we could use the money for other things even though the government would surely add penalties and interest,” she said.
Ironically, the couple, who have three children, decided the tax payment would be a stepping stone in paying off other bills, regardless of how long it would take.
They also decided that they would no longer borrow money and set a goal of paying off their debts while vowing to save for any items they may want in the future, including luxury automobiles that David Mills might desire or a stylish wardrobe makeover which constantly dominated Danielle’s fantasies.
Today, more than four years later, the couple has eradicated all of their debt and each said sleep comes a bit easier.
“This year we were able to take a trip to Cancun,” Danielle said. David quickly added that, “the trip was paid for with cash, no loans, no payment plans.”
What helped the Mills erase their huge debts were better spending habits, using extra money to pay down credit cards and to pay off their two automobile loans.
They also held garage sales, and sold unwanted but enticing gold and platinum jewelry on eBay.
“We noticed that what we were doing had begun to put a dent in what we owe, so that motivated us to continue to pay bills on time and to be smart,” David said.
Economists and experts note that the Great Recession began on September 15, 2008, with the bankruptcy filing by Lehman Brothers, the Wall Street financial giant that the government and millions of Americans relied upon.
A record number of U.S. residents lost their homes to foreclosure as banks went belly-up and the stock market fell to all-time lows during the recession.
“Climbing out of debt can sometimes feel like a full-time job and takes serious work and discipline,” said Howard Dvorkin, a personal finance expert and consumer advocate. “There is a laundry list of issues to be confronted when getting out of debt. First and foremost is reigning in spending by creating a tight and complete budget and sticking to it,” said Dvorkin, author of, “Credit Hell: How to Dig out of Debt.”
For the Mills family, whose children are 17, 14, and 10, a lifestyle change proved necessary but also difficult. The couple said they consulted with credit consolidation agencies and they were forced to make big sacrifices.
“We knew what we needed, we knew what our children needed,” Danielle Mills said. “What we had to avoid was what everyone wanted. There is a big difference between want and need, so we stuck with our plan to purchase only things that we needed,” she said.
For instance, David Mills said, two of their children are video game enthusiasts who regularly request the latest and most up-to-date games available.
“We’d see a commercial on television or an ad in the paper about this hot new game and the kids just had to have it,” Mills said. “But, that had to come to an end, and for them, it was quite painful. There were some attitude adjustments made.”
Among the changes David and Danielle made were packing lunch instead eating out. They also found ways to carpool, effectively cutting back the money spent on gasoline.
The couple said they’re prospering and so is America.
Today, most economists agree that the country is again thriving.
“We are in a much better place than we were five years ago,” said Mark Zandi, chief economist at Moody’s Analytics Inc., in West Chester, Pa. “Consumers are feeling much, much better; certainly investors are.”