How We Paid Off $50K of Debt in Just One Year

How to Get Out of Debt Fast - Try these Practical Tips to Get Rid of that Suffocating Debt ASAP!

 

Shortly before our first child was born, my husband and I got serious about paying off our debt, enabling me to quit my six-figure salary job and stay home full time with our little ones.

We made some stupid mistakes when we were young and found ourselves living a luxury lifestyle without any of the happiness we were looking for.

If you are tired of living paycheck to paycheck and ready to take control of your life again, then keep reading.

Learn from my mistakes and triumphs, so that you too can start living a life of freedom, joy and fulfillment. Getting rid of your debt is one of the best steps you can take on that path.

Here’s the story of how we got out of debt – and why we’ve never gone back!

What Kind of Debt Did We Have?

Probably the same kind you have. When we both got our first “adult” jobs, we did the natural, and stupid thing and went out to buy as much stuff as possible.

We started with new cars.

Then we bought a house (which need to be painted, carpeted, furnished, etc.).

We were both busy and tired and inexperienced at the whole grown-up, married thing, so that meant A LOT of eating out (I didn’t bother to learn to cook until we had kids).

And I was working for a big time law firm, so I needed fancy new clothes to look the part, right?

There was also the matter of my husband’s graduate school student loan – which actually wasn’t a huge amount. We were both blessed beyond belief by parents and scholarships that paid for ALL of our other schooling. (Thanks Mom and Dad – I hope we can do the same for our kids!).

We both carried some debt on personal credit cards as well.

All totaled, we were starting our life together with just over $50,000 of debt.

 

So What Happened To Change our Course?

The thing is, when you’re young and you and your spouse both have good jobs, you really do have the money to make your minimum payments and not feel much pain.

Who needs a budget when you have more money than you’ve ever had before (neither of us were extravagant spenders in college), and relatively few expenses?

My husband and I look back at that pre-children era now and laugh. Seriously, what were we spending money on? I’m not really sure, but somehow we were spending every paycheck with no thought to save or plan for the future.

Until one day it hit me. Despite the hefty paycheck and prestigious title, I was pretty miserable at my job. As my thoughts turned to starting a family, I realized that the way we were living meant I would have to keep working at the job I hated indefinitely.

Despite our best intentions (when we were engaged, I remember talking about living on one of our salaries and squirreling away the rest – yeah, that never happened), we’d become accustomed to our two-income way of life. So accustomed, in fact, that for a long time I really couldn’t see a way to live any differently.

But I wanted to stay home with my kids so much, that I was willing to find a way. After a little persuasion (aka arm-twisting), I convinced my husband that we could live on his salary alone.

He was understandably doubtful. I mean, we weren’t exactly rolling in dough at the end of every month.

Didn’t we need both paychecks to survive?

I had to come up with proof, as much for me as for him.

That was the day I made our first budget. To be accurate, it was actually a snapshot of our cashflow. Just a simple Excel spreadsheet, with all the totals of what we were spending every month.

Boy was that eye-opening. I had no idea we were spending so much on silly things like eating out and little odds and ends to decorate the house.

At first, my spreadsheet was a little depressing. Yes, we could cut back on some spending, but a lot of what I saw seemed non-negotiable. Maybe we did need my paycheck. The utilities, the mortgage, the car payments, the student loan payments…those added up to quite a chunk of money. And none of them were going anywhere.

Or were they?

Around this time, I started listening to Dave Ramsey’s radio program and his ideas started to sink in. Debt was a noose around my neck, and it was keeping us from the things we really wanted. I looked at our budget again and felt a hope for the first time.

If we could pay off all the debt and make a few cutbacks in the way we were spending, we actually could live on one paycheck.

But How Did We Do It?

It’s simple really.

We drastically cut all our spending and threw every penny we could at that debt.

To save money:
  • I stopped turning my nose up at store brand groceries.
  • I started cooking at home for a change and we severely cut back our dining out habit.
  • We packed lunches for work (this was a huge change for us both since eating out at work was the way to make friends).
  • I decided to wear the clothes I already owned for a while, instead of buying new ones.
  • I stopped redecorating our house every few months.
  • We temporarily stopped contributing to our 401(k)s, except for the percentage that our employers matched (remember those days??).
  • We stopped giving big-ticket gifts to each other and our friends and family (no one really seemed to mind whether we spent $20 on their birthday gift or $75).
  • I went longer between hair appointments (and eventually started dying my hair myself with amazing results!).
  • We switched to a much cheaper gym.
  • We traded expensive date nights for Redbox movie nights and microwave popcorn.
To pay off the debt:
  • My husband got into the financial stuff and made a spreadsheet calculating the original payoff dates for all our loans, including total interest paid (he’s good with numbers that way). Yikes – talk about money down the drain!
  • We followed Dave Ramsey’s advice and paid down the smallest loans first.
  • Doing this, we paid off:  the student loan ($6,709 at 4.21%), my husband’s car ($16,479 at 9.95% interest) and my car (27,575 at 6.99%) in just under 12 months.
What Happened Next?
  • I quit my job two weeks before my first son was born, and we now live off my husband’s income.
  • We paid cash for a new swagger wagon when our next two sons came along.
  • We took our family on yearly vacations and are getting ready for a Disney cruise – all paid for in cash.
  • We bought a bigger house for our growing family, putting 20% down in cash.
  • We started saving for college and retirement.
  • We started giving more to our church and other charities.
So What About You? Here are My Action Steps so that You can Get Out of Debt Too!

Are you ready to start living the life you really want? Do you see how debt is keeping you from that life? If it feels overwhelming, just start with one small step and move on from there.

Step 1

First, draw a line in the sand today and refuse to go into further debt.

Step 2

After that, take a really honest look at your finances and figure exactly how much you’re paying every month for things you bought months or even years ago. Those things – those things – are imprisoning you. Be real with yourself, your spouse, and your family.

Step 3

Breathe a sigh of relief. It’s easy to panic after you see how much debt you actually have. But I want to encourage you to look at your situation differently. All that money. Those wasted dollars down the drain are YOURS to reclaim. Get rid of that debt, and those hundreds (or maybe thousands) of dollars can be used for anything you want! Quit your soul-killing job. Start the business you’ve been dreaming of. Take your family on an amazing vacation. Pay cash for a new car. Buy a new house. Retire early. The sky is the limit.

Step 4

Set up a budget and make a plan to cut spending. Use my ideas above as a jumping off point and seriously cut back your lifestyle. Don’t be afraid to live like a pauper for a few months. You won’t die. Your kids may not like it, but they’ll be better off for it. When they see how hard it is to get out of debt, they probably won’t want to take it on as adults.

Step 5

Throw every penny you can at that debt. If you’ve cut all you can from the budget, and it’s still not enough, find a way to increase your income. You or your spouse might take on a part-time job to get things moving faster. Side hustles are everywhere now. Have a garage sale. Sell your high-interest car and buy a junker for cash. Remember, this is only temporary. As Dave Ramsey says, “Live like no one else, so you can live like no one else.”

Step 6

Celebrate!!! You did it! Now you can start living your real life. Live free from the chains of your debt. Reclaim all those wasted dollars. Live like no one else. And then go out there and teach everyone you know how to do the same.

So there you have it! Don’t let debt (no matter how big it is) keep you stuck in a life you don’t love one more day. You have all the tools you need to get rid of it once and for all. Can you picture the day that you’re finally free? The happiness? The peace of mind? The stress-free vacations that are fully paid for? The security of knowing you have plenty of money in the bank?

You can do this, friend! Stop reading this blog and get to work.

1 thought on “How We Paid Off $50K of Debt in Just One Year”

  1. Great post, I loved your story! Our debt started after we had kids. And I always think to myself how easy it would have been for us to get out of our debt now back then. But after reading your post I realized it just the same with or without kids…hard.

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