Hey, friends! We have another debt freedom story for you today. Jacob shares a great story on how he and his wife (just out of college and with a new baby) dumped $16k in debt. Enjoy! To read other debt freedom stories, click on our Road to Debt Free page.
How much debt did you start out with and what kind of debt was it?
When I first met my wife, I had $11,000 in my “debt collection”. I had credit card debt, as well as both auto and student loans. A little after getting married, my wife got pregnant. We knew that prenatal care and the delivery would be expensive, but we were in for a shock!
We had saved money ahead of time, but we misunderstood how our insurance would work, so our expenses were more than what we had saved (mostly because our baby was breech, which resulted in a C-section).
After picking up some medical debt, we finally hit our peak at $16,000. That may not be as much as some, but to two working, newly married students (and brand new parents), it was crushing!
What was the “eureka” moment when you knew things had to change?
Our “eureka” moment came one night while we were living in Utah. We were thinking about life and we both realized how stressed we were about our finances. We were so consumed with life, school, work, and money that we hadn’t realized that the money issue had become such a huge burden!
We took out a piece of paper and wrote “Our Debt Destruction Plan” at the top and we came up with a plan of attack to get rid of our debts. Well…the plan worked!
How long did it take you to pay off the debt?
Once we actually got serious with our debt destruction plan, it didn’t actually take that long. It took us a little more than 8 months to blow through $16,000. Before we put our plan together, we tried to make strides at paying off our debt, but our efforts didn’t seem like they were going anywhere. Once we had made the commitment and had a plan in place, it went rather quickly.
The commitment and the plan became our driving force. Then, it came down to us trying to live a frugal lifestyle. Shopping at Goodwill, using coupons to buy groceries, and always eating at home became a lifestyle that would help push us to finish paying off the debt. Living frugally became our middle names.
What are the top five things you did to get the debt paid off (you can add more if you feel like they’re important) and how did those five things help you to make permanent changes and stick with your plan?
I can think of four, not five, but here they are:
- We picked a method of getting out of debt (we picked the Snowball Method, but there are other methods too), and then followed that plan as much as we could.
- We worked really hard on cutting down on our expenses. We did that by actually budgeting (shocker, I know…) and getting rid of some expenses. We started by addressing all of the subscription expenses that we had: Gym, Netflix, Hulu, Amazon Prime, Spotify, etc. When we added all of the subscription fees up, we were paying almost $200 each month. We canceled all of them and were instantly saving!
- We made a commitment to the process and each other that we wouldn’t deviate from the plan.
- We also tried to stay positive. There were moments where we caved in and failed on our commitment. Then we felt bad… but by remembering how good we had been up to that point helped. By keeping the long game in mind, we were able to come out of that “bad feeling” moment and use it to propel and motivate us forward.
All of those things, outside of the method to get out of debt, we use on a regular basis now. We are solid budgeters now and we consistently cut down on expenses. Sometimes it’s hard to stay positive and financially committed when you have a new marriage, a new baby, and lots of things to pay for. Through it all, one lesson we learned is that it is crucial to be on the same page financially with each other. Since we were, it became the greatest source of power that we had to getting out of debt once and for all!
How is life different now that you are debt free compared to when you were drowning in debt, both from an emotional standpoint and a financial standpoint?
From an emotional standpoint, it’s huge. I wake up every day knowing that the money I make is mine! That’s a great feeling. It isn’t going to someone else and I get to choose what I do with it.
Financially, it was probably even bigger than the emotional side of things for us. A few months after being debt free, we had a work opportunity fall into my lap. Along with the opportunity, we also knew I wouldn’t make any money for the first few months while I was getting the business going. Because we were debt free, and we had 6 months’ worth of expenses saved up, we knew we could make it! We wouldn’t have been able to do that if had still been in debt.
Recommended Reading: The Recovering Spender: How to Live a Happy, Fulfilled, Debt-Free Life
What message or words of encouragement do you have for those still struggling with debt who are overwhelmed/in denial regarding their situation?
The message I want to share is to not give up! We all have moments of financial weakness, or a financial emergency that costs money. That’s just fine; don’t let those things push you away from reaching your ultimate goal of becoming debt free. You can do it. Believe in yourself, get on the same page with your spouse if you have one, and then go to work and I promise you’ll get there.
Jacob Merkley is a full-time blogger who started in the accounting, financial, and retirement realms before switching to working online. Now he focuses on teaching others about Life Skills that put YOU in control, including the important principles of money management. He blogs over at PowerOverLife.
If you’re interested in sharing your own debt freedom story and how becoming debt free has changed your life, contact us for details!