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:
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.
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? :)
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