You may be here looking for direction because you are starting your debt free journey. You may be here because you are stuck somewhere in the middle of your journey. You may be here because you are also near the end of your own debt free journey (hooray)! Whatever your reasons for being here, I want to share with you our experience with paying off debt in hopes that it gives you encouragement to continue!
Ours is not a get out of debt quick story. I have been frustrated many times reading stories of popular finance guru followers who touted that they “paid off $250k debt in 8 months”! (That’s probably a bit of an exaggerated example.) I feel like a lot of those stories entailed things like:
- a large inheritance
- other kinds of large windfalls
- each one had a high paying job
- “stupid” expenses like shaving off $1k/month in car payments
- down-sizing their home and extravagant expenses
- maybe adding a side hustle or multiple jobs
…all without children involved. That just wasn’t our story and that wasn’t going to happen for us unless God provided some miracle. ha! (I’m not saying all of the testimonies were like that, but it’s rare to find a story like ours out there where the journey has taken a lot longer than a year or two. Or at least they are harder to come by, which can be very discouraging.)
The Beginning
My husband and I have been married almost 11 years now. When we got engaged in 2009, and started looking at our combined debt and income at the time, we knew that becoming debt free would be a priority in our marriage. We did not know exactly how we would do it, but we knew that we weren’t going to just shove it under the rug or make minimum payments for decades. We started our marriage with just over $97,000 in debt. This included several school loans, two car loans, a couple personal loans, and a small balance on my credit card. Most of that was our wedding expenses that we knew we could pay off fairly quickly. (I will write a blog post at another time about how we paid for our own wedding AND week long honeymoon for around $6k). Below is a rounded breakdown of what we totaled up before getting married in October 2009.
Note: We hate debt and we hate that we had so much when we got married. We regret spending so much on private college education, but that’s in the past and we can only hope that our children will make wiser decisions because of our experience. More on that later.
Slow Start
Our first couple years of marriage we were not too aggressive with paying down debt. We paid off my credit card in that time frame and made some larger payments on other loans, but mostly we paid the minimum required. My husband was finishing his masters degree during our first year of married life, so we also incurred a couple more loans in that time frame. We had decent jobs, but we also liked to travel. Our families lived in different states than us, so we traveled a good bit to see all of them. We knew that we wanted children (up to 4) and at our ages (26 and 27 when we got married), we didn’t want to put that off until after our debts were paid off. It just wouldn’t be realistic. Now, we could have each worked 3 jobs a piece (a la Dave Ramsey style) before we started our family, but we also wanted to enjoy being newlyweds and didn’t want to spend those years before children never seeing one another. We worked with what we had and we kept our expenses really low.
Low Maintenance + Specific Priorities
We are both super low maintenance people when it comes to hobbies, entertainment, clothes, and personal upkeep costs (i.e. hair, nails, etc.). We just don’t spend money on things like that. We pretty much only paid for internet and mobile phone service as our “luxuries”. ha! Our priority was traveling, either trips to see family, planned vacations to see friends, or just a trip on our own. That’s really the only thing we “splurged” on. Otherwise, it was your basic groceries, eating out, utilities…you get the picture. We rented a two bedroom apartment when we first got married for $850/month, and two years later we moved to a 3-bedroom house down the street and paid $750/month in rent. We got pregnant in the fall of 2011 with our firstborn. I REALLY wanted to stay home, but we decided that with our income at the time, even with a daycare expense, it still made sense for me to continue working to keep paying off debt more quickly.
Growing a Family + Readjusting
Our first child was born in May 2012, and I continued to work full time. It killed me not to be home with him. I cried ugly tears most days when I dropped him off. Pumping at work and missing all of those snuggles. He loved being there, but it still broke my mama heart and I never “got used to it” as many told me would happen. I still get weepy thinking about that “lost” time. I’m trying to make up for it now. Anyway… we paid close to $1,200 per month for daycare. We wanted something close to my office and had a great reputation. Even still, we were able to bring enough home to pay off more than our minimum payments on our debt. When we were expecting our second child due in May 2014, we decided that it was better for me to be home with the children after I delivered. So I continued to work until she was born. We knew we would have to save up a year’s buffer so that we could “float” until my husband could find a job that would replace my lost income. So, our more intense debt payoff went on the back burner during my pregnancy while the extra money I brought in went towards saving for me to leave the workplace. When our second was born, I was elated to be able to finally stay home with my babies, but I knew that we’d have to live very simply to conserve the savings until we found something else for my husband. Thankfully, by September of that same year we had found a job that would bring us closer to my husband’s family, and would give us the freedom to continue paying off debt quicker than we had been. We moved into a 3-bedroom rental home for $975/month and thought we’d only be renting maybe a year. We figured we would get a feel for the area and the job, and then we would look into buying a house while continuing to pay down debt. Spoiler: We are still here almost six years later!
Additional Debt Accrual + Grand Totals
Between some additional school loans that first year of marriage, replacing vehicles for various reasons (i.e. totaling a car via hydroplaning the day before our first child was born… you know, the usual), hospital bills for labor & delivery and a gallbladder removal surgery (thankfully those are interest free) we added another $44,000 to the debt we had to pay off. Now, that is just in addition to the ebb and flow of the original $97k. I have no clue how much interest we have paid over 10 years either. I didn’t keep track of it to that degree. I’m also not including larger expenses like medical bills that we didn’t have to pay long term. We would have just paid those outright with savings or something. This is just anything that was in long term payments or was an actual loan or true debt. All told we have been working towards paying off somewhere in the ball park of $142,000 (without interest) for our entire marriage. I would guess by the end it will be more like $170k-$180k (including interest) that we’ve paid total. Whew. That’s a lot of money! One of the master’s loans alone had about $14k worth of interest that we paid at the end!
Home Ownership + Materialism
We started to get impatient and feel like we should try to buy a house in the spring of 2016, before our third child was born. The American dream and the increasingly crowded space of our rental home seemed to be urging us to go for it even though we still had debt left to pay. We didn’t have a peace about it though, and were thankful when an offer on a house came back countered and we were able to withdraw without any money on the table. We decided to keep our heads down and keep on keeping on. The reality was we didn’t have money for the COST of home ownership itself. We have a small emergency fund and that’s it. Our whole marriage we have been putting everything we can towards getting rid of this burden of debt. We didn’t feel that the timing was right to buy something. That ultimately would have put us even further into debt due to lack of funds for repairs, unknown expenses, furnishing, etc. It was hard to walk away from that pursuit because we do have a strong desire to have our own place one day. When you see others enjoying their spacious homes, fixing things up, adding on beautiful decks and landscaping, decorating to their hearts content… it’s hard. While I am extremely grateful, it’s hard for me sometimes to continue using tired, old, hand-me-down furniture and not feel the desire to have something I’ve picked out and that I love. For instance, I complain off and on about our kitchen table (and our ugly sofa). It was my husband’s grandmother’s (the table, not the sofa) and he cherishes it. It isn’t anything special, but he reminds me that we at least have a table and that one day soon we can replace it with something else. Now is not that time! We have a mission!
To be very clear, I know that even as we are, we are privileged beyond what many in this world could ever dream of having. I am extremely grateful to have what we have. I am just wanting to be vulnerable here and share that this journey has not been without it’s trials, temptations, and disappointments.
Making Headway
We’ve added two more children (May 2016 and May 2018…we’ve got a thing for May due dates people!) to our family and we’ve made significant headway the last several years especially, including paying off almost $22,000 since October 2019. We have $2,777 left to pay and we are so excited!! I can see the light at the end of the tunnel! Some things we’ve done throughout our journey, but especially in the last 6 years have been:
- Sticking to a budget. We use You Need a Budget (YNAB) for our budgeting application. It’s web based and also has an app. We LOVE it and couldn’t say enough good things about it. I know the word budget makes a lot of people cringe, but having a budget is absolutely KEY to getting out of debt. You have to know where your money is going and every dollar has to be given a place. If you don’t know how much you spend on groceries every month on average… you NEED a budget. We don’t always get it perfectly, but it’s about paying attention and making adjustments. It’s also important to be on the same team and have the same desires to see the debt GONE.
- Eating simply and meal planning. We do eat out occasionally, but I meal plan for a month at a time and that really helps me to keep our food budget within a range that is comfortable for us and that serves our budget and our family well. I also shop almost exclusively at ALDI and that has saved us a ton of money as well. (I’m not into clipping coupons people.)
- Maintaining our priorities. Figure out what things you are willing to cut out to get to your goal faster. Cut out all the unnecessary stuff. If you want to travel, find a way to do it on a budget. (We went to Europe for 10 days to celebrate our 10 year anniversary. We only spent $2,500. I will write about that at a later time!) If you insist on having an expensive car payment, you’ve got to find other ways to shave off expenses. If your desire is to stay home with your children, you have to decide what changes you can make. Cut out weekly mani/pedis, expensive hair treatments, curb clothes shopping, cut out cable, reign in the grocery bills, reevaluate expensive hobbies, etc. It’s doable, you just have to make some sacrifices. If you enjoy working outside the home, I support you, but you must take a look at the things you are throwing your money at every month and make changes.
- Find ways to shave off dollars. We were able to get on a family plan with my brother for our mobile phones several years ago, and that saved us almost $60 a month right there. Take a look at your car insurance premiums periodically and shop better options. Our landlord lowered our rent over several years in order to keep us. I’m sure he’s had some doozies in the past. I know that is very unheard of, but we were blessed to be in that position. Accept ALL the hand-me-downs. I’ve barely bought clothes for my kids the last several years. (Thank you to all of those that have donated to the cause!) Resist the urge to have extravagant birthday parties and Christmases for your kids. Those are money suckers right there! Your kids won’t remember the gifts, they will remember the time spent. (That’s my excuse because we have four birthdays in the span of a month and I despise planning parties. ha!) I could go on… but you get the idea. $20 here and there adds up quickly!
- Resist the urge to spend those windfalls. We’ve had a few windfalls the last several years. A large bonus from work and tax refunds (it pays to have four kids and an average income) are enticing things to want to spend. Every tax refund or large windfall we have received has gone straight to our debts. The exceptions would be putting some money aside for a larger trip that we know is coming up, but even then it’s just a small portion. Resist the urge to go and spend that money on something other than paying down your debt. It hurts in the moment because it seems like you aren’t getting anything for it, but that shrinking debt line sure is nice!
- Using a credit card strategically. We don’t have credit card debt, but we DO use a credit card. Strategically and carefully. We never pay interest. I sometimes even make multiple payments on it a month because that’s just how I am. We utilize ONE credit card for every expense we possibly can, and treat it like a debit card. We keep track of all expenses in YNAB as if it were coming straight out of checking, but we get all the benefits of using the card. We use those points towards hotels, flights, etc. We haven’t paid for a hotel room in YEARS. As stated before, traveling is a priority for us so this is one way we are able to keep our trip expenses lower. If you have a hard time controlling spending using a credit card, this wouldn’t be for you.
NEXT STEPS
I’m sure that I could go on and on with more details, but the point is we are almost there and we have done it with patience, perseverance, and prayer! It hasn’t been a quick journey, but we have not had to sacrifice time with each other, time with our kids, or our top priority of traveling. We plan to save up for several months after we are DEBT FREE so that we have savings going into purchasing our first home. We don’t want to start that process in the hole again because we couldn’t afford to replace carpet or paint if necessary. I understand that a mortgage is still debt, but this will be something that we address as quickly as we can with the same tools we have used for all the “bad” debt we’ve paid off. I would love to be able to refinance a few years in to a 15-year mortgage so that we can pay that off even faster.
Are you in a similar situation? Have you been discouraged by “keeping up with the Jones'”? Are you struggling to get to your debt free goals? I hope that our story can be an encouragement to you. We can’t say we are debt free just yet, but we are so close we can taste it! Proverbs says, “The poor are always ruled over by the rich, so don’t borrow and put yourself under their power (Proverbs 22:7 MSG).” We talk about our regrets with money, and wish that we could have done things differently. It truly has felt like an oppressive situation a lot of times. We would not have met each other though if we had not both gone to the same college. We wouldn’t have the four beautiful children that we have. We wouldn’t have the amazing community of friends we have now. We can’t dwell on those regrets. We can only move forward with more wisdom. I hope that our children see the hard work we’ve put in. I hope that they learn to see finances as something to take very seriously, and grasp the long-term impact of poor decisions. I’m rooting for you and praying for you friends! You can do it!