how we paid off $60k in 11 months

I mentioned in my previous post that we started our little hobby farm by renting an acreage—a dumpy little acreage that in my husband’s words was “barely livable”…. It wasn’t that bad, seriously. It wasn’t good, but it wasn’t that bad!

 

But the point I want to make is that we made a sacrifice that MANY of our friends or family members were simply not willing to make. My sister once told me she could never live in a house like that. But we did it. Why?

 

Because it allowed us to embark on a journey that has changed the trajectory of our lives.

 

Upon moving into this dumpy little house with mint green, metal kitchen cabinets circa 1952 and commercial grade carpet in the kitchen (seriously, nothing grosser than carpet in a kitchen, except maybe carpet in a bathroom) we assessed our financial position. My husband had just gotten a new job with a great big pay raise putting his annual income around $45k. Huge, right?! I know, but we were coming from an annual income of about $26k so it was huge to us! I had just finished college and was about to start a job (about $16 per hour) and we had student loan debt totaling $60k. Not a great outlook.

 

We were enjoying our little homestead and had added chickens which our two young children just loved. We were living an immensely simple and happy life on those secluded thirty acres. The contentment I felt while living there was so pure. We truly found joy in the little things.

 

We still attended our church in town and so at least once a week we drove thirty minutes to get there. One of those times, I grabbed a book that we had received as a gift but had never read. It was called The Total Money Makeover by Dave Ramsey. Perhaps you’ve heard of him? I began reading the success stories aloud as my husband drove and that day a fire was born in the two of us to be debt free.

 

Paying off $60k of student loans on our income with two small children at home was not going to be easy, but I was convinced we could tackle it. I followed everything Dave told us to do. We cut out all eating out, practically all entertainment and sent every spare penny to debt. For date night, we would park our car out at Jack’s parents’ house and turn on an episode of Dave Ramsey’s radio show and split wood together while the kids slept in the car. It was exercise, quality time and fuel for heat in our home all rolled into date night. Oh yeah, and it was free!

 

We avoided “lifestyle creep”. Every penny of our new higher income went straight to debt. We shopped our car insurance and put the savings towards debt. Jack painted houses on the side and all the profit went to debt. I flipped furniture off craigslist and every sale went to debt. This was our only focus. Our only goal. We had tunnel vision and at the end of the tunnel was freedom.

 

Besides our new income going straight toward debt, there were some random things that helped our journey. We received a refund from a past utility company, a settlement from a past credit card and the sale of some stocks– each of these items were just a couple hundred dollars, but they went straight to the debt. Every little bit adds up. We are Christians and we chose to continue to tithe to our church while we were getting out of debt. I believe God blessed us through this entire journey.

 

We were so rigid in our goal to be debt free, but we didn’t talk about it a lot. Some of our friends and family knew what we were doing and watched, but many just simply didn’t think it could be done. But 11 months later, we achieved our goal.

 

We were debt free.

 

At that point, so many of our friends wanted to know how we did it! They had been “trying to get out of debt” for years and just couldn’t seem to make any traction. With each person I spoke to, I started to notice a pattern. These people who claim to be trying to get out of debt were still going out to eat, still buying new clothes, accessories, shoes, etc, and still had cable TV. Those things didn’t seem to make much of a financial difference, but I tell you, that was the biggest difference between us and them. We cut our budget down to nothing. They didn’t.

 

I believe that is the reason most people trying to get out of debt just can’t do it. They aren’t willing to adjust their current living enough. Sure, if they get a tax refund or a bonus at work, they will throw that on their debt, but they can’t see how eating in all the time will get them out of debt.

 

And that’s true—if all they do is quit eating out, that probably won’t be enough to get them out of debt. It’s a combination of all the unnecessary things that cost money, cut out and then thrown at your debt over and over that will eventually get you out of debt. It is the side hustle you start to earn $100 here and there that will add up.

 

Its just too much for most people. So they stay in debt, eventually add more debt when an unexpected medical thing comes up and soon they are nearing retirement with a modest amount saved, a mortgage on their home (still) and kids who are needing money for college. That’s where they are headed.

 

DON’T LET THAT BE YOU.

 

Draw a line in the sand today. Go to undebt.it and punch your info into their debt calculator. Fiddle with it and see how much time you can shave off if you throw an extra $1-200 at your debt each month. Find motivation. Subscribe to this blog, to other personal finance blogs. Fill your mind with information. Drink in podcast after podcast to keep your focus and your motivation.

It’s the only way to dig yourself out of the mess you are in. It’s all or nothing. If you are anywhere in between, you will be there for years.

 

Make the sacrifice, like we did. I promise you, its worth it.

 

-Cate