We Are Debt Free!!!

My hubby and I have always been cost conscious. We bought our home way under the amount we were approved for. We purchased most of our cars with cash. And when we did finance our van, we bought it for $16,000 with $4,000 down payment and a 2% interest rate, knowing we were going to pay it off quickly. Compared to most, we were pretty smart with our money.

So why were we $66,000 in debt? We had $53,000 of student loans, a personal loan of $5,000 for an emergency HVAC fiasco, and a $8,000 car loan.

We also had another problem…compulsive spending.

I’m not talking about big shopping sprees or random large purchases. I am talking about $5 here, $20 there…random small stuff. Stuff you wouldn’t think would cause going over a budget. If you even have a written budget, which in our case, we did not.

Dave Ramsey refers to the financial peace seeking conversion as “your sick and tired moment.” Ours was in February 2018 when my husband was laid off of his (what we though was) a secure job. We were blessed to receive a severance package of 3 months income but no idea how long it would take to obtain another position.

So, I went ninja crazy on our budget…I mean like obsessive, annoying everyone I talk to, need to start a frugal living blog crazy! My survival mode veins were popping out of my forehead! I was determined to make that 3 months of income last us as long as we needed it to- being a one income family, I took Ben Franklin’s saying, “a penny saved is a penny earned,” very seriously. That is my paycheck baby!

If you are interested in some of the switches that made the biggest difference in our budget read Things I Had To Give Up To Dump Debt.

My husband found a new job in March of 2018 which was way quicker than expected. But with opened eyes, my nerdy self calculated that we could surprisingly pay off all our loans (except the mortgage) in 24 months if we stayed true to frugality.

Our total income for the majority of this time was $4,200 a month after taxes and insurance.  Even though I don’t consider us high income, we were encouraged by the numbers and dedicated ourselves to the new goal.

With our new rigid budget, were were able to only live off of $1,800-$2,000 per month, leaving us $2,000-$2,200 a month to go towards debt.

The severance ignited the process by paying off our van. Between the severance, the unity we have as a couple, my love for everything frugal and just pure stubbornness, we ended the first year $40,000 lighter.

When February of 2019 rolled around, we were ecstatic to find that we were getting a $9,000 tax return! I have to admit, it was tempting to spend some of that but luckily logic overtook us, and we applied all of it towards our goal.

After the first 12 months or so, we started collecting a random assortment of expenses. But, we were blessed to be able to cash flow them. Unfortunately, that meant we had infrequent large sums going towards debt. So we weren’t making the huge strides like we were the first year. But I always saw the Lord’s hand in everything and somehow, we were still on track.

I became even more intense (because why not be even weirder right?) and I started side hustles on top of cloth diapering and beans and rice experiments. Babysitting, dog sitting, delivering groceries, selling my homeschooling material…it was actually quite fun! Check out my side hustle page for some ideas. I averaged $50-$200 per month extra. Homeschooling four young kiddos can make it difficult to stay consistent in any sort of business. I don’t know how some of these mamas do it!

If you have read one of my most resent posts  Is a $1,000 Emergency Fund Enough? I shared that my hubby and I had to hold off on our debt dumping journey for a few months in order to increase our $1,000 emergency fund. It was so hard because we were only $16,000 away and I could see the finish line. But we had a couple of tragedies that happened in our family and needed the cash on hand.

My hubby’s job was not going well and he was forced to quit in late May 2019 before securing a new position. Beforehand, we stopped our debt snow ball and were able to save almost 3 months of living expenses which made the transition doable.

The Lord blessed him in early July 2019 with a better paying job which sped the process up quite nicely! We felt very confident in his new position and so after calculating our payment of $2 a day in interest, we decided to go ahead and dump all but $1,000 of our savings towards our debt. We made our last payment on August 21, 2019 leaving us DEBT FREE almost six months quicker than planned!

Seriously, God is so good!

Everyone’s journey looks different. I hope you have found encouragement as you have read mine. If you are in the middle of paying off debt, I have one piece of advise. Look at it as a very temporary season and just have fun with it. I know that sounds like an oxymoron but if you look at dumping debt as a game of sorts, I promise that it will go by incredibly fast.

So what now?

Well…that is for another post. Haha. Stay tuned!

I just want to say a special thanks to so many people. This goal was not accomplished by my efforts alone…

To my husband, the love of my life and my best friend. Thank you for putting up with me!! And for being the hard working man you are.

To my mother-in-law for the love and encouragement. For supplying my children with most of their clothes and shoes. And all the random things along the way.

To mom for being my cheerleader, for the 5 year supply of shampoo and conditioner, kids clothes and for all my emotional blabbing during this journey.

Thank you to all my family members and friends for putting up with me and not killing me for getting very zealous in our conversations…I tend to be a little intense.

My kiddos for being my motivation.

And most of all, to the Lord Jesus Christ. The only way to true freedom.

Thank you all!!!

 

 

 

 

 

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