Home By Dawn Make 2017 your year to get out of debt!

 

Here is the imperfect story of how my husband and I paid off $60,000 of debt in one year .

But before I begin…

The reason I am sharing this

The reason I wanted to share about our progress (even though we haven’t reached our goal yet) is two-fold:

How we paid of $60,000 of debt in one year (and you can, too!)

1) I am always encouraged by other people’s testimonies about how they have been able to pay off obscene amounts of debt in rather short periods of time (with some sacrifice and intentionality).
2) To encourage you to get started! My husband and I didn’t realize the burden our debt put on us and OUR RELATIONSHIP.

 

The Beginning…you need a plan!

How we got started: About 4 years ago my husband and I purchased the Dave Ramsey Starter Kit and we watched the DVD’s at home (I read The Total Money Makeover book that came with it and my husband listened to the CD’s that we purchased separately on the way to work). Dave presented us an easy to follow plan and “gazelle like intensity” became our battle cry.

We immediately cut up our credit cards (literally) and made a budget.

We were shocked to find that between student loans, vehicle loans, hospital bills and credit cards we had $128,000 in debt…NOT including our mortgage. 

That number was daunting and it felt like we would never be able to pay it back. But we decided to get started on the smallest debt first like Dave Ramsey teaches and go from there.

In the first 3 months of our new commitment we paid off about $10,000 in debt. We felt encouraged. Maybe this wouldn’t be so bad.

Then a funny thing happened: My husband started a new job making significantly more money. Well that should help accelerate the process, right? Wrong :(

Instead of putting the new found money onto our debt…we bought a new(er) vehicle…with a loan…and payments. But we justified it, and the new payment was less than the pay increase so we were still coming out ahead.

The next 2 1/2 years were filled with selling our home, moving twice and adding two babies to our family. It was a hectic time in our lives, and getting ahead on debt was not our focus…survival was!

While we were aware not to take on new debt, paying off existing debt was no longer our focus.

Job loss spurs us on

Then the unexpected happened…I lost my full-time job. Now if you have read our tithing story you’ve heard us talk about how:

a) we desired for me to be a stay at home mom but didn’t think that we could afford it
b) how our lifestyle was better after I lost my job
c) and how the Lord was so faithful through that time, providing for us over and over again.

What should have been devastating to our financial well-being, actually turned out to be one of the best things that has happened to us. And, it caused us once again to be much more intentional about our resources.

Make a plan, work the plan

As we calculated our new budget without my income, we were glad to see that we would still be able to cover all of our bills each month. However, there didn’t seem to be much left for extras or unexpected expenses, let alone getting ahead on debt. So we had to recommit and make some changes to get ahead.

Here are a few ways we found extra money to put on debt:


1) Selling our newer vehicle for a less expensive one that we paid cash for
2) Only going out to eat if we have a gift certificate (we ask for these for Christmas and Birthday gifts)
3) Selling ANYTHING & EVERYTHING that we don’t need– from my husband’s snowmobile and tool box to lighting fixtures and kid things, it has turned into a game to see how many things we can sell and who can get the most from them. Some things we have only gotten $20 or $40 for, but IT ALL HELPS!
4) Not going to the mall or window shopping–have you noticed that when you go shopping you really want to buy things? We avoid shopping for now (except for groceries)…we know that sacrificing for a season will pay off.
5) Cutting our grocery bill: Going to Aldi, making my own detergent, buying quality wholesale meat…nothing new here!
6) Need verse want– we have gotten really strict with what qualifies as a “need” and a “want”…which isn’t always easy because my husband is very creative!
7) Garage sales– we buy most anything for the kids at garage sales and often joke that everything in our house was purchased off of Craigslist (but still looks really nice). (We also have very generous family that love to buy things for our kids, too…they have probably sacrificed the least! :)
8) THE MOST IMPORTANT: Keeping a budget– I’ve always been the budget master for our house, but now I am meticulous about it and share it with my husband on a regular basis which helps to keep him from wanting to buy things (he is the self labeled spender in our relationship!)

And again, the Dave Ramsey program helped us make a plan, create and keep a budget, and continues to inspire us when we start to feel discouraged.

Watch out!

We’ve only really recommitted in the last year, but have paid off over $60,000 in debt (WITHOUT me working).

We also have noticed that since we have been living more sacrificially (which sounds funny to even say since we are SO blessed) that we have seen favor, increase and blessing above what we have in the past. It seems that God has honored our discipline and diligence and multiplied it. (We shouldn’t be surprised, He is a good God and promises us that as we are faithful to Him he will be faithful to us…I guess sometimes it is just easier to expect blessings for other people and not ourselves…but if you want to see blessings, just be faithful and diligent with what little you have :)

When we first really committed last January, it was almost comical the increase that we saw. Our tax return was WAY larger than we were expecting, we received a check that was $2,000 more than what we thought it would be, we’d go out to eat (planning on using a gift card) and our meal would be covered by a scratch-off promotion they were running, we won $270 in gift cards at my husband’s Christmas party, I received extra contract work, we’d sell items on Craigslist with ease…it went on and on!

Overall, we didn’t have a $60,000 increase in income that allowed to get so far this past year, in fact, according to our budget, we should have only gotten $20,000 ahead. All I can say looking back, is that we continued to “sow” through our tithes and offerings, and what we “reaped” was bigger and better than what we imagined!

So even if your budget is tighter than tight, maybe you can’t even cover your monthly expenses, let alone put extra on debt: MAKE A PLAN, work the plan, and just see what happens :)

Here is what keeps us going:

1) Knowing that this is only for a season: Once we get our debt paid off  we will be able to enjoy all of the things that we have put on hold…and enjoy them without guilt or having to pay for them over and over again.

2) Our dream home: We decided to move into a townhouse for the time being to be able to funnel as much money as possible toward our debt. Once we are out of debt (besides our current mortgage) and have a sizable down payment saved up we hope to move into our forever house. We may build, or find an existing home…either way, I can’t wait!

3) Freedom from the stress of living pay check to pay check. We still have to be careful with how we spend our money, and we have been far from perfect with our budget (even while I’m writing this, I am aware that we went WAY over our Christmas budget), but any sacrifice we have made to get to this point has been incredibly worth it.

Make a plan…work the plan. I could manage our budget in my sleep now, find what works for you and get started. We enjoyed the Dave Ramsey program, his humor appealed to my husband, however, we have also heard good things about the Crown program.

And, this is NOT a guilt thing

…it is meant to be an encouragement :)

Have you ever noticed that guilt helps you to form new habits for about 30 seconds or the next temptation, whichever comes first? :) It has taken until now for my husband and I to get into a place where this can be a priority and we can funnel energy into it. This comes at different times for everyone!

This takes a lot of energy, and if you are investing large amounts of energy someplace else right now (caring for a loved one, battling an illness, going back to school)…this may not be the right time.

But, if you are tired of there always being more month than money, it may be a great time to start! If you would have told me last year at this time that we would be $60,000 ahead, I would have said you were crazy!

Where could you be one year from now? :)

DW-Signature

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Author
Dawn
A graphic designer & marketer by trade, I left the traditional working world in 2012 to stay home with my four kids. I love being home, but am glad to still have opportunity to design professionally and for fun and to share my ideas here from time to time. A country girl at heart, I live with my husband and four kids (5, 3, 2 and infant) just outside of the Twin Cities and only a few miles from my parent’s farm.
15 replies to this post
  1. Thank you for sharing your story! It is good to hear the “in the middle of it” story. Sometimes I feel that THAT is the hardest part. My commitment to staying debt free fluctuates (mostly with the need/want). I found recently that as I write down the debt total monthly, and I see it drop, it helps me stay motivated. Thank you for your story!

  2. I’m so, so happy I found this. I’ve been a little discouraged in trying to pay down debt because there doesn’t ever seem to be enough to even break even. With almost 100K of student loans (law school, grrr) and a job that’s eat what you kill, it’s hard enough to get everything paid minimally. I’ve thought about taking a side job to pull in more income, but I already work 50-60 hours a week. It seems like a lot of posts regarding this subject involve a major windfall, whether it’s an inheritance or a gift- and it’s refreshing to see how “normal ” people have done it :)

  3. This is such an encouraging post! I just found it via Pinterest exactly when I needed to read it (: I have about $46k left in undergraduate loans (was $60k!) and I’m currently living in the Caribbean with my husband while he attends medical school. I’m unemployed technically, however we have made it work with me cooking meals for other students and doing some graphic design jobs on the side. It has been a blessing and I’ve paid off one of my smaller loans already! We leave the island to move back to the states in about a month and medical school is SO expensive, especially out of the country – the amount of loans we will have is nerve wracking to say the least! I know, he will be a doctor. I hear it a lot, “oh he will make enough to pay those off in no time”. However we plan to move back to our small hometown, he wants to be a pediatrician..all of which are low pay levels for doctors. I need a new car, we will be moving at least twice in the next few years for his rotations then residency, we want to start having kids in the next year or so and ideally I would stay home. It’s a lot and it all adds up. To read this definitely uplifted my spirits (: thank you for the encouragement and setting a wonderful example! I’m looking forward to having my husband read this! He has always been debt free and so financially stable so I know this stresses him out (:

    • Stephanie, I’m so glad to hear that this has encouraged you! It is definitely not easy, and there have been many difficult decisions along the way, but it has been such a worthwhile endeavor. Great work on the progress you have already made and BLESSINGS on your future :)

  4. Your story is so inspiring! Looking at the date of this blog post, I am so curious how much further along you have gotten! Thank you for sharing this at the #HomeMattersParty with us!

  5. These are such great tips! Thanks for the reminder that it’s totally possible to pay off debt even on one income. We’re working on our debt-free story right now and have been able to pay off all our debts except one student loan and our mortgage. It’s such a relief to get rid of that debt!

  6. Saving and being frugal was instilled in me since I was a kid. I don’t miss a lot of things that I guess many do such as getting nails done, I clip my own, besides I don’t have the time to sit down for nail dos. I get my hair cut maybe once or twice per year, again, it is a time thing too. I do hair buns and pony tails. My car is used and it have served me well for 5 years now and still look good, I am a very gentle driver and do super mile-ing. I live in an apartment (bachelor to save money) and have to wash car in a wand wash, I prewashed my car bringing a bucket/soap/brushes/rags to a quiet parking area, so I only used 2 dollars to wash my car. All my furniture is bought off craigslist and if I move, I will sell it on craigslist. Clothing is mainly used or a very good deal from the store (usually less than $10). I don’t drink or smoke. I prepare snacks to take with me if I go out for a day to do errands, including a thermos. Most foods I buy is on sale,(junk food is minimum) I carefully watch the prices at the cashier, found many times they ring in too high.
    Always pack my own lunches for work. I don’t buy any baked goods (if I want cookies or a cake I bake it myself) I buy bread from a bread discount store. I never use the dryer, I hang laundry to dry in my bachelor, it dries overnight when I am sleeping. I use printer paper twice, use up both sides and have the printer on economode. Currently I have no tv, so borrow cd’s from the library. My enjoyments are usually free such as hikes/walks in parks. I cook up meals for days so cooking time is reduced, also use pressure cooker for fast meals. I always save my receipts if I need to return items to the store, it saves me a lot of money and regrets. I used basic soap and shampoo, no need for anything fancy, my look is my look, expensive shampoo is not going to change anything. Being organized is a money saver too and time saver. Categorize things and make sure they have a “home”. Most of cooking is done from |scratch, no pre cut lettuce etc. Getting good sleep is also frugal, you feel better, think better, make better decisions, look better, being healthier and happier. Living simply and within your means is frugal too as you are more realistic and less stressed, which make you look better too. To do without is ok too, most things are wants, not needs. And learn to not sweat the small stuff. Most stuff is small stuff. Always look for ways to simplify, that way you can spend more time on what matters to you. Just some frugal tips for the day.
    Frugal is fun, creative and makes you feel good when you don’t have to stress about money, it gives me a sense of pride to be able to sail my own ship without others having to back me up. You can do it. De brainwash yourself from the what the commercials/society have been mantra ing you since you were a toddler. Reclaim your brain and will, be you, not some artificial non realistic “model”.

    • Mariah I love your comment, thank you for all of the wonderful ideas! And I think you are absolutely right, that being frugal can be fun. My husband and I had to make a game out of it, we’d see who could make the most selling things on eBay and Craigs List and he’d jokingly give me a hard time if I didn’t go to the gas station that gave us two cents off per gallon. For me it was easy because I grew up in a frugal family, but for him it wasn’t as second nature so we had to make it fun :) Thanks again!

  7. Great advice It feels impossible to get ahead when you have a ton of debt. After reading the article, I feel encouraged. I realize that there are ways that I can cut back on my wants and use that money towards my existing balance on a bill. I love to get my nails done and I realized that I spend close to 75 dollars per month. I decided a few weeks ago to begin doing my own manicures. I am also not going to eat out or buy coffee. I realize that I will save another 70-100 bucks per month if I bring my own lunch and brew my own coffee. Thanks for sharing your experience. I feel encouraged because my debt is about 10,000 and my goal is to be debt free by December of 2015.