Category: The Road to Debt Free

Ok, this is where the rubber meets the road.

April 10, 2017

Getting Out of Debt: Here’s How to Start

Hey, frugal friends! Today’s post is from Mrs. Daisy, who blogs about debt, family and farm life over at Dirt Road Daisy. Enjoy!

When my husband and I stopped ignoring the fact that we were in six figures of debt and decided to do something about it, we jumped right in the express lane with no plan whatsoever. Our strategy worked for a few months as we haphazardly put extra money here and there on different debts with no real rhyme or reason. The balances slowly started to decrease, but then we hit a wall. Read more

April 5, 2017

How Debt Destroys Your Chances for Financial Freedom

Happy Wednesday, friends! Today’s guest post is from Josh, who blogs over at Money Buffalo. Enjoy!

Let’s face it, you are most likely part of the 80% of the American population that is currently making a monthly loan payment. Between student loans, a home mortgage, car loans, and the exercise machine you bought on sale in January, it can be nearly impossible to not borrow money at some point in your life. While going into debt is often viewed a normal facet of life, most people do not realize how debt can destroy your chances of financial freedom and living the life you truly desire. Read more

April 4, 2017

The Hidden Gems of Financial Wellness

You want to know a secret to financial wellness? The truth is you probably already know what these secrets are, but you’re likely highly underestimating them. We did. For years. And knowing them but not doing them almost ruined us financially. Read more

March 21, 2017

Your Money Situation Won’t Change Until You Start Taking Responsibility for Your Actions

I realize that this post might get me in hot water with some, but I recently read another article about the dire money situation of Americans and how it’s not their fault. Being an American who for many years took little responsibility for my own money situation (along with my husband) and being one who is digging out of a dire financial situation, I know whereof I speak. Read more

March 2, 2017

Who Benefits From My Debt?

“One way to grapple with debt is to ask yourself ‘who benefits from my debt?'” This is the question Mrs. Groovy suggested people ask themselves as they work toward paying off debt, and I thought that the profound statement deserved an entire post, so here it is. Read more

February 20, 2017

Household Debt is Rising Again and it’s Not Okay

Yes, you heard it right, my friends. Household debt is rising again, with total household debt reaching $12.58 trillion dollars at the end of 2016. Debt totals jumped by $460 billion this year alone, the highest jump in nearly ten years. Our previous “record” for household debt in America was $12.68 trillion. But for some reason, the experts don’t think this is too terribly bad. Read more

February 13, 2017

How to Pay Off Debt Without Living Under a Rock

*Note: This post may contain affiliate links.

For some people, paying off their debt is pretty cut and dry. They make a plan, stop spending and get the job done. For us, it hasn’t been so cut and dry. We started with a boat load of debt. We realized that there were many emotional reasons we were spending beyond our means and had to work to uncover and heal them. And we had to figure out ways to help pay off debt that worked for our individual personalities and for our family. Read more

February 6, 2017

The Power of Freedom: Andrew’s Story

Yes, it’s another powerful story of debt payoff to motivate us all to follow suit. Today, Andrew from Family Money Plan shares his amazing story.

How much debt did you start our with and what kind of debt was it?

When we topped out we were over $320,000 in mortgage debt. We decided to build our dream home and I remember moving into the house and thinking. “YES!!! This dream home is a reality.”

That thought disappeared when I realized that my mortgage was a 30 year debt (read: death) sentence. It’s a bitter sweet feeling owning a house. There is so much pride in home ownership but at the same time you only own a small part of that house. It’s really the bank that owns it in the beginning.

What was the “eureka” moment when you knew things had to change?

When we were in our new place with all this debt, the number 30 kept rattling around my head. I realized that my newborn son would be my age and I still wouldn’t have paid off my house.

I knew that a mortgage was “normal”. It was what everyone around us had. As I played with the idea I would talk to other people about extra mortgage payments and all I got back was blank stares. That tipped me off to there might be something there.

The saying that floated around in my head was: “If you do what everyone else does, you will get what everyone else has.” Everyone else has a lot of debt. I wanted to be mortgage free.

The eureka moment that sticks out for me was when we were doing some landscaping in the yard. Instead of hiring someone to plant these trees (we are talking 8 to 10 foot trees), I cheaped out. All because I didn’t want to pay $75 a tree to have them planted, and I did them myself.

I spent a full weekend digging giant holes in my yard and planting trees. It may not sound like a big deal but if you knew me you would know this wasn’t my kind of thing.

By the end of that weekend, I had spent over 20 hours thinking about money and my future. You tend to think better when there is nothing else to distract you like a phone or TV screen.

I realized that if I wanted to be financially free I would need to have this house paid off. I remember scaring myself into it by realizing that if I were to die planting these trees, (which I thought could happen at one point) my young family wouldn’t have much to fall back on.

So I decided that it would be best to pay of our house and get our financial house in order. Getting debt free was a big part of that.

How long did it take you to pay off the debt?

6 years. It was a long time, but we had a young family and we knew we were in the sweet spot as far as kids go. They were young enough to only need the basics and we wanted to lay a good family foundation with our kids. It meant staying at home… a lot…. and enjoying what you have. Looking back on it I’m happy we had the opportunity to make this choice.

The early days of being a parent can be crazy. If you are a new parent, you realize everything in your life starts to change. So we embraced that change and started to enjoy a simpler life.

In some ways we took advantage of the time of life we were in and used all the chaos to set up some good money habits.

What are the top five things you did to get the debt paid off and how did those five things help you to make permanent changes and stick with your plan?

The first important thing we did was find a money system that worked for us. We tried a lot of different budgets and tactics, and none of them worked for us. Or we would use them at first and then give up on them for a multitude of reasons (one of them being a lack of discipline).

When we found the system that worked for us, we automated it and worked that system. It’s made all the difference with the success of our system, we have started to teach it to others.

We made sure to take full advantage of all our mortgage options for prepayment whenever we could. The biggest being the matched payment every chance we could. That meant saving a lot of money and figuring out where we could get the extra money every two weeks. Most of our money came from cost cutting things that we didn’t really need.

We also made sure we could give ourselves a way out should we ever need that money in an emergency. This was a big one for us because we set up a HELOC but didn’t touch it. We knew it was there in case of emergency which was great but we didn’t want to access it, it was for peace of mind. I’m not sure we would have done it without having a “safety net” to access the money should we need it in an emergency.

We kept our goal right in front of us. When our friends would go on trips or buy new cars, we reminded ourselves “Mortgage free in our thirties.” Those 5 words we repeated to each other so many times it’s unbelievable and it was very important to our success. We had to remind ourselves all the time why we were doing this and what it meant for us.

I’ve got a long list of things we gave up to become mortgage free on our site but I’ll give you some of the ones that stand out.

We didn’t have a smartphone, we shared the classic flip phone and we couldn’t even text. We looked ancient compared to everyone’s smartphones.
We didn’t eat out and learned to cook good meals. Part of this was out of necessity with our family developing allergies. But it ended up helping our budget quite a bit.
We didn’t travel at all. This was one of the harder things to do. My wife and I love to travel and to stay put was more of a challenge than we thought it would be.
We cut costs wherever we could. We stocked up on groceries when they were cheap, always hunted for good deals and often when without.

Overall,we questioned every expense. From Netflix, to car washes, to groceries and everything else you can think of. The question was always: “Do we need this right now or can we wait?” You will be amazed at the amount of things you can pass up on when you don’t really need it.

Delaying gratification also played a huge part. Even today I think about any significant purchase for months, I have found waiting for things makes me either want it more or lose interest. Either way it’s a win.

How is life different now that you’re debt free compared to when you were drowning in debt, both from an emotional standpoint and a financial standpoint?

Life is completely different, and utterly the same all at once.

There’s two parts of being debt free. The actual debt free part means life is a lot better. The looming mortgage payment is no longer part of my reality and that is a great feeling. That feeling of needing to make a payment every two weeks (plus the extra match payment) isn’t there anymore. The stress of money has gone down a lot. Once you get to debt freedom you realize that you don’t need as much money. This is partially through the habits of becoming debt free, and partially through no longer having the debt itself.

At the same time, life isn’t any different. We aren’t financially free so our day to day routine is the same as it was before. Wake up, kids, work, kids, eat, sleep, and repeat. So it’s a strange beast in a lot of ways. Financially it’s great, but day to day not a lot is different. Which I have to say is a little bit of a let down, but we are talking less than 1% let down and 99% awesome!

That said, anytime things are a little rough or the day is feeling long I remind myself we are debt free and it always puts a smile on my face.

What are some of the pivotal things you’ve been able to do now without debt that you could have never done while in debt?

We are able to save like it’s going out of style. Which it never will, because saving money is cool. Tell your friends!

Pivotal things…hmmm…. we are able to travel more now. We are hitting our stride with that, the kids are at the best age for travelling. We have just come up with our travel plans for the next 5 years and I’m really looking forward to all the trips.

Another nice thing, while not pivotal, is we are able to live on less. We trained ourselves for a long time to make the extra mortgage payments, and now that we are debt free, there isn’t a need for spending more.

One of the biggest pivotal things is that we now are able to think about what’s important. We value family time and experiences above things. I find myself walking the malls (because it’s ridiculously cold here and I love walking) some evenings and seeing everything and thinking “Don’t need it” and “Don’t see the value in it” which is weird, because when I was going without for those 6 years I wanted everything at first. Now I am able to buy more stuff I find I question the item a lot and if I don’t have a great reason for buying it then I pass on it.

What message or words of encouragement do you have for those still struggling with debt who are overwhelmed/in denial regarding their situation?

If you are reading this and wondering if you can do it yourself, the answer is yes, you can become debt free. You don’t have to buy into minimum payments and 30 year mortgages. Take some small steps in the beginning and see how it feels. Take control of your situation. You can do it!

I’m an average person and was able to do it. It takes times and effort. So focus on the long game. Every time you put extra down on your debt you are giving your future self a raise. It won’t feel like much at first but if you keep at it you will start to see results.

That’s my advice, figure out why you want to be debt free, start small, and keep at it until it’s done. One last bit

If you are wanting to learn more about getting mortgage free faster I have a free book for you called “How to Hack Your Mortgage and Save Thousands” Click here to check it out: familymoneyplan.com/frugal-farmer.

January 30, 2017

How to Pay off Debt : Beating the Broke Mindset

As we began weaving through the process of figuring out how we got into debt and how to pay off debt, it occurred to me that we really had no control over our emotions during that time. As I’ve mentioned before, our debt load didn’t come from big purchases – we literally nickeled and dimed our way into debt. Rick had been laid off in 2010, and had subsequently, after 7 months, taken a job at 80% of his former salary.

January 23, 2017

The Power of Freedom: MSM’s Story

Greetings, financially succeeding friends!! Today we’ve got yet another story from someone who’s achieved debt freedom. Our friend Rob, who blogs over at www.mustardseedmoney.com, shares his powerful story of how he became totally debt free. Enjoy!

How much debt did you start out with and what kind of debt was it?

I was fortunate that the only debt that I carried was from my mortgage. The mortgage debt was $400,000 on a 15-year loan. In order to afford the mortgage, I had to get three other roommates. Even then, it still took over half of my paycheck in order to pay the mortgage bill each month.

What was the “eureka” moment when you knew things had to change?

Initially, I was super excited to own a home. I was 23 and thought I knew everything. In hindsight, I was really fortunate to buy when I did. It was just before the housing market peaked. So even when the housing market cratered, the house was never underwater. I can’t say that was the case with everyone else in my neighborhood as some took bloodbaths.

After about a year, the new home smell wore off. Watching half my paycheck go out the door became a miserable feeling. It was then when I became obsessed with paying off my mortgage. Every bonus that I got and every extra dollar that I had laying around in my bank account started going right towards the mortgage.

I built excel amortization tables to see how adding the extra money towards the mortgage principle would impact the final mortgage due date. There was something so satisfying watching the date creep up each month when I applied new principle. I was running at this new goal with ultimate determination.

How long did it take you to pay off the debt?

I moved into my house in June of 2004, and I paid off the mortgage in December of 2012. So it took about 7.5 years to pay off my 15-year mortgage loan.

What are the top five things you did to get the debt paid off and how did those five things help you to make permanent changes and stick with your plan?

I learned the power of delayed gratification. While my friends were spending lots of money on items and experiences on a regular basis, I learned to just say “No” if it wasn’t something that I truly valued. For instance, they loved to go camping in the winter. But that camping required a lot of snow gear including a heavy-duty sleeping bag and snowshoes. First, I don’t love camping that much, and second, buying gear that I’d probably only use a handful of times in my life seemed like a waste. So I learned that saying “No” to certain things was okay. Looking back, I really didn’t miss out on much. I just had different priorities at the time, and I don’t regret them.

I was consistent in that I always applied extra principle to my mortgage each month. While it wasn’t always enjoyable, I knew that paying off my mortgage would lead to more freedom down the road. Any bonus I’d receive or any other surprise cash would go directly into the mortgage. I figured since I wasn’t expecting that money, I probably wouldn’t miss using it for other things.

I always bought used cars. Admittedly, when my roommates were driving brand-new BMWs, Lexuses and Jeeps, I was a little embarrassed of my old Honda. Now that I’m out of debt, I have no desire to drive those types of cars. Amazing how your perspective changes over time.

I have only ever bought one new piece of furniture. All the rest of the furniture that I used to furnish the house came from Craigslist. This substantially cut down on my expenses and allowed me to apply the savings towards my mortgage. This habit has carried on today as my wife and I have used Craigslist almost exclusively to find baby-related items in addition to furniture.

How is life different now that you’re debt free compared to when you were drowning in debt, both from an emotional standpoint and a financial standpoint?

Life is completely different. I feel like a weight has been lifted from my shoulders, and I don’t worry about money at all anymore. I have automated all of my expenses, so I hardly ever check my finances since I have a cushion in my savings and checking accounts. Before I constantly checked my Personal Capital account, but now I log in maybe once every week or two.

On top of not worrying about money, I now take on projects at work that I think are interesting as opposed to trying to climb the corporate ladder to make more money. Funny enough, since I became mortgage-free, I have actually received two promotions at work. I attribute this to pursuing my passions at work and not focusing on the money as much.

What are some of the pivotal things you’ve been able to do now without debt that you could have never done while in debt?

Being debt-free has allowed me to travel the world with my wife and not feel guilty. Before I paid of my debt, I had no desire to travel the world. But, once I went with my wife to Europe, I got bit by the travel bug. It’s probably for the best that I didn’t get bit while paying off my mortgage. We’re hoping to go to Iceland in August.

What message or words of encouragement do you have for those still struggling with debt who are overwhelmed/in denial regarding their situation?

I always tell people to really think about how they want to live. If debt is wearing you down, you can do something to change that. Even the smallest of actions can have a lasting effect. I knew that I didn’t want to be shackled by debt any longer. So, I got on the track of paying off my debt as quick as possible. While it had its tough moments, my determination and diligence has paid off.

The first step is recognizing where you are and then determining where you want to be. Those are the two hardest steps, but once they are complete, the next part is the best part. This is where you get to build the financial bridge to get to your dreams. It may take some time, but if you stay diligent, you will get there.

My hope is that MSM’s story encouraged and motivated you to create your own path to debt freedom. If you have any questions at all, or if you have your own debt freedom story to share, feel free to contact us.