The number one question I’ve gotten across all of my social media since our debt free scream went live is this: “How did you do it? How did you stick tode it? How did you stay disciplined?” While there is definitely no single answer that will work for every family or every person, I thought I would share a few of the things that we did that helped us stay on track!
How we Paid Off $57K in less than Two Years
It is also worth mentioning that none of these things are the “absolute number one” thing either. They all had equal bearing on our journey. What will motivate you may be different, how you budget will almost surely be different, and your monthly priorities will definitely be different from ours. I’m just sharing some ideas that hopefully you can implement if you’re wanting to start this journey but just can’t seem to get going!
1. Baby Step Zero
We first had to conquer what we call Baby Step Zero. Dave calls it the “I’ve had it moment”. I covered it extensively in this blog post, but it is basically the idea that as a person, or as a couple, you link arms together and decide that no matter what life brings you going forward, you will never use debt again.
(By the way, any time I mention “debt” in this post, I’m always referring to consumer debt minus a mortgage – we did not have a mortgage to pay off in the process but we plan to take out a mortgage to purchase a home once we have a down payment saved up!)
If you are accustomed to using debt regularly, this will be very, very hard for you. We believed that we would always have a car payment and would never be able to pay off our student loans. You have to completely change your mindset and be convinced that you can live in the consumerist world we live in without buying things you can’t afford.
This step can be really hard, but it is absolutely essential! It won’t do you any good to pay off that credit card if you keep it and use it again when you want to go on a vacation!
2. Communication
For the first 7 or so years of our marriage, I did all the day to day finance stuff. We never really talked about money, other than me telling Chris he could not put gas in the truck because I needed to buy groceries. Since I was the one balancing the checkbook and paying the bills, I was the one “making the financial decisions”, except I wasn’t really making any decisions at all.
Instead of truly budgeting (which I go into detail about below), Chris and I were both spending money whenever and wherever we wanted, without any kind of plan, and I would pay the bills and balance the checkbook at the end of the month in tears because we would be overdrawn, again.
We never made decisions together on how we were going to spend our money and it was killing our financial future. When we started this journey we sat down and had our first budget meeting and talked about everything. How much we spent on gas, groceries, the electric bill, annual expenses, eating out, everything. I had gone through our expenses for the last few months and added everything up and it was embarrassing how we were spending our money. There were months where we spend more on eating out than our rent – no wonder we were broke.
Anywho, once we had that first meeting and I told Chris how much it stressed me out when he went out to eat or took a church member for lunch without checking with me first, or confessed how much I’d really spent at Target over the last year (staggering, really!), we were able to get past all the guilt and shame and feelings involved with our financial situation. I came to a realization:
You should never feel guilty about spending the money that you work so hard to make.
For years, Chris was trying to do ministry with people and it would frustrate me and I would hide bags from Target and lie and say “oh honey, we’ve had that pillow forever!!” Do you see where I’m going? Talking about our money openly allowed us to get past all that junk that had been sitting between us for the last few years. We didn’t even REALIZE how much it was hindering our relationship, but here it was!
Opening that line of communication was crucial for us. Now there is just Chris and I working together with our money and making decisions together with it, and it has been absolutely life changing for us.
3. Remember that we are stewards.
As Christians, we are tasked with handling the gifts we have been given, whether they are spiritual or financial. Old Chris and Skye were turning in a financial report to God every month that said “See how much your Kingdom means to us? Wayyyyyy less than Taco Bell, Target, and Amazon. Love ya Jesus!” Thankfully, we both know and fully understand that God loves us even when we’re boneheads with the blessings he has given us.
Our long-term goals are to have enough retirement saved up that Chris can volunteer his services full time at a church so that they can use what would be his salary towards missions. Short-term, we wanted to be able to give freely to the church and any other missional opportunities that arise. Friends, when you’re spending all of your money eating out every month, you cannot help anyone else.
Our giving has never stopped once during this process and we would not go back and change that for anything. While we are not tithing, we give about 5% of our income and are working towards a full tithe when we get out of Baby Step 3. A full tithe is 10% of your income and we would love to above and beyond that. When you think of yourselves as financial advisers for money that belongs to someone else, you manage it a lot differently!
4. The budget.
Oh the dreaded B-word. Trust me, I used to hate it too. A budget to me meant I could not spend any money, and as the spender in this relationship, that killed my soul. I started listening to the Dave Ramsey show everyday on the podcast and when he explained what a budget really was, telling your money what to do every month rather than wondering where it went at the end of the month, it made SO much more sense to me.
So instead of doing what I had been doing for years, which clearly was not working, I sat down and wrote out all of our regular monthly expenses for the next month (which was October of 2015) and literally could not believe how much money we would have left over. At the time, Chris had just taken his new job and he was making more money than ever before, so there was that. But it was still mind-boggling to think of all the money we had frittered away the first several years of our marriage and it made my stomach hurt.
That is when I saw, for the first time ever, the power of planning what you would do with your money each month before spending it all. I realized that we could actually do this debt snowball with success if we really budgeted each month and stuck to it. It showed me that I could have my own spending money each month and buy whatever I wanted without feeling guilty. CAN YOU EVEN IMAGINE THIS FOR ME?
From that moment on, I was totally on board. I showed it to Chris and explained to him that we were just two short years (which feels like forever but in the grand scheme of life IS NOT THAT LONG), we could have all our debt paid off. It was like someone had used a bolt cutter and cut chains off my heart, lungs, and brain that I hadn’t even known were there.
I blogged more about budgeting here if you want to read more: Budgeting 101: How to Make Your First Budget, Budget Meetings: How to Line Out your Month Without Losing Your Mind.
5. Switching to Cash
Dear reader, let me tell you how addicted I was to my debit card before we started this. I vividly remember when I got my debit card and didn’t have to write checks anymore. (I can’t believe I used to write a check at Sonic for a Route 44 Dr. Pepper… insanity). Anyway, I felt like SUCH a grown up with this new fancy card I could just swipe whenever I wanted something.
Oh by the way, it also meant that you had to have money in your account too. And sometimes, I forgot about that part. Whoopsie!
Suffice it to say, I had spent the better part of 25 years of my life never having cash in my pocket or purse, which is so weird to me because my dad did a lot of his purchasing with cash. I never picked up on this good habit of his, and man I wish I had. When you start using cash for categories that you can easily, and frequently, overspend in, like at the grocery store or eating out, it will honestly change the way you spend your money. I wrote an entire blog post about switching to cash you can read here for more details.
6. Tracking our progress.
From day one, I knew I would need something visual that would help us track our progress and keep us (okay, me the spender) motivated. We had made this goal, and if I couldn’t see us moving towards completing that goal, I knew I wouldn’t stick with it. So I made a debt snowball tracker (you can get it here for freeeeee), and hung it on our fridge where I had to look at it every single day when I filled up my water bottle.
I can’t tell you how many times I went back to that chart and looked at it when I needed a reminder of how far we had come (and how far we had left to go). We had set this goal to pay off our debt in two years, which was a lofty goal, but that simple little chart helped me measure every purchase I wanted to make against this bigger goal and see which one was more important. Every time (okay, well almost every time), paying off the debt won.
I really think these six things were the biggest and most important aspects of this journey for us that would translate well to other households. That being said, there were other things we did that certainly helped but may not work for you or your family. Here are some of them.
Other things that helped:
1. Cut our spending: we cut as much as possible out of our budget. No travel, no eating out, no home purchases, no cable, and our grocery budget was almost nothing ($75/week for a family of three). These cuts may not work for your family, but I do encourage you to find places in your budget to lower your costs so you can put more towards debt.
2. We sold things: we didn’t “sell so much the kids thought they were next” as Dave frequently states, but we did have a big garage sale at the end to really get us over that last hump. I also sold things here and there throughout the process that we didn’t need anymore.
3. We followed Dave’s plan exactly: there are a lot of people out there who do their own modified version of the Baby Steps, and that is perfectly fine with me. But we had tried that before and completely failed. I knew from this experience that if we were going to be successful, we would have to do it to the T.
4. We used the debt snowball: by starting with the smallest debt and working through them one at a time from smallest to largest, it gave us serious momentum every time we paid off a debt. Killing them in that order was empowering and helped us see that we really could do it!
5. I shared our entire story: a lot of people are squeamish about sharing their financial situation as publicly as we have and that’s fine. But knowing that it could help just one family (and it has helped many based on the number of “thank you for sharing your story it’s so motivating!” messages I have received), was really inspiring for me! So I jumped in and blogged about it regularly, and joined the #debtfreecommunity on Instagram too. There are lots of motivating, inspiring, and educational folks over there sharing their stories too!
6. I listened to the Dave Ramsey podcast like it was my job: Three hours, every day. It might sound like a lot, but it kept me in the right frame of mind every day.
7. We attended Financial Peace University at our church and then we led a small group. Being small group leaders meant that we had to keep going. You can’t teach it if you aren’t following the program. Plus it gave us some really great friends to hang out with too!
Friend, if you’ve hung in there this long, then you’re really serious about this journey. I’m impressed with you and I’m here to say YOU CAN TOTALLY DO THIS! Dig your heels in, hook arms with your spouse, and do it!!!
Did you just scroll to the bottom – too much to read?
Don’t worry – I get it. This post is obnoxiously long. Here’s the synopsis:
We paid off $57,666.01 in 22 months. Here’s how:
- Baby Step Zero: we are never using debt again (aside from a mortgage one day)
- Communication: we actually started talking about our finances together and it changed everything.
- Remember we are stewards: we started planning our money as if we were managing it for God and it helped us set priorities.
- Budgeting: we gave every dollar of our budget a job before the month started and it gave us both guilt free permission to spend and power over our money.
- Switch to cash: using cash for categories like groceries, clothing, and eating out will help keep you from overspending.
- Tracked our progress: we found a way to see how far we had come to keep us motivated.
- We cut our spending, sold things, followed Dave’s plan exactly, used the debt snowball, shared our entire story, listened to the Dave Ramsey podcast, and attended/led Financial Peace University.
I really hope these 2,500+ words help you get started and stay motivated during your journey! If you loved it and want to share it with your friends please use the image below to share on Pinterest or any of the share buttons at the bottom of the post!
